Market Summary
The S&P 500 (+0.2%) and the Nasdaq Composite (+0.5%) closed at or near their highs of the day after a surge of buying in the mega cap space in the afternoon trade. The Dow Jones Industrial Average closed slightly higher than yesterday, and the Russell 2000 logged a 0.2% decline.
Top Performers
- Apple (AAPL 213.25, +4.18, +2.0%)
- Amazon.com (AMZN 193.61, +7.27, +3.9%)
- Tesla (TSLA 196.37, +9.02, +4.8%)
- NVIDIA (NVDA 126.40, +0.31, +0.3%) - traded down as much as 2.8% before turning higher ahead of the close
Other Notable Movements
- FedEx (FDX 296.19, +39.81, +15.5%) - better-than-expected earnings and indication of improved demand through FY25
- General Mills (GIS 64.17, -3.09, -4.6%) - fiscal Q4 earnings report included a revenue miss driven by lower prices and volumes
Market Sentiment
There was an underlying negative bias driving today's action. Decliners led advancers by a roughly 4-to-3 margin at both the NYSE and the Nasdaq. The price action in Treasuries contributed to the underlying downside bias in equities. The 10-yr note yield settled eight basis points higher at 4.32%, and the 2-yr note yield rose two basis points to 4.32% despite a solid $70 billion 5-yr note sale today. The market also digested a below-consensus New Home Sales report for May.
Sector Performance
The equal-weighted S&P 500 registered a 0.4% decline, and eight of the 11 S&P 500 sectors settled lower. The financial sector was among the worst performers, down 0.5%, while the consumer discretionary sector (+2.0%) led the pack.
Year-to-Date Performance
- Nasdaq Composite: +18.6% YTD
- S&P 500: +14.8% YTD
- S&P Midcap 400: +4.7% YTD
- Dow Jones Industrial Average: +3.8% YTD
- Russell 2000: -0.4% YTD
Economic Data Review
- Weekly MBA Mortgage Applications Index: 0.8%; Prior: 0.9%
- May New Home Sales: 619K (consensus 650K); Prior revised to 698K from 634K
The key takeaway from the report is that new home sales activity languished in May. However, after accounting for the upward revision to April sales, the combined two-month period was better than what was embedded in the consensus estimate for May (650,000) and the original report for April (634,000). Even so, higher mortgage rates and elevated prices continue to pressure new home sales (-16.5% yr/yr).
Guru Stock Picks
Invesco EQV European Equity Fund has made the following transactions:
Today's News
Micron Technology (MU, Financial) shares plummeted 6.5% in extended-hours trading on Wednesday after the company issued guidance that was in-line with estimates, overshadowing a stronger-than-expected third-quarter. Despite earning an adjusted $0.62 per share and revenue jumping 82% year-over-year to $6.81B, cash flow from operations fell short of expectations at $2.48B. The memory chipmaker attributed much of its sales growth to artificial intelligence, with AI demand driving 50% of its sequential revenue growth in the data center. Micron's AI-related demand has also caused tightness in leading edge nodes.
Levi Strauss (LEVI, Financial) reported Q2 Non-GAAP EPS of $0.16, beating expectations by $0.05, but revenue of $1.44B fell short by $10M. The company's shares dropped 5.92%. Levi Strauss reaffirmed its fiscal 2024 guidance, expecting 1-3% revenue growth and adjusted diluted EPS between $1.17 to $1.27. Despite the revenue miss, the company reported a record gross margin of 60.5% and saw global DTC revenue increase by 8%.
Intel (INTC, Financial) showcased the chip industry's first fully integrated optical compute interconnect chiplet for AI applications. The OCI chiplet, co-packaged with an Intel CPU, supports 64 channels of 32GB per second data transmission over 100 meters of fiber optics, significantly reducing power consumption and extending reach. This innovation aims to address the increasing data movement demands in data centers.
AT&T (T, Financial) declared a quarterly dividend of $0.2775 per share, maintaining its forward yield at 5.91%. The dividend is payable on August 1 to shareholders of record as of July 10. The telecom giant's shares have continued to gain for seven consecutive sessions, closing 0.4% higher at $18.7 on Wednesday.
Marathon Digital Holdings (MARA, Financial) announced it has started mining Kaspa (KAS-USD), a proof-of-work digital asset, to diversify its digital asset compute portfolio. As of June 25, Marathon has mined 93M KAS, valued at approximately $15M. Kaspa's market cap stands at $3.9B with a daily trading volume of $64.8M.
Amazon (AMZN, Financial) plans to create a new shopping section linking buyers directly to cheaper items in Chinese warehouses. This new online catalog will feature unbranded fashion, home goods, and other items, aiming to compete with platforms like Temu (PDD) and Shein. The discount section is expected to start accepting inventory by this fall.
Oxford Lane Capital (OXLC, Financial) announced the commencement of a registered public offering of notes. The proceeds will be used to acquire investments and for general working capital purposes. The company recently raised its dividend by 12.5% to $0.09 per share.
Schlumberger (SLB, Financial) ended its six-day rally, with shares falling 2.75% to $46.22 on Wednesday. Despite the recent decline, the company maintains strong profitability and growth prospects, as indicated by its Quant ratings.
Jefferies Financial Group (JEF, Financial) reported Q2 GAAP EPS of $0.64, beating expectations by $0.01, and revenue of $1.66B, up 59.6% year-over-year. The company also declared a 16.7% increase in its quarterly cash dividend to $0.35 per share, payable on August 30.
Recursion Pharmaceuticals (RXRX, Financial) announced plans to offer and sell $200M of Class A common stock in an underwritten public offering. All shares are being offered by the company, aiming to raise capital for its drug discovery efforts.
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