Strong Q2 Earnings, Cooling PPI Lead Pre-Markets Higher
Pre-market futures are climbing into the green this morning, following a cooler-than-expected wholesale inflation report and better-than-expected financial Q2 earnings numbers out before the bell today. After starting off roughly -0.1% across the board, we're currently up +160 points on the Dow, +13 points on the S&P 500 and +14 on the Nasdaq. The small-cap Russell 2000, which yesterday shed -2% in regular trading, is +15 points presently.
PPI Data Lower than Expected: A Pull-Forward in Effect?
This morning, the latest Producer Price Index (PPI) was released, for the month of June. Following yesterday's Consumer Price Index (CPI) — the retail print on monthly inflation — today's PPI reflects the wholesale side. Headline PPI for June, month over month, reached 0.0% — lower than the +0.2% expected and 30 basis points (bps) below the upwardly revised +0.3% from the prior month.
Subtracting volatile food and energy costs on the producers' side, core PPI was also 0.0%, as was the latest ex-food, energy and trade read: 0.0%. These are down from the upward revisions on both metrics of +0.4% and +0.1%, respectively. These are also the coolest inflation prints on PPI since April of this year — the month President Trump brought tariffs to bear.
PPI year over year on headline came in at +2.3%, 30 bps below expectations and the lowest since +2.1% reported in September of last year. Core PPI year over year reached +2.6%, a notch below estimates and -40 bps from the May print of +3.0%. Year over year, ex-food, energy and trade, we see +2.5% — 20 bps under estimates and the slimmest wholesale inflation print since November of 2023.
Coming as these numbers are within the static of a U.S. tariff policy with constantly moving goalposts, we can attribute some of this surprise to a likely pull-forward from the months prior. Lower wholesale inflation — especially when we saw warmer-than-expected retail inflation in the CPI numbers yesterday — quite likely means supplies had been sufficient in previous months to not be beholden to higher sticker prices in the month of June.
To the extent this data funnels into Fed-preferred metrics on overall inflation, we still see these PPI numbers above optimal inflation levels of +2.0%. In fact, since the Great Reopening as the Covid pandemic dimmed four years ago, we've never gotten back down to +2.0% inflation. Then again, as we mentioned in this space yesterday, +2.0% inflation is a notion very likely on borrowed time; once Fed Chair Jerome Powell is replaced, we expect the overall narrative to change.
Q2 Earnings Roundup: Financials and More
After Tuesday kicked off Q2 earnings season for some of the biggest banks on Wall Street, today we see a continuation: Bank of America BAC posted a 3-cent beat to 89 cents per share (6 cents higher than the year-ago quarter) for a +3.5% earnings surprise. Revenues, however, missed estimates slightly, -0.5%. Better-than-expected loan revenue has helped prop the stock in early trading. For more on BAC's earnings, click here.
Perhaps the best Q2 earnings report so far belongs to Goldman Sachs GS, which posted a +15.7% earnings surprise this morning: $10.91 per share versus $9.43 expected (which itself was +9.4% higher than the year-ago quarter) on $14.58 billion in quarterly revenues, which easily surpassed the $13.5 billion estimate by +8%. This is a good sign for investment banking overall. But as shares have already climbed +22.7% year to date, this morning's gains are so far slim. For more on GS' earnings, click here.
Morgan Stanley MS also represented strongly for investment banking this morning, with earnings of $2.13 per share on $16.79 billion in revenues for the quarter outpacing the Zacks consensus by +10.36% and +5.5%, respectively. Yet shares are selling a bit ahead of the opening bell, -1.8%, after having doubled the finance sector year to date. For more on MS' earnings, click here.
Johnson & Johnson JNJ shares are up +2% on its impressive Q2 earnings beat this morning, with earnings of $2.77 per share outperforming projections for $2.66 (though still down from $2.82 per share reported in the year-ago quarter). Revenues of $23.7 billion are up nicely from the $22.80 billion expected. CEO Joaquin Doato says he sees a stronger 2H2025 ahead for the pharma/household goods giant. (You can see the full Zacks Earnings Calendar here.)
Questions or comments about this article and/or author? Click here>>
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity.
Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report
Bank of America Corporation (BAC): Free Stock Analysis Report
Morgan Stanley (MS): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
17 minutes ago
- Globe and Mail
Down 19%, Should You Buy the Dip on Apple Stock? The Answer Might Surprise You.
Key Points Apple has created a powerful walled garden that keeps customers essentially locked into the company's ecosystem. Investors must keep tabs on the dynamic trade situation, since Apple isn't immune from the effects. Shares are having a disappointing year, but the valuation is still expensive. 10 stocks we like better than Apple › It hasn't been a good year for investors in Apple (NASDAQ: AAPL). As of July 14, shares of the consumer tech powerhouse are down 17%. Tesla is the only other "Magnificent Seven" company to have a worse performance in 2025. Apple stock's disappointing showing this year doesn't take away from the fact that it's up 564% in the past decade. That gain is well ahead of the S&P index. But shares are trading 19% below their peak from December last year. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Is now the time for investors to buy the dip? The answer might surprise you. Apple is one of the world's best businesses I believe long-term investing success comes down to owning the right companies. And by this, I mean high-quality businesses that have durable competitive strengths. What's more, operating from a position of financial prowess is also a necessity. Here's where Apple stands out. One reason this is such a great company is its brand presence. Consumers across the globe have come to love Apple's beautifully designed hardware and easy-to-use software. These are at the premium end of the spectrum, and they really resonate with people. The ecosystem Apple has built is another reason this is a superb business. Its products only work with the company's own software and services, which creates a walled garden that makes for an exceptional experience for consumers. This also makes it difficult to switch to the offerings of competitors. When it comes to financial strength, Apple is near the top. As of March 29, it carried $35 billion in net cash on its balance sheet. And during the latest fiscal quarter, the business generated $25 billion in net income. The risk that Apple gets into financial trouble is practically nonexistent. Risks that are too hard to ignore It doesn't matter how wonderful a company is; all of them must overcome challenges at some point. Apple is no different. There are three pressing issues investors need to be mindful of right now. Growth is slowing. Revenue declined 2.8% in fiscal 2023 to $383 billion, before rising by just 2% in fiscal 2024. Over the following three fiscal years, Wall Street consensus analyst estimates call for sales to increase at a compound annual rate of 5.3%. This outlook isn't exactly bringing in growth-minded investors. During the second quarter of 2025, 49% of total revenue came from the iPhone, a product that's 18 years into its life cycle. While this might be the most successful product of all time, its maturity these days doesn't really incentivize consumers to constantly buy the newest upgrades. To be fair, Apple's other products are incredibly popular, but it's hard to drive meaningful growth on a very high sales base. There have been concerns that Apple's entrance into artificial intelligence (AI) has been slow. The new and improved AI-powered Siri isn't expected to be launched until 2026. And it seems that observers are constantly hearing about new AI developments from big tech peers. For what it's worth, though, Apple's focus on the user experience and privacy are always bright spots. Investors can't forget about the dynamic tariff situation. For a lot of its production, the company relies on China, a country that's always on top of President Donald Trump's mind when making decisions about trade policy. It also doesn't help that Apple's sheer size and visibility make it a punching bag for Trump, who criticized the company for moving more production to India. The latest challenges are certainly worth paying attention to. However, this is still a fantastic company that should be able to navigate whatever comes its way. But even though the stock is 19% off its record, its current price-to-earnings ratio (P/E) of 32.5 is still expensive. In fact, it's well above the trailing-10-year average. Until the P/E gets closer to 25, investors shouldn't buy Apple shares. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,415!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025
Globe and Mail
42 minutes ago
- Globe and Mail
World shares gain after Wall Street cruises to more records, helped by strong US retail sales
MANILA, Philippines (AP) — World shares were mostly higher on Friday after Wall Street rose to records following better-than-expected updates on the economy and a mixed set of profit reports from big U.S. companies. In early European trading, Germany's DAX was up 0.4% at 24,479.86. In Paris, the CAC 40 rose 0.6% to 7,869.86, while Britain's FTSE 100 added 0.2% to 8,987.81. The future for S&P 500 rose 0.1% while that for the Dow Jones Industrial Average also edged 0.1% higher. In Asian trading Japan's Nikkei 225 closed 0.2% lower at 39,819.11 as traders stayed on the sidelines ahead of an election for the upper house of parliament on Sunday that could wipe out the ruling coalition's upper house majority. The government reported that core inflation excluding volatile food and energy prices rose to 3.3% in June from a year earlier, slowing from 3.7% in May but still above the central bank's 2% target. Hong Kong's Hang Seng index added 1.2% to 24,825.66, while the Shanghai Composite index advanced 0.5% to 3,534.48. Taiwan's Taiex climbed 1.2%, helped by a 2.2% gain for Taiwan Semiconductor Manufacturing Co. On Thursday, TSMC reported its net income soared nearly 61% in the last quarter from a year earlier. The world's largest contract chip maker said it's seeing strong demand from artificial-intelligence and other customers. On Thursday, TSMC's stock that trades in the United States rose 3.4%. Australia's S&P/ASX 200 rose 1.4% to 8,757.20, and the Kospi in South Korea shed 0.1% to 3,188.07. India's Sensex lost 0.6%. 'Asia's riding the global rally wave, AI fever refuses to break, and even the Fed is making soothing noises,' Stephen Innes of SPI Asset Management wrote in a commentary. 'But underneath all the sunshine is a market running hot, with volatility on sale and positioning still cautious.' On Thursday, the S&P 500 climbed 0.5% to top its all-time high set a week ago, closing at 6,297.36. The Dow Jones Industrial Average rose 0.5% to 44,484.49, and the Nasdaq composite added 0.7% to its own record set the day before, climbing to 20,885.65. Trading was calmer than on Wednesday, when President Donald Trump rocked financial markets by saying he had discussed the 'concept' of firing the chair of the Federal Reserve, though he said he was unlikely to do so. Such a move could help Wall Street get the lower interest rates investors love, but would also risk a weakened Fed unable to make the unpopular moves needed to keep inflation under control. Treasury yields were mixed following several better-than-expected reports on the economy. One said that shoppers upped their spending at U.S. retailers by more last month than economists expected. Such spending, along with a relatively solid jobs market, has helped keep the U.S. economy out of a recession. A separate report said that fewer U.S. workers applied for unemployment benefits last week, which could be a signal of limited layoffs. A third suggested unexpectedly strong growth in manufacturing in the mid-Atlantic region. Such solid data could keep the Federal Reserve on pause when it comes to interest rates. The Fed has been keeping rates steady this year, after cutting them at the end of last year. The Fed's chair, Jerome Powell, has been insisting that he wants to wait for more data about how Trump's tariffs will affect the economy and inflation before the Fed makes its next move. That's because while lower interest rates could boost the economy and prices for investments, they would also give inflation more fuel. Prices may already be starting to feel the upward effects of tariffs, based on the latest data. In other dealings early Friday, U.S. benchmark crude oil rose 84 cents to $67.07 per barrel. Brent crude, the international standard, picked up 80 cents to $70.32 per barrel. The U.S. dollar rose to 148.72 Japanese yen from 148.61 yen. The euro rose to $1.1640 from $1.1596.
Globe and Mail
an hour ago
- Globe and Mail
5 Artificial Intelligence (AI) Stocks You Can Buy and Hold for the Next Decade
Key Points Nvidia, TSMC, and ASML are all great long-term plays on AI infrastructure. Meta is investing heavily in AI and is well-positioned for an AI world. Alphabet should not be overlooked for what the company is doing in AI. 10 stocks we like better than Nvidia › Artificial intelligence (AI) isn't just a technology trend -- it's transforming the word we live in. As such, investing in leading AI companies for the long haul could be a smart move. Let's look at five AI stocks you can buy and hold for the next decade. 1. Nvidia When it comes to AI infrastructure, Nvidia (NASDAQ: NVDA) is the clear leader. Its graphic processing units (GPUs) are the main chips used to train and run AI workloads. The company had an over 90% market share in the GPU market in Q1, while its data center revenue has jumped more than 9x over the past two years. That kind of growth from a $4.17 trillion company is almost unheard of. The company's wide moat comes from its CUDA software platform, which it pushed into universities and research labs long before AI became mainstream. As a result, CUDA became the primary platform on which developers learned to program GPUs, and a plethora of libraries and tools were built on top of its software to help optimize the performance of its chips for AI. Outside of AI, Nvidia's auto segment is also seeing strong growth. Revenue hit $567 million last quarter, with the company projecting $5 billion for the year. With the advent of autonomous driving, this could become another big growth leg for the company in the future. 2. Taiwan Semiconductor Manufacturing Today, most chipmakers don't manufacture their own chips; they just design them. That is where Taiwan Semiconductor Manufacturing (NYSE: TSM) steps in. It is the world's leading semiconductor contract manufacturer, making chips for leading chip designers like Nvidia, Advanced Micro Devices, Apple, and Broadcom. Manufacturing advanced chips isn't an easy process, as it requires both scale and technological expertise. Foundries are constantly racing to shrink node sizes, as the more transistors that can be packed onto a chip, the better a chip's performance and power efficiency. TSMC has a wide lead in advanced node manufacturing. Chips built on 7nm and smaller nodes made up 73% of revenue last quarter, while 3nm chips alone accounted for 22%. Apple has already locked in future supply for its 2nm line. As rivals have struggled, TSMC has become a vital partner to leading chip designers. This has given it pricing power, as chip designers work closely with the company to secure future capacity to meet growing demand for advanced chips. 3. ASML While TSMC manufactures advanced chips, ASML (NASDAQ: ASML) is the company that provides the equipment that makes it possible. It has a near-monopoly on extreme ultraviolet lithography, which is the technology used to make advanced chips. ASML's business is driven by chipmaker capital spending. With TSMC and Intel planning to invest hundreds of billions into new capacity, ASML will benefit. As long as demand for advanced chips keeps rising, it should continue to see solid demand moving forward. The company also recently introduced a new technology called a high numerical aperture extreme ultraviolet lithography system, or High NA EUV. This technology will help shrink chip sizes even further. While TSMC has balked at these machines' nearly $400 million price tag, last quarter it shipped its fifth High NA EUV system. It now has machines placed at the three largest semiconductor contract manufacturers, and none of them are likely going to want to fall behind. With companies looking to design more powerful AI chips in the future, ASML looks well-positioned for the long run. 4. Meta Platforms Meta Platforms (NASDAQ: META) owns one of the most powerful digital ad platforms in the world, and AI is making it better. Its Llama model is increasing personalization and engagement across Facebook and Instagram, which is driving strong revenue growth. In Q1, its ad impressions rose 5%, while pricing climbed 10%. That's a strong sign that users are spending more time on its apps, and that advertisers are getting more value from the platform. Meta's new AI tools are helping marketers generate better creative content and target users more effectively. That makes campaigns better and increases return on ad spend, which keeps advertisers coming back. Meta is also investing heavily in its AI infrastructure, giving it more control over performance and cost. The company is also just starting to serve ads on both its messaging platform, WhatsApp, and its new social media site, Threads. WhatsApp has more than 3 billion users, and Threads has already hit 350 million. As such, both have a long runway of ad growth ahead. Overall, Meta looks well-positioned for an AI world. 5. Alphabet Alphabet 's (NASDAQ: GOOGL)(NASDAQ: GOOG) moat should not be underestimated. While investors fear that AI will disrupt its core search business, investors are missing what Google truly does. Google isn't about search; it's about content discovery, and whether that is delivered via traditional search or AI, the company has a few big advantages. Its biggest advantage is distribution. Its Chrome browser has a more than 65% browser market share, while its Android operating system runs on more than 70% of smartphones. It's also the default search engine on Apple devices and partners with other browsers like Opera. The company also has decades of user search data and the world's largest ad network, with unprecedented scale and reach. Importantly, Google is integrating AI into products people already use. Its new AI Mode in search turns Google into an AI assistant, not just a list of links. A recent Oppenheimer survey showed 82% of users found it more helpful than traditional search, and 75% said it was more useful than ChatGPT. That's a strong signal that Google is getting this right. Its cloud computing unit, Google Cloud, is also gaining momentum. Q1 revenue rose 28%, and operating income more than doubled. Cloud customers are using Google's Vertex AI tools to train and deploy models. It even has developed its own custom AI chips, which even OpenAI has been testing. Meanwhile, Waymo is another underappreciated asset. It's now running over 250,000 paid robotaxi rides per week and has started expanding into new markets through its Uber partnership. Alphabet's Willow quantum chip is also showing real progress in reducing error rates. This may take years to play out, but it could be another growth engine down the road. Overall, with its combination of leading and emerging businesses, Alphabet looks like one of the best AI stocks to own over the long term. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,415!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Opera. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Alphabet, Apple, Intel, Meta Platforms, Nvidia, Taiwan Semiconductor Manufacturing, and Uber Technologies. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.
