News and analysis

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.

Construction equipment maker Caterpillar (CAT) is back in the spotlight, just being stuck in a phase of disappointing pullback, less than a week after the recent hit to its historical high at $441.15. I described many signs of the firm's long-term strength about one year ago, in early August 2024. At that time, the stock was trading at $325+ then quickly added more than 25% to its market value to knock several times at its next saturation ceiling area above $410 in winter. Next, it was back at $325+ once again by early April after the crowd mostly decided to fix profits. The further launch of protracted tariff battles provided CAT buyers with excellent bottoms under $270, followed by a creeping 65% rally in less than four months. That was unparalleled for the entire industrial segment during this year, and now the quarterly earnings gave it a reason to wallow into a rather fast but probably short-lived correction.

Caterpillar share price lost initially 3% to below $420 on the pre-market on Tuesday, as solid demand for energy and construction equipment to repair pretty worn infrastructure of U.S. roads, bridges and transhipment hubs led the stock to nearly repeating of its absolute revenue record at $16.6 billion vs consensus estimates of $16.27 billion, but failed to generate the appropriate profit margin as the company announced its Q2 EPS (equity per share) of $4.72 only, $0.18 worse than the average expert forecast of $4.90. This meant they sold more energy and transportation equipment for example, at higher prices for customers, but growing inner costs and tariff impact reduced net income. The company CEOs admitted they suggest net incremental tariffs of approximately $1.3 billion to $1.5 billion for the full year of 2025, with $400 million to $500 million expected in Q3 already.

I don't think this should be a reason for sentiment to reverse, so that the asset would barely dive below $400, and even the range near last winter's highs (between $410 and $420 per share) could serve well as new support. If a one-off drop below $400 does happen, then my worst-case scenario is that the bottom could be around $380, but that's not the base case. The company's potential to participate broader in power generation and data centre building may also help to overcome some current challenges in earning more money on its traditional construction and mining machines businesses where it is still a pure global leader. Thus, I prefer to keep driving my cautiously optimistic way concerning Caterpillar. Consider resuming a Big Long strategy here rather sooner than later - perhaps in a couple of weeks or so, once the dust from quarterly report would settle a bit.

It's also worth noting that earnings may not have jumped as much as Wall Street expected, and are still far from last year's ideal of $6 per share, but still it rose by 18% QoQ despite all tariff headwinds and other economic uncertainties. Its operating profit even added 18% YoY, while adjusted operating profit (corrected by currency fluctuations) climbed 22%. Caterpillar has strong cash flow, at $2.4 billion in its Machinery, Energy & Transportation segment in Q2 2025, only slightly below the $2.5 billion generated in a very successful and record-breaking Q2 2024. Here is also another 7% increase in Caterpillar's quarterly dividend, in the 5th consecutive year with a high single-digit quarterly increase in payment for shareholders. As to the company's forward guidance, it expects 2025 sales to be "slightly higher" vs 2024, compared to its previous quarter’s estimate of "flat to slightly down" which did not prevent CAT shares from rallying in the previous three months.

Neo (NEO) is rising by 3.6% to $6.06 this week, outperforming Bitcoin (BTC), which is up just 0.2% to $114,581. The crypto market is showing signs of recovery after last week’s sell-off. Neo recently dropped to a strong support level at $5.00 and quickly found footing for a rebound. This level has only been touched five times in the coin’s history, each time resulting in a significant bounce. With improving market sentiment, Neo appears well-positioned for a strong move upward, potentially targeting the nearest resistance at $10.00.