After Hours Report

The market had a mixed showing again today. The Nasdaq Composite (+0.3%) settled slightly higher than yesterday, boosted by gains in some mega cap constituents. The S&P 500 settled 0.3% lower than yesterday, below its 50-day moving average (5,506).

Mixed action persisted through the entire session due to a lack of conviction in front of the August Employment Situation Report tomorrow at 8:30 ET. The market's focus of late has been on labor market conditions, but this morning's data didn't garner outsized responses from equities or bonds.

The ADP Employment Change Report for August was weaker than expected, the weekly initial jobless claims report was better than expected, the revised Q2 productivity report had the right mix of an upward revision to productivity and a downward revision to unit labor costs, and the ISM Services PMI for August was better than expected but little changed from July.

The 10-yr note yield settled four basis points lower at 3.73% and the 2-yr note yield settled two basis points lower at 3.75%.

Today's lackluster action was also due to the understanding that the market has experienced quite a bit of consolidation this week. The S&P 500 is 2.6% lower than Friday's close, the Nasdaq Composite sits 3.3% lower than last Friday, and the Russell 2000 is down 3.9% from last week. 

Eight of the 11 S&P 500 sectors settled with declines led by health care (-1.4%), industrials (-1.2%), and financials (-1.0%). The consumer discretionary (+1.4%), communication services (+0.5%), and information technology (+0.1%) sectors were alone in positive territory at the close, reflecting mega cap leadership.

Tesla (TSLA 230.17, +10.76, +4.9%) was a winning standout from the space after a Bloomberg report that it could introduce full self-driving technology in China and Europe, pending necessary approvals, in the first quarter of 2025.

• S&P 500: +15.4% YTD
• Nasdaq Composite: +14.1% YTD
• Dow Jones Industrial Average: +8.1% YTD
• S&P Midcap 400: +7.2% YTD
• Russell 2000: +5.2% YTD

Reviewing today's economic data:

• August ADP Employment Change 99K (Briefing.com consensus 150K); Prior was revised to 111K from 122K
• Weekly Initial Claims 227K (Briefing.com consensus 236K); Prior was revised to 232K from 231K, Weekly Continuing Claims 1.838 mln; Prior was revised to 1.860 mln from 1.868 mln
  • The key takeaway from the report is that layoff activity remains relatively tame; however, so does hiring activity, evidenced by the elevated stickiness of continuing jobless claims.
• Q2 Productivity-Rev. 2.5% (Briefing.com consensus 2.3%); Prior 2.3%,Q2 Unit Labor Costs-Rev. 0.4% (Briefing.com consensus 0.9%); Prior 0.9%
  • The key takeaway from the report was the friendly inflation view embedded in the softening unit labor costs. They were up just 0.3% over the last four quarters, which is the lowest rate since the fourth quarter of 2013.
• August S&P Global US Services PMI - Final 55.7; Prior 55.0
• August ISM Non-Manufacturing Index 51.5% (Briefing.com consensus 51.0%); Prior 51.4%
  • The key takeaway from the report is that overall activity in the largest sector of the U.S. economy remains in an expansion mode, which is what the market, worried about a possible hard landing, wants to see. Slow to moderate growth, the report said, was noted across many industries.

The headline event tomorrow is the August Employment Situation report at 8:30 ET. 

Overseas:

• Europe: DAX +0.0%, FTSE -0.3%, CAC -0.9%
• Asia: Nikkei -1.1%, Hang Seng -0.1%, Shanghai +0.1%

Commodities:

• Crude Oil +0.01 @ 69.14
• Nat Gas +0.12 @ 2.26
• Gold +17.80 @ 2543.20
• Silver +0.55 @ 29.09
• Copper +0.06 @ 4.13

After-Hours Spotlight:

• Braze (BRZE) beats by $0.12, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY25 EPS above consensus, revs above consensus... BRZE down 4.8%
• Broadcom (AVGO) beats by $0.02, reports revs in-line; guides Q4 revs below consensus; expects FY24 AI revs of $12.0 bln... AVGO down 4.6%
• DocuSign (DOCU) beats by $0.16, beats on revs; guides Q3 revs above consensus; guides FY25 revs above consensus... DOCU up 1.5%
• Guidewire Software (GWRE) beats by $0.08, beats on revs; guides Q1 revs above consensus; guides FY25 revs above consensus... GWRE up 7.8%
• Salesforce (CRM) confirms it agreed to acquire Own Company for approximately $1.9 bln in cash... CRM down 0.1%
• Samsara (IOT) beats by $0.04, beats on revs; guides Q3 EPS in-line, revs above consensus; guides Q4 (Jan) EPS in-line, revs above consensus; guides FY25 EPS above consensus, revs above consensus... IOT up 6.1%
• Smartsheet (SMAR) beats by $0.15, reports revs in-line; guides Q3 EPS in-line, revs below consensus; guides FY25 EPS above consensus, reaffirms FY25 revs guidance... SMAR up 3.5%
• UiPath (PATH) beats by $0.01, beats on revs; guides Q3 revs in-line; guides FY25 revs above consensus; also announces that Ashim Gupta will be taking on an expanded role as Chief Operating Officer; announces $500 mln expansion to its stock repurchase program... PATH up 8.9%

Fair Value for Friday, Sept. 6:

• S&P 500: 5,515
• Nasdaq 100: 18,973
• DJIA: 40,835

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

• Earnings/Guidance (Full Earnings Calendar):
  • AeroVironment (AVAV) beats by $0.27, beats on revs; reaffirms FY25 EPS guidance, revs guidance
  • AT&T (T) provides update during BofA conference; remains on track to achieve consolidated financial guidance outlined in July
  • Buckle (BKE) reports August comp sales increased 1.7% yr/yr; net sales down 6.6% yr/yr
  • C3.ai (AI) beats by $0.08, reports revs in-line; guides Q2 revs in-line; reaffirms FY25 revs guidance
  • Casey's General (CASY) beats by $0.33, misses on revs, inside comps of +2.3%; FY25 outlook unchanged, no updates until after closing of previously disclosed Fikes transaction
  • ChargePoint (CHPT) misses by $0.01, misses on revs; guides Q3 revs below consensus; to reduce workforce by approximately 15%
  • Concrete Pumping (BBCP) misses by $0.06, misses on revs; guides FY25 revs below consensus
  • Copart (CPRT) misses by $0.03, reports revs in-line
  • Couchbase (BASE) beats by $0.03, reports revs in-line; guides Q3 revs in-line; guides FY25 revs in-line
  • Credo Technology Group (CRDO) reports EPS in-line, revs in-line; guides Q2 revs above consensus
  • Danaher (DHR) reaffirms prior guidance for Q3 and FY24 ahead of analyst event
  • Descartes (DSGX) beats by $0.01, beats on revs
  • Edwards Lifesciences (EW) at conference says that TAVR was below expectations in Q2; says they are working on solving the issue; says FY25 EPS will be lower than FY24
  • Equity Residential (EQR) provides operating update; same store revenue growth remains on track with guidance; expects to produce physical occupancy of 96.2% for FY24
  • G-III Apparel (GIII) beats by $0.25, reports revs in-line; guides Q3 EPS below consensus, revs in-line; raises FY25 EPS guidance above consensus, reaffirms FY25 revs guidance
  • Hewlett Packard Enterprise (HPE) beats by $0.03, reports revs in-line; guides Q4 midpoints of EPS and revs above consensus
  • Hon Hai Precision (HNHPF) reports August revenue +32.8% yr/yr to NT 548..3 bln
  • Korn/Ferry (KFY) beats by $0.05, beats on revs; guides Q2 EPS in-line
  • McKesson (MCK) earlier reaffirmed FY25 EPS guidance at conference appearance, guides Q2 EPS below expectations
  • Movado Group, Inc. (MOV) Announces Second Quarter Results
  • Newtek (NEWT) reaffirms FY24 guidance
  • NIO (NIO) reports EPS in-line, revs in-line; guides Q3 revs above consensus
  • Phreesia (PHR) beats by $0.04, reports revs in-line; reaffirms FY25 revs guidance, raises adjusted EBITDA guidance
  • Science Applications (SAIC) beats by $0.20, beats on revs; guides FY25 EPS above consensus, reaffirms FY25 revs guidance
  • Shoe Carnival (SCVL) beats by $0.02, reports revs in-line; guides Q3 EPS above consensus, revs in-line; raises FY24 guidance; Q2 comps -2.1%
  • Sprinklr (CXM) reports EPS in-line, beats on revs; guides Q3 EPS below consensus, revs above consensus; guides FY25 EPS below consensus, revs above consensus
  • Toro (TTC) misses by $0.05, misses on revs; lowers FY24 guidance
  • United Micro (UMC) reports August sales increased 8.9% yr/yr to ~NT$20.65 bln
  • Utz Brands (UTZ) reaffirms FY24 guidance ahead of Barclays' conference
  • Verint Systems (VRNT) misses by $0.04, misses on revs; guides FY25 EPS below consensus, reaffirms FY25 revs guidance
  • Wiley (WLY) misses by $0.08, beats on revs; reaffirms FY25 EPS guidance, revs guidance
  • Yext (YEXT) beats by $0.02, reports revs in-line; guides FY25 revs above consensus
  • Zeta Global (ZETA) raises its Q3 revenue guidance after seeing an acceleration in the marketing cloud replacement cycle and increasing adoption of Gen AI
• General News
  • Vice President Kamala Harris proposes increasing all in capital gains tax rate to 33%, which is lower than President Biden has proposed (rate is 23.8% currently), according to the Wall Street Journal
  • US, UK, & EU aiming to agree on artificial intelligence standards, according to Financial Times
  • White House announces $7.3 billion for clean, affordable, reliable electricity for rural America
  • FDIC-insured institutions reported net income of $71.5 billion
  • OPEC+ agreed to delay oil output increase for two months, according to Reuters
  • Bureau of Industry and Security is implementing export controls on several semiconductor, quantum, and additive manufacturing items
  • USDOT seeks to protect consumers' airline rewards in probe of four largest U.S. airlines' rewards practices
  • Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman extend voluntary cuts
  • U.S. Postal Service proposes temporary rate changes for 2024 holiday shipping season
  • Abbott Labs (ABT) announced U.S. availability of Lingo, the company's first continuous glucose monitoring system available without a prescription
  • AbbVie (ABBV): NImmune Biopharma announces R&D collaboration with BioTherapeutics, Inc. to advance the next wave of inflammation and immunology precision medicines
  • Airbus (EADSY) and Rolls Royce PLC (RYCEY) to brief airlines following easing pressure for A350 checks, according to Reuters
  • Alamos Gold (AGI) Announces Development Plan for Puerto Del Aire Outlining an Attractive, High-Return Project with After-Tax IRR of 46%, and Significant Exploration Upside
  • Alibaba.com (BABA) unveils game-changing AI sourcing agent, helping SMEs simplify global trade
  • Alibaba.com (BABA) and Mastercard (MA) team up to launch U.S. co-branded business credit card powered by cardless
  • Alphabet's (GOOG) YouTube releases new tools to protect creators and artists
  • Amazon (AMZN): CPSC warns consumers to immediately stop using SafPow and AMPOWSURE battery chargers sold on Amazon.com due to fire and burn hazards; risk of serious injury and death
  • Amazon (AMZN) eyes deal to stream local NBA, MLB, and NHL games on Prime for $20/month, according to NYPost
  • Amazon (AMZN): White House met with AMZN, Google (GOOG, GOOGL), Microsoft (MSFT), and Cloudflare (NET), according to Reuters
  • Amazon (AMZN) anticipates it will help Indian exports sell $5 bln products, according to Reuters
  • Amcor (AMCR) appoints Peter Konieczny as Chief Executive Officer, who has served as interim CEO since April 2024
  • Apple (AAPL) China competitor Huawei facing production issues with new smartphone, according to The information
  • Applied Digital Corporation (APLD) announces $160 mln strategic financing, fueling transformative accelerated compute and AI infrastructure
  • Arcadium Lithium (ALTM) suspends Stage 4A Waste Stripping at Mt Cattlin and plans to transition site to Care & Maintenance by mid-2025
  • ASML (ASML): CEO says the U.S. export restrictions to China are economically motivated, according to Reuters
  • AstraZeneca (AZN): China detained some AstraZeneca employees, according to Bloomberg
  • Bank of America (BAC) aiming to provide $205 mln in exchange for tax credits for carbon capture technology, according to the Wall Street Journal
  • Bank of America (BAC) whistleblower says company shared nonpublic data with Indian investors, according to WSJ
  • Bavarian Nordic A/S (BVNRY) confirms first doses of Bavarian Nordic’s Mpox vaccine now arriving in the Democratic Republic of Congo
  • Bayer AG (BAYRY): The Lung Cancer Research Foundation announces its collaboration with Bayer Pharmaceuticals to fund two research grants focused on innovative strategies to advance understanding and management of lung cancers harboring HER2 mutations and/or other HER2 alterations
  • BMW Group (BMWYY) and Toyota Motor (TM) take collaboration to the next level to offer Fuel Cell Electric Vehicle options for passenger cars
  • Boeing (BA) Starliner will undock from space station without crew, according to the New York Times
  • BRC Inc. (BRCC) unveils a long-term sales and distribution agreement with Keurig Dr Pepper Inc. (KDP) for BRCC’s new line of ready-to-drink Black Rifle Energy beverages
  • EchoStar (SATS): Dish Network in discussions to settle lawsuit with creditors, according to Bloomberg
  • Eli Lilly (LLY): In a first-of-its-kind fixed dose study, once weekly insulin efsitora alfa leads to A1C reduction similar to daily insulin
  • Emergent BioSolutions (EBS): Oak Hill Advisors is administrative agent and sole lender for Emergent BioSolutions debt refinancing
  • Ford Motor (F) reports August US sales +13.4% yr/yr to 182,985 units; EVs up 28.9% yr/yr to 8,944 units
  • Fortive (FTV) announces intention to pursue spin-off of its Precision Technologies segment, announces leadership succession plan, and reaffirms Q3 and FY24 guidance
  • General Dynamics (GD) awarded $491.6 million design and development contract for space development agency's ground, management and integration program
  • Hess (HES) raises its quarterly dividend by 14% to $0.50 per share; annual yield of 1.5%
  • HIVE Digital Technologies (HIVE) reports August production
  • Honeywell (HON) announces CFO succession plan
  • HUYA (HUYA) announces appointment of Mr. Raymond Peng Lei as Acting Co-Chief Executive Officer and Chief Financial Officer, effective September 5, 2024
  • Immuron (IMRN) Plans Phase 2 Trial for IMM-529 following FDA review
  • Johnson & Johnson (JNJ) aiming to pay an additional $1.1 billion to resolve talc lawsuits, according to Reuters
  • Johnson & Johnson (JNJ) to secure more votes in favor of its talc settlement plan after increasing offer to roughly $9.0 bln, according to the Wall Street Journal
  • Liberty Media (LSXMA): Formula 1 and Lenovo announce the extension of its partnership that will see the technology giant elevated to a Global Partner in a multi-year renewal starting from the beginning of 2025
  • Liquidity Services (LQDT) selected by one of the largest E&P companies to sell more than 30 drilling rigs
  • Live Nation (LYV): UK CMA launches investigation into Ticketmaster over Oasis concert sales
  • Lockheed Martin (LMT): The Egyptian Armed Forces announces at the Egypt International Air Show that Lockheed Martin will deliver two C-130J-30 Super Hercules tactical airlifters to the Egyptian Air Force through a Foreign Military Sale with the U.S. Air Force
  • MarketAxess (MKTX) announces monthly volume statistics for August 2024
  • MediaAlpha (MAX) and Insurify extend their publishing partnership with a new multi-year agreement; MediaAlpha’s robust technology platform connects leading auto and home insurance carriers with Insurify’s high-intent shoppers
  • Medtronic (MDT): FDA removes certain McGrath MAC video laryngoscopes, updates use instructions for others due to increased risk for battery overheat and explosion
  • Merck Canada (MRK) and the pan-Canadian Pharmaceutical Alliance (pCPA) successfully complete negotiations for WELIREG® (belzutifan)
  • NVIDIA (NVDA) spokesperson says company did not receive a DOJ subpoena, according to Reuters
  • Nvidia (NVDA) aiming to invest in Sakana AI, according to the Wall Street Journal
  • Old Dominion (ODFL) reports LTL operating metrics for August
  • Opthea Ltd. (OPT) announces executive leadership changes and senior hires
  • Paramount Global (PARA)  will be controlled by Larry Ellison after deal is complete, according to Bloomberg
  • Perspective Therapeutics (CATX) announces that the U.S. FDA granted Fast Track Designation for the development of 212Pb VMT01 for the diagnosis and treatment of patients with unresectable or metastatic melanoma and who have demonstrated MC1R tumor expression
  • Pharvaris N.V. (PHVS) provides business update and expands development program for Deucrictibant
  • Poseida Therapeutics (PSTX) Presents New Case Study Demonstrating Reactivation of CAR-T Therapy with a T-Cell Engager in a Patient with Relapsed Multiple Myeloma
  • Qiagen (QGEN) enters into collaboration with Eli Lilly (LLY) to support development of QIAstat-Dx in-vitro diagnostic
  • Qualcomm (QCOM) exec says the company is working on developing smart glasses with Samsung (SSNLF) and Google (GOOG, GOOGL), CNBC
  • Rigel (RIGL) Announces First Patient Enrolled in Phase 1b/2 Triplet Therapy Trial of REZLIDHIA® (olutasidenib) in mIDH1 AML
  • Riot Platforms (RIOT) announces August 2024 production and operations updates; mines 322 bitcoin
  • RTX (RTX) awarded $405 mln U.S. Navy contract modification
  • Sealed Air (SEE) to provide Best Buy (BBY) packaging using more recycled content
  • Snap (SNAP): NM Attorney General Raul Torrez files lawsuit against SNAP to protect children from sextortion, sexual exploitation, and other harms
  • Snap (SNAP) issues statement on New Mexico Attorney General’s complaint
  • Sonoco (SON) announces review of strategic alternatives for the thermoformed & flexibles packaging business as part of further portfolio simplification
  • Sony Electronics (SONY) launches closed monitor headphones with high sound isolation for studio sound quality anywhere
  • Southwest Air (LUV) announces "Companion Pass is the benefit that allows you to choose one person to fly with you, free of airline charges (does not include taxes and fees from $5.60 one-way) unlimited times whenever you purchase or redeem points for a flight"
  • Steel Dynamics (STLD) along with several other organizations, files trade petitions against countries on corrosion resistant flat rolled steel
  • Stellantis (STLA) pauses production of Jeep Wrangler and Grand Cherokee SUVs, according to the Wall Street Journal
  • Talos Energy (TALO) reports new discovery and adds additional 2024 prospect in the Gulf of Mexico
  • Timken (TKR) appointed Tarak Mehta the company's president and CEO
  • Topgolf Callaway Brands (MODG) announces intent to pursue the separation of its business into two independent companies: Callaway and TopGolf
  • Toyota Motor (TM), Nissan (NSANY) and others will invest $7 bln in Japan battery capacity, according to Nikkei
  • Tutor Perini (TPC) announces that its subsidiary, Five Star Electric, has been awarded lighting subcontract for JFK International Airport Terminal 6
  • Verint Systems (VRNT) authorizes $200 million stock buyback program
  • Voya Financial (VOYA) appoints Michael Katz as CFO, effective Jan 1, 2025
  • Walt Disney (DIS): Some Disney financial data was leaked, according to the Wall Street Journal

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

• Upgrades:
  • Ascendis Pharma (ASND) upgraded to Outperform from Perform at Oppenheimer; tgt $180
  • Beazer Homes (BZH) upgraded to Outperform from Neutral at Wedbush; tgt raised to $45
  • EastGroup (EGP) upgraded to Outperform from Neutral at Mizuho; tgt raised to $200
  • Nordstrom (JWN) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $23
• Downgrades:
  • Azul S.A. (AZUL) downgraded to Hold from Buy at HSBC Securities
  • Celanese (CE) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $150
  • Dollar Tree (DLTR) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $68
  • Dollar Tree (DLTR) downgraded to Hold from Buy at Loop Capital; tgt $65
  • EVERTEC (EVTC) downgraded to Negative from Neutral at Susquehanna; tgt lowered to $28
  • Goodyear Tire (GT) downgraded to Peer Perform from Outperform at Wolfe Research
  • Intel (INTC) downgraded to Sell from Hold at Erste Group
  • KB Home (KBH) downgraded to Underperform from Sector Perform at RBC Capital Mkts; tgt $70
• Others:
  • Adient (ADNT) resumed with a Peer Perform at Wolfe Research
  • Airbnb (ABNB) initiated with an Underweight at Cantor Fitzgerald; tgt $94
  • Algonquin Power & Utilities (AQN) initiated with a Neutral at Janney
  • Alphabet A (GOOGL) initiated with a Neutral at Cantor Fitzgerald; tgt $190
  • Amazon (AMZN) initiated with an Overweight at Cantor Fitzgerald; tgt $230
  • Aptiv (APTV) resumed with an Outperform at Wolfe Research; tgt $89
  • ATI Inc. (ATI) initiated with a Positive at Susquehanna; tgt $75
  • aTyr Pharma (ATYR) initiated with a Buy at Jefferies; tgt $9
  • Autoliv (ALV) resumed with an Outperform at Wolfe Research; tgt $120
  • Booking Holdings (BKNG) initiated with a Neutral at Cantor Fitzgerald; tgt $3590
  • BorgWarner (BWA) resumed with a Peer Perform at Wolfe Research
  • Dana Inc (DAN) resumed with a Peer Perform at Wolfe Research
  • DoorDash (DASH) initiated with an Overweight at Cantor Fitzgerald; tgt $160
  • eBay (EBAY) initiated with a Neutral at Cantor Fitzgerald; tgt $62
  • Etsy (ETSY) initiated with a Neutral at Cantor Fitzgerald; tgt $50
  • Expedia Group (EXPE) initiated with a Neutral at Cantor Fitzgerald; tgt $130
  • Ford Motor (F) resumed with a Peer Perform at Wolfe Research
  • General Motors (GM) resumed with a Peer Perform from Outperform at Wolfe Research
  • GoDaddy (GDDY) initiated with a Neutral at Cantor Fitzgerald; tgt $170
  • Instacart (CART) initiated with an Overweight at Cantor Fitzgerald; tgt $45
  • Itron (ITRI) initiated with an Outperform at Exane BNP Paribas; tgt $133
  • Kodiak Sciences (KOD) initiated with a Neutral at H.C. Wainwright; tgt $3
  • Lear (LEA) resumed with a Peer Perform at Wolfe Research

• Econ Data (Friday):
  • 8:30 ET: August Nonfarm Payrolls (Briefing.com consensus 165,000; prior 114,000), Nonfarm Private Payrolls (Briefing.com consensus 142,000; prior 97,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.2%), Unemployment Rate (Briefing.com consensus 4.2%; prior 4.3%), and Average Workweek (Briefing.com consensus 34.3; prior 34.2)
• Earnings:
  • Monday (Sept 2)
    • Pre-Market: None
    • After-Hours: None
  • Tuesday (Sept 3)
    • Pre-Market: MOMO
    • After-Hours: GTLB PD ZS
  • Wednesday (Sept 4)
    • Pre-Market: CRMT CIEN CNM DKS DLTR HRL REVG CURV
    • After-Hours: AVAV AI CASY CHPT CPRT BASE CRDO HPE PHR CXM VRNT YEXT
  • Thursday (Sept 5)
    • Pre-Market: KFY NIO SAIC SCVL TTC
    • After-Hours: AGX BRZE AVGO DOCU GWRE IOT SMAR SWBI PATH ZUMZ
  • Friday (Sept 6)
    • Pre-Market: ABM BRC DOOO GCO
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike