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EIA reports higher than expected natural gas storage change of 48B in the US
The United States Energy Information Administration (EIA) reported a natural gas storage increase of 48 billion cubic feet on July 25, 2025. This was higher than the expected 38 billion cubic feet.
The Australian dollar struggled against the US dollar, trading between 0.6430 and 0.6420 due to the increasing strength of the US dollar. Meanwhile, the Euro gained ground against the dollar, reaching 1.1460 despite the US dollar’s overall strength.
US stock indices declined, reversing earlier gains, while Meta and Microsoft held onto most of their profits.
Major US stock indices ended lower, giving up earlier gains. The NASDAQ, which had risen by 327 points, closed down 7.23 points.
The Dow Industrial Average fell by 330.30 points, finishing at 44,130.98, after peaking with a gain of 204.54 points. The S&P dropped by 23.51 points, and the Russell 2000 decreased by 20.74 points.
Market Winners And Losers
Meta and Microsoft retained most of their gains after reporting strong earnings. Meta’s shares rose by $78.23, while Microsoft increased by $20.26 after market hours. Apple’s Q3 2025 earnings beat expectations, with EPS at $1.57 and revenue of $94.04 billion, boosting its shares by $3.80. Coinbase reported Q2 2025 earnings with EPS at $5.14 but fell short of EBITDA expectations, leading to a share price drop of $16.21. Stryker reported better-than-expected Q2 2025 results, with adjusted EPS of $3.13, but its shares fell by $14.78. First Solar also exceeded expectations, showing EPS at $3.18, and its shares rose by $7.27. Amazon beat EPS expectations but missed on AWS net sales, resulting in a decline of $7.13 in its stock price.Market Warnings And Strategic Observations
Today, July 31, 2025, highlights a significant warning in the market. The NASDAQ’s drop from a 327-point gain to a flat close shows a classic reversal pattern. This implies that buying pressure is fading, and traders should brace for increased volatility. This weakness indicates that even impressive earnings from companies like Meta and Apple can’t support a rally. The CBOE Volatility Index (VIX) surged over 15% to close at 15.2, its highest in a month. Buying call options on the VIX could be a smart move to profit from the rising fear expected in August. The reaction to after-hours earnings is revealing. When firms like Amazon and Coinbase surpass profit estimates but their stocks decline, it shows the good news is already factored in. This “sell the news” response serves as a bearish sign, indicating limited upside potential. This behavior fits into a broader context. The latest CPI inflation report showed a rise to 3.4%, higher than the 3.2% expected by economists. This keeps pressure on the Federal Reserve and unsettles investors hoping for rate cuts. We should monitor the Russell 2000 index closely, which underperformed today. This suggests the broader market weakness extends beyond major tech stocks. We believe buying put options on the IWM, an ETF tracking the Russell 2000, is a wise strategy for potential downturns. The current market situation feels reminiscent of the choppy conditions from late 2023, where rallies consistently stalled at significant levels. The CBOE’s total put/call ratio has also risen to 0.95 from a low of 0.80 last week, indicating that savvy investors are starting to hedge against declines. Given the significant reversal, purchasing near-term put options on the QQQ, the ETF tracking the NASDAQ 100, appears to be a key strategy. Today’s inability to maintain gains suggests a test of lower support levels in the coming weeks. We should focus on protecting against a pullback rather than chasing rallies. Create your live VT Markets account and start trading now.Apple exceeds expectations in Q3 2025 with record revenues and sales growth across all segments
Apple announced impressive third-quarter results, showing its biggest revenue growth since December 2021. Earnings per share reached $1.57, beating the expected $1.43. Total revenue hit $94.04 billion, exceeding the forecast of $89.3 billion.
iPhone sales brought in $44.58 billion, higher than the anticipated $40.06 billion. In Greater China, revenue was $15.37 billion, just over the expected $15.19 billion. The product segment earned $66.61 billion, compared to the projected $62.36 billion.
On the downside, iPad revenue was $6.58 billion, missing the estimate of $7.07 billion. However, Mac sales were better than expected, reaching $8.05 billion against a forecast of $7.3 billion. The Wearables, Home, and Accessories segment earned $7.40 billion, falling short of the $7.78 billion estimate.
Apple noted that nearly 10% of its sales growth came from consumers making early purchases due to upcoming tariffs. The company also set a record for June quarter revenue, with double-digit growth in iPhone, Mac, and Services across all regions.
These strong results indicate that Apple’s core business remains robust, mainly driven by iPhone sales. As a result, we can anticipate a positive movement in the stock price soon.
With earnings now out, the high implied volatility from options is expected to decline. This “IV crush” means it will be cheaper to open new positions in the coming weeks. Traders betting on this drop in volatility may be cashing in their profits now.
We should also note that some sales were advanced due to tariff announcements. This could mean that the current strong numbers might take away from future demand, possibly affecting results for the next quarter. This creates uncertainty as we approach the end of the year and the new iPhone launch.
The overall market situation adds more caution, with the VIX staying low around 15 for most of July 2025. New government data showing inflation rising to 3.1% has raised concerns about Federal Reserve actions, which could limit how high stocks rise despite good news.
Reflecting on the past offers a warning. Last time growth was this strong was in December 2021, after which the stock peaked early in 2022 before a sharp decline. History shows that a standout quarter can sometimes precede a correction.
Additionally, both iPad and Wearables revenues fell short of expectations. While the iPhone drives the company, these misses indicate that some of Apple’s product lines face challenges. This might suggest a change in consumer spending habits.
The Euro weakens against the US Dollar, declining for the sixth consecutive day near lows
The EUR/USD currency pair is close to a seven-week low but remains above the key support level of 1.1400. The US Dollar’s strength has kept the Euro under pressure for six days in a row, with the US Dollar Index reaching a new two-month high near the 100 mark.
In July, Germany’s Consumer Price Index (CPI) rose by 0.3% month-over-month, while the annual rate held steady at 2.0%, aligning with market expectations. Additionally, US data revealed that the core PCE Price Index grew by 0.3% month-over-month in June, with a yearly increase of 2.8%, slightly exceeding the forecast of 2.7%.
US Economic Indicators
In the US, personal spending rose by 0.3% in June, outperforming May’s data, while personal income also increased by 0.3%. Initial jobless claims dropped to 218K for the week, falling below expectations, highlighting a tight job market. Germany’s mixed inflation signals did not help the Euro. The monthly CPI was 0.3%, just above the 0.2% forecast. Meanwhile, the Eurozone Unemployment Rate decreased to 6.2% in June, indicating a strong labor market in the region. The Euro showed strength against the Japanese Yen, as shown in the day’s currency heat map. The ongoing strength of the US Dollar keeps the EUR/USD pair under pressure. The main point is the contrast between a strong US economy and a weaker outlook for the Eurozone, which is likely to influence trading in the upcoming weeks. The critical support level at 1.1400 is the area to focus on. Recent US data from July 2025 supports this perspective, showing persistent core inflation and a tight labor market. The Federal Reserve has maintained a “higher for longer” stance on interest rates throughout 2025, giving them little reason to adjust their approach. This stands in contrast to the European Central Bank, which has indicated a more cautious stance due to some economic weaknesses in the Eurozone.Derivative Trading Approaches
For those trading derivatives, a bearish outlook on the EUR/USD seems reasonable. One strategy could be buying put options with a strike price below 1.1400, which allows positioning for a potential drop. This method defines risk if the support level holds and the pair rises instead. It’s also important to remember that major support levels can lead to short-term rebounds before breaking. An alternative approach is to sell out-of-the-money call credit spreads, allowing for premium collection while betting that the pair won’t rise significantly from current levels. This strategy is more conservative, benefiting from either a continued decline or sideways movement. Looking back, in early 2024, the EUR/USD faced a similar prolonged test near the 1.0950 mark before finally breaking down after several weeks. As we approach the 1.1400 level, we might see an increase in implied volatility, which raises the cost of options but also enhances potential rewards. This scenario supports strategies that can take advantage of significant moves in the coming weeks. Create your live VT Markets account and start trading now.DexCom’s stock falls despite earnings beat and 15.2% sales increase in Q2
DexCom, Inc. reported adjusted earnings of 48 cents per share for the second quarter of 2025, beating expectations by 6.7%. This is up from last year’s earnings of 43 cents.
Revenues increased by 15.2% to $1.16 billion, surpassing projections by 3.1%. This growth was fueled by strong demand, especially in the type 2 diabetes market, and recent access gains.
However, DexCom’s shares fell by 5.5% in after-hours trading on July 30, 2025, even though they are up 9.9% so far this year. This decline comes amidst a 7.3% drop in the industry.
Sensor and other revenue, which makes up 97% of total revenue, grew by 18% to $1.12 billion. In contrast, hardware revenue dropped by 31% to $39.3 million.
In the U.S., revenues went up 15% to $841 million, while international revenues rose 16% to $316.1 million. However, their adjusted gross margin fell to 60.1%, down 340 basis points from the previous year.
DexCom also reported a 9% increase in research and development costs, totaling $148.2 million. Adjusted operating income rose by 13.5% to $221.8 million, although margins were slightly lower.
The company expects revenues for 2025 to be between $4.6 billion and $4.625 billion, signaling 14-15% growth. They anticipate a gross margin of around 62%.
Product innovations include the new 15-day G7 sensor and the Stelo biosensor app, which has over 400,000 downloads. They are also launching an AI-powered Smart Food Logging feature for better diabetes management.
Despite expected short-term margin pressures, the company remains positive about its gross margin outlook. Kevin Sayer will step down as CEO in early 2026, with Jake Leach taking over.
The planned competitive bidding program for Medicare continuous glucose monitoring (CGM) could be challenging, but DexCom is confident in its strong market position. The company is expanding its reach to about 6 million new lives, with a goal of 25 million. With significant cash reserves and a growing customer base, DexCom is well-placed in the CGM market.
We are seeing a typical “sell the news” pattern with DexCom after its earnings report on July 30. Despite exceeding revenue and earnings forecasts, the stock’s drop suggests that the market is worried about declining gross margins. This pressure on profit is the main concern right now, overshadowing the positive revenue growth.
From an options perspective, this event has changed the landscape. The implied volatility for DXCM, which spiked over 60% before the announcement, has already begun to decrease sharply to around 45%. This drop in post-earnings volatility makes selling options more appealing than buying.
Market concerns about margins are heightened by external factors. Reports from mid-July 2025 revealed that competitor Abbott received an accelerated FDA review for its next-generation Libre 4 sensor, raising fears of a price war. This situation makes it unlikely that DXCM shares will reach new highs anytime soon.
Looking at the stock’s history, we’ve seen similar post-earnings dips in late 2023 and mid-2024. In those cases, strong user growth was also overshadowed by worries about future profitability, leading to short-term declines. This pattern suggests that the current drop is part of a recurring theme rather than a new problem.
Given the solid growth drivers, like the new Stelo biosensor and broader market access, a complete drop in the stock price seems unlikely. The recent sell-off could offer opportunities for strategies that bet on a floor price, such as selling out-of-the-money put spreads. This approach allows us to earn premium while managing risk in case of temporary dips due to margins concerns.
In the coming weeks, we expect the stock to enter a consolidation phase as traders balance the positive sales growth against the negative margin pressures. The upcoming CEO transition in 2026 adds some long-term uncertainty but is unlikely to affect short-term trading. Therefore, we are considering strategies that profit from the stock trading within a certain range.
Inflation pressures rise despite calls for rate cuts, as tariffs increasingly affect durable goods prices
The latest U.S. core PCE inflation data shows a 0.26% increase in June. This is close to PIMCO’s forecast of 0.25% and slightly below what the market expected at 0.3%. The annual inflation rate remains at 2.8%, which is above the Federal Reserve’s target of 2% but still considered manageable.
PIMCO warns that if month-over-month growth reaches 0.3%, it may signal changes in inflation trends, with tariffs starting to impact consumer prices. Some companies that previously absorbed added costs are now passing these on to customers, leading to a rise in durable goods inflation.
Durable Goods Inflation and Supply Chains
Durable goods are closely linked to global supply chains and are especially affected by tariffs. PIMCO notes an uptick in durable goods inflation on a six-month annualized basis, which raises concerns about the overall inflation path. PIMCO is a significant player in the global bond market, managing over $1.8 trillion in assets. Their insights are influential due to their in-depth research and impact on financial markets globally. The June 2025 inflation data was largely as expected, but the annual rate remains steady at 2.8%, well above the Fed’s target. Ongoing price pressures complicate the discussions around rate cuts from some members of the Fed board. It’s now important to dig deeper for signs of where inflation might be headed. A crucial point is the rising pressure on durable goods prices, which are significantly influenced by global trade and tariffs. Many companies initially absorbed these costs, but they are now beginning to pass them on to consumers. This could indicate the start of a new phase of inflation, driven by supply chain issues rather than only demand factors.Implications for Interest Rates and Market Volatility
This situation complicates the case for anticipated rate cuts. The data suggests that the Federal Reserve may need to keep rates higher for a longer period to tackle this new inflation challenge. This mismatch between market expectations and economic reality may lead to trading opportunities in the coming weeks. Looking back to the 2018-2019 trade disputes, we saw tariffs on goods like washing machines cause price increases of over 12% in just one year. Recent data from the Bureau of Labor Statistics shows a 4% rise in import prices for consumer electronics through the second quarter of 2025. History suggests we should take the signal from durable goods seriously. For those trading interest rates, it’s wise to reevaluate positions that expect aggressive rate cuts. The current pricing in the Secured Overnight Financing Rate (SOFR) futures market may be too optimistic, presenting an opportunity to bet on fewer rate cuts for the rest of 2025. This is further supported by the 2-year Treasury yield, which has remained around 4.5%, despite discussions about rate cuts. This environment also suggests a potential rise in market volatility. If inflation remains high and the Fed delays rate cuts, stock market sentiment could quickly worsen, especially in sectors sensitive to interest rates. Considering protection through VIX options or puts on the Nasdaq 100 index could be a smart move as we approach August. We should recall the inflation surge of 2021-2022, which was initially thought to be “transitory” but ended up being lasting. The early signs we’re seeing in durable goods inflation seem familiar. Thus, assuming a smooth return to 2% inflation may be risky from a trading perspective. Create your live VT Markets account and start trading now.Amazon’s Q2 2025 results surpass expectations, with optimistic guidance for Q3 revenues and income
For the second quarter of 2025, Amazon reported earnings per share of $1.68, which is higher than the expected $1.33. Their net sales reached $167.70 billion, exceeding the anticipated $162.15 billion.
Amazon Web Services (AWS) also did well, earning $30.87 billion in net sales, slightly more than the projected $30.77 billion. Looking ahead to the third quarter of 2025, Amazon expects net sales to fall between $174.0 billion and $179.5 billion, higher than the analyst estimate of $173.24 billion.
Operating Income Outlook
For the same period, Amazon’s operating income outlook ranges from $15.5 billion to $20.5 billion, with a predicted figure of $19.42 billion. Previously, both Amazon and Apple announced their earnings after the market closed. Today’s earnings report on July 31, 2025, shows a big lead in both profit and sales, signaling a bullish trend. The guidance for the third quarter is strong, with even the low end of the sales forecast exceeding analyst predictions. This indicates that the company is stronger than the market had previously believed. Implied volatility in Amazon options has likely dropped following these results. Before the market closed, the front-month implied volatility was over 50%, but it has likely decreased to around 30%. This sharp drop, known as “volatility crush,” makes options more affordable now than they were the day before. We believe the stock is set for an upward trend in the coming weeks. A similar situation occurred after the Q4 2023 earnings report, which resulted in a 15% rally in the following month. The current situation, with strong guidance, resembles those favorable conditions.Consumer Spending and Retail Sales
This positive outlook is backed by June 2025 government data showing that consumer spending remains strong. This overall trend supports the impressive retail sales numbers Amazon just reported. The healthy state of consumer spending is a boost for Amazon’s main business. While AWS sales improved only slightly, the stronger performance in the retail and advertising divisions is the key takeaway. This shows that Amazon’s profit sources are diversifying beyond cloud computing, making the company more resilient. Consequently, we are considering bullish strategies that take advantage of the lower volatility. Buying call options or implementing bull call spreads with September 2025 expirations can help us capture the expected upward movement. These trades allow us to benefit from the strong guidance while taking advantage of the newly lower option premiums. Create your live VT Markets account and start trading now.Chicago PMI for the United States reaches 47.1, exceeding expectations of 42
The Chicago Purchasing Managers’ Index (PMI) in the United States showed a reading of 47.1 for July 2025. This exceeded the expected level of 42, indicating better performance than anticipated.
In currency news, the Euro-US Dollar pair reversed its previous decline, with the EUR/USD rising to around 1.1460 even as the US Dollar remained strong.
Gold Hitting a Barrier
Gold is facing a challenge as it attempts to break past the $3,300 mark per troy ounce. This price movement occurs alongside falling US yield rates and slight declines in the US Dollar. Ripple’s (XRP) price fell to $3.09 after failing to surpass $3.32. This drop reflects weak retail demand and changing market feelings following the US Federal Reserve’s recent decision on interest rates. The Federal Open Market Committee (FOMC) is currently discussing the effects of tariffs, weighing potential risks to inflation and the job market. These talks reveal differing views on how tariffs could impact the economy. Although the Chicago PMI reading is better than expected, it remains below 50, indicating contraction. This means the economy isn’t collapsing but isn’t thriving either, leading to uncertainty about future actions from the Federal Reserve. Historically, similar recoveries from low PMI levels often result in stagnant markets instead of sustained growth.Expect Increased Market Volatility
Given the FOMC’s split opinions on tariffs, we expect more market volatility in the coming weeks. The CBOE Volatility Index (VIX) recently rose by 5% to 19.5, reflecting conditions similar to the volatile markets during the 2018-2019 trade conflicts. Buying VIX call options or options on volatility ETFs could be a wise way to prepare for sudden market changes due to policy shifts. The Euro’s rebound to 1.1460 against a strong dollar is significant. This level has previously acted as a major barrier between 2018 and 2020. If we believe this is a solid breakout, we should think about buying long-dated call options. Alternatively, if we see it as failing at resistance, short-term put options may be appropriate. Gold is facing a notable hurdle at the $3,300 level, which serves as both a psychological and technical barrier. Data from major exchanges shows many call options sold at this price, creating a ceiling for now. We plan to sell call spreads to take advantage of this resistance while monitoring falling US yields, which could trigger a breakout. Ripple’s failure to push past $3.32 is a bearish signal, especially close to its inflation-adjusted peak from 2018. The low retail demand hints at a fundamental shift in sentiment rather than just a temporary dip. For now, we prefer buying put options or taking short positions through futures until buying activity increases. Create your live VT Markets account and start trading now.S&P 500 faces uncertainty after Jerome Powell’s hawkish comments on earnings amid profit-taking
The S&P 500 dipped a bit after Fed Chair Jerome Powell’s tough remarks but is expected to bounce back, with a predicted 0.9% rise thanks to strong earnings from Meta and Microsoft. The Nasdaq 100 is also on the rise and may reach a new high, with an expected increase of 1.3%.
A recent survey shows that 40.3% of investors are optimistic, while 33.0% are pessimistic. However, there are signs of a potential peak in the S&P 500, suggesting caution for the future. The VIX has been fluctuating, indicating possible market volatility, but its recent drop suggests less fear in the market.
Volatility Breakout System Performance
The Volatility Breakout System has been successful since June 2025 and continues to spot key market trends, even during short-term pullbacks. Seasonal signals point to a possible end to the market’s short-term strength. S&P Futures are close to a record 6,469, supported by tech earnings. Crude oil prices closed higher amid positive sentiment but are under pressure from OPEC+ production changes. Predictions indicate crude prices may drop over time, influenced by market uncertainties and increased output. In this environment, careful management is essential due to low volatility and high valuations. With the S&P 500 near a record high of 6,469, we see a mix of strong tech earnings battling against tough Fed signals. This suggests we should consider strategies that benefit from continued growth while managing our risk. For instance, bull call spreads on the Nasdaq 100 ETF (QQQ) can help us stay engaged in the market while capping our maximum loss. The VIX is currently low, around 13.5, making options cheaper than usual. This calm period might be a chance to buy protection before any sudden shifts occur. We should consider buying some out-of-the-money put options on the SPY as a budget-friendly hedge against a potential drop.August And September Market Trends
As we head into August, historical data shows that this month, along with September, can be tough for the market. This seasonal weakness, combined with inflation hovering around 3.5%, supports the Fed’s cautious stance. Selling covered calls against existing stock positions could be a smart way to earn income during a potentially stagnant or declining period. The recent market rise was driven by a few key companies, like Microsoft, which reported fantastic results fueled by AI-driven cloud growth. We can use this insight to sell cash-secured puts on these high-quality stocks to earn premiums now, with the chance of acquiring strong stocks at a discount if the market pulls back. In the energy sector, crude oil is under pressure as OPEC+ plans to increase production next month. With oil trading around $82 a barrel, forecasts for a price decline seem likely as supply increases. We might consider buying puts on oil-related ETFs to speculate on this anticipated price drop. Create your live VT Markets account and start trading now.Caixin Manufacturing PMI expected to drop slightly after July’s disappointing results
The Caixin/S&P Manufacturing PMI from China is set to be released today, following disappointing official PMI results for July. The July Caixin Manufacturing PMI is expected to remain in the growth zone, but it may be slightly lower than June’s figure.
There are key differences between China’s National Bureau of Statistics (NBS) PMI and the Caixin/S&P Global PMI. The NBS PMI is compiled by a government agency, while the Caixin PMI is created by Caixin Media in collaboration with S&P Global, a private enterprise. The NBS focuses on large state-owned companies in both manufacturing and non-manufacturing sectors, while Caixin targets small to medium-sized private enterprises (SMEs).
