Good morning. Happy Friday.
The Asian/Pacific markets mostly did well. Japan, China, Hong Kong, Australia, New Zealand, Malaysia and Singapore are leading. Europe, Africa and the Middle East are currently mostly up. France, Norway, Spain, Italy, Portugal and Austria are leading while South Africa and Hungary are down. Futures in the States point toward a moderate gap up open for the cash market.
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The dollar is up. Oil is flat; copper is up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
A good summer
There’s a lot to celebrate as August comes to an end, with a late summer rally that saw stock market indexes head back to all-time highs. The Dow Jones Industrial Average (DJI) just notched its 25th record close of the year, while the S&P 500 (SP500) is within striking distance. The Nasdaq (COMP:IND) has also regained more than 1,000 points over the past month, though there are still some tech pressures out there following the latest earnings from AI darling and market leader Nvidia (NVDA).
Macro lens: U.S. Q2 GDP growth was revised up to a solid 3.0% rate on Thursday, reflecting an upward adjustment to consumer spending. It’s all about the consumer these days, which has seen the pace of inflation come down across the board. Meanwhile, the U.S. central bank’s favorite gauge of price pressures will be released this morning at 8:30 AM ET, and expectations are for further cooling in the core PCE index (see below).
“Stocks are rapidly recovering their losses because fears that the rate of economic growth was deteriorating are fading just as quickly,” writes SA Investing Group Leader Lawrence Fuller. “On top of that, investors are adding to risk assets in anticipation of the Fed’s rate-cut cycle, which has been a harbinger of outperformance for the stock market during periods when the economy slows but avoids a recession. This is why better-than-expected economic data is now good news for the stock market, as inflation is no longer the primary concern for the consensus of investors or the Fed.”
Let’s party! Further signs of healthy spending will be seen this weekend, with a record number of people forecast to hit the roads for Labor Day. 17M people are additionally expected to pass through airport security, according to the TSA, and United (UAL) and American Airlines (AAL) said they are anticipating their busiest Labor Day operations on record. Speaking of the strong consumer, “back-to-school and college spending along with special deal days offered by retailers clearly helped,” added Jack Kleinhenz, chief economist at the National Retail Federation.
Next steps
Intel (INTC) is reportedly exploring options such as splitting its foundry business and scrapping factory projects, as the chipmaker struggles to turn around its business amid mounting losses. While such a decision would mark a major U-turn for CEO Pat Gelsinger, Intel is expected to make a smaller move first, like pausing expansion plans. Gelsinger has also admitted it’s been a difficult few weeks since Intel’s grim results. “We were determined to lay out a clear view of where we were, but also some of the next steps we needed to address, and obviously, the market didn’t respond positively.” (12 comments)
Favorite indicator
Fed policymakers are keeping their eyes peeled on the July personal income and outlay report due to its preferred measure of underlying inflation – the core PCE price index. For months, Chairman Jerome Powell said the central bank was looking for more evidence that inflation was sustainably headed towards its 2% goal, and just last week, he said it’s time to adjust monetary policy. The PCE report will also show whether consumers’ income is keeping up with inflation and whether they’re spending more than they’re bringing in. Mortgage rates are also declining due to rate cut expectations.
Tourist tax
It may soon become more expensive to visit Italy, as the country proposes higher tourist taxes to boost revenue and address growing public discontent over excessive visitors. Unsurprisingly, the proposal has not been welcomed by the travel industry, which claims the move will scare away tourists. “Not all taxes are a tax. The tourist tax, or rather the purpose tax, is not,” Italy’s tourism minister Daniela Santanchè recently responded. “In times of over-tourism, we are discussing why it is a real help to improve services and make the tourists who pay it more responsible.” (1 comment)
Today’s Economic Calendar
08:30 AM Personal Income and Outlays
09:45 AM Chicago PMI
10:00 AM Consumer Sentiment
01:00 PM Baker Hughes Rig Count
03:00 PM Farm Prices
What else is happening…
SA Sentiment: What’s currently the biggest portfolio risk?
Apple (AAPL), Nvidia (NVDA) eye joining OpenAI funding round.
Retail: Walmart (WMT) may be destroying the dollar store model.
Dell (DELL) perks up as results top expectations on AI momentum.
Ulta Beauty (ULTA) takes an ugly turn as results and forecast miss.
Amazon (AMZN) loses appeal to overturn NY unionization vote.
Best Buy (BBY) rallies after computer sales shine, guidance raised.
Lululemon (LULU) beats profit view, makes progress on margins.
Shell (SHEL) to cut 20% of oil exploration jobs in cost-cutting drive.
Dogecoin (DOGE-USD) case: Musk, Tesla (TSLA) win dismissal.
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Good morning. Happy Thursday.
The Asian/Pacific markets were weak overall. Hong Kong did well, but South Korea, Taiwan, New Zealand, Malaysia, Indonesia, Thailand and the Philippines did poorly. Europe, Africa and the Middle East are currently doing great. The UK, Denmark, Poland, France, Turkey, Germany, Finland, Switzerland, Spain, the Netherlands, Italy and Sweden are posting solid gains. Futures in the States point toward a positive open for the cash market.
————— VIDEO: The Best Long-Term Flag Patterns —————
The dollar is up. Oil is up; copper is down. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Debt relief
It’s one of the speediest and largest sovereign debt restructurings in recent times. As Ukraine launches the next counter-offensive against Russia, the country has worked out a new deal that will result in relief for its more than $20B in international bonds. “This is an important step on Ukraine’s path to restoring long-term economic stability and will enable our swifter re-entry to international markets once the security situation improves,” according to Finance Minister Serhiy Marchenko.
Backdrop: The last time Ukraine restructured its sovereign debt was in 2015, which came shortly after Russia’s annexation of Crimea. Following a full-scale invasion in early 2022, bondholders granted a two-year suspension on payments, but it has not been enough as the attacks continue on cities and infrastructure. Expenses have not only ballooned for financing Ukrainian defense, triggering broader discussions in recent months about a potential haircut and other support mechanisms.
This time around, bondholders agreed to accept nominal losses of 37% on their holdings, relinquishing $8.7B of claims. The agreement also lowers interest rates and postpones due dates for bonds, which Ukraine forecasts will save its economy $11.4B over the next three years. Elsewhere, the IMF is scheduled to meet Ukrainian officials next week to decide on loan disbursements tied to its budget outlook, while GDP warrants with other debt holders are likely to be renegotiated.
Outlook: Ukraine has raised a total of $90B to fund its war effort since 2022, but is looking for more financial help as it faces a budget deficit of $43B in 2024 and $35B in 2025. The U.S. has been one of the nation’s biggest contributors over the past two years, allocating $175B in support for the country. Of the total amount approved by Congress, $117.4B has gone towards military, security and weapons assistance, with the remaining $57.4B earmarked for budgetary funding, economic assistance, and humanitarian aid.
Nvidia recap
You called it. Trading following Nvidia’s (NVDA) results was a wildcard! The stock slumped 7% AH to $116.95/share on Wednesday despite the AI darling’s impressive results and guidance, along with a $50B buyback. Nvidia has since pared the big losses and is now only down 2% in the premarket session. Who knows if things can even turn positive once the analyst notes begin to pour in, with Hunter Wolf Research already reiterating a “Strong Buy” rating following the latest numbers. SA Investing Group Leader Victor Dergunov also commented that Nvidia’s earnings were “excellent,” but the market likely wanted more. (544 comments)
Super crash
Super Micro Computer (SMCI) plunged 19% on Wednesday after disclosing that it would not be able to file its annual 10-K report on time. “Additional time is needed for management to complete its assessment of the design and operating effectiveness of internal controls over financial reporting.” The update came a day after Hindenburg Research’s new short report claimed evidence of accounting manipulation. SA’s Alpha Picks Service, which has recommended Super Micro to investors, also weighed in on the news, while things are getting heated in the comments section. (476 comments)
DEI backlash
Ford (F) is the latest company to scale back its diversity, equity and inclusion program, joining several other U.S. firms who have revised their policies amid increasing pressure and online criticism. The automaker will no longer participate in the Human Rights Campaign’s Corporate Equality Index, while it has refocused employee resource groups and is shifting some of its corporate sponsorships. Activist and political commentator Robby Starbuck claimed credit for pushing many companies to modify or eliminate their DEI initiatives, with Lowe’s (LOW) revealing a policy shift earlier this week. (50 comments)
Today’s Economic Calendar
08:30 AM GDP Q2
08:30 AM International Trade in Goods (Advance)
08:30 AM Jobless Claims
08:30 AM Corporate Profits
08:30 AM Retail Inventories (Advance)
08:30 AM Wholesale Inventories (Advance)
10:00 AM Pending Home Sales Index
10:30 AM EIA Natural Gas Report
01:00 PM Results of $44B, 7-Year Note Auction
03:30 PM Fed’s Bostic Speech
04:30 PM Fed Balance Sheet
What else is happening…
Buffett’s Berkshire Hathaway (BRK.B) joins $1T market cap club.
Salesforce (CRM) gains as results beat estimates; CFO steps down.
Yelp (YELP) sues Google (GOOG) over alleged search monopoly.
Outage impact: CrowdStrike (CRWD) falls after slashing guidance.
ONEOK to buy Medallion, major stake in EnLink (ENLC) for $5.9B.
U.S. House committee sends warning to PBM execs over testimony.
Report: Tesla (TSLA) sought lower Canada tariff on China-made EVs.
Leadership rejig: Adam Rymer named Chipotle’s (CMG) next CFO.
Supreme Court keeps hold on student loan relief plan in place.
Will OpenAI be valued at over $100B in new funding round?
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Good morning. Happy Wednesday.
The Asian/Pacific markets were split. Taiwan, Malaysia and Indonesia led while China and Hong Kong were weak. Europe, Africa and the Middle East are currently split. France, Germany, Switzerland and Israel are up; Poland, the UAE, Norway, Hungary and Saudi Arabia are down. Futures in the States point toward a down open for the cash market.
————— VIDEO: The Best Long-Term Flag Patterns —————
The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are unchanged.
Stories/News from Seeking Alpha…
The most important stock
If history is any guide, there will be some big moves after the bell today. Nvidia (NVDA) is scheduled to report Q2 results, with options markets already showing outsized activity before the numbers reveal the latest inning of the AI revolution. The stock has moved an average of about 8% after earnings over the past 12 quarters, and should that happen again this afternoon, it would result in a market cap move of around $250B, which is bigger than many U.S. companies.
Off the charts: Q2 EPS and revenues are expected to come in at $0.64 (+138%) and $28.7B (+113%), respectively, doubling from the levels seen only a year ago. It’s even more impressive with margins in the mid-70% range despite pressure from recent capacity expansions. Most importantly, investors are going to want to hear more impressive guidance, along with the product roadmap that it will take to achieve those figures. Keep an eye on commentary surrounding the next-generation Blackwell chip (refuting reported delays?), as well as current Hopper sales, especially the newer H200 GPU.
Demand is likely intact through 2025, with many companies warning of greater risks of underinvestment in AI (rather than overspending), but there could also be pressure given sky-high expectations. Nvidia shares are up a whopping 159% in 2024, accounting for around a quarter of the S&P 500’s YTD return of 18%. This means a lot is riding on the results of this one company, which is the symbol of the AI story, the Mag7 story, the overall market story, and even the U.S. growth story.
SA commentary: “So far, so good with the signals we see from TSMC and SMCI’s most recent earnings reports. Foxconn commentary helps as well,” writes Investing Group Leader Beth Kindig. “Blackwell is on its way, the GB200s are going to crush expectations in FY2026, we are getting the green light from suppliers the delay is immaterial at this time, demand/big tech capex remains high, and let’s be real, nothing can stop what’s coming.”
Taking jobs?
Swedish firm Klarna (KLAR) is expecting a further reduction in its workforce after its employee numbers shrunk from 5,000 to 3,800 over the past year. “Not only can we do more with less, but we can do much more with less,” CEO Sebastian Siemiatkowski told the FT. “Internally, we speak directionally about 2,000.” The popular “buy now, pay later” has already imposed a hiring freeze and expects natural attrition, along with AI taking over in areas like customer service and marketing. Klarna is also considering removing a key ally as the company eyes going public in the U.S.
$1T club
Warren Buffett’s Berkshire Hathaway is inching towards joining the coveted trillion-dollar club, with its market capitalization reaching close to $993B on Tuesday. Berkshire (BRK.B) shares have gained 29.2% this year and are up 7.5% since its last earnings report. If its market value hits $1T, that would make it the eighth U.S. company to ever reach the milestone and the ninth globally. Investing Group Leader Daniel Jones believes Berkshire’s stock is worth the premium, while REITer’s Digest said its recent rebound leaves limited upside.
Pre-approved
In a move that would finally bring Wall Street to the richest U.S. sports league, the NFL is now allowing private equity players to pick up minority stakes of up to 10% in teams. The approved PE firms include the likes of Ares Management (ARES), Arctos Partners, and Sixth Street, and are expected to bring in huge investments. Recall that the Washington Commanders was sold to Apollo (APO) co-founder Josh Harris for a record $6.05B in 2023. Other leagues already allow their teams to sell up to 30% of equity to a PE fund, like the MLB, NBA and NHL. (1 comment)
Today’s Economic Calendar
01:15 AM Fed’s Waller Speech
07:00 AM MBA Mortgage Applications
10:30 AM EIA Petroleum Status Report
11:00 AM Survey of Business Uncertainty
11:30 AM Results of $28B, 2-Year FRN Auction
01:00 PM Results of $70B, 5-Year Note Auction
02:00 PM Treasury Buyback Results
06:00 PM Fed’s Bostic Speech
What else is happening…
Consumer confidence surprises to the upside in August.
Super Micro Computer (SMCI) flagged in new short report.
Former Intel (INTC) board member quit over turnaround plan?
Meta (META) shuts down AR studio to focus on other areas.
Apple (AAPL) inks new streaming collaboration in India.
Real estate check: Home prices continue to outpace inflation.
Lilly (LLY) slashes Zepbound prices by 50% for lowest doses.
Walmart (WMT) looks to expand fast-growing marketplace.
Value option drives upbeat results at Nordstrom (JWN).
Feds file new indictment against Trump in Jan. 6 case.
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Good morning. Happy Tuesday.
The Asian/Pacific markets were split. Japan, Hong Kong and Malaysia did well; China, South Korea and New Zealand were weak. Europe, Africa and the Middle East are currently split. Turkey, Germany, Italy and Israel are up; Denmark, Poland and Saudi Arabia are down. Futures in the States point toward a down open for the cash market.
————— VIDEO: The Best Long-Term Flag Patterns —————
The dollar is up slightly. Oil is down; copper is up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Drama ends
It’s official! The bidding war for Paramount Global (PARA) has ended after Edgar Bronfman Jr. ended his pursuit of acquiring the storied Hollywood studio for $6B that challenged Skydance Media’s merger deal. The exit of the Seagram Co. heir means that Skydance – run by David Ellison, son of billionaire tech maverick and Oracle (ORCL) co-founder Larry Ellison – will become the new owner of Paramount.
Dropping out: “Tonight, our bidding group informed the special committee that we will be exiting the go-shop process,” Bronfman said in a statement. “It was a privilege to have the opportunity to participate. We continue to believe that Paramount is an extraordinary company, with an unrivaled collection of marquee brands, assets and people.” The decision was reportedly partly because of a tight deadline to submit financial documents.
Bronfman’s decision has cleared the way for Skydance to take control of Shari Redstone’s media empire. Paramount announced that it ended its “go-shop” period that allowed it to field other bidders, and now expects to complete its deal with Skydance in the first half of next year. But shares of Paramount tumbled 4% before the bell today following Bronfman’s exit.
Background: Both proposals included payment of about $2.4B to acquire National Amusements, the Redstone family company that controls Paramount, and investments in Paramount to reduce its debt. Skydance’s deal includes its eventual merger with Paramount for $4.5B in cash or stock. Meanwhile, Bronfman had sweetened his offer last week for National Amusements and a minority stake in Paramount itself to $6B from his original $4.3B proposal. (33 comments)
COVID censorship
Meta (META) CEO Mark Zuckerberg said it was wrong for Biden administration officials to pressure the company to censor COVID-19 content in 2021. “I feel strongly that we should not compromise our content standards due to pressure from any administration – and we’re ready to push back if something like this happens again,” he wrote in a letter to the House Judiciary Committee. Zuckerberg also admitted that Meta shouldn’t have hidden content related to corruption allegations involving Hunter Biden, and said he would not make contributions to support electoral infrastructure this election cycle. (40 comments)
Rethinking DEI
Lowe’s (LOW) is the latest company to dial back its diversity, equity and inclusion programs, buckling under online criticism of its policies, with conservative activist Robby Starbuck claiming credit for the move. The home improvement retailer will no longer participate in the Human Rights Campaign’s Corporate Equality Index, and will only sponsor community events related to affordable housing, disaster relief and skilled trades education. The move follows Tractor Supply (TSCO), Deere (DE), and Harley-Davidson (HOG) scaling back or scrapping DEI programs in recent months. (9 comments)
New tariffs
Canada plans to impose a 100% surtax on all Chinese-made electric vehicles, effective October 1, with the aim of leveling the playing field as Chinese EV makers currently enjoy large subsidies in the country. Currently, Tesla (TSLA) is the only automaker that exports China-made EVs to Canada. The decision follows the U.S. and the European Union imposing their own tariffs on Chinese EVs amid growing concerns of an oversupply of the cheap vehicles. Speaking of tariffs, XPeng (XPEV) is looking to set up a manufacturing site in Europe to lessen the impact of the region’s levies. (91 comments)
Today’s Economic Calendar
09:00 AM Case-Shiller Home Price Index
09:00 AM FHFA House Price Index
10:00 AM Consumer Confidence
10:00 AM Richmond Fed Mfg. Index
01:00 PM 2-Year Note Auction
01:00 PM Money Supply
What else is happening…
WSB survey results: Nvidia (NVDA) earnings will be a wildcard.
Albertsons sees bleak future if Kroger (KR) deal falls through.
Marijuana rescheduling likely delayed due to DEA hearing.
Fed’s Mary Daly joins Jerome Powell in calling for rate cuts.
vHP (HPQ) secures $50M in proposed CHIPS Act funding.
BYD’s (OTCPK:BYDDF) lithium project likely to be delayed.
Ark Invest: Tesla is robotaxi leader despite rivals’ early start.
PDD sinks after warning of weak demand, fierce competition.
Crude oil gains on supply concerns as Libya shuts production.
Trump Media (DJT) registers 5M shares for sale; stock dips.
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets leaned to the upside. Hong Kong, India, Australia, New Zealand, Indonesia and Thailand did well; Japan and South Korea were weak. Europe, Africa and the Middle East are currently quiet and little changed. Norway is up; Denmark, Poland and Israel are down. Futures in the States point toward a down open for the cash market.
————— MoneyShow Presentation: How I use RSI, MACD and Stochastic to Identify Trades —————
The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Mideast on edge
Oil prices will be on watch as Israel and Lebanese paramilitary group Hezbollah engaged in the heaviest missile exchange on Sunday following 10 months of warfare, fueling fears of a wider conflict in the Middle East. The exchange of fire does not appear to have set off a long-feared war, but tensions remain high.
What happened: Hezbollah launched hundreds of missiles at northern Israel in retaliation for the assassination of a senior commander last month. Israel said it launched airstrikes targeting rocket launchers across southern Lebanon to stop an imminent Hezbollah attack. At least three people were killed, including a fighter with the Hezbollah-allied Amal group, and two were wounded in the strikes on Lebanon. Lt. Col. Nadav Shoshani, an Israeli military spokesman, said an initial assessment showed “very little damage” in Israel.
De-escalation: Both sides have signaled their intention of avoiding further escalation. Hezbollah leader Hassan Nasrallah said the group had targeted an intelligence base and the operation had concluded. “At this current stage, the country (Lebanon) can take a breath,” he added, seeking to assuage fears of repercussions. Israeli defense minister Yoav Gallant said he spoke with U.S. secretary of defense Lloyd Austin on avoiding regional escalation and working together to ensure Israel’s defense.
Oil on watch: Oil futures were higher on Monday. Front-month Nymex crude (CL1:COM) for October delivery rose 2.7% at the time of writing, and October Brent crude (CO1:COM) was up 2.5%. Warren Patterson, head of commodities strategy at ING, said the rise was driven by Fed Chair Powell’s speech and Middle East developments. “We would expect any rally on the back of these (Middle East) developments to be rather short-lived except if Iran were to become more directly involved, as this would raise oil supply risks more meaningfully.” (4 comments)
Telegram CEO arrest
French authorities on Saturday arrested Pavel Durov, billionaire CEO of messaging app Telegram, who is reportedly still being detained for questioning. The arrest is part of an investigation into an alleged lack of moderation on Telegram, which police claim has allowed criminal activity to continue undetected on the app. “Durov has nothing to hide,” said Telegram. “It is absurd to claim that a platform or its owner are responsible for abuse of that platform.” The arrest has prompted widespread backlash, including from Elon Musk, Rumble (RUM) CEO Chris Pavlovski and Edward Snowden. (155 comments)
Antitrust showdown
Kroger (KR) will start batting in court with the Federal Trade Commission today over its plan to block the supermarket behemoth’s $24.6B purchase of rival Albertsons (ACI). The hearing in Portland, Oregon is scheduled to end with closing arguments on September 13, with the judge’s decision expected 10 days after the trial ends. The FTC sued to block the combination in February, saying the deal would lead to higher prices for consumers. The companies have been trying to appease the FTC by offering to divest hundreds of stores to make the deal more palatable for the regulator. (22 Comments)
Astronauts’ return
Butch Wilmore and Sunita Williams, who were sent to orbit on Boeing’s (BA) Starliner in June, will remain at the International Space Station until next year, before hitching a ride back home on a SpaceX (SPACE) spacecraft. This would extend their stay in orbit from the originally planned one week to about eight months. The decision comes as Boeing and NASA have struggled to decide on the astronauts’ return journey amid safety concerns over Starliner. Meanwhile, the empty Starliner capsule is expected to undock from the ISS in a week or two, and begin its return home on autopilot. (171 comments)
Today’s Economic Calendar
8:30 Durable Goods
10:30 Dallas Fed Manufacturing Survey
What else is happening…
Analysts see string of 25-bp rate cuts after Powell’s latest speech.
Bronfman wants Paramount to partner with big tech for streaming.
Chinese tech giants continue AI splurge despite U.S. chip curbs.
Oil majors, OPEC+ face risks as crude supply outstrips demand.
Fire at Rivian’s (RIVN) Illinois plant damages several vehicles.
XPeng (XPEV) soars 6% as CEO boosts stake in EV maker.
Deadpool & Wolverine retakes No.1 spot at movie box office.
This sector is seen as being most impacted by U.S. election.
Lilly (LLY), Novo (NVO) to maintain lead in weight loss market.
Stocks most loved and shunned by hedge and mutual funds.
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