After Hours Report

The S&P 500 (-0.4%) closed lower for the fifth consecutive session today, and the Nasdaq Composite's (-0.3%) loss marks five retreats out of the past six sessions. While the DJIA (-0.3%) has weathered this week's mega-cap weakness better than its counterparts, it closed with a similar loss today, as losses were more broad-based.

The stock market retreated following some hawkish Fed speak that chipped away at rate cut expectations, while this morning's earnings reports and economic data also disappointed.

Kansas City Fed President Schmid (voting FOMC member) said in a CNBC interview that he is not in a hurry to cut rates, citing several key inflation readings that will come out between now and the September FOMC meeting. Cleveland Fed President Beth Hammack (non-voting FOMC member) stated in a Yahoo! Finance interview that she sees no imminent case for rate cuts, as inflation remains too high.

Today's economic data further stoked inflation concerns.

The Philadelphia Manufacturing Business Outlook Survey dropped to -0.3 in August (Briefing.com consensus: 9.0) from 15.9 in July, while the indexes for prices paid (66.8 from 58.8) and prices received (36.1 from 34.8) both went up versus July, reflecting an acceleration of price increases.

While the preliminary S&P U.S. Global Manufacturing PMI (53.3 from 49.8) showed a return to growth and the Services PMI (55.4 from 55.7) showed only a modest slowdown in the pace of expansion, it is worth noting that both PMI reports showed a sharp increase in input prices, which was attributed to tariffs.

Coupled with the rise in initial jobless claims (235,000 vs. Briefing.com consensus of 222,000) and continuing claims (up 30,000 to 1.972 million), today's data, in aggregate, tipped toward a stagflation environment.

The jump in initial and continuing claims is apt to keep economists' nonfarm payroll estimates in a soft growth zone, which could possibly lead to a more dovish tone in Fed Chair Powell's speech at Jackson Hole tomorrow, the market's most anticipated happening this week. However, with the July core CPI and July core PPI moving away from the Fed's two percent inflation target, and more inflation and employment data to come before the next FOMC meeting, Powell is likely to reiterate his "wait-and-see approach."

As it stands now, the probability of a 25-basis point rate cut at the September FOMC meeting is 73.6%, down from 82.4% yesterday and 92.1% a week ago, according to the CME FedWatch tool.

Today's retreat was broad-based, with nine S&P 500 sectors finishing in negative territory.

The consumer staples sector (-1.2%) posted the widest loss as Walmart's (WMT 97.96, -4.62, -4.50%) first earnings miss since May 2022 had a rippling effect throughout the sector. Walmart missed EPS expectations by $0.05 despite in-line revenues, citing increasing costs as the company replenishes inventory at post-tariff prices.

Mega-cap stocks faced pressure again today, though the declines were less severe than yesterday. Weakness in their largest components pulled the consumer discretionary (-0.7%), information technology (-0.4%), and communication services (-0.4%) sectors lower. The Vanguard Mega Cap Growth ETF (-0.4%) finished identically to the S&P 500 (-0.4%) and the S&P 500 Equal Weighted Index (-0.4%).

The Russell 2000 (+0.2%) outperformed, and the S&P Mid Cap 400 (-0.2) saw a modest loss

Meanwhile, the energy sector (+0.7%) was the top performer today, benefitting from oil futures settling the session $0.80 higher (+1.3%) at $63.50 per barrel. The materials sector (+0.3%) also captured a modest gain.

U.S. Treasuries retreated on Thursday, lifting yields toward their highest levels of the week. The 2-year note yield settled up five basis points to 3.79%, and the 10-year note yield settled up three basis points to 4.33%.

• Nasdaq Composite: +9.3% YTD
• S&P 500: +8.3% YTD
• DJIA: +5.3% YTD
• Russell 2000: +2.0% YTD
• S&P Mid Cap 400: +1.5% YTD

Reviewing today's data:

• Weekly Initial Claims 235K (Briefing.com consensus 222K); Prior 224K, Weekly Continuing Claims 1.972 mln; Prior was revised to 1.942 mln from 1.956 mln
  • The key takeaway from the report is that it covers the period in which the survey for the August employment report is completed. The jump in initial and continuing claims is apt to keep economists' nonfarm payroll estimates in a soft growth zone.
• August Philadelphia Fed Index -0.3 (Briefing.com consensus 9.0); Prior 15.9
• August S&P Global U.S. Manufacturing PMI - Prelim 53.3; Prior 49.8
• August S&P Global U.S. Services PMI - Prelim 55.4; Prior 55.7
• July Existing Homes Sales 4.01 mln (Briefing.com consensus 3.92 mln); Prior 3.93 mln
  • The key takeaway from the report is that a moderation in selling prices, coupled with an increase in inventory (the highest since May 2020), helped boost sales despite the persistence of higher mortgage rates.
• July Leading Indicators -0.1% (Briefing.com consensus -0.1%); Prior -0.3%

Overseas:

• Europe: DAX +0.1%, FTSE +.2%, CAC -0.4%
• Asia: Nikkei -0.7%, Hang Seng -0.2%, Shanghai +0.1%

Commodities:

• Crude Oil +0.80 @ 63.50
• Nat Gas +0.08 @ 2.83
• Gold -6.70 @ 3381.70
• Silver +0.30 @ 38.08
• Copper +0.00 @ 4.44

After-Hours Spotlight:

• Intuit (INTU) beats by $0.09, beats on revs; guides OctQ EPS in-line, revs below consensus; guides FY26 EPS in-line, revs in-line...INTU -5.8%
• Ross Stores (ROST) beats by $0.03, reports revs in-line; comp sales of +2%; guides Q3 and Q4 comps sales of +2-3%; guides Q3 EPS below consensus; guides Q4 (Jan) EPS above consensus; guides FY25 EPS in-line...ROST +2.2%
• Workday (WDAY) beats by $0.10, reports revs in-line, subscription revenue increased 14.0%, issues Q3 and FY26 guidance; Also announces acquisition of Paradox...WDAY -5.1%
• Zoom Communications (ZM) beats by $0.15, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY26 EPS above consensus, revs above consensus...ZM +5.5%

Fair Value for Friday, August 22:

• S&P 500: 6,389
• Nasdaq 100: 23,219
• DJIA: 44,853

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

• Earnings/Guidance (Full Earnings Calendar):
  • Aegon N.V. (AEG) reports H1 results
  • Bilibili (BILI) beats by $0.11, reports revs in-line
  • Canadian Solar (CSIQ) reports Q2 (Jun) results, misses on revs; guides Q3 revs below consensus; guides FY25 revs in-line
  • Coty (COTY) misses by $0.06, beats on revs; provides outlook and pipeline updates
  • Navios Maritime Partners (NMM) beats by $0.38, beats on revs
  • Nordson (NDSN) beats by $0.09, beats on revs, updates full year guidance; Approved a new $500 mln share repurchase authorization
  • Nutex Health (NUTX) reports Q2 results; beats on revs
  • The Marzetti Company (MZTI) misses by $0.02, beats on revs
  • VNET Group (VNET) reports Q2 results; beats on revs; sees FY25 revs below consensus
  • Walmart (WMT) misses by $0.05, reports revs in-line, U.S. comps (ex fuel) of +4.6%; guides Q3 EPS above consensus; reaffirms FY26 EPS guidance
• General News
  • US and EU issue joint statement on a United States-European Union framework; European Union intends to eliminate tariffs on all U.S. industrial goods and to provide preferential market access; United States commits to apply the higher of either the U.S. Most Favored Nation tariff rate or a tariff rate of 15%
  • Fed Governor Lisa Cook says she will not resign over allegations of mortgage fraud, according to CNBC
  • Texas passes a congressional map that should help Republicans gain five House seats in the midterm election. Several other states are planning redistricting, including California, according to NY Times
  • China considering stablecoins backed by Yuan, according to Reuters
  • DOJ encourages Fed Chairman Jerome Powell to remove Fed Governor Lisa Cook and will start an investigation, according to Bloomberg
  • China's rare earth exports to U.S. reach 6 month high, according to Nikkei
  • The Trump Administration considering using $2 billion in Chips Act funds for critical minerals, according to Reuters
  • 3D Systems (DDD) names Phyllis Nordstrom as Interim CFO
  • Air Products (APD) has successfully completed the first fill of the world's largest hydrogen sphere at the National Aeronautics and Space Administration's Kennedy Space Center located on Merritt Island, Florida
  • Alibaba (BABA) Board announces that Banma is seeking a separate listing of the Banma Shares on the Main Board of the Hong Kong Stock Exchange
  • Altria (MO) Board approves quarterly dividend increase to $1.06 per share versus the previous rate of $1.02 per share
  • Alvotech (ALVO) and Advanz Pharma receive European approval for Mynzepli
  • Amazon (AMZN): Anthropic in discussions to raise $10 billion in additional funding, according to Bloomberg
  • Apple (AAPL) increasing price of Apple TV+ to $12.99/month from $9.99/month prior, according to Variety
  • Autodesk (ADSK): Toolpath announced strategic investment by Autodesk
  • Axsome Therapeutics (AXSM) received a Paragraph IV Certification Notice Letter from Apotex related to generic version of Symbravo
  • BAE Systems' (BAESY) investment to modernize its Nashua, New Hampshire Microelectronics Center, supported in part by the CHIPS Act, will purchase new, more efficient manufacturing tools to significantly increase production capacity, markedly speed delivery, and substantially reduce costs for Department of Defense chip production for the U.S. Air Force, Army, Navy, and Marines
  • BAE Systems (BAESY) received a contract from Lockheed Martin (LMT) in December 2024 for additional radio-frequency sensors that provide critical guidance capabilities for the stealthy Long-Range Anti-Ship Missile
  • BeOne Medicines (ONC) announced that the European Commission has approved a new film-coated tablet formulation of BRUKINSA (zanubrutinib) for all approved indications
  • Blackstone (BX) announces that private equity funds affiliated with Blackstone have entered into a definitive agreement to acquire Shermco from Gryphon Investors
  • Boeing (BA) getting close to deal with China to sell the country 500 aircraft, according to Bloomberg
  • Bombardier (BDRBF) opens new component manufacturing facility in Moorpark, CA
  • BTCS Inc (BTCS) engages Equity Stock Transfer as transfer agent for "Bividend” – the first blockchain dividend payable in Ethereum
  • Centene (CNC) recommends stockholders reject "mini-tender" offer from TRC Capital
  • Clear Secure (YOU) increases its TSA PreCheck enrollment and renewal locations to more than 190 Staples US retail stores nationwide
  • CME Group (CME) announces alliance with Fanduel that will launch new products and expand access to financial markets for FanDuel customers in the U.S.
  • Comcast (CMCSA): FanDuel Sports Network extended its existing carriage agreement with Comcast; Financial terms were not disclosed
  • Comcast (CMCSA) in talks with MLB to carry games on Peacock, according to WSJ
  • Corpay (CPAY) announces that its Cross-Border business has entered into an agreement with New Zealand Football to become their official Foreign Exchange partner
  • CVS Health (CVS) will not add Gilead Sciences (GILD) new HIV prevention drug to its commercial plans at this time, according to Reuters
  • DaVita (DVA) increases share repurchase program by $2 bln
  • DeepSeek updated AI model, according to Bloomberg
  • Dollar General (DG) names Donny Lau as CFO
  • Dover (DOV) announces that its Blackmer unit launched its new Hydraulic Adapter Kit for the upgrade of Blackmer LB080 and LB160 Series Reciprocating Gas Compressors
  • DraftKings (DKNG): PolyMarket will offer sports futures in U.S. for 2025 NFL season, according to Sportico
  • Energy Fuels (UUUU) has successfully completed production of its first kilogram of dysprosium (Dy) oxide at pilot scale at the Company's White Mesa Mill in Utah
  • Entegris (ENTG) in collaboration with the Trump Administration, announces $700 mln in domestic R&D spending over the next several years to accelerate semiconductor innovation
  • Flex (FLEX): Missile strike on Ukraine hits Flex facility
  • Forward Air (FWRD) executes a nationwide automotive replenishment
  • Helix Energy (HLX) receives multi-year contract commencing in 2026
  • Inseego (INSG) and National MSP OneSource announce partnership and the launch of Janus
  • Int'l Paper (IP) and Kraton Corporation execute strategic continuity of services agreement
  • Intuitive Surgical (ISRG): Surgical Science is strengthening its collaboration with its largest customer, Intuitive, and the company's simulation software will be integrated into all da Vinci 5 surgical systems
  • Ionis Pharma (IONS) confirms DAWNZERA (donidalorsen) approved in U.S. as first and only RNA-targeted prophylactic treatment for hereditary angioedema; to host webcast today
  • Itron (ITRI) and Fiji Water Utility collaborate on smart metering deployment in the Fiji Islands
  • JP Morgan (JPM): Union support at JP Morgan creating tensions, according to Barron's
  • Keysight (KEYS) has completed the industry's first PSA Certified Level 4 security evaluation for Silicon Labs’ Series 3 Secure Vault on the SixG301 wireless SoC, marking a significant advancement in the security assurance of connected devices
  • Krystal Biotech (KRYS) announces an update on development plans for KB707
  • Kyndryl (KD) announced growth plans in India with a focus on modernizing technology infrastructure; plans to spend $2.25 bln over three years
  • L3Harris (LHX) has completed a $100 million expansion at its satellite integration and test facility in Palm Bay to support the Department of Defense’s urgent need for on-orbit technology for the Golden Dome for America
  • Masimo (MASI) filed a lawsuit against CBP over Apple Watch (AAPL) imports, according to Reuters
  • Meta (META) froze hiring in artificial intelligence unit, according to WSJ
  • Northeast Comm. Bancorp (NECB) declares a special cash dividend of $0.20/share
  • NVIDIA (NVDA): China pushed groups to stop purchasing Nvidia H20 chips after comments from Commerce Secretary Howard Lutnick, according to FT
  • Oceaneering Intl (OII) wins US Navy contract
  • Parsons (PSN) announces the successful go-live of the New Jersey Department of Transportation's statewide advanced traffic management system
  • Petrobras (PBR) provides Chairman update
  • POSCO (PKX) releases follow-up response to Hyundai Motor (HYMTF) rumors or media reports
  • Powell Inds (POWL) announces $12.4 mln investment to expand production capacity at Jacintoport facility
  • Raymond James (RJF) reports July operating data; AUM up 10% yr/yr
  • Rhythm Pharmaceuticals (RYTM) Announces FDA Acceptance of sNDA for Setmelanotide in Acquired Hypothalamic Obesity
  • Rocket Companies (RKT) President Bill Emerson will retire from his position as President of the Company, effective December 31, 2025
  • S&P Global (SPGI) announces a partnership with Google Cloud to integrate technology in S&P Global's comprehensive AI-Ready Data portfolio with Google Cloud's robust data, AI, and analytics infrastructure
  • Sarepta Therapeutics (SRPT) refinances ~$700 mln of 1.25% Convertible Senior Notes due 2027
  • Scripps's (SSP) six national channels, ION, ION Mystery, Bounce, Court TV, Court TV Legendary Trials and Scripps News, are now streaming as part of Peacock's 24/7 channel offering
  • SEALSQ Corp (LAES) announces the signing of a non-binding Letter of Intent with Ajyal Holding, to establish a Joint Venture in United Arab Emirates with the name KUAENTUM
  • Spotify (SPOT) details two new integrations on Meta Platforms' (META) Instagram
  • State Street (STT) has become the first third-party custodian to launch on J.P. Morgan’s Digital Debt Service, marking a significant milestone in the institutional adoption of blockchain-based debt securities
  • Tecnoglass (TGLS) responds to short seller report
  • Tenable (TENB) announces the appointment of Matthew Brown as Chief Financial Officer, effective immediately
  • Two Harbors Investment (TWO) announces resolution of Pine River litigation and Q3 common stock dividend
  • UnitedHealth (UNH) discloses updates to its Board of Directors in SEC filing, including formation of new Public Responsibility Committee, and appointment of new lead independent director
  • Veradigm (MDRX) amends and extends stockholder rights plan
  • Walt Disney (DIS) announces on its website that WWE Premium Live Events will debut on ESPN platforms starting on September 20, which is earlier that previously announced
  • Walt Disney (DIS) reshapes sports streaming landscape with ESPN launch and NFL, WWE content expansion
  • WeRide (WRD) unveils WePilot AiDrive

• Upgrades:
  • Bio-Techne (TECH) upgraded to Buy from Neutral at Citigroup, tgt $70
  • Broadstone Net Lease (BNL) upgraded to Buy from Sell at Goldman, tgt $21
  • CoreWeave (CRWV) upgraded to Buy from Neutral at Arete, tgt $180
  • CoreWeave (CRWV) upgraded to Buy from Neutral at H.C. Wainwright, tgt $180
  • HP Enterprise (HPE) upgraded to Overweight from Equal Weight at Morgan Stanley, tgt $28
  • iQiyi (IQ) upgraded to Buy from Neutral at UBS, tgt $3.32
  • Kanzhun (BZ) upgraded to Buy from Neutral at UBS, tgt $26
• Downgrades:
  • downgraded to Neutral from Overweight at JPMorgan
  • Aris Water Solutions (ARIS) downgraded to Hold from Buy at Texas Capital, tgt $25
  • BHP (BHP) downgraded to Neutral at Citigroup
  • Coty (COTY) downgraded to Neutral from Buy at Citigroup, tgt $4.25
  • Extra Space Storage (EXR) downgraded to Neutral from Buy at Goldman, tgt $146
  • FormFactor (FORM) downgraded to Neutral from Buy at Citigroup, tgt $31
  • Icon (ICLR) downgraded to Neutral from Buy at Citigroup, tgt $200
  • Instacart (CART) downgraded to Underperform from Neutral at Wedbush, tgt $42
  • James Hardie (JHX) downgraded to Neutral from Buy at UBS
  • Kilroy Realty (KRC) downgraded to Sell from Neutral at Goldman, tgt $33
  • Marvell (MRVL) downgraded to Neutral from Outperform at KGI Securities, tgt $75
  • Monday.com (MNDY) downgraded to Neutral from Buy at BofA Securities, tgt $205
  • South Bow (SOBO) downgraded to Underweight from Neutral at JPMorgan, tgt $27
  • Truist Financial (TFC) downgraded to Equal Weight from Overweight at Wells Fargo, tgt $47
• Others:
  • Achieve Life Sciences (ACHV) initiated with a Buy at H.C. Wainwright, tgt $12
  • Adient (ADNT) initiated with a Buy at Stifel, tgt $27
  • Allot (ALLT) initiated with an Outperform at William Blair
  • American Axle (AXL) initiated with a Hold at Stifel, tgt $6
  • AST SpaceMobile (ASTS) initiated with a Market Perform at William Blair
  • Bank of Hawaii (BOH) assumed with a Neutral at Piper Sandler, tgt $71
  • Central Pacific (CPF) assumed with an Overweight at Piper Sandler, tgt $35
  • Charter (CHTR) resumed with an Equal Weight at Wells Fargo, tgt $300
  • Cooper-Standard (CPS) initiated with a Buy at Stifel, tgt $39
  • Cullinan Therapeutics (CGEM) assumed with a Buy at H.C. Wainwright, tgt $24
  • Fastenal (FAST) initiated with a Neutral at Northcoast
  • First Hawaiian (FHB) assumed with a Neutral at Piper Sandler, tgt $26
  • NetApp (NTAP) assumed with an Equal Weight at Morgan Stanley, tgt $115
  • Oruka Therapeutics (ORKA) initiated with a Buy at Clear Street, tgt $46
  • PubMatic (PUBM) initiated with a Buy at Rosenblatt, tgt $17
  • Pure Storage (PSTG) assumed with an Equal Weight at Morgan Stanley, tgt $60
  • Scholar Rock (SRRK) assumed with a Buy at Jefferies, tgt $50
  • NuScale Power (SMR) initiated with a Neutral at BofA Securities, tgt $36
  • Trevi Therapeutics (TRVI) initiated with an Overweight at Morgan Stanley, tgt $18
  • Vontier (VNT) initiated with an Overweight at KeyBanc, tgt $50

• Econ Data (Friday):
  • There is no U.S. economic data of note

• Earnings:
  • Monday (Aug 18)
    • Pre-Market: BTDR, RSKD
    • After-Hours: FN PANW XP
      
    Tuesday (Aug 19)
    • Pre-Market: AS HD MDT PINC VIK
    • After-Hours: JKHY JHX KEYS LZB SQM TOL ZTO
      
  • Wednesday (Aug 20)
    • Pre-Market: ALC ADI BIDU DY EL GDS KC LOW TGT TJX
      
    • After-Hours: COTY NDSN
      
  • Thursday (Aug 21)
    • Pre-Market: BILI CSIQ SCSC HOV MZTI WMT
    • After-Hours: INTU ROST WDAY ZM
  • Friday (Aug 22)
    • Pre-Market: BJ BKE
    • After-Hours: None