After Hours Report

Stocks had a mixed showing today in a lightly traded session. Buy-the-dip action in the mega cap space led to the outperformance of the Nasdaq Composite (+1.6%) and helped limit losses elsewhere. The major indices had been drifting lower in the early going before bouncing off their lows around 12:00 p.m. ET with no specific news to account for the improvement.

Notably, Treasury yields, which had been rising and keeping pressure on stocks, started to pullback from their highs around the same time that the stock market hit its worst levels of the session. Ultimately, the major indices settled near their best levels of the day, which had the S&P 500 just a whisker shy of 4,400. The S&P 500 hit 4,407 at its high of the day.

The 2-yr note yield settled eight basis points higher at 4.99% after reaching 5.00% earlier. The 10-yr note yield rose nine basis points to 4.34%, which is its highest level since 2007, after hitting 4.35% earlier. The 30-yr bond yield rose eight basis points to 4.46%, hitting its highest level since 2011.

Mega cap stocks, which had already been outperforming due to buy-the-dip interest and presumably some safe haven trading, drove a lot of the late afternoon rally. The Vanguard Mega Cap Growth ETF (MGK) rose 1.5% while the Invesco S&P 500 Equal Weight ETF (RSP) closed flat.

Tesla (TSLA 231.28, +15.79, +7.3%) and NVIDIA (NVDA 469.67, +36.68, +8.5%) were top performers from the mega cap space. NVDA, which reports earnings after the close on Wednesday, traded up after HSBC raised its price target to $780 from $600. TSLA, meanwhile, had declined nearly 30% since its high July 19 coming into today.

S&P 500 sector performance was mixed. Information technology (+2.3%), the most heavily weighted sector in the S&P 500, outpaced the remaining ten sectors by a decent margin. Palo Alto Networks (PANW 240.81, +31.12, +14.8%), which reported better than expected results after Friday's close, was the largest percentage gainer in the sector. The interest rate sensitive real estate sector (-0.9%) saw the largest decline in today's session.

Some angst ahead of Fed Chair Powell's speech Friday at the Jackson Hole Symposium also contributed to the weakness in the Treasury market today after a Wall Street Journal article by Nick Timiraos discussed why the neutral rate may need to be higher.

Festering concerns about China's disappointing growth remained a limiting factor for stocks today. On a related note, the People's Bank of China lowered its one-year loan prime rate by ten basis points to 3.45% while the 5-yr rate was left unchanged at 4.20% against expectations for bigger cuts.

There was no U.S. economic data of note today, but tomorrow's calendar features the Existing Home Sales report for July (Briefing.com consensus 4.15 million; prior 4.16 million) at 10:00 a.m. ET.

• Nasdaq Composite: +29.0% YTD
• S&P 500: +14.6% YTD
• S&P Midcap 400: +6.2% YTD
• Russell 2000: +5.4% YTD
• Dow Jones Industrial Average: +4.0% YTD

Overseas:

• Europe: DAX +0.2%, FTSE -0.1%, CAC +0.5%
• Asia: Nikkei +0.3%, Hang Seng -1.7%, Shanghai -1.2%

Commodities:

• Crude Oil -0.54 @ 80.12
• Nat Gas +0.07 @ 2.63
• Gold +6.30 @ 1923.00
• Silver +0.60 @ 23.34
• Copper +0.02 @ 3.72

After-Hours Spotlight:

• Charles Schwab (SCHW) planning actions to streamline operations related to the integration of TD Ameritrade; to downsize corporate offices, reduce headcount; expects to realize at least $500 mln of incremental annual run-rate cost savings... SCHW up 0.4%
• Coty (COTY) and Marc Jacobs sign and expand long-term license agreement... COTY up 0.7%
• Fabrinet (FN) beats by $0.06, beats on revs; guides SepQ EPS in-line, revs in-line; adds $47.6 mln to repurchase authorization... FN up 14.0%
• Nordson (NDSN) beats by $0.03, misses on revs; expects Q4 sales to be strongest of the year; guides FY23 EPS below consensus, revs in-line... NDSN down 2.9%
• PureCycle Technologies (PCT) in 8K filing: increases amount available to the Company under the indebtedness covenant basket for offerings of unsecured convertible notes from $200 mln to $250 mln... PCT down 14.1%
• Teva Pharma (TEVA) settles price-fixing charges from 2020 with the U.S. Department of Justice; will pay $225 mln over five years... TEVA up 0.9%
• Zoom Video (ZM) beats by $0.28, beats on revs; guides Q3 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs in-line... ZM up 4.6%

Fair Value for Tuesday, August 22:

• S&P 500: 4,413
• Nasdaq 100: 14,985
• DJIA: 34,528

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

• Earnings/Guidance (Full Earnings Calendar):
  • Axonics Modulation (AXNX) CFO to retire; appoints Kari Keese as successor; reaffirms FY23 revs guidance
  • Macerich (MAC) reports record leasing volumes
  • Mueller Water (MWA) announces leadership transition and continued Board refreshment; reaffirms guidance
  • Napco Security Systems (NSSC) guides Q4 revs below consensus; raises quarterly dividend 28% to $0.08/share
  • Palo Alto Networks (PANW) beats by $0.15, reports revs in-line; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus
  • RE/MAX Holdings (RMAX) reaffirms Q3 and FY23 revenue guidance; announces a 7% workforce reduction
  • Taiwan Semiconductor Manufacturing (TSM) maintains its guidance provided at the Company's July 20 Investor Conference
• General News
  • China urging banks to increase lending to boost recovery, according to Bloomberg
  • US, Japan, and South Korea expand mutual security arrangements, according to the New York Times
  • Scientists monitoring new coronavirus variant, according to CNN
  • Tropical Storm Hilary makes landfall
  • Bitcoin had worst week since November
  • UK will spend GBP 100 mln on artificial intelligence chips, according to Telegraph UK
  • UAW strike vote expected this week, according to ABC News
  • 10-yr note yield hits 4.35%, up 10 basis points today and hitting highest level since 2007
  • Roark Capital near deal with Subway for reported $9.6 bln, according to WSJ
  • Adobe (ADBE): UK's CMA cases and projects website updates Adobe/Figma merger page to include "Notice of termination of extension published"
  • Alphabet's (GOOG) YouTube announces principles for partnering with the music industry on AI technology
  • AMC Entertainment (AMC) / AMC Preferred Equity units (APE) lower after court said stock conversion can proceed this week
  • American Airlines (AAL) pilots approve new contract
  • Amicus Therapeutics (FOLD) announces that Simon Harford has been appointed Chief Financial Officer, effective immediately
  • AppLovin (APP) entered into an agreement to repurchase 15 mln shares of its Class A common stock beneficially owned by KKR Denali Holdings in a private transaction at a price per share of $36.85, for an aggregate purchase price of $552.75 mln
  • Arcutis Biotherapeutics appoints John Smither as interim CFO, effective August 31
  • Aurinia Pharma (AUPH) appointed Dr. Daniel G. Billen as Chair of the Board of Directors
  • AxoGen (AXGN) announces the successful first week of processing for Avance Nerve Graft at the newly opened Axogen Processing Center, in Dayton, Ohio
  • Bristol Myers Squibb (BMY) to Showcase Data Across its Innovative Cardiovascular Portfolio at the European Society of Cardiology Congress 2023
  • Calliditas Therapeutics AB (CALT): Everest Medicines announces partner Calliditas Therapeutics receives FDA Priority Review for full approval of Nefecon
  • Citigroup (C) considers overhaul, according to Financial Times
  • Duke Energy (DUK) responds to constructive North Carolina Utilities Commission decision on Duke Energy Progress' Performance-Based Regulation Application; discloses it will recognize one-time accounting charge of approximately $75 - 100 million related to settlement order
  • DuPont (DD) sheds another plastics business as its transformation nears completion
  • EHang (EH) unmanned aircraft cloud system approved by the CAAC; EH216-S positioned for post-TC commercial operations
  • Exelixis (EXEL) and Ipsen (IPSEY) announce positive results from Phase 3 CONTACT-02 pivotal trial evaluating Cabozantinib in combination with Atezolizumab in metastatic castration-resistant prostate cancer
  • Finnovate Acquisition Corp. (FNVT) and Scage International Limited enter SPAC combination agreement; Scage Future to list on Nasdaq Stock Market, post-combination valuation set at $1.0 bln
  • Flowers Foods (FLO) files mixed securities shelf offering
  • Forward Air (FWRD): ClearBridge Investments sends letter urging Board of directors of FWRD to reconsider announced intention to acquire Omni Logistics
  • Fox Corporation (FOXA) confirms FOX Weather, FOX News Media’s free, ad-supported streaming television weather service, has further expanded its distribution to reach Samsung (SSNLF) TV Plus users and Cox subscribers
  • Franchise Group (FRG) announces completion of merger
  • Freshpet (FRPT) has entered into a cooperation agreement with JANA Partners
  • General Motors (GM): California ordered Cruise to cut its robotaxi fleet by 50% following accident, according to Bloomberg
  • Geron (GERN) announces FDA Acceptance of NDA for Imetelstat for the treatment of lower risk MDS
  • Gilead Sciences (GILD) announces that the U.S. FDA has placed a partial clinical hold on the initiation of new patients in U.S. studies evaluating magrolimab to treat acute myeloid leukemia
  • Hawaii Electric (HE) was warned of system issues prior to wildfires, according to the New York Times
  • Huntington Ingalls (HII) announces that its Mission Technologies division was awarded a $138 mln recompete task order to provide professional services to the U.S. Air Force Life Cycle Management Center Bombers Directorate that will support the fielding of critical combat capabilities for U.S. combatant commands
  • HUTCHMED (HCM) Announces that the Sovleplenib Phase III ESLIM-01 Study Met Its Primary Endpoint in Primary Immune Thrombocytopenia in China
  • HYZON Motors (HYZN) announces proven global innovator Erik Anderson to become chairman of the board
  • IDEAYA Biosciences (IDYA) announces clearance of IND application for Pol Theta Helicase development candidate GSK101
  • Intel (INTC) will eliminate over 100 jobs, according to India Business Today
  • Kenvue (KVUE): Johnson & Johnson (JNJ) announces preliminary results of KVUE exchange offer
  • Kontoor Brands' (KTB) CFO to retire; appoints Joe Alkire as successor
  • Kraft (KHC) sees market opportunities in school lunches, according to the Wall Street Journal
  • LiveOne (LVO): PodcastOne common stock expected to commence trading on or around September 8, 2023; LiveOne sets record date of August 28, 2023 for special dividend of ~19% of PodcastOne’s common stock
  • Lockheed Martin (LMT): The Space Development Agency awarded Lockheed Martin a firm-fixed price agreement valued at approximately $816 mln to build 36 Tranche 2 Transport Layer Beta satellites
  • Masimo (MASI) reports new study evaluating the use of Masimo PVi as an indicator of fluid responsiveness to guide goal-directed fluid therapy in elderly patients undergoing gastrointestinal surgery
  • Medical Properties Trust (MPW) updates capital allocation strategy to further enhance long-term value creation
  • Meta (META) to introduce new web version of Threads, according to the Wall Street Journal
  • Meta (META): Threads daily active users has fell below 10 mln, according to the Wall Street Journal
  • Micron (MU) subsidiaries submitted full applications to the U.S. Department of Commerce’s CHIPS Program Office in response to the CPO's Notice of Funding Opportunity for semiconductor manufacturing
  • Neurocrine Biosciences (NBIX) Announces FDA Approval of INGREZZA Capsules for the Treatment of Chorea Associated With Huntington's Disease
  • NexGen Energy (NXE) completes the Provincial Environmental Assessment Technical Review and submission of the Final Environmental Impact Statement
  • Phathom Pharmaceuticals (PHAT) submits six-month stability data in support of erosive GERD New Drug Application
  • PNM (PNM) and parties reach unanimous settlement agreement for customer rate credits to resolve remaining steps of San Juan coal plant retirement
  • Regeneron Pharma (REGN) receives FDA approval for EYLEA HD
  • ReNew (RNW) reports JunQ results
  • Shell plc (SHEL) North Sea assets have three bidders, according to Bloomberg
  • Skillz (SKLZ) authorizes $65 million share repurchase program and exploration of debt repurchases
  • U.S. Steel (X): CNBC's Jim Cramer says he suspects the government will block ArcelorMittal (MT) deal for US Steel
  • Vale S.A. (VALE) informs reduction of shareholding ownership
  • Woodside (WDS) unions might strike in Australia, according to Reuters

(see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Acushnet (GOLF) upgraded to Buy from Hold at Jefferies; tgt raised to $84
  • AppFolio (APPF) upgraded to Overweight from Equal-Weight at Stephens; tgt raised to $212
  • Cogent Communications (CCOI) upgraded to Neutral from Sell at Goldman; tgt raised to $64
  • Insulet (PODD) upgraded to Buy from Neutral at Citigroup; tgt lowered to $265
  • Liberty Media (LSXMA) upgraded to Buy from Neutral at Seaport Research Partners; tgt $32
  • XPeng (XPEV) upgraded to Buy from Neutral at BofA Securities; tgt $22
• Downgrades:
  • Alpha Metallurgical Resources (AMR) downgraded to Market Perform from Outperform at TD Cowen; tgt lowered to $194
  • Insulet (PODD) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $219
  • Medical Properties Trust (MPW) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $7
  • Napco Security Systems (NSSC) downgraded to Mkt Perform from Outperform at William Blair
• Others:
  • FMC Corp (FMC) initiated with a Neutral at JP Morgan; tgt $90
  • GameSquare (GAME) initiated with a Buy at ROTH MKM; tgt $7
  • Merus (MRUS) initiated with an Outperform at TD Cowen
  • Peloton (PTON) removed from Tactical Underperform List at Evercore ISI
  • Restaurant Brands Int'l (QSR) initiated with an Overweight at JP Morgan; tgt $82
  • Subsea 7 SA (SUBCY) resumed with an Equal-Weight at Morgan Stanley

• Econ Data (Tuesday):
  • 10:00 ET: July Existing Home Sales (Briefing.com consensus 4.15 mln; prior 4.16 mln)
• Earnings:
  • Monday (Aug 21)
    • Pre-Market: None
    • After-Hours: FN NDSN ZM
  • Tuesday (Aug 22)
    • Pre-Market: BIDU BJ CSIQ COTY DKS GDS KC LOW M MDT PINC SCSC SPHR
    • After-Hours: LZB TOL URBN
  • Wednesday (Aug 23)
    • Pre-Market: ANF AAP ADI BBWI DY FL GRAB KSS LANC PTON WSM
    • After-Hours: ADSK GES NTAP NVDA SNOW SPLK ZUO
  • Thursday (Aug 24)
    • Pre-Market: BURL DLTR FRO HAIN NTES OSIS WOOF RY TD WB
    • After-Hours:   AFRM CRDO GPS INTU MRVL JWN ULTA WDAY
  • Friday (Aug 25)
    • Pre-Market: None
    • After-Hours: None