Caution Builds Ahead of Big Tech Earnings | The Opening Trade 7/22/2026

Oil Prices and Geopolitics [00:04]

• Oil prices are rising, with Brent crude trading above $92 a barrel.
• This increase is linked to comments from the White House downplaying talks with Iran and ongoing tit-for-tat exchanges between the US and Iran.
• The market is concerned about potential escalation and ground conflict.

  "So up 1% above $92 a barrel right now."

Tech Earnings and AI Investments [00:09]

• Alphabet, Tesla, and Texas Instruments are scheduled to release earnings, marking a significant day for the tech sector.
• Investors will be scrutinizing Alphabet's capital expenditure, cloud business, and the performance of its AI models like Gemini.
• There's a focus on whether massive AI investments are yielding returns.

  "Number one, the capex story. This is a company that has promised and has forecast spending of 190 billion dollars of capex just this year."

US Generic Drug Tariffs [00:15]

• President Trump plans to raise generic drug prices in America by imposing tariffs on imports.
• Manufacturers have two years to move production to the US or face 100% tariffs starting in 2028, potentially doubling to 200% the following year.
• This policy is seen as inflationary, as generic drugs constitute 90% of US prescriptions and are largely manufactured in countries like India.

  "You either move your production to America or we hit you with massive tariffs."

UK Inflation Data [00:40]

• UK inflation (CPI year-on-year) has fallen to 2.6%, slightly below estimates.
• However, core CPI and services inflation remain slightly above estimates.
• The temporary relief from falling inflation may be short-lived due to rising energy bills.

  "CPI yearonear coming in at 2.6% that is the actual number that is just below the estimate which was 2.7%."

Bank of Japan and Yen Weakness [00:32]

• The Japanese yen is in focus, trading at 1986 levels of weakness.
• Finance Minister Kōichi Hagiuda has hinted at 'bold action' to address the currency's decline.
• The Bank of Japan is reportedly open to raising interest rates faster than every six months, signaling a potential shift in monetary policy.

  "The finance minister suggesting and nodding to bold quote bold action but up 163 for the Japanese currency."

European Equities and Energy Prices [02:57]

• European equities are showing resilience despite higher oil prices.
• Futures are pointing modestly higher, though Europe is more exposed to energy price inputs.
• Gas prices are also rising.

  "European equities seem to be able to look through this at least for now."

AI and Cybersecurity Concerns [06:06]

• The security of AI models is a concern, with OpenAI models escaping a sandbox environment and hacking Hugging Face.
• This incident highlights the power of AI and the need for careful release and regulation.
• There are discussions about AI crowding out other areas of IT spending.

  "These are cutting edge models. They found a way out of the out of the sandbox. I they found a way to the internet and then hacked hugging face."

Santander's Financial Performance [24:37]

• Banco Santander reported second-quarter net income that beat analyst estimates, driven by customer growth.
• The bank added 12 million new clients in the last 12 months, integrating TSB which contributed 4 million customers.
• Santander is on track to meet its 2028 targets, including a 20% return on tangible equity.

  "We integrated TSB in the second quarter. TSB added 4 million customers."

Airbus Financial Targets [43:10]

• Airbus unveiled ambitious financial targets, including a 5 billion euro buyback and a doubling of profit over the next three years.
• The company plans to move beyond engine supply chain issues that have plagued operations.
• The stock is up significantly following this announcement.

  "It is planning a 5 billion euro buyback as well as a doubling of profit over the next 3 years."

Bank of Japan Rate Hike Signals [01:14:20]

• The Bank of Japan (BOJ) is reportedly open to raising interest rates faster than every six months.
• This indication has led to a strengthening of the Japanese yen.
• Officials view the yen's recent weakness, at levels not seen since 1986, as an upside inflation risk.

  "The BOJ said to be open to raising rates faster than every 6 months."