Market Weekly Recap 7/18

Welcome back to another weekly Friday Edition of the newsletter! In this edition, we are once again excited to guide you through a comprehensive overview of all the significant news events and developments that have unfolded over the past week. Our aim is to help you understand what these updates mean for your investment strategies.

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Earnings Season Lights a Fire Under Stocks

A strong first wave of Q2 reports helped push the S&P 500, Dow, and Nasdaq to new record closes this week. FactSet-tracked data show roughly 71% of early reporters beating earnings estimates, and aggregate S&P earnings growth tracking north of 9% for the quarter so far. Retail sales for June beat expectations (+0.6%) and jobless claims fell to 221K, reinforcing the “resilient consumer” narrative that supported risk appetite.

PepsiCo jumped after topping revenue and profit expectations and nudging its outlook higher as FX headwinds eased alongside a weaker dollar—a reminder that mega consumer staples can still deliver in uneasy macro environments.

United Airlines posted a profitable quarter, beat the Street, highlighted improving demand into Q3, and saw shares pop as investors warmed to the travel recovery narrative, even as guidance brackets widened. One thing to keep an eye on with United Airlines is their decision to raise most of their credit card fees over the next year. While this segment currently makes up only about 6% of their total revenue, it's still a key profit driver tied closely to customer loyalty. It remains to be seen whether these fee increases will have a positive or negative impact. Our view is that it could push some travelers to consider other airlines or competing cards, especially as consumers become more fee-sensitive. This is a development we’ll be watching closely in the coming quarters.

Big banks added fuel: JPMorgan reported Q2 net income of $15.0B ($5.24/sh) with strong CIB contribution, helping financials participate in the rally. 

We continue to like PepsiCo at its current price and believe it remains a solid buy. The company posted strong Q2 earnings, with adjusted EPS of $2.12, beating expectations of $2.03, and revenue growing 1% year-over-year to $22.73 billion. Even more attractive is the annual dividend of $5.42 per share, which offers a yield of just over 3% at current levels—making it a strong play for both growth and income. We bought shares ahead of the earnings report and plan to continue adding to our position, as we believe PepsiCo is well-positioned to climb back toward its all-time highs. The combination of a strong global presence, reliable dividend, and proven execution keeps us bullish for the long term.

Positioning note: After a run to highs, we’re letting winners ride but not chasing strength; instead, we’re lining up buy-the-dip levels in quality cyclicals (travel, select banks) if macro jitters or Fed headlines trigger a pullback.

TSMC’s Blowout Quarter & Accelerated U.S. Build-Out

The semiconductor onshoring theme got real momentum this week. TSMC reported a historic Q2: revenue roughly $30B (up ~44% YoY in USD terms) and net profit up about 60.7%, smashing forecasts on surging AI chip demand. 

On U.S. soil, the company said it’s speeding up production at its Phoenix, Arizona “gigafab cluster,” pulling forward the timeline for its second fab (3nm) by several quarters and considering an accelerated ramp for a third facility as U.S. customers clamor for supply.

The strong print helped lift the broader tech complex and was one of the supporting factors behind this week’s index highs, offsetting weakness elsewhere.

How we’re thinking about it: Semiconductor capacity build-out in the U.S. is no longer a story stock theme—it’s a capital spending cycle. We remain constructive on diversified semi equipment names and U.S. fab ecosystem suppliers on pullbacks. Watch out for $TSM ( ▼ 2.16% ) , $AMD ( ▼ 0.95% ) , and others in the space.

Energy Watch: Supply Shocks Meet Coming OPEC+ Barrel Wave

Crude got a volatility jolt after repeated drone strikes on Iraqi Kurdistan oil fields cut an estimated 140k–150k bpd of output and pushed Brent roughly $1 higher to the high-$60s, reminding traders how thin the geopolitical margin can be.

Medium-term, attention turns to supply management: OPEC+ reaffirmed plans to raise production by ~548k bpd in August as part of its accelerated unwinding of prior cuts, arguing the global economy could surprise to the upside in 2H 2025 and that refineries are already running hard to meet summer fuel demand. 

Still, the IEA’s July Oil Market Report flags that 2025 oil demand growth is running at its slowest pace since 2009 (ex-2020), even as supply ramps—setting up a tug-of-war between geopolitics, seasonal demand, and building barrels. 

Trade thought: Although there is not a singular stock that we are focusing on when it comes to IEAs announcement and forecast, we see this as a strong market signal once again to invest more money into nuclear stocks like Vistra Corp ($VST) and Oklo ($OKLO), both of which have seen massive rises over the last couple of months.