Market Performance
Producer Price Index Data
- Total PPI increased by 0.1% month-over-month in July, matching consensus expectations.
- Core PPI, which excludes food and energy, remained flat, against a consensus of 0.2%.
- Year-over-year, total PPI rose 2.2%, down from 2.7% in June.
- Core PPI increased by 2.4%, compared to 2.9% in June.
Treasury Yields
- The 10-year note yield fell six basis points to 3.85%.
- The 2-year note yield, which is more sensitive to changes in the fed funds rate, dropped eight basis points to 3.94%.
Sector Performance
- Information Technology: +3.0%
- Consumer Discretionary: +2.4%
- Communication Services: +1.5%
- Health Care: +1.2%
- WTI crude oil futures: -1.9% to $78.37/bbl
- Natural gas futures: -1.4% to $2.16/mmbtu
Individual Stock Performances
- Home Depot (HD, Financial) closed at $350.07, up 1.2%, after initially trading down 1.9% due to below-consensus guidance.
- Starbucks (SBUX, Financial) surged 24.5% to $95.90, making it the biggest advancer in the S&P 500, following the announcement that CEO Laxman Narasimhan will be replaced by Chipotle (CMG, Financial) CEO Brian Niccol.
Index Performances Year-to-Date
- Nasdaq Composite: +14.5% YTD
- S&P 500: +13.9% YTD
- S&P Midcap 400: +6.2% YTD
- Dow Jones Industrial Average: +5.5% YTD
- Russell 2000: +3.4% YTD
Economic Data Review
- July NFIB Small Business Optimism: 93.7 (Prior: 91.5)
- July Core PPI: 0.0% (Consensus: 0.2%, Prior revised to 0.3% from 0.4%)
- July PPI: 0.1% (Consensus: 0.1%, Prior: 0.2%)
Upcoming Economic Data
- 7:00 ET: Weekly MBA Mortgage Index (Prior: 6.9%)
- 8:30 ET: July CPI (Consensus: 0.2%, Prior: -0.1%) and Core CPI (Consensus: 0.2%, Prior: 0.1%)
- 10:30 ET: Weekly crude oil inventories (Prior: -3.73 million)
Overseas Market Performance
- Europe: DAX +0.5%, TSE +0.3%, CAC +0.4%
- Asia: Nikkei +3.5%, Hang Seng +0.4%, Shanghai +0.3%
Commodities
- Crude Oil: -1.54 to $78.37
- Natural Gas: -0.03 to $2.16
- Gold: +2.70 to $2507.60
- Silver: -0.20 to $27.77
- Copper: -0.02 to $4.05
HD,SBUX,CMG
Guru Stock Picks
Jeff Auxier has made the following transactions:
Seth Klarman has made the following transactions:
Keeley-Teton Advisors, LLC has made the following transactions:
David Rolfe has made the following transactions:
Al Gore has made the following transactions:
Sarah Ketterer has made the following transactions:
Third Avenue Management has made the following transactions:
Chuck Akre has made the following transactions:
Elfun Trusts has made the following transactions:
Dodge & Cox has made the following transactions:
- Add in AVTR by 7.83%
Tom Russo has made the following transactions:
David Nierenberg has made the following transactions:
Chuck Royce has made the following transactions:
Frank Sands has made the following transactions:
Mohnish Pabrai has made the following transactions:
Jeremy Grantham has made the following transactions:
Tweedy Browne has made the following transactions:
Today's News
Starbucks Corporation (SBUX, Financial) experienced a significant stock surge of 21.6% following the announcement of a leadership change. The company is replacing CEO Laxman Narasimhan with Chipotle Mexican Grill's (CMG, Financial) CEO Brian Niccol. Niccol will formally take over on September 9, 2024, with interim CEO duties being handled by CFO Rachel Ruggeri. The market responded favorably to the move, as investors see potential for operational improvements and digital innovations similar to those Niccol achieved at Chipotle.
Huawei Technologies is on the verge of unveiling a new AI chip, Ascend 910C, to compete with Nvidia's (NVDA, Financial) H100. The chip is currently being tested by Chinese internet companies and telecom operators and is said to be comparable to Nvidia's offering. Huawei aims to overcome U.S. sanctions and manufacturing delays, but potential new U.S. curbs could impact its ability to procure essential machine parts and memory chips.
Intel (INTC, Financial) and Advanced Micro Devices (AMD, Financial) both reported increased CPU shipments during the second quarter. The overall PC market showed growth, with a 9% increase from the previous quarter. AMD gained 1% of notebook unit share, while Intel's desktop share also rose by 1%. Despite signs of an overfilled PC CPU supply, the market has demonstrated resilience, reaching pre-COVID levels.
Sea Ltd. (SE, Financial) saw its shares rise over 6% after reporting strong second-quarter results. The Singapore-based company's revenue grew by 23% year-over-year, driven by a 33.7% increase in its e-commerce segment. Sea's net income also improved to $79.9M, marking a positive shift from net losses in previous quarters. The company expects its e-commerce platform, Shopee, to become adjusted EBITDA positive by the third quarter.
Tilray Brands (TLRY, Financial) announced an agreement to acquire four breweries from Molson Coors Beverage Company (TAP). The transaction aims to strengthen Tilray's position in the U.S. craft beer market. The deal includes Hop Valley Brewing Company, Terrapin Beer Co., Revolver Brewing, and Atwater Brewery, adding 30% of new beer-buying accounts to Tilray's portfolio.
The Producer Price Index (PPI) for July edged up 0.1%, lower than the expected 0.2%, and cooled from June's 0.2% increase. The year-over-year increase in PPI was 2.2%, while core PPI was flat on a monthly basis. This cooler-than-expected inflation data fuels optimism that the Federal Reserve may cut its benchmark rate in September, with the probability of a 50-basis point cut increasing to 54.5%.
Hawaiian Holdings (HA, Financial) dropped 2% amid concerns about a potential Department of Justice lawsuit to block its planned sale to Alaska Air (ALK). A DOJ trial attorney involved in a previous lawsuit to block JetBlue's (JBLU) acquisition of Spirit Airlines (SAVE) filed to practice in Hawaii, raising investor concerns about regulatory hurdles for the Hawaiian Holdings deal.
Workplace experience platform CXApp (CXAI, Financial) saw a massive 74% jump in its stock price after signing a multi-year, multi-million dollar agreement with Google Cloud (GOOG). The partnership will focus on developing advanced AI infrastructure, security, and application products, positioning CXApp to leverage Google's latest AI innovations to revolutionize the workplace market.
Apple (AAPL, Financial) and Microsoft (MSFT, Financial) led the market for AI-capable PCs in the second quarter. Apple accounted for 60% of these shipments, while Microsoft held 39%. These AI-capable PCs feature dedicated chipsets like AMD's XDNA, Apple's Neural Engine, Intel's AI Boost, and Qualcomm's Hexagon, marking significant momentum in the expansion of AI technology in the PC market.
Home Depot (HD, Financial) reported a Q2 Non-GAAP EPS of $4.67, beating estimates by $0.12, with revenue of $43.2B, a 0.7% year-over-year increase. Despite a 3.3% decline in comparable sales, the company updated its fiscal 2024 guidance, projecting total sales to increase between 2.5% and 3.5%, including a 53rd week that is expected to add approximately $2.3 billion in sales.
GuruFocus Stock Analysis
- Coca-Cola and PepsiCo Are Both Resilient, but One Is More Attractive by Akim Guerreiro
- Booking Holdings a Buy Amid Strong Results, Good Value and High Growth by Oliver Rodzianko
- If Only Ben Graham Could Speak to Us by John Dorfman
- A Stellar Quarter for Kinsale Capital by Renato Neves
- Amazon Offers Attractive Growth at a Reasonable Price by Blue Chip Portfolios
