After Hours Report

Stocks had a mixed showing in another lightly traded session. Market participants were eyeing the price action in Treasuries again, which was somewhat spastic and helped to keep the stock market in check.

In the early going, relative strength from the mega cap space had been driving Nasdaq gains and limiting losses elsewhere. The S&P 500 for its part had been trading above 4,400 at its high of the day before quickly slipping below that level. The S&P 500 failed to breach 4,400 on a few retests, which invited more selling interest in the afternoon trade.

The major indices ultimately settled the session near their worst levels of the day. The Dow Jones Industrial Average fell 0.5%, the S&P 500 fell 0.3%, and the Nasdaq rose 0.1%.

Weak bank stocks were a notable overhang for the broader market after S&P downgraded the credit ratings of multiple banks, noting concerns about funding risks from rising rates and weaker profitability. Additionally, retailer Macy's (M 12.66, -2.07, -14.1%) talked about weakening consumer credit conditions in its business, and that acknowledgment was another weight on the banks. The SPDR S&P Regional Banking ETF (KRE) fell 2.4% and the SPDR S&P Bank ETF (KBE) fell 2.0%.

Macy's was down sharply following its earnings report and Dick's Sporting Goods (DKS 111.53, -35.51, -24.2%) was another big loser after reporting earnings. Dick's came up well shy of consensus earnings estimates and attributed its disappointing profits and guidance to inventory shrink (i.e. theft). Lowe's (LOW 225.74, +8.15, +3.8%) went against the grain, though, and posted a nice gain after its quarterly report. 

Homebuilders outperformed the broader market, boosted in part by an existing home sales report for July that continued to show a lean supply of homes for sale. The SPDR S&P Homebuilder ETF (XHB) rose 0.3%. The iShares U.S. Home Construction ETF (ITB) rose 0.8%.

The S&P 500 financials sector (-0.8%) saw the largest sector decline due to its weak bank components. The real estate sector (+0.3%), meanwhile, led the outperformers. 

Treasury yields declined overnight before nudging higher after the cash open. Yields ultimately settled below their highs of the day. The 2-yr note yield note yield rose five basis points to 5.04% and the 10-yr note yield fell one basis point to 4.33%.

• Nasdaq Composite: +29.0% YTD
• S&P 500: +14.3% YTD
• S&P Midcap 400: +5.7% YTD
• Russell 2000: +5.2% YTD
• Dow Jones Industrial Average: +3.4% YTD

Today's economic data was limited to the existing home sales report for July. Existing home sales decreased 2.2% month-over-month in July to a seasonally adjusted annual rate of 4.07 million (Briefing.com consensus 4.15 million) from an unrevised 4.16 million in June. Sales were down 16.6% from the same period a year ago.

• The key takeaway from the report is that the inventory of existing homes for sale remains tight and affordability continues to be adversely impacted by rising prices and higher mortgage rates, all of which is also acting as moving deterrents for existing homeowners.

Tomorrow's economic calendar will feature:

• 7:00 ET: Weekly MBA Mortgage Index (prior -0.8%)
• 9:45 ET: Flash August S&P Global US Manufacturing PMI (prior 49.0) and flash S&P Global US Services PMI (prior 52.3)
• 10:00 ET: July New Home Sales (Briefing.com consensus 701,000; prior 697,000)
• 10:30 ET: Weekly crude oil inventories (prior -5.96 mln)

Overseas:

• Europe: DAX +0.7%, FTSE +0.2%, CAC +0.6%
• Asia: Nikkei +1.1%, Hang Seng +0.9%, Shanghai +0.9%

Commodities:

• Crude Oil -0.48 @ 79.64
• Nat Gas -0.07 @ 2.56
• Gold +3.00 @ 1926.00
• Silver +0.11 @ 23.45
• Copper +0.04 @ 3.76

After-Hours Spotlight:

• La-Z-Boy (LZB) beats by $0.07, beats on revs; guides Q2 revs in-line; expects consumer trends to remain soft... LZB down 1.9%
• Nikola Corp (NKLA) files for 10,266,209 share common stock offering by selling shareholders... NKLA down 1.4%
• Toll Brothers (TOL) beats by $0.88, beats on revs, homes delivered up 5%, increases FY23 home deliveries guidance... TOL up 1.0%
• UPS (UPS) unchanged after Teamsters ratify five-year national agreement, according to Teamsters.org... UPS up 0.7%
• Urban Outfitters (URBN) beats by $0.21, beats on revs, comps +4.9%... URBN up 3.0%

Fair Value for Wednesday, August 23:

• S&P 500: 4,400
• Nasdaq 100: 14,955
• DJIA: 34,345

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

• Earnings/Guidance (Full Earnings Calendar):
  • Agora (API) reports Q2 results
  • American Airlines (AAL) confirms new collective bargaining agreement with its mainline pilots represented by the Allied Pilots Association; provides CASM guidance
  • Baidu (BIDU) beats by RMB5.75, beats on revs
  • BHP Group (BHP) reports FY23 results; provides production outlook
  • BJ's Wholesale (BJ) beats by $0.07, misses on revs; guides FY24 EPS in-line
  • Canadian Solar (CSIQ) beats by $0.87, misses on revs; guides Q3 revs below consensus; guides FY23 revs below consensus
  • Coty (COTY) misses by $0.01, beats on revs; guides FY24 EPS below consensus
  • Dick's Sporting Goods (DKS) misses by $0.99, reports revs in-line; guides FY24 EPS below consensus; announces business optimization
  • Fabrinet (FN) beats by $0.06, beats on revs; guides SepQ EPS in-line, revs in-line; adds $47.6 mln to repurchase authorization
  • GDS Holdings (GDS) beats by $0.98, reports revs in-line; reaffirms FY23 revs guidance
  • Kingsoft Cloud (KC) reports Q2 (Jun) results, misses on revs
  • Lowe's (LOW) beats by $0.09, reports revs in-line; reaffirms FY24 EPS guidance, revs guidance
  • Macy's (M) beats by $0.12, beats on revs; guides Q3 EPS below consensus, revs below consensus; reaffirms FY24 EPS, rev, and comp guidance; Q2 comps -8.2%
  • Medtronic (MDT) beats by $0.09, beats on revs; raises FY24 EPS and organic revenue growth guidance
  • 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
  • NuStar Energy (NS) in slide presentation says it expects to generate adjusted EBITDA of $700-760 mln in FY23; co expects to have additional free cash flow growth in 2024 and beyond
  • Pebblebrook Hotel Trust (PEB) reports July metrcs with Hotel EBITDA of $41.5 mln
  • Premier (PINC) beats by $0.02, misses on revs
  • ScanSource (SCSC) beats by $0.01, beats on revs; guides FY24 revs above consensu
  • Sphere Entertainment Co. (SPHR) reports Q4 (Jun) results, beats on revs
  • Woodside Energy Group (WDS) reports H1 results; revs in0line
  • Zimmer Biomet (ZBH) appoints Ivan Tornos as President and CEO and election to the Board of Directors, effective immediately; reaffirms guidance
  • 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
• General News
  • New York & California lost $1 trillion when financial firms moved to southern states, according to Bloomberg
  • There were no reports of deaths or major storm damage in Los Angeles or San Diego following Hurricane Hilary, according to the New York Times
  • Auto loan delinquencies are surging, according to the Wall Street Journal
  • Project NextGen awards over $1.4 billion to develop the future of COVID-19 vaccines and therapeutics
  • Activision Blizzard (ATVI): EU will assess impact of Microsoft's (MSFT) UK Activision (ATVI) remedy, according to Reuters
  • AerSale (ASLE) successfully completes certification flight testing for the AerAware enhanced flight vision system
  • Agiliti (AGTI) approves stock repurchase program for up to $50 mln of shares of common stock
  • Airbnb (ABNB): NYC rental regulations could eliminate large amount of Airbnb listings, according to the Wall Street Journal
  • Alphabet (GOOG) introduces YouTube's Music AI Incubator; co is working closely with its music partners, including Universal Music Group, to develop an AI framework
  • Altria (MO) subsidiary NJOY filed a complaint against JUUL Labs with the U.S. International Trade Commission
  • American Airlines (AAL) confirms new collective bargaining agreement with its mainline pilots represented by the Allied Pilots Association; provides CASM guidance
  • American Water Works' (AWK) Illinois American Water completed the acquisition of the Village of Broadlands water system for $425,000
  • Amgen (AMGN) to discuss application for lumakras (sotorasib) for the treatment of KRAS G12C-positive NSCLC at FDA advisory committee meeting
  • Aris Water Solutions (ARIS) appoints Dylan Van Brunt, current EVP of Operations and Planning, to position of COO, effective immediately
  • AstraZeneca (AZN): FDA approves orphan drug designation for treatment of sickle cell disease
  • BioXcel Therapeutics (BTAI) announced that the FDA granted the Company a Type B/Breakthrough guidance meeting regarding the Company’s TRANQUILITY clinical trial program, which is scheduled for October 11, 2023
  • Boeing (BA) receives commitment from Indonesia to acquire Boeing F-15EX
  • Bowman Consulting Group (BWMN): Illinois Department of Transportation authorizes additional $4.9 million in funding for consulting services relating to the Phase III Route I-80 Corridor Management Program
  • CenterPoint (CNP) appoints Earl Cummings as Independent Chair of the Board
  • 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
  • Cleveland-Cliffs (CLF) delivered letter to United States Steel (X) demanding that it comply with obligations
  • Coinbase Global (COIN) is increasing its support for stablecoins with an investment in Circle; Circle will take full control over USDC issuance and governance; Coinbase and Circle will also maintain a commercial relationship
  • Coty (COTY) and Marc Jacobs sign and expand long-term license agreement
  • Eli Lilly (LLY) announces topline results from the LIBRETTO-531 study evaluating Retevmo versus physician's choice of the multikinase inhibitors cabozantinib or vandetanib as an initial treatment for patients with advanced or metastatic rearranged during transfection-mutant medullary thyroid cancer
  • Fidelity Nat'l Info (FIS) appoints James Kehoe as CFO effective August 21, 2023; reaffirms 2023 revenue and adjusted EBITDA guidance
  • Fulcrum Therapeutics (FULC) announces that the U.S. FDA has lifted the clinical hold on the Investigational New Drug application for FTX-6058 for the potential treatment of sickle-cell disease
  • Goldman Sachs (GS) said to weigh offer with TDR, Sycamore consortium for Subway to compete with Roark Capital Group, according to Bloomberg
  • Goldman Sachs (GS) wants workers in offices five days a week, according to Bloomberg
  • Hawaiian Electric (HE) seeking advice from Guggenheim to determine fallout from wildfires, according to Bloomberg
  • Incannex Healthcare (IXHL) received approval from the FDA to conduct the Investigational New Drug opening pivotal IHL-42X Phase 2/3 clinical trial in the United States as planned
  • Intel (INTC) to quadruple chip packaging capacity by 2025, according to Nikkei
  • Matterport (MTTR) has joined LOT Network, patent licensing platform that help protect against costly litigation from patent assertion entities
  • New Found Gold Corp. (NFGC) intercepts 86.9 g/t au over 5.30m & 29.4 g/t au over 7.75m at iceberg
  • Novavax (NVAX) reports updated protein-based XBB COVID vaccine induced neutralizing responses against emerging subvariants, including EG.5.1 and XBB.1.16.6
  • Oramed Pharmaceuticals (ORMP) amended Scilex Holding (SCLX) / Sorrento Therapeutics (SRNE / SRNEQ) stock purchase agreement
  • Peloton (PTON) partners with colleges, universities, athletes, and student platforms; to bring the brand's workouts to campuses
  • Pfizer (PFE): U.S. FDA Approves ABRYSVO, Pfizer’s Vaccine for the Prevention of Respiratory Syncytial Virus (RSV) in Infants Through Active Immunization of Pregnant Individuals 32-36 Weeks of Gestational Age
  • 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
  • Rackspace Technology (RXT) announces professional services collaboration with Alphabet's (GOOG/L) Google Cloud
  • Regeneron (REGN) confirms agreement with BARDA supporting development of next-generation antibody therapy for COVID-19 preventio
  • Rhythm Pharmaceuticals (RYTM) sold $50 mln in shares from its ATM program in recent weeks
  • Science Applications (SAIC) signs Strategic Collaboration Agreement with Amazon (AMZN) Web Services, expanding its cloud offerings to government customers
  • SOPHiA GENETICS SA (SOPH) announced the expansion of its relationship with Gustave Roussy, the leading cancer center in Europe
  • SS&C Techs (SSNC) increases quarterly dividend by 20% to $0.24/share; equates to new annualized yield of 1.7%
  • Teva Pharma (TEVA) settles price-fixing charges from 2020 with the U.S. Department of Justice; will pay $225 mln over five years
  • Toyota Motor (TM) will produce two new models at Philippines plant, according to Nikkei
  • Union Pacific (UNP) provides Southern California operations update
  • UPS (UPS): International Brotherhood of Teamsters will vote later today on UPS agreement, according to WSJ
  • Valens Semiconductor (VLN) announces that its CFO is stepping down to pursue other opportunities; Vice President of Finance appointed interim CFO
  • Vanda Pharma (VNDA) disclosed last night that Court denied the Company's petition for a patent rehearing
  • Vishay (VSH) is releasing a new series of IHPT solenoid-based haptic actuators that are bundled with patent licenses for Immersion Corporation’s (IMMR) haptic technology
  • Westport Fuel Systems (WPRT) announced today that David Johnson, Chief Executive Officer has decided to step down as chief executive officer and will resign from the Board, effective immediately
  • Wheels Up Experience (UP) disclosed last night that lenders determined to further extend the grace period for the payment of outstanding principal and interest currently due under such equipment notes to August 23, 2023

(see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • AppLovin (APP) upgraded to Buy from Hold at Jefferies; tgt raised to $50
  • Aramark (ARMK) upgraded to Buy from Neutral at UBS; tgt $43
  • Cognizant Tech (CTSH) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $77
  • Edison (EIX) upgraded to Buy from Neutral at Mizuho; tgt raised to $75
  • Emerson (EMR) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $107
  • Iron Mountain (IRM) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $68
  • Jefferies (JEF) upgraded to Buy from Neutral at Goldman; tgt raised to $40
  • Pinnacle West (PNW) upgraded to Buy from Neutral at Mizuho; tgt raised to $85
  • Provident Finl (PFS) upgraded to Overweight from Neutral at Piper Sandler; tgt $20
  • Restaurant Brands Int'l (QSR) upgraded to Buy from Neutral at Northcoast
  • Shift4 Payments (FOUR) upgraded to Outperform from Mkt Perform at Raymond James; tgt $74
  • Trinity Capital (TRIN) upgraded to Buy from Neutral at Compass Point; tgt $15.50
• Downgrades:
  • Certara (CERT) downgraded to Hold from Buy at Jefferies; tgt lowered to $17
  • Evercore (EVR) downgraded to Neutral from Buy at Goldman; tgt lowered to $140
  • Genpact (G) downgraded to Underweight from Neutral at JP Morgan; tgt $40
  • Target (TGT) downgraded to Neutral from Outperform at Daiwa Securities; tgt $134
  • Xcel Energy (XEL) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $60
• Others:
  • Alphabet A (GOOGL) initiated with an Outperform at Wedbush; tgt $160
  • Amazon (AMZN) resumed with an Outperform at Wedbush and added to Best Ideas List; tgt $180
  • Axon (AXON) initiated with an Equal-Weight at Morgan Stanley; tgt $230
  • Celldex Therapeutics (CLDX) initiated with an Underweight at Wells Fargo; tgt $21
  • CRH Plc. (CRH) resumed with a Buy at Citigroup
  • Gulfport Energy (GPOR) initiated with a Buy at BofA Securities; tgt $155
  • GXO Logistics (GXO) initiated with a Buy at UBS; tgt $74
  • InterDigital (IDCC) resumed with an Outperform at William Blair
  • Karuna Therapeutics (KRTX) initiated with an Overweight at Wells Fargo; tgt $225
  • Light & Wonder (LNW) initiated with a Buy at Redburn; tgt $104
  • Madison Square Garden Entertainment (MSGE) initiated with a Buy at BofA Securities; tgt $41
  • MercadoLibre (MELI) initiated with an Outperform at Wedbush; tgt $1500
  • Meta Platforms (META) initiated with an Outperform at Wedbush; tgt $350
  • Osisko Gold Royalties (OR) resumed with a Sector Perform at Scotiabank
  • Pinterest (PINS) initiated with a Neutral at Wedbush; tgt $30
  • Portland Gen Elec (POR) initiated with a Neutral at UBS; tgt $46
  • Sea Limited (SE) initiated with an Outperform at Wedbush; tgt $48
  • Shopify (SHOP) initiated with an Outperform at Wedbush; tgt $62
  • Surf Air Mobility (SRFM) initiated with an Outperform at Bernstein
  • TripAdvisor (TRIP) initiated with a Neutral at Wedbush; tgt $17

• Econ Data (Wednesday):
  • 7:00 ET: Weekly MBA Mortgage Index (prior -0.8%) 
  • 9:45 ET: Flash August S&P Global US Manufacturing PMI (prior 49.0) and flash S&P Global US Services PMI (prior 52.3)
  • 10:00 ET: July New Home Sales (Briefing.com consensus 701,000; prior 697,000)
  • 10:30 ET: Weekly crude oil inventories (prior -5.96 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