📈 THE BULL'S DEN 📈

Banks Deliver Record Profits — While IBM Has Its Worst Day Since 1987

Tuesday lived up to the hype. All five major U.S. banks reported before the bell, alongside a cooler-than-expected June CPI print — and then, completely unrelated to the bank story, IBM detonated the Dow with a preliminary earnings warning that sent the stock down roughly 25%, its worst single-day move on record. Two very different stories, same trading session.

The Banks: A Clean Sweep of Beats

JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo, and Citigroup collectively posted about $49 billion in combined second-quarter profit, up roughly 39% from a year earlier, driven by a rebound in trading, investment banking fees, and dealmaking — with the SpaceX IPO in June contributing meaningfully to underwriting and advisory revenue across several of them.

Symbol	Company	EPS Est.	Reported EPS	Surprise %	Revenue (Reported)
JPM	JPMorgan Chase	$5.85	$6.14	+5.0%	$58.02B
WFC	Wells Fargo	$1.72	$2.00	+16.3%	—
BAC	Bank of America	$1.13	$1.21	+7.1%	$31.60B
GS	Goldman Sachs	$14.46	$20.98	+45.1%	$20.34B
C	Citigroup	$2.72	$3.15	+15.8%	$24.77B

EPS estimates and surprise percentages vary slightly by data provider (LSEG, FactSet, StreetAccount); figures above reflect widely reported consensus numbers as of July 14, 2026 close.

JPMorgan: The Headline Number

JPMorgan posted net income of $21.2 billion — the highest quarterly profit in the bank's history — with every business line posting record revenue. Equity markets revenue jumped 86% year-over-year to $6.0 billion, and investment banking fees rose 30% to $3.3 billion, the highest level since 2021. CEO Jamie Dimon called the environment "particularly favorable," while still flagging geopolitical instability, inflation, and stretched valuations as ongoing risks worth watching.

Goldman Sachs: The Biggest Beat, the Quietest Reaction

Goldman's numbers were the standout of the morning — record net revenues of $20.34 billion and record EPS of $20.98, a beat of roughly 45% versus consensus. Global Banking & Markets revenue surged 53% year-over-year. Shares initially popped nearly 8% in premarket trading, but the stock's reaction through the rest of the session was comparatively muted — some analysts read that as the market having already priced in a strong quarter, or as early questions about whether this pace of growth (particularly the 53% segment growth) is sustainable into year-end.

Citigroup: A Beat That Got Sold

Citigroup's quarter was arguably the most interesting divergence of the day. EPS of $3.15 beat estimates by roughly 16%, net income rose 45% year-over-year to $5.8 billion, and revenue of $24.77 billion was the bank's best quarterly total in a decade — yet shares reversed from an intraday high near $144 to close down roughly 4%. The read from several analysts: Citigroup's investment case still hinges on proving its multi-year turnaround is durable, not just that one quarter looked good. Good numbers weren't enough on their own to settle that question.

IBM: The Other Story of the Day

Completely separate from the bank narrative, IBM issued a preliminary Q2 warning that sent shares down about 25% — the stock's worst single-day decline on record, surpassing even its October 1987 drop. IBM projected adjusted EPS of $2.93 against a $3.01 estimate, and revenue of $17.2 billion versus $17.85 billion expected.

CEO Arvind Krishna attributed the shortfall to enterprise clients redirecting capital spending away from software and mainframe products and toward AI infrastructure — servers, storage, and memory — in the final weeks of June, partly to secure supply ahead of expected price increases tied to the ongoing memory shortage. Infrastructure revenue specifically slid about 7%, a steeper decline than the low-single-digit dip management had guided to back in April. Krishna also pointed to elevated cybersecurity caution among clients as a factor slowing decision-making on software deals.

The move rippled into other enterprise software and consulting names — ServiceNow and Salesforce both fell sharply at the open, while Accenture and Cognizant also declined — though several of those names pared losses as the session went on. Meanwhile, memory and hardware names like SanDisk, Lam Research, and AMD traded higher, reinforcing the same theme showing up across the market this month: capital is rotating toward the physical AI buildout, sometimes at the expense of software incumbents. IBM's full Q2 earnings call and formal guidance are scheduled for July 22.

The Bigger Picture

• Bank earnings confirmed what options markets were pricing in all week — this was a genuinely strong quarter for the sector, with capital markets activity as the common thread across nearly every beat.
• Not every beat was treated equally — Citigroup's selloff despite strong numbers is a good reminder that "beat the estimate" and "the market liked it" are two different things.
• IBM's move is a single-company story on the surface, but the underlying theme — clients prioritizing AI infrastructure spend over software licenses — is one worth watching across the broader enterprise tech sector in the quarters ahead.

MSTR and the Bitcoin Treasury Model: Opportunity, Stress, and the Case for Separating the Two

This one's a deep dive rather than a wrap-up. Strategy Inc. (formerly MicroStrategy, ticker MSTR) just lived through one of the more dramatic stretches in its history — a new 52-week low, a formal capital restructuring, and a sharp round-trip recovery, all inside about three weeks. It's a useful case study in a broader question: what happens to a "Bitcoin proxy" company when its own balance sheet becomes the story instead of the asset it holds? As always — this is a look at the mechanics and the numbers, not a recommendation to buy or sell anything.

What Is a Bitcoin Treasury Company, Actually?

The model, pioneered by Strategy, is simple in concept: raise capital — through stock sales, convertible notes, or preferred shares — and use it to buy and hold Bitcoin on the corporate balance sheet. The pitch to investors is leveraged, liquid exposure to Bitcoin through a regular brokerage account, without touching a crypto exchange directly.

The key metric these companies report is BTC per fully diluted share — sometimes marketed as "BTC Yield." In theory, every new dollar raised should buy more Bitcoin per share than existed before, growing the ratio over time. The model works cleanly in one direction: rising BTC prices plus accretive capital raises compound shareholder value. The risk is what happens when that direction reverses — when new shares or debt get issued not to buy more Bitcoin, but to cover cash obligations the company already has.

MSTR's Rough June — and the Snapback

Strategy currently holds roughly 847,000 BTC, with an average purchase price of about $75,650. When Bitcoin traded down into the high-$50,000s in late June, the position was underwater on a cost-basis view, and the pressure showed up first not in the stock, but in Strategy's preferred securities — STRC, STRD, and STRK — which are used to fund the company's dividend obligations. Those preferred shares fell to new 52-week lows even on days Bitcoin was flat or higher, a genuine decoupling that suggested the market was pricing company-specific credit risk separately from the underlying asset.

MSTR common stock followed: after peaking near $136 in mid-June, it slid to an intraday 52-week low of $81.81 on June 26. From there it staged a sharp recovery — climbing back above $100 by July 2 on roughly a 23% bounce, before settling in the high-$90s the following week as the rally's volume began fading. That kind of round trip in under three weeks says a lot about how much of MSTR's price action is now driven by capital-structure sentiment rather than Bitcoin's spot price alone.

The Response: A New Capital Framework

On June 29, Strategy filed a "Digital Credit Capital Framework" that formally authorizes selling a portion of its Bitcoin holdings — something the company had never done for this purpose before. The framework includes a roughly $2.55 billion USD reserve requirement (enough to cover about 12 months of preferred dividend and interest obligations), up to $2 billion in combined stock and preferred-security buybacks, and authorization to sell up to $1.25 billion in Bitcoin specifically to fund that reserve.

The most interesting piece, from a capital-allocation standpoint, is the preferred buyback authorization. Buying back preferred shares that are trading well below face value permanently retires more liability than the cash spent — a genuinely accretive move if executed. It doesn't solve the underlying tension in the model, but it's a rational response to it.

Metric	Value
BTC held (approx.)	~847,000 BTC
Average BTC cost basis	~$75,650
BTC price (Jul 10, 2026)	~$64,300
MSTR 52-week low	$81.81 (Jun 26, 2026)
MSTR 52-week high	$457.20
MSTR trailing 12-month return	≈ -77%
USD Reserve target (new framework)	~$2.55B
Next earnings date	July 30, 2026

Figures approximate as of mid-July 2026; MSTR and BTC prices move quickly and should be checked independently before relying on them.

The Opportunities Worth Watching

• A cleaner distinction between BTC and MSTR risk. Watching the two decouple — preferred shares hitting new lows while Bitcoin holds flat — is a useful, real-time signal for separating "is Bitcoin the asset under pressure" from "is this specific company's capital structure under pressure." That's a genuinely useful lens for anyone following the sector, whether or not they hold anything.
• The buyback mechanism, if executed well. Retiring discounted preferred stock with cash is one of the more textbook-accretive moves available to a company in this position — it's worth watching whether Strategy actually executes on it aggressively in the coming quarters.
• A potential Bitcoin entry signal, separate from MSTR itself. If a large, forced or quasi-forced unwind of a major corporate BTC holder were ever to occur, that kind of event has historically been the type of dislocation long-term holders look for — pressure on price that's driven by one entity's balance sheet needs rather than a change in Bitcoin's underlying adoption or fundamentals. Whether that scenario actually plays out here is very much an open question, not a prediction.

The Challenges That Remain

• Dilution mechanics cut both ways. The same fully-diluted share count that grows BTC-per-share in good times can shrink it when new shares are issued faster than new Bitcoin is acquired — and that's a live risk given ongoing ATM issuance and convertible note terms.
• Cash burn is real and recurring. Preferred dividends, convertible interest, and standard operating costs add up to a meaningful annual obligation that has to be funded somehow — Bitcoin sales, share issuance, or both — regardless of where BTC's price sits.
• Legal and governance overhang. A shareholder-rights law firm has opened an inquiry into potential securities-disclosure issues at the company. That doesn't establish wrongdoing, but it adds a layer of headline risk worth tracking independently of the balance-sheet story.
• The premium-to-NAV question. Historically MSTR has traded at a premium to the value of its Bitcoin holdings, on the theory that the vehicle offers something extra (leverage, liquidity, options market access). That premium has compressed substantially and isn't guaranteed to return — something worth understanding before treating MSTR as a simple Bitcoin proxy.

Separating the MSTR Trade From the Bitcoin Thesis

The most useful framework to come out of this whole episode might be the simplest one: MSTR and Bitcoin are not the same bet, even though the company's entire value proposition rests on Bitcoin. One is a specific, leveraged corporate capital structure with real obligations, covenants, and dilution mechanics. The other is a decentralized asset with none of those things. A person can hold a long-term view on Bitcoin's future while remaining genuinely uncertain — or outright skeptical — about whether any single leveraged vehicle built on top of it is the right way to express that view. That's roughly where this research leaves things: cautious interest in Bitcoin itself, real hesitation about company-specific balance-sheet risk, and a "watch and learn" posture on the framework's execution over the next couple of quarters.

Cash is a position too

Sitting in cash isn't "doing nothing" — it's a decision, same as buying. The trick is not confusing patience with fear. Waiting for a fat pitch beats swinging at every one.

Week Ahead: Big Bank Earnings Take Center Stage

This week's focus is squarely on the banks. Five of the largest U.S. financial institutions all report Q2 2026 earnings on the same morning, landing alongside a key inflation print — a genuinely stacked catalyst day rather than a routine earnings release.

Tuesday, July 14: The Big One

JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo, and Citigroup all report before the market open — the same morning the June CPI report lands. Options markets are already pricing in elevated volatility across the group: Goldman Sachs carries the largest expected move at 6.0%, while even typically-steady JPMorgan is priced for a 4.4% swing.

Beyond headline EPS, net interest margin is shaping up as the metric that matters most this cycle — the spread between what banks earn on loans versus what they pay out on deposits. With the Fed's rate path still uncertain, NIM trends will say a lot about whether profit growth can hold up. Credit quality and investment banking revenue round out the other key focal points.

Tuesday's Reporting Lineup

Symbol	Company	Call Time	EPS Est.	Reported EPS	Surprise %	Market Cap
JPM	JPMorgan Chase & Co.	BMO	$5.79	TBD	TBD	$901.58B
BAC	Bank of America Corp.	BMO	$1.12	TBD	TBD	$423.45B
GS	Goldman Sachs Group, Inc.	BMO	$14.51	TBD	TBD	$311.29B
WFC	Wells Fargo & Co.	BMO	$1.72	TBD	TBD	$266.73B
C	Citigroup Inc.	BMO	$2.71	TBD	TBD	$240.13B

EPS estimates as of July 11, 2026. See Entry 005 for actual reported results.

Rest of the Week

Bank earnings don't stop Tuesday. Wednesday brings Morgan Stanley, BlackRock, and PNC Financial alongside ASML and Johnson & Johnson, and Thursday adds U.S. Bancorp, State Street, and Citizens Financial to the mix, alongside heavyweight non-bank names like UnitedHealth, GE Aerospace, and Taiwan Semiconductor. It's a full week of financial-sector reporting, with Tuesday as the headline event.

Broader Context

• The current rally has largely been earnings-led rather than valuation-led — the S&P 500 is already up close to 11% year-to-date, and this week's results will test whether that pattern holds.
• New Fed Chair Warsh is scheduled to testify before Congress starting Tuesday, with markets currently pricing in a possible quarter-point rate cut as soon as September — his first testimony landing the same week as bank earnings adds an extra layer to watch.
• The general read-through expected on big banks this quarter is continued strength in capital markets activity, tied to the recent pickup in dealmaking.

Market Wrap: Week Ended July 10, 2026

U.S. Markets: A Choppy Week That Recovered Into Friday

It was a volatile week bookended by strength. Markets opened Monday on a high note, with the Dow closing at a fresh record of 53,055.91, up 0.29%, while the S&P 500 gained 0.72% to 7,537.43 and the Nasdaq jumped 1.12% to 26,121.16, helped partly by a rally in defense and drone stocks.

That optimism didn't last. By Tuesday, the Dow slipped 0.2%, the S&P fell 0.5%, and the Nasdaq dropped 1.2% after Samsung's earnings and a report that China's DeepSeek is developing its own AI chip spooked the semiconductor trade. Wednesday brought more turbulence — the Dow fell roughly 1% (over 500 points) while the S&P dipped 0.2% and the Nasdaq eked out a 0.2% gain, as U.S.-Iran tensions flared after American strikes in response to attacks on commercial vessels in the Strait of Hormuz.

Markets found their footing again by Thursday, with the Dow up 0.27% to 52,487.41, the Nasdaq climbing 1.30% to 26,206.89, and the S&P rising 0.81% to 7,543.64, powered by a rebound in chip stocks. Friday closed out the week on a firm note: the Dow gained 0.3%, the S&P rose 0.4%, and the Nasdaq added 0.3%, with both the S&P and Nasdaq finishing the week higher despite the mid-week whipsaw.

The Big Story: SK Hynix's Record U.S. Debut

South Korean memory chipmaker SK Hynix — a key Nvidia supplier — made its Nasdaq debut Friday via American Depositary Receipts. Shares opened at $170, a pop of over 14% above the IPO price, after the company raised $26.5 billion — the largest-ever U.S. listing by a foreign company. Other reports pegged the pop closer to 20% intraday. Peer chipmakers traded mixed on the news, with Nvidia advancing 4% and AMD rising 2%, while Broadcom and Intel slipped. The listing effectively served as a market referendum on the AI-memory trade, and investors treated it as a vote of confidence.

Canada / TSX

The Toronto market had a strong week, closing near record territory. The S&P/TSX Composite finished Friday at 35,305.31, up 0.30%, extending Thursday's 0.76% advance to 35,200.45. The catalyst was a stronger-than-expected domestic jobs report: Canadian employment rose by 18,200 in June, building on May's 88,000 gain, while the unemployment rate unexpectedly fell to its lowest level in nearly two years. Financials were mixed, retailers gained, and tech names like Shopify rose roughly 4%, riding the wave from SK Hynix's blockbuster U.S. offering. On the flip side, gold miners pulled back — Agnico Eagle, Barrick, and Franco-Nevada all declined as gold prices eased.

Other Threads Worth a Mention

• Geopolitics drove volatility all week — renewed U.S.-Iran hostilities around the Strait of Hormuz kept oil prices and markets on edge, with WTI hovering near $71/barrel and Brent above $76 by week's end.
• Micron raised its planned U.S. investment to $250 billion through 2035 (up from $200 billion) and announced a $3 billion investment in GlobalWafers' Texas silicon wafer operations.
• Meta said it plans to begin manufacturing a custom AI chip in September, aiming to boost computing power to 14 gigawatts by 2027, and rolled out an AI model update.
• Big bank earnings kick off next week (JPMorgan and others), along with results from ASML and TSMC — worth flagging as a "what to watch" for next week's post.