PayPal stock is dipping on earnings, while Union Pacific and Norfolk Southern reportedly strike a massive deal. The Daily Breakdown digs in.
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Tuesday’s TLDR
- Earnings in focus with PYPL, SOFI
- Consumer confidence report on tap
- UNP and NSC have an $85 billion deal
What’s Happening?
This morning has featured earnings from a slew of firms, including UPS, Spotify, Boeing, UnitedHealth, and Procter & Gamble. Tonight, we’ll hear from Starbucks, Visa, Booking Holdings, and more.
It’s a busy week in that regard, but the economic calendar also has some noteworthy events today — namely, the JOLTS (Job Openings and Labor Turnover Survey) and the consumer confidence reports, both set to be released at 10 a.m. ET.
We’ll be looking for a strong JOLTS report to reassure investors about the labor market, and a solid consumer confidence reading to gauge the health of everyday Americans.
Zooming out, markets continue to perform well. The S&P 500 notched a new record high on Monday, clearing 6,400 for the first time. It’s now up about 8.5% on the year. The Nasdaq 100 also hit a record high on Monday and is up nearly 10% so far in 2025.
Chip stocks like Advanced Micro Devices, Nvidia, and Broadcom have helped power the latest move, with the SMH ETF set to open at record highs today.
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The Setup — PayPal
Shares of PayPal are falling this morning, down slightly in pre-market trading after the firm reported earnings. The company beat on earnings and revenue expectations for last quarter and raised its full-year outlook. Management now expects to earn $5.15 to $5.30 a share this year, up from a previous forecast of $4.95 to $5.10 a share. Venmo revenue rose 20% year over year.
PYPL stock has traded pretty well from the April lows, but keep in mind that it was north of $90 earlier this year. Investors are hoping it gets back there at some point. When we look at the chart, bulls would love to see PayPal find support above the 200-day moving average, but ultimately, they just need to see the stock stay above the $73 area.
If it can do that, its current uptrend will remain intact and the stock will be able to stay above the 50-day moving average. However, if it can’t do that, more selling pressure could ensue.
Options
As of July 28th, the January $100 calls had the highest open interest — meaning the largest open positions in the options market — followed by the December $72.50 calls, then the December $87.50 calls.
On a dip, buying calls or call spreads may be one way to take advantage of a pullback. For call buyers, it may be advantageous to have adequate time until the option’s expiration.
For those that aren’t feeling so bullish or who are looking for a deeper pullback, puts or put spreads could be one way to take advantage.
To learn more about options, consider visiting the eToro Academy.
What Wall Street Is Watching
UNP
Union Pacific and Norfolk Southern are both in focus this morning after it was announced that UNP will acquire NSC in a massive $85 billion deal. The cash-and-stock deal would form a transcontinental railroad giant and would become the industry’s largest deal ever.
SOFI
Shares of SoFi are in focus this morning as the company reported earnings, beating both profit and sales expectations. Management also gave a slight boost to the company’s full-year revenue and earnings outlook. As a result, shares are higher by more than 10% this morning. Dig in deeper to SoFi’s fundamentals.
NVO
Novo Nordisk shares are not doing well this morning. At one point, the stock was down almost 30% in pre-market trading. As sales for its key weight-loss drug waver, the firm was forced to slash its revenue and earnings outlook. Novo is also undergoing a leadership change. Check out NVO’s charts.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
