Daily Newsletter 7/23/25
The market was somewhat stronger on Tuesday than most investors had anticipated. A notable mean reversion occurred yesterday.
We believe that a favorable earnings report season is contributing to the market’s resilience, alongside bets from investors that the Federal Reserve may soon start cutting interest rates.
Important earnings releases scheduled for today include AT&T (T), Alaska Air Group (ALK), Alphabet (GOOGL), Tesla (TSLA), and Freeport-McMoRan (FCX).
AT&T stock dipped in premarket trading even though the company exceeded Wall Street’s earnings expectations.
Tesla is scheduled to release its earnings after the market closes today
Given these headwinds and a stock down almost 13% year to date, the earnings report and subsequent conference call will be closely watched for insights into Tesla’s path forward, profitability outlook, and management’s response to these market pressures.
Although a decline in earnings and revenue is expected, investors will be closely watching margin trends, guidance for future vehicle deliveries, and any updates on Tesla's progress in expanding AI-driven mobility solutions and energy storage deployments.
Tesla’s earnings report is important for the markets because it serves as a key indicator of the health and direction of the electric vehicle (EV) sector, which has significant influence on broader market sentiment and innovation trends.
The discussion surrounding the Federal Reserve is becoming increasingly complex.
Prominent economist El-Erian has publicly urged Federal Reserve Chair Jerome Powell to resign in order to protect the Fed’s independence amid escalating political pressures, particularly from the White House and former President Donald Trump.
Our view is that Powell should continue in his role to help maintain the Federal Reserve’s independence. While it is important to recognize that the Fed may not always perfectly time market interventions, allowing the President to exert pressure for resignation and appoint a successor could set a concerning precedent. It is also worth considering whether other entities—such as Congress, the President, or external groups like hedge fund managers and economists—would necessarily provide better stewardship of monetary policy. Maintaining institutional integrity should remain a priority.