Good Afternoon. Seventy-one years ago today, Disneyland opened its gates in Anaheim. Walt Disney bet that families would drive to the middle of nowhere for a curated fantasy, and the parks became a permanent moat that streaming can't replicate.

Netflix, which spent a decade convincing us the couch was the new Main Street, learned this morning that magic is harder to guide.

The stock's off ~7.5%, chip names are having their worst week since March, and the S&P 500 is closing out July's first losing week.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: 21 — the number of tankers that transited the Strait of Hormuz today, down from a typical 50+.

The news: Day three of the chip rout, and it isn't getting friendlier. The Philadelphia Semiconductor Index is now down 22% from its June 22 peak, technically bear-market territory, and the group's on pace for its worst week since March. $SMH fell 2.14% Friday, $NVDA slipped 2.10%, and $AVGO shed 0.45%. Growth-fund outflows hit $7.18B this week while value funds pulled in $3B — a $10.18B rotation gap that isn't slowing down.

Zoom out: Growth has led the S&P 500's return for nine straight months, but Momentum ETFs are rolling over hard. Some strategists call it healthy broadening. Others call it a forced deleveraging in AI names that got too crowded. Either way, the sector that carried the market since April is finally sitting one out.

Big picture: When your largest weights lose 20% in a month, the index doesn't get to sit that one out either.

Source: Reuters via Fidelity

The news: $NFLX fell 7.16% to $69.03 after guiding third-quarter revenue to $12.86B — versus Wall Street's $13B — and EPS to $0.82 against $0.84 consensus. Q2 itself was fine: revenue $12.56B up 13.4% YoY, EPS $0.80 beating by a penny. But operating margin slipped to 33.4% from 34.1% a year ago, and free cash flow dropped to $1.5B from $2.3B on a cash tax hit tied to the terminated Warner Bros licensing deal.

Zoom out: Netflix bought back a record $4.7B of stock in Q2 — the largest quarterly repurchase in company history — and still has $27B authorized. Management's confident enough to smash the buyback pedal, but the growth-rate deceleration is real: 13.4% is the slowest revenue growth since Q3 2023, and the ad-tier ramp isn't yet big enough to offset it.

What's next: Q3 hinges on Stranger Things' final season and heavier live-sports rotation. If subscriber momentum stalls into the guide-down, that's the whole streaming trade re-rating with it.

Source: Yahoo Finance

The news: $FITB dropped 2.77% after Fifth Third posted Q2 net interest income of $2.22B and expanded net interest margin 6 basis points to 3.36% — but the profit line came in weaker than analysts wanted. $RF fell 2.48% on a revenue miss, and $MTB shed 1.91%. Even the money-centers that reported earlier this week — $JPM, $GS, $MS — spent Friday giving back gains they'd earned Wednesday.

Zoom out: The setup was textbook sell-the-news. Regional banks entered earnings up 8% year-to-date on NIM-expansion hopes and Comerica-Fifth Third merger synergies. When actual profits came in mixed, the trade unwound fast. Deposits grew, margins expanded — but nothing wowed anyone.

Bottom line: Banks needed to beat to hold their gains. They didn't.

Source: MarketScreener

The news: The University of Michigan's preliminary July consumer sentiment reading came in at 54.4 — versus 51.0 expected and up from 49.5 in June. That's a 5-month high and the biggest one-month jump since 2024. Lower gas prices in early July did most of the heavy lifting, along with easing tariff anxiety after the Fourth of July trade-truce headlines.

Zoom out: Consumer sentiment has been catastrophically low all year — the June reading was the fourth-lowest of the decade. So a bounce to 54.4 sounds nice until you remember pre-pandemic averages sat around 90. Households are still stressed; they're just marginally less panicked than a month ago.

Big picture: Given how much of the S&P 500's earnings come from consumer discretionary and staples, a sentiment thaw matters. But it's a thaw, not a spring.

Source: WSJ Live Coverage

The news: Fed Chair Kevin Warsh finished his semiannual Humphrey-Hawkins testimony Friday with a closing message that boiled down to one phrase — "zero tolerance for inflation." He described himself as "laser-focused" on getting the CPI trend fully anchored below 2%, and he pushed back on any suggestion that the September FOMC could deliver a cut. Fed funds futures now price essentially zero cuts in 2026 and are starting to price a small hike risk.

Zoom out: Reuters reported today that voices favoring a hike are "swelling" ahead of the July 30 meeting, though the consensus still expects a hold. Warsh's anchored expectations firmly in one direction, and that's showing up in the growth-to-value rotation: rate-sensitive tech re-rates faster than banks and industrials when the terminal-rate view drifts higher.

What's next: July 30 FOMC. If the dot plot moves up, the chip rout won't stop at three days.

Source: Reuters

The news: Only 21 commercial tankers transited the Strait of Hormuz today — less than half a normal day. Crude flows dropped to 3.9M barrels/day from the typical 4.6M, a 15% cut to seaborne supply through the world's most important oil chokepoint. The IEA's chief warned that global energy security enters a "different regime" if the strait doesn't reopen within weeks. $USO surged 3.82%, and Brent's parked near $85.

Zoom out: US strikes expanded overnight to include bridges and a collapsed control tower at Bandar Abbas — Iran's largest commercial port. Insurance premiums for Persian Gulf shipping have tripled since Tuesday. Even if traffic normalizes next week, the risk premium's now baked into the crude curve for months.

Bottom line: Every extra day the strait stays half-shut, gasoline futures move higher. That's a headline the Fed's watching too.

Source: Reuters

The news: $TSM fell 3.35% in the US, which translates to a ~7% weekly drop in Taipei — its worst week since April 2025, even though Q2 earnings were a record. Korean giant SK Hynix's ADR dropped 13.69% across the week. The MSCI EM Asia index is off 3.3%, and the Hang Seng Tech Index fell into a correction of its own. Foreign fund flows out of Asian semis hit a five-week high, so it's not a Wall Street–only story anymore.

Zoom out: Foreign investors pulled money from the Taiwan Stock Exchange for a fourth straight week — that's the longest streak since 2023. Every domino behind the AI capex story is starting to shake: Nvidia customers, memory suppliers, foundry partners. When one tips, the rest follow.

Big picture: The AI trade was one big global daisy chain. When Nvidia sneezes, TSMC catches it in Taipei by lunch.

Source: Edge Malaysia

The news: A Reuters poll of economists shows the People's Bank of China'll leave benchmark loan prime rates unchanged for a 14th consecutive month when it announces Monday. Q2 GDP grew only 4.3% YoY — the weakest since Q4 2022 and below Beijing's 4.5–5% target — but the PBoC's holding its powder for fiscal stimulus rather than rate cuts.

Zoom out: Retail sales did rebound to +1% YoY in June, and industrial production accelerated to +5.3%. So the growth mix is bifurcating — strong external demand and manufacturing, weak domestic consumption. Goldman raised the odds of an RRR cut later this quarter, though a policy-rate cut still isn't the baseline.

What's next: Politburo meeting late July. If Beijing signals stronger fiscal support, industrial commodities catch a lift. If not, we're stuck with the same slow-motion recovery.

Source: Reuters

Q: What do you call cheese that isn't yours?

A: Nacho cheese.

A statistical measure of how far returns swing away from their average — the go-to proxy for total volatility risk.

A stock with a 20% annual standard deviation has typically moved ±20% around its mean return in a given year. Higher standard deviation means wider dispersion, wider drawdowns, and a wider gap between what you hoped would happen and what actually did.

Today's NFLX about -7.50% move is roughly a two-to-three sigma event for a mega-cap growth name — the kind of move that's supposed to happen once or twice a year, not once a quarter.

Stay Ahead of the AI Economy

Artificial intelligence is no longer just a tech story — it’s becoming one of the biggest forces shaping business, markets, jobs, and investing. The Deep View is a free daily newsletter that helps you understand what matters in AI, from major company moves and product launches to research, policy, and market trends. Read by 750,000+ people, it’s an easy way to stay informed on an industry that could define the next decade. Sign-up here.