News and analysis

A rare happy good luck! For anyone who has long been looking for a high-quality US asset with at least $500 billion in market capitalization, but much cheaper than what people call a "fair price". Eli Lilly delivered a stunning second-quarter financial performance, by far shattering all its previous records once again and beating already too hot and much elevated consensus estimates for the profitability of its best-selling weight-loss drug by 12.88%. But its stock price suddenly plunged nearly 15% due to a quite controversial clinical miss of a new oral pill. I don't tell you to grab the first price found on the street tomorrow morning, but a procrastinating delay for too long would be even a bigger mistake.

Eli Lilly was a measly $30 shy of hitting $1,000 at its 2024 peaking price and about $80 distance short of touching that same milestone in 2025. And it's currently trading below $650, which means another $300 of headroom for nearly 50% of the future recovery potential. Perhaps the fortune will grant us an even lower price, but for me it's very unlikely that the asset may fall below $600 for more than a day. Here are some major details, and you draw your own conclusions.

To be very brief, the company's main profit has so far been made by anti-diabetic and weight loss products under the Zepbound and Mounjaro brands, and they have broken all previous records and average expectations once again. Those key medications are in the forms of injections. Together, they provided sales that grew to $10.40 billion, with Mounjaro generating $5.20 billion (up 68% YoY) and Zepbound contributing $3.38 billion (up 172% YoY). This is a unique achievement. No competitors like NovoNordisk, whose drugs reportedly and allegedly have unacceptable side effects like vision damage, can even come close to Eli Lilly's current achievement. Its EPS (earnings per share) jumped 92% YoY to $6.29 against $3.92 in the same period of 2024 and the previous record of $5.32 in Q4 2024. Beside that, Lilly raised its full-year sales guidance by another $1.5 billion to a higher range of $60 billion to $62 billion, also raising its inner profit expectations to $20.85-$22.10 per share.

This is all on the positive side. So what else could the market want? First, a few months ago the crowd wound itself up with even higher expectations, which prevented the $1000 from being taken by storm and brought about a rollback and correction phase. However, that would be only half the self-made trouble for too brave investing minds. And the other half of the same trouble is that Eli Lilly has vowed to make and promote a very effective pill so that patients do not have to take injections. And the market has too high hopes for that pill. Morgan Stanley experts, for example, estimated the financial effect of the pill revenue at an extra $40 billion each year by 2033. But the most recent weight loss pill trial effect was modest compared to high market bets. In particular, the last phase of a clinical trial led the group of patients to lose an average weight of 12.4% (27.3 pounds) over 72 weeks. 59.6% of all participants lost at least 10% of their corresponding body weight and 39.6% lost even 15% or more. Despite this being statistically significant, specialists expected even higher results.I don't know what you'll say, but for me, I'd rather swallow one pill a day than inject myself in the stomach or anywhere else, even if the pills would burn off my weight more slowly. The company also emphasized that its innovative pill (named orforglipron) still represents a significant advancement as a "once-daily oral therapy that could support early intervention and long-term obesity management, though the commercial opportunity may be more limited than originally anticipated".

Well, you can do whatever you want, but next week I’m personally buying a few shares of Eli Lilly for my mostly tech portfolio, without looking at the particular share price at all. And if it suddenly falls below $600 for a while, then I’ll buy the same amount more of Eli Lilly and I'll wait for the $950 or higher target as long as it takes. A typical situation for brave hands. Remember when CrowdStrike shares nearly collapsed because of a stupid computer glitch that "buried" Windows on 19 July 2024. There was a huge price discount, with CRWD share price plunging to $200 per share. So what? Less than a year passed, and CrowdStrike shares were breaking new records above $500, as if nothing had happened. The same will happen with Eli Lilly.

Dogecoin (DOGE) is up 3.3% this week to $0.2065, outperforming the broader crypto market, where Bitcoin (BTC) has gained a modest 0.15% to $114,530. DOGE surged 29.3% in July, reaching $0.2125 and peaking at $0.2875 before retreating amid broader negative market sentiment. Despite the pullback, the overall monthly performance highlights the memecoin’s underlying strength.

August has brought renewed pressure, but strong support from large investors at the key $0.2000 level reinforces the bullish outlook. If this support continues to hold, the next upside target remains $0.3000, a level that would mark a significant continuation of DOGE’s recovery trend.

The S&P 500 index added more than 100 points since the beginning of the week, leaving the broader Wall Street market up 1.75% as of Wednesday evening. Corporate earnings were still coming in better than sceptics feared. Advancing performances succeeded the number of declining stocks by only a 11-to-10 ratio on the New York Stock Exchange (NYSE) on August 6, yet 145 new session highs were detected vs 65 new lows. Bets for a September and December rate cuts made the rally easier to go on, but up to 3.75% gains of McDonalds and Apple's surging by more than 5% paved the way to climb higher.

Of course, Apple is very big, and so its fresh positive changes in dynamics is most influential for other techs. But the example of Apple, which rose faster than many others, is not indicative, just because the iPhone maker grew not on any kind of solid earnings numbers. Its quarterly report on the night of August 1 was received coolly by the market crowd and initially led to a decline in its stock price, with a three-day retest of a $200+ support area. Later a rebound took place rather on promises to invest more in the further extension of Apple's U.S.-based manufacturing program to repatriate more capitals and save costs on transborder levies. Well, even if this pledge is fulfilled, the results will not affect the financial well-being of the company anytime soon.

On August 6, Apple confirmed an additional $100 billion investment agreement by its CEO Tim Cook with the White House administration. This may enhance Apple's previous commitment to invest $500 billion into the U.S. economy to as much as $600 billion over the next four years. Apple is going to produce 100% of iPhone and Apple Watch cover glass in America, but that was all the bright side of the Apple-related agenda. This piece of news may allow Apple's share price to rise maybe above $225, but whether a stable money flow will resume from the U.S. or China is still a question for those heirs of Steve Jobs which have lost so much of his innovativeness. A few years before, the same Tim Cook referred to potentially manufacturing iPhones in the U.S. as being not feasible because China locations had much more superior capabilities. Now he has to adapt to changing conditions, but do they promise benefits or only reduced damage?

McDonald's success in the bullish earnings' parade is another matter. If Apple is only planning to earn more money vs last year, McDonald's has already done it. Their top and bottom lines of $3.19 equity per share on quarterly revenue of $6.84 billion not only propelled the famous food chain business to 7.4% and 5.4% YoY growth, but also put it on track to nearly hit an all-time record of the last Christmas season, even though it's not Christmas yet. If you are interested in more details on how they achieved it, then a limited-time Happy Meal offer tied to the "Minecraft" Movie, McCrispy Chicken Strips as a permanent menu item and the $5 meal deal combined with the "buy-one, add-one for $1" offers were cited as drivers. Even MCD sales in its so-called "business segment" where classical brand restaurants are operated by local partners, reportedly jumped 5.6%, with demand recovery also in countries like the U.K., Canada and France. This is much more indicative of the overall consumer spending sentiment for a larger number of retailers, even when considering the example of budget-conscious diners amid some global uncertainty.

That's why yesterday's 3% to 3.5% gain in McDonald's stock is worth more to us as a more important psychological contribution to a future railing mood of traders than 5% or more in Apple stock. Strong Buy recommendations for trading shares of McDonald's, with an average target price levels from leading investment houses above $330 per share, means an extra 7% and may support a similar increase in targets for the S&P 500, from currently 6,350 by the same 7% to about 6,800.

Cosmos (ATOM) is down by 1.3% to $4.194 this week, underperforming Bitcoin (BTC), which has slipped by 0.3% to $113,910. ATOM continues to trade sideways within the $3.500–5.250 range that has contained price action since February. In July, the token attempted a breakout, rallying 28% to $5.311, but was ultimately held back by negative market sentiment.

A major software upgrade Gaia v25 was announced in early July, aiming to simplify the rollout of new features by developers. While promising in the long term, it hasn’t been enough to trigger a breakout above the upper boundary of the consolidation zone.

For now, ATOM remains range-bound, and without a clear catalyst, breaking above the $5.000–5.250 resistance area will likely remain a challenge. Traders and investors may want to stay on the sidelines until the token firmly clears this level, which could then open the way for a move toward the next target at $7.500.