After Hours Report

The stock market rallied today, leaving all the major indices higher by at least 1.0%. Advancers led decliners by a 4-to-1 margin at the NYSE and by a nearly 3-to-1 margin at the Nasdaq. The positive bias followed pleasing Producer Price Index data for July.

Total PPI jumped 0.1% month-over-month in July (Briefing.com consensus 0.1%) while core PPI, which excludes food and energy, was flat (Briefing.com consensus 0.2%). The monthly figures left total PPI up 2.2% year-over-year, versus 2.7% in June, and core PPI up 2.4%, versus 2.9% in June.

The welcome disinflation in the report contributed to optimism around the Fed's rate cut path, which sent yields lower and boosted equities. The upside bias may continue tomorrow if the release of the July Consumer Price Index at 8:30 ET corroborates the market's view. 

Treasury yields were already lower following some weak new loan data out of China and some weak economic sentiment data out of the eurozone and dropped further in response to the PPI data. The 10-yr note yield fell six basis points to 3.85% and the 2-yr note yield, which is most sensitive to changes in the fed funds rate, dropped eight basis points to 3.94%.

With today's move higher, the S&P 500 closed above 5,400 for the first time since August 1, just before the jobs report that precipitated last Monday's sharp selloff. Just about everything participated in upside moves, leaving ten of the 11 S&P 500 sectors higher. 

The heavily-weighted information technology (+3.0%), consumer discretionary (+2.4%), communication services (+1.5%), and health care (+1.2%) sectors led the pack. Meanwhile, the energy sector logged a 1.0% decline amid falling commodity prices. WTI crude oil futures settled 1.9% lower at $78.37/bbl and natural gas futures settled 1.4% lower at $2.16/mmbtu.

Dow component Home Depot (HD 350.07, +4.26, +1.2%) closed with a solid gain after trading down as much as 1.9% in response to below-consensus guidance.

Fellow discretionary-related name Starbucks (SBUX 95.90, +18.87, +24.5%) was the biggest advancer in the S&P 500, surging on the news that CEO Laxman Narasimhan has stepped down and will be replaced by Chipotle (CMG 51.68, -4.19, -7.5%) CEO Brian Niccol.

• Nasdaq Composite:+14.5% YTD
• S&P 500: +13.9% YTD
• S&P Midcap 400: +6.2% YTD
• Dow Jones Industrial Average: +5.5% YTD
• Russell 2000: +3.4% YTD

Reviewing today's economic data:

• July NFIB Small Business Optimism 93.7; Prior 91.5
• July Core PPI 0.0% (Briefing.com consensus 0.2%); Prior was revised to 0.3% from 0.4%, July PPI 0.1% (Briefing.com consensus 0.1%); Prior 0.2%
  • The key takeaway from the report is the disinflation trend in total and core PPI, as that is moving in a necessary direction to drive a rate cut by the Fed.

Wednesday's economic lineup features:

• 7:00 ET: Weekly MBA Mortgage Index (prior 6.9%)
• 8:30 ET: July CPI (Briefing.com consensus 0.2%; prior -0.1%) and Core CPI (Briefing.com consensus 0.2%; prior 0.1%)
• 10:30 ET: Weekly crude oil inventories (prior -3.73 mln)

Overseas:

• Europe: DAX +0.5%, TSE +0.3%, CAC +0.4%
• Asia: Nikkei +3.5%, Hang Seng +0.4%, Shanghai +0.3%

Commodities:

• Crude Oil -1.54 @ 78.37
• Nat Gas -0.03 @ 2.16
• Gold +2.70 @ 2507.60
• Silver -0.20 @ 27.77
• Copper -0.02 @ 4.05

After-Hours Spotlight:

• Alphabet (GOOG) down over -1% after the Justice Department considers breaking up Google following court ruling, according to Bloomberg... GOOG down 1.3%
• Flutter Entertainment (FLUT) reports Q2 (Jun) results; revenue jumps 20% yr/yr; average monthly players up 17%; raises FY24 guidance... FLUT up 10.2%
• General Motors (GM): AG of Texas suing the company for collecting drivers' data and selling it to several companies... GM down 0.5%
• GRAIL (GRAL) reports Q2 (Jun) results; grows revs 43% yr/yr; reducing headcount and planned hires by around 30%; corporate restructure extends cash runway into 2028... GRAL up 12.8%
• Ibotta (IBTA) beats by $1.73, beats on revs; guides Q3 revs below consensus; Ibotta and Instacart (CART) announce strategic partnership to provide Instacart customers with access to Ibotta coupons... IBTA down 8.1%
• Mercury (MRCY) beats by $0.29, beats on revs... MRCY up 9.7%
• Navient (NAVI) to sell equity interests in Xtend Healthcare to CorroHealth for $365 mln in cash... NAVI up 8.2%
• Ouster (OUST) reports Q2 results, revenue inline, guides Q3 revenue below consensus... OUST down 15.1%
• Serve Robotics (SERV) reports Q2 results... SERV up 9.2%
• XP (XP) beats by $0.07, beats on revs... XP up 7.4%

Fair Value for Wednesday, August 14:

• S&P 500: 5,458
• Nasdaq 100: 19,101
• DJIA: 39,877

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Baxter (BAX) provides guidance in slide presentation; targeting 4-5% operational sales growth annually; expects operating margin of 16.5% in FY25 and expanding annually thereafter; targeting 80% free cash flow conversion
  • BuzzFeed, Inc. (BZFD) Posted Strong Q2 Financial Results and Expects Continued Improvement in Q3
  • ChipMOS TECHNOLOGIES (IMOS) reports Q2 (Jun) results, revs in-line
  • DHT (DHT) misses by $0.01, reports revs in-line; provides market commentary
  • HIVE Digital Technologies (HIVE) reports Q1 results; beats on revs
  • Home Depot (HD) beats by $0.14, beats on revs; guides FY25 EPS below consensus, revs above consensus
  • Hudbay Minerals (HBM) misses by $0.07, misses on revs
  • HUYA (HUYA) beats by $0.04, reports revs in-line
  • IHS Holding Limited (IHS) reports Q2 (Jun) results, beats on revs
  • Illumina (ILMN) announces strategy to accelerate value creation; Delivering double digit to teens non-GAAP diluted earnings per share growth 2025-2027
  • James Hardie beats by $0.03, misses on revs; provides Q2 guidance; reaffirms FY25 guidance
  • Kodiak Gas Services (KOD) reports Q2 results; misses on revs; raises FY24 EBITDA guidance
  • Kyverna Therapeutics (KYTX) beats by $0.03; provides update
  • Loar Holdings (LOAR) beats by $0.03, beats on revs; raises FY24 guidance
  • Melco Resorts & Entertainment (MLCO) misses by $0.04, reports revs in-line
  • Mersana Therapeutics (MRSN) misses by $0.03, misses on revs
  • Montana Technologies (AIRJ) will be restating its previously issued unaudited financial statements for the three months ended March 31, 2024
  • MSG Sports (MSGS) beats on EPS, beats on revs
  • On (ONON) misses by CHF0.01, beats on revs
  • Orla Mining (ORLA) beats by $0.01
  • PACS Group (PACS) reports Q2 (Jun) results, beats on revs; guides FY24 revs in-line
  • Paysafe (PSFE) misses by $0.01, beats on revs; guides FY24 revs above consensus
  • Perspective Therapeutics (CATX) beats by $0.03, beats on revs; provides business updates
  • Rumble (RUM) beats dual est by $0.02, beats on revs
  • Sea Limited (SE) misses by $0.20, beats on revs
  • Sun Life (SLF) beats by CAD 0.14
  • Talen Energy (TLN) reports Q2 (Jun) results, beats on revs
  • Tencent Music (TME) misses by RMB0.03, reports revs in-line
  • TeraWulf (WULF) misses by $0.01, reports revs in-line
  • UroGen Pharma (URGN) Ahead of Schedule to Complete UGN-102 NDA Submission and Reports 2024 Second Quarter Financial Results and Business Highlights
• General News
  • Israel places its military on high alert ahead of potential Iranian attack, according to the Wall Street Journal
  • Global EV sales rise 21% in July, according to Reuters
  • White House announces $150 million from ARPA-H to deliver progress on Biden cancer moonshot goals and improve health outcomes
  • Elon Musk says "There appears to be a massive DDOS attack on ??. Working on shutting it down. Worst case, we will proceed with a smaller number of live listeners and post the conversation later"
  • Airbus (EADSY): airBaltic places order for 10 additional A220 aircraft
  • Alaska Air (ALK) announces investment in JetZero to propel innovative aircraft technology and design
  • Alexander & Baldwin (ALEX) files mixed securities shelf offering for an undisclosed amount
  • AllianceBernstein (AB) announces preliminary assets under management (AUM) increased to $777 bln during July 2024 from $770 bln at the end of June
  • Alphabet (GOOG): CXApp Inc. (CXAI) announced yesterday largest 'expansion' deal & strategic multi-year agreement with Google Cloud
  • Alphabet (GOOG) introduces Google Pixel Watch 3; Premium (PTON) members can also enjoy a variety of Peloton workout classes from Peloton instructors
  • Alphabet (GOOG) announces new Pixel 9 smartphones; It will be the first processor to run Gemini Nano with Multimodality — which helps your phone understand text, images and audio
  • Alphabet (GOOG): FTC outlines remedy concerns in amicus brief after jury finds Google "illegally monopolized App Store"
  • Apple (AAPL): India ordered recall following reports of Apple antitrust lawsuit, according to Reuters
  • Archer Aviation (ACHR) announces an agreement focused on the deployment of electric vertical take off and landing aircraft services across top global markets
  • Aris Mining (ARMN) announces high grade drill results from ongoing segovia operations exploration program
  • AstraZeneca's (AZN) Enhertu receives approval in China for patients with previously treated HER2-positive advanced or metastatic gastric cancer
  • atai Life Sciences N.V. (ATAI) announces positive preliminary results from phase 1b trial of VLS-01
  • Aurinia Pharma (AUPH): Lucien Selce issued a letter to the Board of Directors regarding the urgent need for accountability and boardroom changes
  • BAE Systems (BAESY) completes testing, ships primary instrument for Roman Space Telescope
  • Bavarian Nordic A/S (BVNRY) announces FDA acceptance and priority review of the BLA for its Chikungunya Vaccine
  • Bitfarms (BITF) announces Board of Directors and leadership updates; CEO Ben Gagnon appointed to the board; Lead Director Brian Howlett appointed Independent Chairman; Liam Wilson to join as COO
  • Boeing (BA) awarded $264 mln U.S. Navy contract
  • Boeing (BA) reports July commercial orders of 72 airplanes (including 57 737 MAX planes), made 43 deliveries in the month; YTD gross orders now total 228 airplanes
  • Boeing (BA): Poland signs LOA for 96 Boeing AH-64E Apache helicopters
  • Boeing (BA) discovered new electrical issue with Boeing 737s, according to Fortune
  • Bruker (BRKR) announces successful installation of 1.2 GHz Avance NMR Spectrometer at the Korea Basic Science Institute
  • Cadiz (CDZI) files $200 mln mixed securities shelf offering
  • China Yuchai (CYD):Yuchai and Rolls-Royce (RYCEY) Power Systems Expand MTU Yuchai Power's operations to address massive opportunities
  • Chipotle Mexican Grill (CMG) announces that Brian Niccol, Chairman and CEO has accepted the role as Chairman and Chief Executive Officer of Starbucks (SBUX) and will be leaving the Company effective August 31, 2024
  • Diana Shipping (DSX) announces that through a separate wholly-owned subsidiary, it has entered into a time charter contract with Paralos Shipping Pte., Ltd., for one of its Kamsarmax dry bulk vessels, the m/v Astarte
  • Embraer SA (ERJ) announces Virgin Australia orders eight E190-E2s
  • Enova International (ENVA) announces new $300 million share repurchase program
  • Fannie Mae (FNMA) begins its most recent sale of reperforming loans as part of the company's ongoing effort to reduce the size of its retained mortgage portfolio
  • FirstEnergy (FE) resolves proceedings with Office of the Ohio Attorney General and Office of the Summit County Prosecutor
  • Flowserve (FLS) to acquire MOGAS Industries, accelerating 3D growth strategy
  • GCT Semiconductor (GCTS) Signs MOU with Samsung (SSNLF) for development of 4G/5G Chipsets and Modules
  • General Motors (GM) aiming to eliminate jobs in China amid plan for larger structural changes, according to Bloomberg
  • Harley-Davidson (HOG): Dealer group accused HOG of inflating profit margins at dealer's expense, according to WSJ
  • Hawaiian Holdings (HA): DOJ trial attorney Brian Hanna will appear in Hawaii court as DOJ investigates HA merger with Alaska Airlines (ALK), according to KHON 2
  • Huawei nearing introduction of artificial intelligence chip to challenge Nvidia (NVDA), according to the Wall Street Journal
  • Invesco (IVZ) reports preliminary month-end assets under management (AUM) of $1,732.0 billion, an increase of 0.9% versus previous month-end
  • Ivanhoe Electric (IE) secures 100% ownership of mineral rights at its Santa Cruz Copper Project with final option payment
  • Johnson & Johnson (JNJ): Lawyers for ovarian cancer victims endorse proposed Texas two-step remedy
  • Kyverna Therapeutics (KYTX) receives U.S. FDA RMAT designation for KYV-101 in the treatment of patients with progressive Myasthenia Gravis
  • Lexicon Pharma (LXRX) announces strategic repositioning to drive value and growth of commercial portfolio
  • Lifeway Foods (LWAY): Edward and Ludmila Smolyansky file consent statement to change leadership at Lifeway Foods
  • Lockheed Martin (LMT) and General Dynamics (GD) announce solid rocket motor strategic teaming agreement
  • LSB Industries (LXU) announces the retirement of Richard Roedel as Chairman of the Board of Directors; President and CEO, Mark Behrman, to Succeed Mr. Roedel as Board Chairman
  • Methanex (MEOH) temporarily idling its manufacturing operations in New Zealand until the end of October 2024
  • MKS Instruments (MKSI) announces that Ram Mayampurath has been appointed Executive Vice President, Chief Financial Officer and Treasurer, effective October 14, 2024
  • NANO Nuclear Energy (NNE) fights back against short sellers
  • New York Community (NYCB) entered into share exchange agreements
  • Paramount Global (PARA) has begun its plan to reduce workforce by 15%, according to Deadline
  • Penumbra (PEN) announces $200 million share repurchase authorization; includes $100 million accelerated share repurchase
  • Replimune (REPL) announces first patient dosed in IGNYTE-3 clinical trial in advanced Melanoma
  • Rogers Corp (ROG) CFO Ram Mayampurath resigns, effective August 12; Laura Russell will assume the role of interim CFO
  • Rumble (RUM) partnering with NFL team the Miami Dolphins and Hard Rock Stadium to leverage infrastructure services from Rumble Cloud
  • Sasol (SSL) CFO to step down
  • Science Applications (SAIC) awarded a $120 million, five-year, cost-plus fixed-fee contract by Naval Supply Systems Command (NAVSUP) to continue the support of Tactical Training Group Pacific’s fleet training mission
  • Scinai Immunotherapeutics (SCNI) signing of loan restructuring agreement with European Investment Bank; converting approximately $29 million of debt to preferred equity convertible into 19.5% common equity
  • Starbucks (SBUX) announced that Brian Niccol has been appointed chairman and CEO
  • Starbucks (SBUX): Elliott statement on Starbucks
  • Starbucks (SBUX): CNBC's Scott Wapner said, 'Sources tell me Trian [Nelson Peltz] had accumulated a substantial stake in $SBUX over the past several months. Sources say they had conversations with Board Chair Hobson.Sources also tell me they're happy with today's outcome and sold the stock'
  • Stereotaxis (STXS) Achieves CE Mark in Europe and Submits 510(k) in the US for Next Generation Robotic System GenesisX
  • Sun Life (SLF) to renew its normal course issuer bid to purchase up to 15,000,000 of its common shares
  • Syros (SYRS) provides update on SELECT-AML-1 Phase 2 Clinical Trial
  • Taiwan Semiconductor Manufacturing (TSM) passed several resolutions at Board of Directors meeting
  • Tandem Diabetes Care (TNDM) Provides Update on March 2024 Nationwide Recall of t:connect Mobile App for iOS Devices
  • Tilray (TLRY) confirms the Company has entered into a definitive agreement to acquire four craft breweries from Molson Coors Beverage Company (TAP)
  • Tilray (TLRY) nearing deal to acquire drink brands from Molson Coors Brewing (TAP), according to Bloomberg
  • Trimble (TRMB) discloses that Ernst & Young LLP has been performing and continues to perform incremental audit procedures responsive to the identified material weaknesses
  • Tutor Perini (TPC) subsidiary WDF has been awarded a project valued at approximately $35.5 million by the New York City Housing Authority to construct a new boiler plant at George Washington Carver Houses
  • Virtus Investment Partners (VRTS) reports preliminary assets under management (AUM) of $178.1 billion and other fee earning assets of $2.5 billion for total client assets of $180.6 billion as of July 31, 2024
  • Wayfair (W) and home decor/furniture peers RH (RH) and Williams-Sonoma (WSM) exhibiting notable strength as rate cut expectations rise following cooler-than-expected PPI report
  • XPeng (XPEV) confirms start-of-production closing - allotted and issued 4,636,447 Class A ordinary shares as the SOP Consideration Shares to DiDi (DIDIY)

Ratings Changes (see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Atea Pharmaceuticals (AVIR) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $6.88
  • Dell (DELL) upgraded to Equal Weight from Underweight at Barclays; tgt $97
  • Ducommun (DCO) upgraded to Buy from Neutral at Goldman; tgt raised to $80
  • First Industrial Realty (FR) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $64
• Downgrades:
  • Academy Sports + Outdoors (ASO) downgraded to Hold from Buy at TD Cowen; tgt lowered to $54
  • CenterPoint (CNP) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $28
  • Cytokinetics (CYTK) downgraded to Neutral from Buy at Goldman; tgt lowered to $60
  • Danimer Scientific (DNMR) downgraded to Hold from Buy at TD Cowen; tgt lowered to $1
• Others:
  • Artiva Biotherapeutics (ARTV) initiated with a Buy at Needham; tgt $23
  • Artiva Biotherapeutics (ARTV) initiated with an Outperform at Wedbush; tgt $18
  • Artiva Biotherapeutics (ARTV) initiated with a Buy at TD Cowen
  • Artiva Biotherapeutics (ARTV) initiated with an Overweight at Cantor Fitzgerald; tgt $23
  • Artiva Biotherapeutics (ARTV) initiated with a Buy at Jefferies; tgt $21
  • Cintas (CTAS) initiated with an Underweight at Wells Fargo; tgt $735
  • Ecolab (ECL) initiated with an Overweight at Wells Fargo; tgt $270
  • Equifax (EFX) initiated with an Overweight at Wells Fargo; tgt $340
  • FactSet (FDS) initiated with an Equal Weight at Wells Fargo; tgt $435
  • Fair Isaac (FICO) initiated with an Overweight at Wells Fargo; tgt $2100
  • Hormel Foods (HRL) upgraded to Buy from Neutral at Citigroup; tgt raised to $37
  • Inozyme Pharma (INZY) resumed with a Buy at Jefferies; tgt raised to $17

• Econ Data (Wednesday):
  • 7:00 ET: Weekly MBA Mortgage Index (prior 6.9%)
  • 8:30 ET: July CPI (Briefing.com consensus 0.2%; prior -0.1%) and Core CPI (Briefing.com consensus 0.2%; prior 0.1%)
  • 10:30 ET: Weekly crude oil inventories (prior -3.73 mln)
• Earnings:
  • Monday (Aug 12)
    • Pre-Market: BLDP GOLD FTRE BEKE MNDY
    • After-Hours: DHT KGS PACS
  • Tuesday (Aug 13)
    • Pre-Market: HD HBM HUYA IHS JHX LOAR MLCO MRSN MSGS ONON PSFE SE SLF TLN TME
    • After-Hours: IMOS FNV IBTA INTA MRCY NATL NPCE USPH XP
  • Wednesday (Aug 14)
    • Pre-Market: ARCO EAT CAE CAH DOLE GLBE JD MRX PFGC RSKD SDHC UBS
    • After-Hours: CSCO DLO LITE PYCR STNE
  • Thursday (Aug 15)
    • Pre-Market: BABA AIT CLBT DE GRAB NICE SPTN TPR WMT
    • After-Hours: AMCR AMAT COHR GLOB HRB
  • Friday (Aug 16)
    • Pre-Market: FLO
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike