Gary Black Tracker

US stocks hovered near records ahead of July CPI data, with Fed rate-hike odds easing after weak payrolls. Oil rose on unresolved Strait of Hormuz tensions as Trump favored economic pressure on Iran over strikes. Long duration equities advanced, TSMC posted strong sales, and S&P FY’2026 EPS estimates continued to rise (now +30% YoY to $361, P/E 21.4x) on higher AI investment, though overall valuations offer no equity risk premium versus 10-year treasuries. We remain cautious on $Tesla(TSLA.US) amid declining long-term earnings estimates, increasing autonomous-vehicle competition, and TSLA’s extended valuation.

US July nonfarm payrolls fell by -23K, well below consensus ests of a +80K rise. June nonfarm payrolls were revised down to +20k from +57k. July avg hourly earnings +0.1% m/m vs prior +0.3%, with the year-over-year gain +3.2% vs +3.5%est.

$Airbnb(ABNB.US) +9.6% AH after posting a 2Q rev and earnings beat and guiding to stronger than expected 3Q revs. 2Q beat was fueled by strong demand by FIFA World Cup in the Americas.

$Celsius(CELH.US) -16% pre-mkt after reporting 2Q Revs and Adj EPS that missed WS estimates. CELH does not offer forward guidance.

$Doordash(DASH.US) -2% post-mkt after reporting 2Q results ahead of ests, and posting stronger than exp 3Q guidance. 2Q earnings were light vs consensus. Stock weak after the print because of higher costs and expenses associated with more orders. I believe stock will recover given strength in orders, revs, and EBITDA.

This makes no sense with 911.5M new $SpaceX(SPCX.US) shares potentially entering SPCX’s float tomorrow, which will double its size.

$Eli Lilly(LLY.US) (+5% today) now has two of the top 10 selling drugs in the world: #1 Mounjaro for type 2 diabetes (est 2026 Revs $36B), and #6 Zepbound for weight loss (est 2026 Revs $18B), plus 6 other drugs with more than $1B in expected 2026 revenues. When a pharma rep has a product platform that deep, it gives the sales rep a huge advantage to sell in both new delivery forms for existing treatments (e.g. LLY’s GLP-1 weight loss pill Foundayo) and for new treatments (LLY’s Kisunla for Alzheimer’s, which should generate $600M sales in FY’2026). At 35x 2026 Adj EPS, LLY is certainly not cheap vs +12-15% long-term rev growth and +18-20% EPS growth but it’s a great play on weight loss, type 2 diabetes, and aging.

$Eli Lilly(LLY.US) +5% premarket after the drugmaker posted 2Q sales ahead of expectations on the strength of its obesity drugs and raised FY’26 revenue full-year forecast above expectations. Foundayo revs (weight loss pill) launched in June beat expectations.

$Uber Tech(UBER.US) -3% pre-market after posting 2Q results broadly in-line with expectations but guiding to 3Q gross bookings that fell 1% short of ests. 3Q EBITDA guidance was above ests.

US stocks were mixed pre-market (SPX +0.2%, NDX -0.2%) as Trump signaled a possible Strait of Hormuz deal with Iran as early as Wednesday, tempered by Iran-backed Houthi threats to disrupt Red Sea travel. Brent rose +1.1% to $80/bbl; gold and silver gained. Notable pre-mkt movers included $SpaceX(SPCX.US) -9% on surging AI spending, $Match(MTCH.US) -10% on disappointing paying users and revenues, and $Eli Lilly(LLY.US) +3% on lackluster Wegovy pill sales at competitor $Novo Nordisk AS(NVO.US). Equities remain fully priced with 2026 EPS estimates now $346 (+25% YoY) on AI and energy gains, implying a 22x forward P/E and an earnings yield below 10yr Treasury yields for the first time since early 2024, and before that 2000. I remain cautious on $Tesla(TSLA.US) amid falling estimates, the continued commoditization of unsupervised autonomy, and an extended valuation.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ $Disney(DIS.US), $Uber Tech(UBER.US), $Eli Lilly(LLY.US), $Kraft Heinz(KHC.US), $Occidental Petroleum(OXY.US), and $Shopify (SHOP.US) report earnings today. On Friday, we get July employment numbers.

$SpaceX(SPCX.US) -6.5% post-mkt after beating 2Q rev and EBITDA ests, but investors likely selling the news after a +9.4% advance today.

$SpaceX(SPCX.US) -5% post-mkt after beating 2Q rev and EBITDA ests, but investors likely selling the news after a +9.4% advance today.

Brand leverage is one of the most powerful value drivers in investing. Brand leverage is the extension of a strong established brand to a neighboring category, which if successful can expand the company’s overall TAM and Revenue base. Examples include Porsche’s extension of the Porsche brand from the sports coupe (911) to the SUV category (Cayenne, Macan); Apple’s extension of the Apple brand from laptops and desktops to cellphones and watches; Marriott’s extension of the Marriott brand in high-end hotels to the budget hotel category (Courtyard by Marriott).

US stocks rose (SPX +0.4%, NDX +1.0%) as a global chipmakers’ rebound led by SK Hynix (+30%) and Samsung (+21%) lifted South Korea’s Kospi by an unprecedented 18%. In addition, $Amazon(AMZN.US) ‘s strong earnings last night (+12% pre-mkt) eased AI spending concerns. Apple fell -7% on weak guidance, while $Alphabet - C(GOOG.US) and $Meta Platforms(META.US) gained. $Tesla(TSLA.US) +1.5% after the WSJ reported that TSLA is considering a potential separation of its China business to pave the way for a possible merger with $SpaceX(SPCX.US). $Rivian Automotive(RIVN.US) +4% after beating 2Q rev and EBITDA estimates and guiding to stronger FY’26 results on the initial strength of R2 SUV sales, RIVN’s cheaper $45K SUV that started deliveries in June. The chip rally followed Citadel buying discounted positions from the giant Situational Awareness hedge fund, which lost half its assets. Hyperscaler FY’26 AI CapEx guidance rose only modestly to ~$730B from $700B previously.

$Rivian Automotive(RIVN.US) +2.0% AH after posting higher than expected revs and lower than expected Adj EBITDA losses in 2Q, Auto gross margin was significantly higher than expected. FY’26 EBITDA guidance was raised by +$50M higher. RIVN’s progress reflects early adoption of the new lower-priced R2 SUV, which launched in June at a base price of $45K vs $80K for the more expensive and larger R1 SUV.

$Meta Platforms(META.US) likely to follow $Alphabet - C(GOOG.US)’s trajectory after missing estimates last week - down -10% after the print, and then a quick recovery (+5% so far) as investors came to realize the results adjusted for one time items weren’t bad, and the slightly negative near-term guidance was management taking its usual conservative stance. The main difference between the two businesses - GOOG revs come mostly from search, META mainly from advertising - are punctuated by GOOG having a surging cloud business and highly popular chat bot (Gemini), while META has neither.

U.S. stocks rebounded (SPX +0.4%, NDX +0.8%) on strong $Microsoft(MSFT.US) cloud growth, reassuring investors that AI investments are paying off and no further escalation in hyper scaler Capex, outweighing inflation worries and a jump in 30-year treasury yields after the Fed held rates steady. $Meta Platforms(META.US) fell pre-market on lighter 3Q rev guidance. Investor focus remains on potential overspend on AI Capex and likely returns; S&P 500 FY’2026 EPS estimates +25% YoY to $346, equating to a 21.1x forward P/E (4.7% earnings yield) in line with 10-year treasury yields. Escalation in U.S.-Iran conflict continues. Caution advised on $Tesla(TSLA.US) due to declining long-term earnings estimates, likely commoditization of autonomous ride-hailing, and a stretched valuation.

$Meta Platforms(META.US) (-6%) posted a messy quarter, with Revs and Non-GAAP EPS ex-one time items ahead of expectations, 3Q rev guidance a little light, and slightly higher than expected FY’26 CapExp guidance. 2Q FCF came in much higher than expected. I expect $Meta Platforms(META.US) to recover over next few days as investors realize ex-one time costs, META profits were strong.

The Federal Open Market Committee voted 9-3 to hold the benchmark federal funds rate in a range of 3.5% to 3.75%, with three officials dissenting in favor of raising rates. The committee repeated their pledge to “deliver price stability” and officials will get fresh inflation data Thursday, amid mounting pressure and uncertainty around the Iranian conflict and inflation.

Visa ( $Visa(V.US)) dipped -1% AH after Visa reported 3Q earnings, revs, and payments that beat expectations, but guided to lower than expected 4Q earnings due to higher than expected expense growth.

U.S. stocks slipped as a deepening chipmaker rout spurred by the plunge in Korean semiconductor stocks and AI spending doubts outweighed gains from lower oil prices and treasury yields. Brent crude fell 3.5% to $85 amid an extended U.S.-Iran pause and Hormuz talks; 10-year yields eased to 4.61% ahead of a Fed meeting widely expected to hold rates. Big Tech and consumer earnings loom, with focus on AI capex. S&P 2026 EPS estimates have risen +25% YoY to $346 (21.4x P/E). I remain cautious on $Tesla(TSLA.US) due to declining forward earnings estimates, the likely commoditization of unsupervised autonomy technology, and a seemingly excessive valuation.

I expect $Tesla(TSLA.US) to fall below $300/share and $SpaceX(SPCX.US) to break $100/share in the coming weeks on valuation concerns. Both trade at FY’26 P/E in excess of 175x which seems excessive as AI-related valuations continue to unravel.

$SpaceX(SPCX.US) merger with $Tesla(TSLA.US) looks less likely today.

$Tesla(TSLA.US) stock (-14.5%) had its worst day since March 2025 (and before that Sept 2020) as investors took to heart management’s caution about not scaling up unsupervised autonomy until the ~40 test vehicles can demonstrate that it’s safe to do so. We have long argued that at a 180x forward P/E the market was way too aggressive in assuming TSLA gets to the finish line first on unsupervised autonomy and that other competitors can’t match its ability to scale.

$Tesla(TSLA.US) -7% this morning and if the pre-mkt decline holds is now -23% YTD vs NDX +15%.