After Hours Report

The stock market exhibited more muted action following today's in-line CPI print compared to yesterday's rally after the pleasing PPI print. The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.6%) closed with gains while the Nasdaq Composite settled fractionally higher than yesterday and the Russell 2000 logged a 0.5% decline.

Total CPI was up 0.2% month-over-month in July, as expected, and core-CPI, which excludes food and energy, was up 0.2%, also as expected. The index for shelter was up 0.4% month-over-month and accounted for nearly 90% of the increase in the all items index.

On a year-over-year basis, total CPI was up 2.9%, versus 3.0% in June, and core-CPI was up 3.2%, versus 3.3% in June.

The lackluster response in equities was due in part to some good news being priced in yesterday. Advancers led decliners by a 5-to-3 margin at the NYSE and decliners led advancers by the same margin at the Nasdaq.

Outsized moves are reserved for stocks with catalysts. Kellanova (K 80.28, +5.78, +7.8%) was the top performing stock in the S&P 500 after news that Mars will acquire Kellanova for $83.50/share in cash, or total consideration of $35.9 billion, including debt.

Alphabet (GOOG 162.03, -3.90, -2.4%) was an influential laggard after a Bloomberg report that the Department of Justice may be looking at breaking up the company following last week's court ruling that Alphabet violated search-related antitrust laws.

This price action, along with a decline in Meta Platforms (META 526.76, -1.78, -0.3%), pinned the S&P 500 communication services sector (-0.9%) in last place on the lineup. Meanwhile, the financial (+1.3%) and information technology (+0.6%) sectors logged some of the largest gains.

The CPI print also had the market repricing the likelihood of a 50 basis points rate cut at the September FOMC meeting. According to the CME FedWatch Tool, there is still a 100% probability of a 25 basis points rate cut in September after today's release, but the probability of a 50 basis points rate cut has been reduced to 35.5% from 53.0%.

The 2-yr note yield, which is most sensitive to changes in the fed funds rate, settled one basis point higher at 3.95%. The 10-yr note yield declined three basis points to 3.82%.

• Nasdaq Composite:+14.5% YTD
• S&P 500: +14.4% YTD
• S&P Midcap 400: +6.2% YTD
• Dow Jones Industrial Average: +6.2% YTD
• Russell 2000: +2.8% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index 16.8%; Prior 6.9%
• July CPI 0.2% (Briefing.com consensus 0.2%); Prior -0.1%, July Core CPI 0.2% (Briefing.com consensus 0.2%); Prior 0.1%
  • The key takeaway from the report is that it points to ongoing disinflation; hence, it won't change the market's belief that the Fed will cut rates by 25 basis points in September even though CPI inflation is comfortably above the Fed's 2% goal, which is oriented around PCE price inflation that is currently at 2.5%.

Wednesday's economic lineup features:

• 8:30 ET: July Retail Sales (Briefing.com consensus 0.3%; prior 0.0%), Retail Sales ex-auto (Briefing.com consensus 0.2%; prior 0.4%), weekly Initial Claims (Briefing.com consensus 232,000; prior 233,000), Continuing Claims (prior 1.875 mln), July Import Prices (prior 0.0%), Import Prices ex-oil (prior 0.2%), Export Prices (prior -0.5%), Export Prices ex-agriculture (prior -0.6%), and Empire State Manufacturing Survey (prior -6.6)
• 9:15 ET: July Industrial Production (Briefing.com consensus 0.1%; prior 0.6%) and Capacity Utilization (Briefing.com consensus 78.6%; prior 78.8%)
• 10:00 ET: June Business Inventories (Briefing.com consensus 0.2%; prior 0.5%) and August NAHB Housing Market Index (Briefing.com consensus 43; prior 42)
• 10:30 ET: Weekly natural gas inventories (prior +21 bcf)
• 16:00 ET: June Net Long-Term TIC Flows (prior -$54.6 bln)

Overseas:

• Europe: DAX +0.4%, TSE +0.6%, CAC +0.8%
• Asia: Nikkei +0.5%, Hang Seng -0.4%, Shanghai -0.6%

Commodities:

• Crude Oil -1.33 @ 77.04
• Nat Gas +0.06 @ 2.22
• Gold -28.70 @ 2478.90
• Silver -0.44 @ 27.33
• Copper -0.01 @ 4.04

After-Hours Spotlight:

• Celcuity (CELC) beats by $0.06; to reach the enrollment target in VIKTORIA-1 study later than expected... CELC down 8.1%
• Cisco (CSCO) beats by $0.02, reports revs in-line; guides Q1 EPS above consensus, revs in-line; guides FY25 EPS in-line, revs in-line; saw steady customer demand; announces restructuring plan; to recognize pre-tax charges of up to $1.0 bln consisting of severance and other costs... CSCO up 6.1%
• NIKE (NKE) up on new position from Pershing Square (Bill Ackman)... NKE up 5.1%
• Titan Machinery (TITN) guides Q2 EPS and revenue well below consensus, due to declining commodity prices and lower than expected equipment revenue... TITN down 20.3%
• Ulta Beauty (ULTA) up big on new position from Warren Buffett... ULTA up 12.3%

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

• Earnings/Guidance (Full Earnings Calendar):
  • Algoma Steel Group (ASTL) reports JunQ results, provides update
  • Arcos Dorados (ARCO) reports EPS in-line, beats on revs
  • Brinker (EAT) misses by $0.13, beats on revs; guides FY25 EPS below consensus, revs above consensus
  • CAE (CAE) beats by C$0.01, beats on revs; reaffirms target three-year EPS growth rate
  • Cardinal Health (CAH) beats by $0.10, beats on revs; guides FY25 EPS above consensus
  • Dole plc (DOLE) beats by $0.06, beats on revs
  • Ecopetrol (EC) reports Q2 results; misses on revs
  • Elbit Systems (ESLT) beats on top and bottom lines
  • Fate Therapeutics (FATE) beats by $0.13, beats on revs
  • Flutter Entertainment (FLUT) reports Q2 (Jun) results; revenue jumps 20% yr/yr; average monthly players up 17%; raises FY24 guidance
  • 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
  • Hon Hai Precision (HNHPF) reports Q2 results
  • Ibotta (IBTA) beats by $1.73, beats on revs; guides Q3 revs below consensus
  • Intapp (INTA) beats by $0.03, beats on revs; guides Q1 EPS in-line, revs in-line; guides FY25 EPS above consensus, revs in-line
  • Franco-Nevada (FNV) misses by $0.06, misses on revs; also acquires 1.8% NSR on Newmont's Yanacocha Operations
  • Global-E Online (GLBE) beats by $0.02, beats on revs; guides Q3 revs below consensus; guides FY24 revs in-line
  • Marex Group plc (MRX) beats by $0.32, beats on revs; Progressive dividend policy announced
  • Mercury (MRCY) beats by $0.29, beats on revs; expects FY25 (Jun) revenue growth to be relatively flat yr/yr, below the FactSet Consensus of roughly +4.8% growth
  • NeuroPace (NPCE) beats by $0.04, beats on revs; guides FY24 revs above consensus
  • Nu Holdings (NU) reports Q2 results, beats on revs
  • Ouster (OUST) reports Q2 results, revenue inline, guides Q3 revenue below consensus
  • Performance Food Group (PFGC) beats by $0.08, reports revs in-line; guides Q1 revs below consensus; guides FY25 revs in-line
  • Progressive (PGR) reports July net premiums written of $6.3785 bln; July net income of $1.38/share
  • Riskified (RSKD) beats by $0.10, reports revs in-line; guides FY24 revs below consensus
  • Ship Finance Intl (SFL) beats by $0.17, beats on revs
  • Silvercorp Metals (SVM) beats by $0.03, reports revs in-line
  • Smith Douglas Homes Corp (SDHC) beats by $0.03, beats on revs
  • Sphere Entertainment Co. (SPHR) beats by $0.04, beats on revs
  • UBS AG (UBS) beats by $0.05; beats on revs; provides outlook
  • U.S. Physical Therapy (USPH) misses by $0.09, beats on revs; lowers FY24 adjusted EBITDA guidance
  • Victoria's Secret (VSCO) raises Q2 guidance
  • XP (XP) beats by $0.07, beats on revs
• General News
  • Hamas will not participate in latest round of ceasefire negotiations, according to the New York Times
  • Japanese Prime Minister Fumio Kishida will step down, according to the New York Times
  • Reserve Bank of New Zealand agreed to ease the level of monetary policy restraint by reducing the OCR to 5.25%
  • China Baowu Steel Group execs warned of industry crisis in steel, according to Bloomberg
  • ACELYRIN, INC. (SLRN) Announces Positive Phase 3 Data for Izokibep in Hidradenitis Suppurativa; Focuses Strategy on Lonigutamab and Reports Second Quarter 2024 Financial Results
  • Alphabet (GOOG): Justice Department considers breaking up Google following court ruling, according to Bloomberg
  • Amazon (AMZN) announced that Iberdrola (IBDRY) has selected AWS as its preferred cloud provider for generative artificial intelligence workloads
  • Apple (APPL): Developers can soon offer in-app NFC transactions using the Secure Element
  • Apple (AAPL) aiming to start development of tabletop home device, which will include a display and a robotic arm, according to Bloomberg
  • Arrowhead Pharmaceuticals (ARWR) to advance two new rnai-based obesity candidates, ARO-INHBE and ARO-ALK7, into clinical studies
  • AstraZeneca (AZN) reports Lynparza and Imfinzi combination approved in the EU
  • AZEK (AZEK) announces $50 million accelerated share repurchase program
  • Bavarian Nordic A/S (BVNRY): European Commission coordinates procurement and donation of 215,000 vaccine doses from Bavarian Nordic to support Africa CDC in addressing the Mpox outbreak in affected countries in Africa
  • Biogen (BIIB) and Eisai (ESAIY) receive approval for LEQEMBI in UAE
  • Boeing (BA): NASA to provide update on Boeing Crew Flight Test on Wednesday at 1 p.m. ET; to evaluate spacecraft's readiness
  • Cadiz (CDZI) entered into a water supply agreement with Cucamonga Valley Water District
  • Comfort Systems (FIX) increases the shares authorized and remaining as available to purchase back up to 1,000,000 shares by authorizing the Company to acquire up to 411,426 additional shares of its outstanding common stock
  • Denali Therapeutics (DNLI) announces publication in Science Translational Medicine demonstrating the potential of the oligonucleotide transport vehicle platform to achieve broad biodistribution of antisense oligonucleotides in the CNS and muscle following intravenous administration
  • DraftKings (DKNG) decided not to move forward with the gaming tax surcharge
  • Equinor (EQNR) wins offshore wind lease in U.S. Central Atlantic auction; Dominion Energy's (D) Virginia Electric and Power Co also provisionally won a lease
  • European Wax Center (EWCZ) Board of Directors appoints David Berg as Chief Executive Officer
  • Everspin Technologies (MRAM) announces a new $9.25 mln strategic contract with Frontgrade Technologies
  • Flutter Entertainment (FLUT) issues response to Playtech (PYTCY) announcement; confirms that it is in discussions to acquire Snaitech
  • General Motors (GM): AG of Texas suing the company for collecting drivers' data and selling it to several companies
  • Gilead Sciences (GILD): FDA approves label for Livdelzi, GILD's treatment of primary biliary cholangitis
  • Gilead Sciences (GILD) confirms that the U.S. FDA has granted accelerated approval for Livdelzi for the treatment of primary biliary cholangitis in combination with ursodeoxycholic acid in adults who have had an inadequate response to UDCA, or as monotherapy in patients unable to tolerate UDCA
  • Ibotta (IBTA) and Instacart (CART) announce strategic partnership to provide Instacart customers with access to Ibotta coupons
  • Incyte (INCY): FDA approves axatilimab-csfr for chronic graft-versus-host disease
  • Intel (INTC) Automotive and Karma Automotive announce bilateral collaboration to co-develop Software Defined Vehicle Architecture which will underpin its upcoming vehicles including the Karma Kaveya super coupe, anticipated to arrive in 2026
  • Johnson & Johnson (JNJ) is weighing support for $6.48 bln talc product settlement, according to Reuters
  • Johnson & Johnson (JNJ) will soon disclose support for $6.48 bln baby powder settlement, according to Reuters
  • JP Morgan (JPM) departures have raised questions about the bank's succession plans, according to Financial Times
  • LegalZoom.com (LZ) appoints current CFO Noel Watson as COO, effective August 13
  • Mondelez Int'l Teamsters (MDLZ) unanimously authorize strike
  • NANO Nuclear Energy (NNE): Rwanda Atomic Energy Board signs MOU with NNE to commence cooperation on the development of nuclear energy
  • NVIDIA (NVDA): Former Google (GOOG, GOOGL) CEO Eric Schmidt recommended purchase of NVDA stock, according to Investing.com
  • ODP Corporation (ODP) announces that D. Anthony Scaglione, executive vice president and chief financial officer, is stepping down from his role to pursue another career opportunity and that his last day will be September 13, 2024
  • Sabre (SABR) and WestJet expand their long-term distribution deal to include NDC content
  • Sonos (SONO) to eliminate 100 jobs, according to Verge
  • Sonos (SONO) also considered re-introducing its old application, according to Verge
  • Sonos (SONO) confirms a reduction in workforce involving approximately 6% of its employees
  • SouthState (SSB) shareholders also approved Independent Bank Group (IBTX) merger at its own special meeting of shareholders
  • Southwest Air (LUV): Elliott Investment Management to launch proxy fight, according to the Wall Street Journal
  • Southwest Air (LUV) comments on Elliott Management's intent to replace a majority of its board
  • Spotify (SPOT): iPhone consumers in the EU will now see pricing information for Spotify in the app
  • Univ Elec (UEIC) announces that it successfully completed the Responsible Business Alliance Validated Assessment Program audit at its facility in Vietnam
  • Upbound Group (UPBD): Attorney General James sues UPBD's Acima
  • US Foods (USFD) to repurchase $221 mln of its common shares owned by a fund managed by Sachem Head Capital Management LP, at a price of $52.28 per share
  • Veeco Instruments (VECO) announces agreement with IBM (IBM) to explore wet processing system for advanced packaging applications
  • Verrica Pharmaceuticals (VRCA) announces preliminary positive results from Part 2 of its Phase 2 clinical trial studying VP-315 for the treatment of basal cell carcinoma
  • Victoria's Secret (VSCO) announces that its Board of Directors has appointed Hillary Super as Chief Executive Officer and a member of the Board, effective September 9, 2024
  • Zura Bio Limited (ZURA) announces in slide presentation that Phase 2 study for tibulizumab targeting SSc starts in 4Q 2024, followed by HS in 2Q 2025

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

• Upgrades:
  • American Woodmark (AMWD) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $110
  • Ball Corp (BALL) upgraded to Outperform from Neutral at Robert W. Baird; tgt $70
  • Chipotle Mexican Grill (CMG) upgraded to Outperform from Neutral at Wedbush; tgt raised to $58
  • Cidara Therapeutics (CDTX) upgraded to Buy from Neutral at H.C. Wainwright; tgt $24
  • EQT Corp. (EQT) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $42
  • Hudbay Minerals (HBM) upgraded to Buy from Hold at Jefferies
  • HUYA (HUYA) upgraded to Buy from Sell at Citigroup; tgt raised to $6
  • Illumina (ILMN) upgraded to Equal Weight from Underweight at Barclays; tgt $125
  • Illumina (ILMN) upgraded to Buy from Hold at TD Cowen; tgt raised to $144
  • Johnson Controls (JCI) upgraded to Sector Perform from Underperform at RBC Capital Mkts; tgt raised to $69
  • L'Oreal (LRLCY) upgraded to Hold from Underperform at Jefferies
  • Meritage (MTH) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $230
  • nCino (NCNO) upgraded to Buy from Neutral at Goldman; tgt raised to $42
  • Nkarta (NKTX) upgraded to Strong Buy from Outperform at Raymond James; tgt $16
  • Sportradar Group AG (SRAD) upgraded to Buy from Hold at Jefferies; tgt raised to $16
  • Starbucks (SBUX) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $120
  • Starbucks (SBUX) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $118
  • Starbucks (SBUX) upgraded to Buy from Hold at Stifel; tgt raised to $110
• Downgrades:
  • ACELYRIN (SLRN) downgraded to Neutral from Buy at H.C. Wainwright; tgt lowered to $6
  • Emerson (EMR) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $115
  • Hershey Foods (HSY) downgraded to Hold from Buy at Argus
  • Hexcel (HXL) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $68
  • Hudson Pacific Properties (HPP) downgraded to Peer Perform from Outperform at Wolfe Research
  • Intuit (INTU) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $685
  • L3Harris (LHX) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $240
  • Marinus Pharmaceuticals (MRNS) downgraded to Neutral from Buy at Ladenburg Thalmann
  • Medtronic (MDT) downgraded to Hold from Buy at Stifel; tgt lowered to $85
  • Playa Hotels & Resorts (PLYA) downgraded to Neutral from Buy at Citigroup; tgt lowered to $8
  • PulteGroup (PHM) downgraded to Peer Perform from Outperform at Wolfe Research
  • Ranpak (PACK) downgraded to Neutral from Outperform at Robert W. Baird; tgt $10
• Others:
  • Bitdeer Technologies (BTDR) resumed with a Buy at Rosenblatt; tgt $9
  • DTE Energy (DTE) initiated with a Buy at Ladenburg Thalmann; tgt $131
  • Enova International (ENVA) initiated with a Buy at BTIG Research; tgt $90
  • Gain Therapeutics (GANX) resumed with an Outperform at Oppenheimer; tgt $8
  • Korro Bio (KRRO) initiated with an Outperform at William Blair; tgt $180
  • Montrose Environmental Group (MEG) initiated with an Outperform at Evercore ISI; tgt $43
  • TeraWulf (WULF) resumed with a Buy at Rosenblatt; tgt $5
  • VSE Corp (VSEC) initiated with a Buy at Jefferies; tgt $100

• Econ Data (Thursday):
  • 8:30 ET: July Retail Sales (Briefing.com consensus 0.3%; prior 0.0%), Retail Sales ex-auto (Briefing.com consensus 0.2%; prior 0.4%), weekly Initial Claims (Briefing.com consensus 232,000; prior 233,000), Continuing Claims (prior 1.875 mln), July Import Prices (prior 0.0%), Import Prices ex-oil (prior 0.2%), Export Prices (prior -0.5%), Export Prices ex-agriculture (prior -0.6%), and Empire State Manufacturing Survey (prior -6.6)
  • 9:15 ET: July Industrial Production (Briefing.com consensus 0.1%; prior 0.6%) and Capacity Utilization (Briefing.com consensus 78.6%; prior 78.8%)
  • 10:00 ET: June Business Inventories (Briefing.com consensus 0.2%; prior 0.5%) and August NAHB Housing Market Index (Briefing.com consensus 43; prior 42)
  • 10:30 ET: Weekly natural gas inventories (prior +21 bcf)
  • 16:00 ET: June Net Long-Term TIC Flows (prior -$54.6 bln)
• 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