After Hours Report

The stock market acted today as if it was biding its time in front of some key happenings that should make for more excitable trading action in Wednesday's trade. In terms of today's trade, it featured modest losses for the major indices that broke an eight-session winning streak for the S&P 500 and Nasdaq Composite.

It was effectively a consolidation trade with neither buyers nor sellers showing a great deal of conviction at the index level.

Outsized moves were reserved for individual stocks like Palo Alto Networks (PANW 368.01, +24.65, +7.2%), which impressed with earnings results and guidance, Eli Lilly (LLY 949.97, +28.16, +3.1%), which impressed with news that tirzepatide reduced the risk of developing type 2 diabetes by 94% in adults with pre-diabetes, and Boeing (BA 172.09, -7.55, -4.2%), which got hit by a Bloomberg report indicating the aircraft manufacturer paused test flights of its 777X to investigate cracks in a key part.

Home improvement retailer Lowe's (LOW 240.32, -2.89, -1.2%) was another story stock, losing ground after issuing disappointing FY25 guidance, yet its losses were not material.

From a sector standpoint, the only material move today was made by the energy sector (-2.7%). Losses were registered by every component in what looked like a basket trade to reduce exposure. WTI crude futures were down just 0.8% to $73.17/bbl.

Outside of the energy sector, the biggest moves were made by the consumer staples (+0.5%) and materials (-0.4%) sectors.

Today's lack of conviction was reflected in the relatively light volume totals at the NYSE and Nasdaq; whereas, today's lack of buying interest was reflected in an advance-decline line that favored decliners by a nearly 2-to-1 margin at the NYSE and Nasdaq.

The Treasury market put together a nice day with yields sliding across the curve. Participants engaged the notion that many of the world's leading central banks -- and the Federal Reserve in particular -- are shifting (or soon will be) to a less restrictive policy stance. The 2-yr note yield dropped seven basis points to 4.00% and the 10-yr note yield fell five basis points to 3.82%.

The impending shift for the Fed, which has held rates higher for longer than other central banks, continues to take a toll on the dollar, which lost ground against the euro, the yen, and pound sterling again today. The U.S. Dollar Index was down 0.5% at 101.48, leaving it down 4.2% for the quarter and trading at its lowest level since the start of the year.

There was a pickup in hedging interest today, evidenced by the 8.0% jump in the CBOE Volatility Index ("VIX") to 15.82.

The pickup in the VIX came ahead of Wednesday's main events, which include the earnings reports from Target (TGT 144.44, -0.19, -0.1%), Macy's (M 17.74, -0.08, -0.5%), and TJX Cos. (TJX 113.31, +0.82, +0.7%) before the open, the release of benchmark revisions to nonfarm payrolls for April 2023-March 2024 at 10:00 a.m. ET, the $16 billion 20-yr bond auction at 1:00 p.m. ET, and the release of the Minutes for the July 30-31 FOMC meeting at 2:00 p.m. ET.

There was no U.S. economic data of note today.

• Nasdaq Composite: +18.7% YTD
• S&P 500: +17.3% YTD
• S&P Midcap 400: +8.3% YTD
• Dow Jones Industrial Average: +8.3% YTD
• Russell 2000: +5.7% YTD

Overseas:

• Europe: DAX -0.4%, TSE -1.0%, CAC -0.2%
• Asia: Nikkei +2.0%, Hang Seng -0.3%, Shanghai -0.9%

Commodities:

• Crude Oil -0.60 @ 73.17
• Nat Gas -0.04 @ 2.20
• Gold +9.90 @ 2550.10
• Silver +0.23 @ 29.48
• Copper -0.03 @ 4.15

After-Hours Spotlight:

• Alcon (ALC) beats by $0.01, misses on revs; reaffirms FY24 EPS guidance, revs guidance... ALC down 3.7%
• BigBear.ai (BBAI) and Concept Solutions team awarded 10yr $2.4 billion shared contract with U.S. Federal Aviation Administration to provide IT solutions and emerging tech... BBAI up 28.1%
• Keysight (KEYS) beats by $0.22, beats on revs; guides Q4 EPS in-line, revs in-line... KEYS up 10.5%
• La-Z-Boy (LZB) beats by $0.02, beats on revs; guides Q2 revs below consensus... LZB down 3.1%
• Microchip (MCHP) detected potentially suspicious activity involving its IT systems; determines that unauthorized party disrupted use of certain servers and some business operations... MCHP down 1.9%
• Toll Brothers (TOL) beats by $0.29, reports revs in-line; provides Q4 guidance; increases expected repurchase total for FY24 (Oct); projects FY24 EPS above consensus; raises adjusted gross margin forecast... TOL up 0.8%

Fair Value for Wednesday, August 21:

• S&P 500: 5,620
• Nasdaq 100: 19,810
• DJIA: 40,953

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

• Earnings/Guidance (Full Earnings Calendar):
  • Amer Sports (AS) beats by $0.11, beats on revs; guides Q3 EPS below consensus; raises FY24 guidance
  • Fabrinet (FN) beats by $0.17, beats on revs; guides SepQ EPS above consensus, revs above consensus; increases share buyback authorization
  • Flexsteel (FLXS) beat single est by $0.08, beats on revs; guides SepQ and FY25 revs above single est
  • Futu Holdings (FUTU) beats on top and bottom lines
  • Hesai Group (HSAI) reports Q2 results; guides for Q3
  • Kingsoft Cloud (KC) beats by RMB0.78, beats on revs
  • Lowe's (LOW) beats by $0.14, misses on revs; lowers FY25 EPS below consensus, revs below consensus
  • Medtronic (MDT) beats by $0.03, reports revs in-line; raises low end of FY25 EPS guidance, in-line; raises organic revs outlook
  • Palo Alto Networks (PANW) beats by $0.10, beats on revs; guides OctQ EPS above consensus, revs in-line; guides FY25 EPS and revs in-line; increases buyback authorization by $500 mln to $1 bln
  • Premier (PINC) beats by $0.20, beats on revs; guides FY25 EPS below consensus
  • Sasol (SSL) reports FY24 results
  • Vipshop (VIPS) misses by RMB0.03, misses on revs; guides Q3 revs below consensus
  • XPeng (XPEV) reports Q2 results; slightly misses on revs; guides Q3 revs below consensus
• General News
  • Intelligence agencies say Iran was responsible for hacking into former President Trump's campaign, according to the New York Times
  • President Biden defended his record during DNC speech, according to the New York Times
  • Former President Trump says he will comment on monetary policy, but he will not force the Fed to listen to him, according to Bloomberg
  • Former President Trump says he "might" ask Congress to provide financial support to homebuyers, according to Bloomberg
  • Former President Trump says he might ask Congress to end $7500 EV tax credit, according to Bloomberg
  • EU Commission discloses to interested parties draft definitive findings of anti-subsidy investigation into imports of battery electric vehicles from China
  • EU Commission approves €5 billion German State aid measure to support ESMC in setting up a new semiconductor manufacturing facility
  • Food industry rejects price gouging claims, according to the Wall Street Journal
  • FTC submits comment supporting proposed FDA guidance on interchangeable biosimilar drugs
  • Independent presidential candidate Robert F. Kennedy Jr. is considering ending his campaign and "joining forces" with former President Trump, according to CNBC
  • 3M (MMM) received an imminent danger order at its quarry in Little Rock; order has been terminated
  • AdaptHealth (AHCO) COO Shaw Rietkerk to transition to a new position as CBO; will no longer serve as COO, effective at the end of September
  • Adeia (ADEA) Receives Decisions in Videotron and Bell/Telus Case Appeals
  • Allegiant Travel (ALGT) reports preliminary passenger traffic results for July 2024; July revenue passenger miles down 1.7% yr/yr; June load factor down 3.7 basis points
  • Alphabet (GOOG): Appeals Court ruled that GOOG must face privacy lawsuit, according to Reuters
  • Alphabet's (GOOG) Waymo confirmed it surpassed 100 thousand trips per week
  • Alphabet (GOOG): Energix Renewables announces the signing of a strategic long-term agreement with Google
  • Altus Power (AMPS) completes two solar projects in Maine, totaling 12.6 MWs, increasing the size of the company’s portfolio in the Pine Tree State
  • Amazon (AMZN) brings Kindle reading to your Peloton (PTON) workout, plus 10 book recommendations
  • Amgen (AMGN) announces that Otezla is now available in the U.S. for pediatric use; First and Only Pill for Children and Adolescents Ages 6-17 with Moderate to Severe Plaque Psoriasis
  • Apple (AAPL) will release iPhone Pro models made in India later this year, according to Bloomberg
  • AstraZeneca (AZN) receives approval for Fasenra in China
  • Astellas Pharma (ALPMY) enter for Drug Evaluation of China's National Medical Products Administration has approved PADCEV for the treatment of adult patients with locally advanced or metastatic urothelial cancer
  • BAE Systems (BAESY) has been selected by Boeing (BA) to upgrade the fly-by-wire flight control computers for the F-15EX Eagle II and F/A-18E/F Super Hornet fighter aircraft
  • Bit Digital (BTBT) signs binding term sheet with Boosteroid, a new customer for its HPC business; represents over $700 mln revenue opportunity over five-year term
  • Boeing (BA): U.S. FAA adopts airworthiness directive for 787 Dreamliners following March incident when plant went into mid-air dive, according to Reuters
  • Boeing (BA) pauses flight tests for its 777X while it investigates cracks in key part, according to Bloomberg
  • Brookfield Corp. (BN) received approval from the Toronto Stock Exchange for the renewal of its normal course issuer bid to purchase up to 10% of each series of outstanding Class A Preference Shares
  • Cognyte Software (CGNT)  releases investor presentation highlighting business momentum in advance of annual meeting
  • Dentsply Sirona (XRAY) initiates search for new CFO
  • Dr. Reddy's (RDY), Aurigene Pharmaceutical Services, and Kainomyx announce potential partnership for joint development of affordable anti-malarial drug
  • Dropbox (DBX): Reclaim is now a part of Dropbox
  • Elanco Animal Health (ELAN) announced the FDA has completed its review of all major and minor technical sections for Credelio Quattro, and the final 60-day administrative review is underway
  • Eli Lilly (LLY) reports tirzepatide reduced the risk of developing type 2 diabetes by 94% in adults with pre-diabetes and obesity or overweight
  • Eli Lilly (LLY): JAMA Network posts study "Disproportionality Analysis From World Health Organization Data on Semaglutide, Liraglutide, and Suicidality"
  • Emergent BioSolutions (EBS) Responds to Mpox Public Health Emergency as Cases Surge in Africa
  • Emergent BioSolutions (EBS) finalizes sale of Baltimore-Camden manufacturing site to Bora Pharmaceuticals; Emergent received ~$30 million at closing
  • Five9 (FIVN) announced a reduction in force plan
  • Fluor (FLR) awarded $1.4 bln U.S. Navy contract modification
  • Forward Air (FWRD): Ancora confirms it issues letter to FWRD Board of Directors regarding the need to initiate a strategic review based on acquirer interest
  • fuboTV (FUBO) reiterated with a Mkt Perform at Barrington Research; Injunction on launch of Venu a positive for potential subscriber growth
  • GlaxoSmithKline (GSK) receives FDA Breakthrough Therapy Designation for B7-H3-targeted antibody-drug conjugate in relapsed or refractory extensive-stage small-cell lung cancer
  • GoPro (GPRO) approves restructuring plan; to reduce workforce by approximately 15%
  • Icahn Enterprises (IEP): Carl Icahn amended BHC, CVI, JBLU, UAN, SD, SWX 13D files to disclose settlement agreements with the SEC
  • ICU Medical (ICUI): FDA updates instructions for use regarding batteries in Plum 360, A+ and A+3 infusion system
  • Infosys (INFY) set to get $100 mln from Microosft (MSFT) deal with Coca Cola (KO), according to Economic Times
  • Jacobs Solutions (J) was selected by King Salman International Airport Development Company to provide concept masterplan validation, detailed masterplan design, runway design and other services for the King Salman International Airport in Riyadh, Saudi Arabia
  • Johnson & Johnson (JNJ) receives FDA approval for RYBREVANT plus LAZCLUZE as a first-line chemotherapy-free treatment for patients with EGFR-mutated advanced lung cancer
  • KBR (KBR) awarded an estimated $199 million cost-plus-fixed-fee contract supporting the Naval Information Warfare Center
  • KKR (KKR) in discussions to purchase The Parking Spot for $1.4 bln, according to Bloomberg
  • Lucid Group (LCID) announces that Lucid Financial Services has introduced leasing to its portfolio of finance options in Canada
  • Marriott (MAR) Retirement Savings Plan is transitioning to a new plan recordkeeper
  • Molina Healthcare (MOH) announces that its Board of Directors has entered into a contract amendment with President and Chief Executive Officer, Joe Zubretsky, designed to secure Mr. Zubretsky’s tenure through at least the end of 2027
  • Monster Beverage (MNST) authorizes new repurchase program for up to an additional $500 mln
  • Navios Maritime Partners (NMM) beats by $0.22, beats on revs (two estimates)
  • Netflix (NFLX) 2024 upfront advertising has more than doubled, according to Variety
  • Netflix (NFLX) confirms it closes successful upfront and expands advertiser capabilities
  • Norfolk Southern (NSC) says it will close ingates to all CPKC Intermodal traffic with Canadian province destinations effective 00:01, Tuesday, August 20
  • Organon (OGN) has expanded its agreement with Eli Lilly and Company (LLY) to become the sole distributor and promoter for the migraine medicine Emgality in 11 additional markets
  • Paramount Global (PARA): Bronfman believes this team achieve $3 billion in cost savings if PARA deal works out, according to updated WSJ story
  • PayPal (PYPL) announces expanded partnership with Adyen, which will now offer Fastlane by PayPal to accelerate their guest checkout experience
  • Pinduoduo (PDD): Shein files lawsuit against Temu for alleged copyright infringement, according to 404 Media
  • Premier (PINC) announces that it has been selected by AllSpire Health GPO as its primary national GPO; also appointed Glenn Coleman, CPA to serve as the Chief Administrative and Financial Officer of the company, effective November 11, 2024; Craig McKasson to retire
  • Rivian Automotive's (RIVN) Vice President of Manufacturing Tim Fallon left the company, according to Electric-Vechicles.com
  • Science Applications (SAIC) awarded $262 mln U.S. Air Force contract bridge modification
  • Scinai Immunotherapeutics (SCNI) announces entering into $2 mln private equity commitment agreement with its largest existing shareholder
  • Shopify (SHOP): Alphabet's (GOOG / GOOGL) Youtube confirms it is expanding partnership with Shopify
  • Silvercorp (SVM) Issues Updated Technical Report for the Ying Mining District
  • Sirius XM (SIRI) inks new multi-year agreement with Alex Cooper, the World's Leading Female Podcaster; "Call Her Daddy" Finds a New Home
  • SJW's (SJW) wholly-owned subsidiary, San Jose Water, announces that, together with the Public Advocates Office, it has reached a constructive settlement agreement in its 2025 to 2027 General Rate Case that was filed with the California Public Utilities Commission on January 2, 2024
  • Southwest Airlines (LUV) CEO Bob Jordan wants investor support ahead of proxy fight, according to the New York Post
  • State Street (STT) announces a strategic agreement that will deliver trusted and reliable digital assets capabilities for State Street Bank and Trust Company clients
  • Stellantis (STLA) workers could strike nationwide, according to Reuters
  • Stellantis (STLA) confirms that Tim Fallon has joined the company as the head of Manufacturing in North America
  • Stellantis (STLA) spokesperson says company is delaying Belvidere investment plans, according to Reuters
  • Taiwan Semiconductor Manufacturing (TSM), Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V. (NXPI) JV ESMC commenced the initial phase of land preparation for its first semiconductor fab in Dresden, Germany
  • Take-Two (TTWO): 2K and Gearbox Software confirm that Borderlands 4, the next entry in the iconic looter-shooter franchise, will launch in 2025 on PlayStation5, Xbox Series X|S, and PC through Steam and the Epic Games Store
  • Tesla (TSLA): Former President Trump says he is considering naming Tesla CEO Elon Musk advisor if he wins the presidency, according to Reuters
  • Texas Instruments (TXN): Elliott Statement on Texas Instruments' Capital Management event
  • Triumph Group (TGI) announces that Mark C. Cherry was elected to the Board of Directors as an independent director at its Annual Meeting of Stockholders on August 8, 2024
  • Uranium Energy (UEC) intersects 12.7% eU3O8 over 7.2 metres, 850 m northeast of Roughrider Deposit
  • U.S. Bancorp (USB): Mitsubishi UFJ Financial Group (MUFG) sells shares of USB
  • VICI Properties (VICI): Culinary Union confirmed that a Tentative Agreement on a new contract was just reached with Venetian Vegas and Palazzo Vegas for over 4,000 hospitality workers
  • Voya Financial (VOYA) surpasses $100 billion in assets across multiple employer solutions
  • VSE Corp (VSEC) announces the appointment of Adam Cohn as Chief Financial Officer and Garry Snow as Chief Growth Officer for VSE Corporation
  • Wabash Natl (WNC) announces leadership changes, including promotion of Patrick Keslin to Senior Vice President, Chief Financial Officer
  • Warner Bros. Discovery (WBD) pledged $8.5 bln for Southern Nevada studio, according to CBS News
  • Wells Fargo (WFC) has entered into a definitive agreement to sell the non-Agency third-party servicing segment of its Commercial Mortgage Servicing business to Trimont

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

• Upgrades:
  • Antero Resources (AR) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt $44
  • Braskem SA (BAK) upgraded to Buy from Neutral at Citigroup
  • BioMarin Pharmaceutical (BMRN) upgraded to Outperform from Mkt Perform at Bernstein; tgt raised to $110
  • Banco Santander Chile (BSAC) upgraded to Neutral from Sell at Goldman; tgt raised to $21
  • Range Resources (RRC) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt $45
• Downgrades:
  • AbCellera Biologics (ABCL) downgraded to Hold from Buy at The Benchmark Company
  • Alight (ALIT) downgraded to Neutral from Overweight at JP Morgan; tgt $8
  • AvidXchange (AVDX) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $9
  • Bancolombia S.A. (CIB) downgraded to Sell from Neutral at Goldman; tgt lowered to $32
  • JPMorgan Chase (JPM) downgraded to Outperform from Buy at Daiwa Securities; tgt $240
  • Stride (LRN) downgraded to Neutral from Buy at Citigroup; tgt raised to $90
  • Woodside Energy Group (WDS) downgraded to Mkt Perform from Outperform at Bernstein
• Others:
  • Advanced Micro (AMD) initiated with a Buy at Edward Jones
  • Abercrombie & Fitch (ANF) positive catalyst watch opened by Citi
  • Concentra Group Holdings Parent (CON) initiated with an Outperform at RBC Capital Mkts; tgt $33
  • MediaAlpha (MAX) initiated with a Buy at Goldman; tgt $20
  • Porsche (POAHY) resumed with a Mkt Perform at Bernstein
  • Sonic Automotive (SAH) initiated with a Buy at Needham; tgt $73
  • Vista Energy (VIST) initiated with an Overweight at JP Morgan; tgt $68

• Econ Data (Wednesday):
  • 07:00 ET: Weekly MBA Mortgage Applications Index (prior +16.8%)
  • 10:30 ET: EIA Crude Oil Inventories (prior +1.36M)
  • 13:00 ET: $16 billion 20-yr bond auction
  • 14:00 ET: July 30-31 FOMC Minutes
• Earnings:
  • Monday (Aug 19)
    • Pre-Market: EL DDD
    • After-Hours: FN PANW
  • Tuesday (Aug 20)
    • Pre-Market: AS GDS KC LOW MDT PINC VIPS
    • After-Hours: COTY KEYS LZB TOL ZTO
  • Wednesday (Aug 21)
    • Pre-Market: ADI DY M TGT TJX ZK
    • After-Hours: A NDSN SNOW SQM SNPS WOLF ZM
  • Thursday (Aug 22)
    • Pre-Market: AAP BIDU BILI BJ CSIQ LANC NTES PTON TD VIK WB
    • After-Hours: BILL CAVA INTU ROST WDAY
  • Friday (Aug 23)
    • Pre-Market: BKE
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike