Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It Wednesday, July 23, 2025.

State of Play

President Trump announced a ‘massive’ trade deal with Japan last night. This caused stocks in Japan to rally as the Nikkei gained 3.5% on the day. As we eye or board of indicators for signs of direction at 0815, these are mostly positive:

* Stock index futures are pointing to gains, led by small caps, usually a good sign. The Russell 2000 is up 0.9%. S&P 500 futures are 0.3% to the good. Nasdaq futures are flat. The Nasdaq actually dropped a bit yesterday;

* Copper is rallying, up 1.6%, close to fresh record highs. WTI crude oil is down 0.6% to trade around $65/barrel;

* Cryptos appear to be taking a bit of a breather. Bitcoin is down 0.5% to trade around $118,500;

* Bonds are down a bit. The 10-year yield is up 3 basis points to 4.36% (yields move inversely to prices).

Today’s Known Events

Earnings season is underway. We got some fresh reports already this morning:

* AT&T (T ) beat earnings earnings estimates and appears to have raised guidance but something in the report didn’t please investors as the stock is dropping in the pre-market, down 3% at the time of this writing;

* Hilton Worldwide (HLT ) also beat estimates but here too the stock is down -1.8%;

* Thermo Fisher Scientific (TMO ) beat estimates and that stock is rising in the pre-market, +2.5%;

* Hasbro (HAS ) trounced estimates and raised guidance and that stock is up 5%.

Of course the big names report after the close at 1600 ET: Google (GOOG )/(GOOGL ) and Tesla (TSLA ).

One economic data release to tell you about. Existing home sales are out at 1000. Economists who were surveyed expect 4.01 million sales, about the same as last month’s 4.03 million.

Finally, a 20-year bond auction is at 1300. No analyst estimate but last one of these resulted in a yield of 4.942%.

The Bottom Line

Trade deals are nice but we aren’t really seeing much of a reaction from US stocks. Maybe that’s because most of the scuttle around Japan negotiations have been positive so the market figured this was coming. But then copper prices certainly speak of increased risk appetite ahead.

The tech rally appears to be on pause, presumably until we get Google earnings tonight. While Google itself has actually been moving higher (+4% over the last week) what management says about AI spending in particular could be what is leading investors to sit on their hands a bit. It may also be simple profit taking from tech, which has been on quite a tear since the April lows (+33%).

The Contrarian, who (full disclosure) is long Google, will be watching the company’s AI datacenter investments that are reported in the form of capital expenditures (the datacenter piece may not be broken out explicitly, but we all know that’s what most of the capex is). Presumably analysts will also be watching because is a direct correlation to AI chipmakers, and therefore most of the tech sector these days. The expectation is for $18 billion in capex, up a bit over the $17 billion reported last quarter.

Beyond that we also have tariffs and trade-related news. The Aug. 1 deadline is still out there.

Housekeeping

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