📈 Healthcare's Humpty Dumpty

Alphabet's AI Drugs Enter Trials, TSMC Shifts to U.S. Strategy, Tesla Tumbles on Musk Politics, Record $6.6T Trading Volume, Ingram Micro Hit by Ransomware

Author

Evelio Silvera
July 07, 2025

Starting this week, the Bull Street Daily Brief will be sent directly to your inbox from Bull Street.

Good morning.

⚡ The Fast Five → Alphabet's AI Drugs Enter Trials, TSMC Shifts to U.S. Strategy, Tesla Tumbles on Musk Politics, Record $6.6T Trading Volume, Ingram Micro Hit by Ransomware

🔎 Market Trends → Market Talk: Fed ‘could start with 50 basis point cut in December’;U.S. stock futures little changed, yields rise, after latest jobs release

And now


⏱ Your 5-minute briefing for Monday, July 7, 2025:

MARKET BRIEF
Before the Open

As of market close 07/03/2025.

Pre-Market

  • Datadog (DDOG) with a +14.92% gain, the best performer on the S&P 500.

  • No major decliner reported, as all S&P 500 sectors ended flat or in the green.

Fear & Greed

 

Markets in Review

Jobs Beat, Tech Soars: S&P 500 and Nasdaq Hit New Highs Before the Fireworks

S&P 500 rose 0.8% to 6,279.4 and Nasdaq added 1% to 20,601.1, both notching fresh record closes. The Dow Jones gained 0.8% to finish at 44,828.5 in a short trading session before the July 4th holiday.

The Big Picture:

A better-than-expected jobs report boosted investor confidence, giving the Fed cover to keep rates on hold while inflation pressures from tariffs play out. 147,000 jobs were added in June, well above the 106,000 consensus, and unemployment unexpectedly fell to 4.1%.

Markets welcomed the news with broad gains, especially in technology, which led the rally. All sectors rose except materials. The Fed’s rate path remains cautious, but the strong labor market suggests no urgency to cut.

Oil ticked down 0.7% to $66.96 as demand concerns persisted. Gold slipped 0.5%, while silver rose 0.9%, reflecting mixed investor sentiment ahead of a long weekend.

Market Movers:

  • Datadog (DDOG) +14.92%: Will join the S&P 500 on July 9, prompting a rush of institutional buying. Index inclusion often sparks passive inflows—a key tailwind for growth names.

  • Cadence Design (CDNS) +5.10% and Synopsys (SNPS) +4.90%: The US lifted export restrictions on their EDA tools to China, unlocking international demand and easing regulatory overhang.

  • SPGI +0.76%: Benefited from broader strength in data and index services as market activity ramps up ahead of Q2 earnings season.

What They’re Saying:

"Tariff impacts may have peaked... the Fed can wait and watch," — Oxford Economics

WHAT WE’RE WATCHING
Events

  • There are no events scheduled for today.

Earnings Reports

  • Today: Barnes & Noble

  • Tomorrow: There are no noteworthy earnings reports.

MARKET BRIEF
Leading News

Healthcare's Humpty Dumpty: Why Centene's 25% Plunge Could Be Your Next Opportunity

Photo Credit: Sheldon Cooper / SOPA Images / LightRocket via Getty Images

Why it matters:

When a $20 billion company loses a quarter of its value overnight, smart money starts circling—and for good reason.

Zoom Out:

Centene Corporation (CNC) just delivered a masterclass in how not to manage investor expectations. The managed care giant yanked its 2025 earnings guidance faster than a magician pulling a rabbit from a hat, citing "uncertainties around Medicaid redeterminations and rising medical costs." Wall Street responded with all the subtlety of a sledgehammer, driving shares down 25% in premarket trading.

But here's what the sell-first-ask-questions-later crowd might be missing: Healthcare stocks have a peculiar habit of bouncing back from these kinds of guidance withdrawals. Remember, behavioral finance teaches us that markets often overreact to negative news—especially when it confirms existing fears about sector headwinds.

The company's Medicaid-heavy business model faces real challenges as states complete post-COVID enrollment clean-ups, but this isn't exactly news. What's changed is management's willingness to acknowledge uncertainty rather than paint rosy scenarios that might explode later.

Key Insights:

  • The Numbers Game: Centene's withdrawn guidance of "greater than $8.08" per share represented modest growth expectations. The market's violent reaction suggests investors were pricing in perfection—a dangerous game in healthcare's current environment.

  • Sector Spillover: UnitedHealth (UNH) and Humana (HUM) face similar Medicaid pressures, but their diversified revenue streams provide better cushioning. Goldman Sachs still forecasts high single-digit EPS growth for healthcare broadly in 2025.

  • Contrarian Signal: When Jim Cramer calls something a "very painful story," seasoned investors often start reaching for their checkbooks. History shows that dramatic single-day drops in quality companies often create asymmetric risk-reward opportunities.

Market Pulse:

"This is the worst single-day performance on record" —Jim Cramer on Centene's historic plunge

Bull’s Take:

Centene's transparency about uncertainty beats the alternative of overpromising and underdelivering. For patient investors with strong stomachs, this violent repricing might just be the market's way of serving up a value meal in healthcare's drive-through.

Headlines

  • Alphabet's Isomorphic Labs to Launch Human Trials for AI-Designed Drugs (link)

  • TSMC to delay Japan plant; prioritizes U.S. to avoid tariffs (link)

  • Tesla shares drop 7% in premarket trading after Elon Musk says he is launching a political party (link)

  • Investors traded a record $6.6 trillion worth of stock in the first half of 2025 (link)

  • The Volkswagen Robotaxi That Wants to Rival Waymo and Tesla (link)

  • Ingram Micro confirms ransomware behind multi-day outage (link)

CRYPTO
Fear & Greed

 

Headlines

  • Bitcoin, Dogecoin, XRP Rise as Bessent Hints at Trade Deals Before Liberation Day Tariff Deadline (link)

  • US Secret Service Plans Worldwide Expansion of Crypto Crime Fight (link)

  • Ondo Finance to acquire US-regulated broker Oasis Pro for tokenized securities expansion (link)

DAILY SHARE
On the Socials

*Hat-tip to wallstmemes

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