To The Moon

US’s S&P 500 hit another record-high close on Tue, 22 Jul 2025, as investors chose to:

• Focus on recent and upcoming quarterly reports.

• Watched for signs of progress in US trade discussions.

When 4pm came around:

• DJIA: +0.40% (+179.37 to 44,502.44).

• S&P 500: +0.06% (+4.02 to 6,309.62). Advancing issues outnumbered falling ones by a 4.3-to-1 ratio.

• Nasdaq: -0.39% (-81.49 to 20,892.69). Recorded 73 new 52-week highs and 41 new 52-week lows.

Trading volume on US exchanges was relatively heavy, with 18.8 billion shares traded, compared with an average of 17.7 billion shares over the previous 20 sessions.

Sector performance.

In a rising S&P 500 index, the top 3 performing sectors on Tuesday were: (see above)

• Healthcare (XLV) at

  +1.86%.

• Real estate (XLRE) at +1.74%.

• Materials (XLB) at +1.38%.

Q2 Earnings - so far.

Q2 earnings season has hit full stride, with nearly one-fifth of the companies in the S&P 500 having reported.

According to LSEG, of the 100 companies reported, 79% have beaten analyst expectations.

Analysts expect YoY S&P 500 earnings growth of +7%, on aggregate, a sizable improvement over the 5.8% growth predicted as of 01 Jul 2025, per LSEG.

$General Motors(GM)$ - one of US major car manufacturers, reported its earnings on Tuesday.

However, it was not with a happy ending:

• Earnings per share (adjusted) : $2.53 vs $2.44 expected vs Q2 2024’s $3.06; that’s a -17.32% decline.

• Revenue: $47.12 billion vs $46.28 billion expected vs Q2 2024’s $47.97 billion, that’s a -1.77% fall.

• Net income (attributable to stockholders): was $1.9 billion vs Q2 2024’s $2.93 billion; that’s a -35.4% fall. 

• Both year-over-year declines mark GM’s first since Q4 2023.

• Revenue decrease also reflect the biggest year-over-year drop since Q4 2021.

Trump Tariff’s effect.

The big revelation from GM’s Q2 earnings was the $1.1-billion hit from tariffs.

Media has chosen to report that US largest automaker’s (by sales) earnings have beaten analyst expectations, supported by strong sales of its core gasoline trucks & SUVs, completely ignoring that Q2 earnings were lower than a year ago.

Outlook & Q3 Guidance.

GM management:

• Revised annual guidance - lowering it to an adjusted core profit of between $10 billion & $12.5 billion, due to impact from Trump’s tariffs.

• Expects Trump’s tariff impact to worsen in Q3 2025.

• Kept the earlier estimate that trade issues could cut profits by $4 - $5 billion in 2025.

• GM said it would take steps to mitigate at least 30% of that impact. Using mid point $4.5 billion, it works out to be $1.35 billion. (see below)

Domestic Investment.

On 10 Jun 2025, GM announced it will invest $4 billion in several American plants.

That included moving or increasing production of two Mexican-produced vehicles to US plants.

In addition, on 15 Jul 2025, GM also announced it will move production of a gas-powered SUV and add manufacturing of pickup trucks to state of Michigan. (see above)

In short, profits will still be affected by Trump’s tariffs. The $4 billion investment will not see its benefits until 1½ to 2 years later (earliest).

Regardless how ‘positive’ GM has positioned its earnings, guidance and outlook, market has not been swayed by the theatrics.

As a result, GM fell by -8.12% (or -$4.32) to close at $48.89 per share on Tuesday. (see above)

Looking at GM’s pre-market stock price, the stock pull back is expected to continue for another day, at least.

If GM, US biggest carmaker (by sales), had such a tough call with its Q2 earnings, don’t really need a genius to guess how $Stellantis NV(STLA)$ & $Ford(F)$ will fare when they report their earnings on July 29 - 30, respectively right ?

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