Daily Market Run-Down 22nd July 2026

[00:00:15]This is the daily market rundown live from the Tredero trading floor. It's Wednesday, the 22nd of July. Saudi Arabia ships turn back in the Red Sea.

[00:00:24]Gold is bid on inflation fears and Google earnings are now in focus.

[00:00:44]Good day traders. Welcome. Happy Wednesday. Yes, it's Wednesday. It is the 22nd of July and this is the daily market rundown live from the Tredero trading floor. So, let's get stuck straight into it. Yesterday, I think the key takeaway was we've now seen ships turn back in the Red Sea. This is the first time we've actually had again some sort of a flare-up in the Mandeb. Of course, up until the start of this week it was mostly just sort of verbal threats, verbal warnings. Of course, the Houthis imposed a restriction on Monday and we've now seen ships turn around and oil has taken a bit on that.

[00:01:19]We have seen of course the markets react to that and now we need to start paying attention to what the market's going to likely do with this information. Of course, there's a number of things going on. I think negotiations are very much still keeping you know, sort of a very aggressive bit out of the oil markets.

[00:01:38]This idea that you know, at any point we could see some sort of a ceasefire. We know that that 10-day sort of idea of a ceasefire is in the markets. We also know the Houthis are now willing to attack any Saudi ships within the Red Sea. So, that's another concern. And then of course, President Trump has come out and said, "Look, if if there is any attack on a ship in the Red Sea, the US will then need to do something. They will react.

[00:02:06]They will respond to that." So there's that threat as well. Now, in the Reuters this morning, there's an article about what this could look like.

[00:02:14]Is it possible? Is it feasible? And I think the key conclusion is that the US is somewhat stretched already enforcing an embargo in the Strait of Hormuz and that whilst not impossible, they are running sort of at full speed and then they've got sort of all hands on deck already in the Strait of Hormuz. So any sort of you know, sort of military transfer over to the Red Sea again, it wouldn't be the most straightforward thing to do.

[00:02:41]However, I think the article concludes that whilst the US is limited in what they can do in the Red Sea, of course so too are the Houthis in that because the Strait of Hormuz is now shut, Iran is not capable of getting a lot of military hardware across to the Houthis. So again, it's one of those things where chicken and egg, what's likely to happen first, what's likely to happen second. The point is that you know, this flare-up in the Red Sea now has implications for the markets. The markets are responding to it and we can see that again with light crude up 4% today. And I think the nature of oil changed a lot coming into this week. If you look at last week and you cast your minds back, we had that initial bit up at the start of last week and then pretty much sideways markets until late Friday afternoon where we then had that bit up and then of course this week now with this new news of ships actually turning around the Red Sea, we're starting to see that oil really start to trend a little bit higher, look a little bit more aggressive and buyers are engaging a lot more in that market. Okay? Now, there is the WTI. You can see it. As I said, you know, last week was very much a contained session. It was very much a Monday bit up and then three days of absolutely sideways trading with a breakout of course on Friday. This week again, we closed strong on Monday, but most of the move has come yesterday afternoon and into today. So, again, that's giving us the confidence that this news is being driven now by those ships turning around the Red Sea, the impact on traffic in the Red Sea. That is what's driving the price of oil. And so, front and center, this is likely to continue this bid until, of course, like we've been saying, we get that ceasefire or we get some sort of negotiations starting up again. Where there's action agreement to stop and we see that flow resuming in both the Mandeb as well as the Strait of Hormuz. Okay, so that's the calculus now is that you got to be there is a real headline risk now both ways. I think a flare-up or a ship being shot at in the Red Sea will again just put more of a bit into this oil.

[00:04:37]But likewise, if we get a 10-day ceasefire agreed, that will, of course, also put an offer back into oil. Now, that 10-day ceasefire, I think from the US's side, seemingly, they don't want to enter into until there is some sort of a an acknowledgement from Iran's side that they will not be charging for the Strait of Hormuz. Rubio came out and he was quite clear to say, "Look, we cannot set a precedent. We cannot allow for anyone to control a waterway.

[00:05:03]Otherwise, if, you know, Iran does it, then China can do it, and you know, South Korea can do it, and everyone in the world can just effectively close a waterway, which is open to all international traffic." Okay, so, from the US's side, they're looking at some sort of a an agreement that the strait will not be shut by Iran in order to enter into some form of a ceasefire. Okay? That is the calculus right now.

[00:05:26]Now, in terms of the charts, we're getting awfully close to that $92 a barrel, which, if you cast your minds back, that was the high set when the MOU effectively went into to agreement. Okay, so that was effectively the ending of the war, the ceasefire, the 60-day ceasefire.

[00:05:42]We're only $4 away from that now, and in particular this week, we're already up 10% in oil, okay? Again, this has got implications and that's what we're going to discuss now because there's the RBOB.

[00:05:52]We spoke about this chart yesterday, unchanged for two sessions, bang, up another 5 cents, okay? That's ticking higher. August is coming, summer season, peak driving season in the United States. Uh we like to keep seeing this move higher, why? Well, because drivers are going to drive, they're going to keep paying these higher prices, uh and of course these high prices are just going to be passed on to consumers and then we are going to see that inflation uh implications. That's heading into bonds. You can see, look at this week, just 2 days, 4.55 we open the week, we're eight basis points higher, okay?

[00:06:21]Bond yields are moving up again, long bond yields, not not front end, long bond yields are moving up again. Natural target is now back towards 4.70. What was that high made? It was made just prior to the MOU being agreed. So, again, this is not a comfortable situation for the US. Uh of course at the early stages of the war everyone was focused on, you know, spot WTI as having implications for the war. Now it's likely everyone's going to start looking at things like RBOB, things like the 3-2-1 crack spread, things like inflation expectations, long bonds.

[00:06:50]That's where the market focus is going to go to because that has got significant implications for markets, okay? Now, in terms of uh and and the reason why, okay? It's it's easy for the globe uh and you know, the Western world to agree to, you know, pump supply from reserves. That is is a doable thing, okay? They can take supply out of reserves and put that into the market and calm spot prices. What they can't do so easy is calm inflation. That's not you can just, "Hey, let's just, you know, do a policy and and and calm inflation down." Doesn't work that way, okay? So, inflation is a far harder genie to solve than a spot price spiking to $115 a barrel. Keep that in mind because at some point these inflation expectations are going to matter a lot for everything, okay? And then you can see it in orange, you've got five-year break-evens in the US. You can see they've catapulted uh from around call it 2.36 up to 2.40. Now, that's only five basis points, not significant, um but keep in mind we're now above the July highs.

[00:07:49]Of course, we look like we're on target to move back up towards you know, those June highs and then of course the MOU highs were somewhere around that 246. Okay, keep an eye on these break evens. Why? Because if you're a gold trader, the nature of gold suddenly shifted yesterday. Okay, gold has been in a down the real sort of downbeat assessment has been doing absolutely nothing but just drifting lower. All of a sudden price action shifted yesterday. This is like a different beast, but importantly it went bid at the same time that bond yields were moving bid. Now, typically when that happens, what it's telling you is that the gold market is starting to price in a hedge against inflation.

[00:08:25]Okay, it's very unusual. Okay, the traditional theory is yields up, gold down. That's the traditional theory. Not this year, not since the war came in. If you look at what happened in the war, of course there are those break evens in orange. What did gold do? It rallied.

[00:08:38]Okay, so that is the textbook play.

[00:08:40]That's what we learned from this war.

[00:08:42]Now, given that we're starting to see these inflation break evens shift higher, I expect gold is going to maintain this bid and that is of course our play of the day. We'll talk a little bit about that later on in today's show.

[00:08:51]So, keep an eye on the gold market and of course those break even yields. Now, the big news of course we do have Google today and I think Google is an interesting one and this is a fascinating article.

[00:09:01]They're talking a lot about how the focus for particularly you know, the the hyperscalers is all about capex, but also return on capex and also how much of their free cash flow is going to be needed and required in order to fund the capex rollout. Okay, so it's not that capex is bad. Okay, capex is investment.

[00:09:21]Don't forget mag seven companies for the last however many years have just been taking all their earnings, all their profits and basically buying back their own stock or paying it out in dividends.

[00:09:31]Okay, that's what they've been doing.

[00:09:32]Now, instead they're taking that free cash flow, those extra profits and they're investing it into infrastructure for the AI race. That's ultimately what they've been doing. Now, of course, this year we saw investors start to get a little bit of fright. It started with Oracle. Okay, there was a lot of nervousness about Oracle and how much spend they were doing, how much of their free cash flow was going into it because ultimately Oracle was going to be spending more than they were actually earning. In other words, they were going to need debt in order to facilitate the capex roll out. Okay? Now, it's starting to look similarly eerily similar for most of the other Mag 7, which is there will come a point where perhaps they won't have any more free cash flow to fund the capex roll out, and they'll then need to start raising debt in order to issuing debt in order to fund that capex roll out. And that's a little bit concerning for markets because it's okay if there's a guarantee that down the line that infrastructure, you know, roll out will deliver returns, will deliver more earnings. Okay, that scenario is a positive scenario, but we're not yet at the stage where investors are convinced that that capex roll out is going to produce significant returns. Okay, so it's the sort of the argument of being, you know, sort of short or perhaps not as aggressively long Mag 7 is there is a concern around future earnings, you know, sort of expectations and whether or not they will be able to get those returns back from the AI race.

[00:10:54]Okay? Go get a Go get ahead of this.

[00:10:56]Read into this. It's quite an interesting one. I think the key summary of what you know, what they're saying is that effectively for 2025, ultimately the capex roll out, you know, is is going to be shifting quite aggressively, and ultimately for every one dollar 57 of additional investment in capex, there's only going to be one additional dollar of cash flow. Okay, so you can see how that's problematic problematic as a long-term thing. Okay, if it's a short-term, and we start to see those earnings pick up and that cash flow pick up as a result aggressively, then fine. Everything's justified, and of course, we will see that Mag 7 start to shine again. Okay?

[00:11:31]Go read through that. It's quite an interesting article. Now, of course, what that means for GOOG is GOOG is the first uh of the hyperscalers, so it's going to get very close attention. And there's a few things we're going to watch out for, but I think the one thing to pay attention to is to understand in terms of the Mag 7, in terms of the hyperscalers, how is GOOG performing?

[00:11:46]What we can see is, of course, most of the Mag 7 uh is pretty much flat to down over the last uh 2 to 3 months. Okay, if you go back all the way to sort of mid-May, uh they're mostly more kind of flat to down. We can see the only one that's bucking that trend is, of course, Apple. It has been the star performer in the last 2 to 3 months, followed by, of course, GOOG and NVIDIA. Okay, they are the three, let's say, outperformers. Uh they're doing a hell of a lot better than the other Mag 7. And so, GOOG is a is an interesting one because if they're an outperformer and their stock underperforms today uh and the news that's driving that underperformance uh is effectively the same news for all the CAPEX players, it does mean we're going to have a very, you know, sort of potential good opportunity to trade uh over the next couple of sessions. Okay, why? Well, because if it's uh if it's news that impacts GOOG that affects all the high hyperscalers, markets will just make the assumptions. Okay?

[00:12:37]Now, in terms of GOOG, uh it's not exactly the most bullish-looking weekly chart. Uh what we can see is that the high was pretty much almost made back uh on the previous earning season, uh and it topped out around $400 and we're down around $50 since then. So, it's been adrift lower, it's not been sort of a a V-reversal type play, but it has been a constant week over week over week drift lower. Okay, which doesn't exactly point to a lot of confidence in the stock. Uh for today's earnings, uh the options markets are looking at around a 5% move either up or down. And I think the key three takeaways that everyone wants to listen out for, it's pretty much the same things we listen out for all the earnings for the hyperscalers, is about, of course, the cloud momentum. What does that looking like? What's their projected revenue from cloud? Of course, that is uh the cash flow, the additional cash flow uh that GOOG needs to generate to justify the CAPEX spend. Okay, so, they better be growing that significantly and it's not just about this quarter or next quarter. It's about well, what does it look like going forward? Okay, so cloud momentum is going to be very important. That stalls, of course, it's got a lot of problems for the stock, but it'll also have problems for the other hyperscalers.

[00:13:40]Okay? Then in terms of capex, of course, that's still always a focus. We know they're going to keep spending aggressively, but any hint of a slowdown, any hint of a, you know, ultimately that they may not need as much as expected. Uh any hint of that the markets will take a little bit of nervousness on this. Uh and of course, the flip side, keep a very close listen out for demand for chips. Okay, we know that the demand for chips is robust and it's obviously the hyperscalers that are going to tell us a lot about that demand. So, listen out for that carefully and then of course, Google makes most of its revenue from ads and so keep a close eye on that. They you know, is there any impact from some of the AI, the likes of Anthropic, is there any challenge to ultimately their dominance in the ad space? Yes or no, again, that will impact the stock and of course, the broader market. Okay? Keep a close eye on that. Google is big enough to drive sentiment in the markets and like I said, right now sentiment is fragile. Okay, yields are pushing higher, oil's pushing higher.

[00:14:36]We can see there's been a little bit of speculation come back into the markets the last two, three sessions, Bitcoin up, chips up, you know, everyone is feeling happy again.

[00:14:46]But ultimately, there is a little bit of nervousness, there's a little bit of risk off sentiment in some of the markets. So, like I said, Google underperforms, Google has a bad earning session, don't be surprised to see that filter over into Europe tomorrow.

[00:14:57]Okay, and there's our play of the day. I think for the first time, like I said, price action shifted. What do I mean by it? Well, we can see of course, if we go back to yesterday, we really got the straight line bid out of nowhere with the market then accepting value higher.

[00:15:09]We call that a P-shaped distribution.

[00:15:11]Okay, so it was quite a trend like day for gold and if we look at today, it's literally just open and gone straight back bit up again. Okay, very, very un-unusual type price action. It's a price action that really does show us that buyers are now intentional.

[00:15:23]Uh we didn't even get back to yesterday's V pop, which really tells us those buyers had come into today's session just wanting to buy. Okay? Now, a couple of key levels to watch out for.

[00:15:33]Keep an eye on that 4100. Uh it coincides with of course the highs made back last week. Uh it did have a pretty decent reversal off of some key news last week. Uh and so I think it's an interesting area to keep an eye on. I think if we hold above that, I do think gold's going to maintain that. But like I said, I think gold is now bidding up on inflation expectations, and that doesn't just stop overnight. Okay? The risk, of course, should we get a 10-day ceasefire, watch out. I suspect you drop below 41, you keep going down. Okay?

[00:16:00]There are buyers in this market. It's a buyers market now. 4100 is the level to start buying, looking for of course an extension of uh the overnight highs, or at least a retest. I think that's probably a very sensible play of the day. Okay? And then finally, our calendar, it's Google, it's Tesla after the close. Watch the oil inventory data.

[00:16:17]Like I said, in oil is now sensitive. Uh you know, watch for those bigger than expected draws. Uh that is going to again flare up this idea of how many barrels are left before we hit uh you know, problematic areas. So again, nothing really points right now to a scenario in which oil is going to have a downturn, except for of course uh some form of a 10-day ceasefire. Okay? That's a wrap for today. If you have any other questions, comments, likes, subscribes, all those wonderful things, do post them in the comment section. Don't forget to like and subscribe, of course, and otherwise, good luck out there. Manage your risk. Go make some money.

[00:17:21]>> Mhm.