Morning Forecast: Wednesday 29 July
The Fed decides today and Microsoft and Meta report tonight.
This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).
👀 Today’s Stories at a Glance
🏦 The Fed’s hardest call lands today: Warsh gives no rate projections, so the dissent count carries the whole message about where September is heading.
🛢️ Oil jumps as the strikes restart: WTI rose more than 5% to $83 after Iran fired ballistic missiles at American forces based in Jordan.
💻 Big Tech’s AI bill goes on trial: Microsoft and Meta report tonight, with capital spending guidance mattering more than either revenue line.
💾 Record profits still count as a miss: SK Hynix’s operating profit rose 557% to 60.5 trillion won and analysts wanted 64 trillion.
🍎 Apple touches five trillion dollars: Only the second company ever to reach the mark, and the one megacap not building data centres.
🔬 Corning beats and falls anyway: Shares dropped about 12% on light current-quarter guidance, dragging Marvell, Lumentum, Coherent and AXT down double digits.
🚗 Ford lifts its profit outlook: Adjusted earnings of 42 cents beat the 35 cents expected, and full-year profit guidance rose to at least $10 billion.
₿ Crypto marks time with the rulebook stalled: The Senate shelved the CLARITY Act, and passage odds on prediction markets fell to 37%.
📄 Your full Fed decision playbook: Twenty pages on the vote, the statement wording and how every outcome lands, free to download before 7pm.
📈 Oil bounces off $78 support: WTI is up more than 5% to $83, with the downward trend line near $87 the next test.
🧠 One Big Thing
The AI spending story gets tested from both ends inside twelve hours today. SK Hynix, the supplier, posted the best quarter in its history overnight, with operating profit up 557% to 60.5 trillion won, and still landed 3.5 trillion short of what analysts had asked for. Microsoft and Meta, two of the biggest buyers, report after the US close, and both carry capital budgets running into the hundreds of billions. Suppliers are being marked down for missing raised expectations while buyers are being marked down for meeting them, which is a market that has stopped rewarding the theme and started auditing it. Watch whether tonight’s capital budgets rise faster than cloud revenue.
⚖️ Fear & Greed
📉 The Number That Matters
$5 trillion
Apple’s market value at its intraday high, the second company ever to touch it, less than a year after passing $4 trillion.
⚔️ Winners vs Losers
Winners
VRRM 0.00%↑: +24.64% Verra Mobility Corporation soared after reaching agreement with Avis Budget Group on the key commercial terms of a new seven-year tolling and violations contract, repairing a relationship whose termination in May erased roughly 70% of the stock in a single session.
RCKY 0.00%↑: +16.31% Rocky Brands, Inc. jumped after second quarter net sales rose 12% to 118.4 million and adjusted earnings of 1.90 per share came in more than four times consensus, with a 15 million tariff refund lifting gross margin to 51.4% from 41.0%.
NEO 0.00%↑: +11.94% NeoGenomics, Inc. climbed after second quarter revenue grew 11% to 201.7 million and adjusted earnings beat by roughly 50%, prompting the oncology diagnostics company to raise full year revenue and adjusted EBITDA guidance on 26% growth in next-generation sequencing.
MANH 0.00%↑: +10.13% Manhattan Associates, Inc. advanced after posting record second quarter results with cloud revenue up 26% and remaining performance obligations up 23% to 2.47 billion, marking a third consecutive quarter of record bookings.
GEHC 0.00%↑: +9.11% GE HealthCare Technologies Inc. rose after second quarter revenue of 5.30 billion and adjusted earnings of 1.13 per share topped estimates, with management reporting record orders and backlog across every segment and reaffirming full year guidance.
TER 0.00%↑: +7.56% Teradyne, Inc. surged after a second consecutive quarter of record revenue, up 104% year over year on strength in DRAM and NAND final test, and third quarter revenue guidance roughly 21% above what analysts had modelled.
JCI 0.00%↑: +6.84% Johnson Controls International reported fiscal third quarter results before the open with earnings ahead of analyst projections, reinforcing the recent lift to its long-term organic growth target on the back of data centre cooling demand and a record backlog.
Losers
PSN 0.00%↑: -19.78% Parsons Corporation tumbled after swinging to a second quarter net loss of 15 million and reporting adjusted EBITDA down 72% to 42 million, driven by 118 million of charges tied to portfolio-shaping actions and a joint venture program.
CSGP 0.00%↑: -15.53% CoStar Group, Inc. slid after guiding third quarter revenue about 3% below consensus and trimming its full year revenue outlook to 3.74 billion at the midpoint, overshadowing a quarter in which adjusted EBITDA more than doubled.
OI 0.00%↑: -13.47% O-I Glass, Inc. dropped after second quarter results fell short of expectations on competitive pressure, with the glass packaging maker cutting its 2026 guidance again and realigning its 2027 targets to reflect a more gradual pace of improvement.
VRT 0.00%↑: -12.16% Vertiv Holdings, LLC fell after second quarter revenue of 3.27 billion missed estimates despite 24% growth, with an earnings beat and a raised full year outlook failing to offset the top line shortfall.
KLAC 0.00%↑: -8.14% KLA Corporation extended losses after September quarter earnings guidance came in around consensus rather than above it, disappointing investors who had bid the stock up more than 50% this year on record June quarter revenue of 3.66 billion.
CAT 0.00%↑: -4.67% Caterpillar, Inc. declined after Baird cut the stock to Neutral and slashed its price target by a quarter, pointing to state and local regulatory action against data centre construction, including New York State’s moratorium on new builds, as raising the odds of an order slowdown in 2027 and 2028.
AMAT 0.00%↑: -2.82% Applied Materials, Inc. slipped in sympathy with KLAC as the semiconductor equipment complex extended a broad selloff that has knocked the Philadelphia Semiconductor Index down more than 5% in a session, with no company-specific news ahead of its August 13 report.
📊 Market Snapshot
Cryptocurrencies:
Bitcoin (BTC): $64,408 (▲0.85%)
Ethereum (ETH): $1,911 (▼0.46%)
XRP: $1.08 (▲1.56%)
Equity Indices (Futures):
S&P 500: 7,484 (▲0.24%)
NASDAQ 100: 28,017 (▲0.34%)
FTSE 100: 10,898 (▲0.07%)
Commodities & Bonds:
10-Year US Treasury Yield: 4.63% (▲0.54%)
Oil (WTI): $83 (▲4.85%)
Gold: $4,033 (▲0.11%)
Silver: $57.68 (▲1.00%)
Data as of: UK: 12:30pm BST / US: 7:30am EDT / Asia (Tokyo): 8:30pm JST
✅ 5 Things to Know
🏦 The Fed’s hardest call of the year lands today
The Federal Reserve announces its decision at 7pm BST, 2pm ET, and Kevin Warsh holds only his second press conference as chair half an hour later. Traders put roughly a 70% chance on rates staying at 3.50 to 3.75 percent and about 30% on a quarter-point rise, odds that have swung from under 11% in mid-July to 38% late last week as oil moved. A hold would be the fifth meeting running without a change. There is no fresh set of rate projections at this meeting, which strips out the usual guide to where policy goes next (Yahoo Finance).
That absence is why the dissents matter. Without a dot plot, the number of officials voting against the decision is the clearest available signal about September, and several members are believed to want a rise now. The backdrop is softening underneath: consumer confidence fell to 90.8 in July from 92.2, missing the 92.4 expected, and the measure of how Americans rate current conditions dropped for a third month running to 114.9. That survey closed on 22 July, before crude’s latest swing. The rate the Fed sets feeds mortgages, credit cards and the discount rate every share on earth is valued against, which is why bonds, the dollar, gold and crypto all tend to move on the vote line before the first question is asked (Yahoo Finance).
Sensei's Insight: We'll certainly have some people voting for a rate hike, but essentially all the information you need to know is in today's cheat sheet. You can find it lower down in today's newsletter. We will be covering this live as well.
🛢️ Oil jumps as the strikes restart
US West Texas Intermediate jumped more than 5% to $83 a barrel and Brent gained about 5.2%, reversing most of a three-session slide, after Iran’s Revolutionary Guard fired multiple ballistic missiles at American forces in the region. US Central Command said four missiles were launched at a base in Jordan and all were intercepted, the first publicly disclosed attack on US troops since Trump paused strikes last week, and it landed hours after he met Benjamin Netanyahu at the White House. Iran-aligned militias in Iraq struck Saudi oil facilities for a second day running, Saudi Arabia hit back at targets inside Iraq, and a tanker crew reported hearing an explosion in the southern Red Sea (Bloomberg).
The move matters because of what it undoes. Brent had fallen 16% over the previous three sessions, its steepest such drop since 2020, and that slide was the single biggest reason the odds of a rate rise today eased from 38% to about 30%. Energy is the fastest route from a foreign conflict into an inflation print, and it is the one input the Fed cannot influence. The weekly count of US crude stockpiles lands at 3:30pm BST, 10:30am ET, three and a half hours before the decision. Whether this pause holds decides whether the inflation question in September is the one the Fed has now or a considerably louder one (CNBC).
Sensei's Insight: The Chart of the Day covers my oil thoughts. We did think this drop would come, and $78 was the level we were looking at for support, and that's where it found it. We are rising again. Anyway, go and look at today's Chart of the Day for a potential trade setup.
💻 Microsoft and Meta put the AI bill on trial tonight
Both report after the US close, around 10pm BST, and both arrive bruised, with Microsoft down about 10% and Meta about 11% since late April. Microsoft’s fiscal fourth quarter is seen at roughly $87.6 billion of revenue and $4.24 a share, growth of about 15% and 16% on the year, with Azure expansion in the high 30s the figure analysts care about most. Meta is seen near $60.2 billion of revenue, up about 27%, with earnings around $7.13 a share and underlying growth close to flat. Qualcomm reports the same evening (Yahoo Finance).
The question tying them together is what they spend. Meta has already guided 2026 capital expenditure to between $125 billion and $145 billion, and analysts expect Microsoft to point at fiscal 2027 spending near $220 billion. Alphabet lifted its own budget to as much as $205 billion last week and lost 7% in a session for it, despite cloud sales rising 82%. JPMorgan puts total AI-related corporate spending near $870 billion by the end of 2026, 77% above a year earlier, with roughly $750 billion of that coming from four companies. Every capital budget that has risen faster than the revenue it funds has been sold this season (Yahoo Finance).
Sensei's Insight: We'll be covering both these earnings tonight on Martyn Lucas Investor. I'll be covering one, Martyn will be covering one. It's not about beating on earnings. It's all about how much money they're going to be spending on AI, and that's what we're going to be watching.
💾 Record memory profits still land as a miss
SK Hynix posted the best quarter in its history overnight and it was not enough. Operating profit rose 557% to 60.5 trillion won, about $41.6 billion, from 9.2 trillion won a year earlier, against the 64 trillion won that LSEG’s forecast pointed to. Revenue of 79.3 trillion won came in under the 84 trillion expected. The operating margin reached 76%, an all-time high, the company started mass shipments of HBM4, its next generation of AI memory, and it lifted this year’s capital spending plan to around $31 billion (CNBC).
The reason for the shortfall is the interesting part. SK Hynix is more exposed to high-end memory sold into AI data centres than its rivals are, so it captured less of the price rally in ordinary memory chips that lifted the wider sector. Being the purest AI supplier turned into a drag for a quarter. The selling around it has been severe, with Korean stocks down 16% in two days on a burst of retail selling, and the Nasdaq-100 briefly fell into correction yesterday, meaning 10% or more below its record, as Sandisk dropped around 14%, Dell 13% and Intel 7%. The next read on whether AI memory demand is genuinely slowing arrives tonight from the companies buying it (Bloomberg).
Sensei's Insight: This is an interesting company. If it does head a little bit lower, I will get interested in buying some. That's my own plan and my own risk, not a suggestion for anyone else. But it's not about how strong the company is. Again, it's about the expectations beyond great earnings.
🍎 Apple touches $5 trillion
Apple’s market value crossed $5 trillion during yesterday’s session for the first time, making it only the second company ever to reach the mark after Nvidia got there in October 2025. The shares traded as high as $342.89, worth about $5.036 trillion, before easing back to around $339.70 and finishing just under the line near $4.99 trillion. The milestone landed less than a year after Apple passed $4 trillion in October 2025, and a day after it took the most valuable company title back from Nvidia, whose value sits near $4.77 trillion (CNBC).
Apple is the only member of the group not spending hundreds of billions of dollars building its own data centres, and in a market marking down capital budgets that has turned into an advantage. Apple is up roughly 24% this year against Nvidia’s 4%. The test arrives tomorrow after the US close, when Apple reports revenue seen near $109 billion to $110 billion and earnings around $1.89 a share, the final set of results under Tim Cook before John Ternus takes over on 1 September (Yahoo Finance).
Sensei's Insight: Apple hitting five trillion dollars is not what many people expected at the beginning of this year. Everyone thought the AI companies like Nvidia would continue to outperform a company like Apple, which hasn't actually invested that much in AI and still holds a lot of cash. But it does show you that it's not all about how much you spend on AI. And even though a lot of people said Apple is behind, well, it's the most valuable company in the world.
Stories You Might Have Missed
🔬 Corning beats, guides light, and drags the optics complex down
Corning fell about 12% yesterday after reporting second-quarter earnings of 78 cents a share on revenue of $4.74 billion, ahead of the 76 cents and $4.61 billion analysts expected. The damage came from the forecast: core revenue of $4.9 billion to $5.0 billion for the current quarter, growth of 16% but a touch under the $5.0 billion consensus. Optical communications revenue rose 32% to $2.07 billion, slower than the 36% growth of the previous quarter, and that deceleration in the fibre business is what investors seized on. The read-across hit the sector hard, with Marvell, Lumentum, AXT and Coherent all falling double digits. Some quotes had Corning down as much as 16% intraday, which would be its worst session since 2002 (CNBC).
🚗 Ford beats and raises its full-year outlook
Ford reported adjusted earnings of 42 cents a share against the 35 cents expected, on revenue of $48.3 billion versus the $47.51 billion forecast, and the shares added about 5% after hours on top of a 1.9% gain in the regular session. Adjusted operating profit rose 17% to $2.5 billion even as revenue fell 4%, helped by firm vehicle pricing and a richer mix of profitable models. The company lifted full-year adjusted operating profit guidance to $10 billion to $11 billion from $8.5 billion to $10.5 billion, and free cash flow to $6 billion to $7 billion. It also expects to recover roughly $2.5 billion of the vehicle volume lost to the Novelis supplier fires, weighted to the second half (CNBC).
₿ Crypto marks time before the Fed with the rulebook stalled
Bitcoin traded around $64,400, up about 0.9% over 24 hours, with Ethereum near $1,913 and XRP at $1.09. The bigger news is legislative. The Senate has set the CLARITY Act aside to clear a Russia sanctions bill and a run of nominations, leaving barely two weeks of floor time before the recess starts on 8 August, and a vote is now unlikely before the final days. Odds of passage on prediction markets have fallen to 37%, from a position leadership was calling the one-yard line earlier in the summer. The bill would split oversight of digital assets between the SEC and the CFTC, and the unresolved fight is over banning senior officials from backing crypto projects. If it slips past the summer it runs into an autumn session disrupted by the November midterms (CoinDesk).
📄 The Fed Decision Playbook
The decision lands at 7pm BST, 2pm ET, and Warsh takes questions half an hour later. I have built you the full playbook for it, and it runs to twenty pages. Our call on the rate, the vote and the closing sentence, with a confidence number against each one so you can mark us afterwards. What is good and bad to hear in the first ninety seconds. A reaction map across stocks, bonds, the dollar, gold and Bitcoin for all three outcomes. The June statement marked up word by word so you can spot the changes yourself, where all twelve voters sit, the levels analysts are naming on Bitcoin and XRP, the Bank of England read-across for tomorrow, and straight answers to the questions people keep asking me this week. Every figure in it is dated. Click below to download it and have it open before the statement drops.
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