Market Performance
The stock market rebounded today after modest declines yesterday, which had interrupted an eight-session winning streak for the S&P 500 and Nasdaq Composite. The Russell 2000 outperformed its peers, rising 1.3%. The S&P 500 logged a 0.4% gain, and the Nasdaq Composite settled 0.6% higher.
Trading Volume and Advancers
Volume was below-average at the NYSE again today, indicating an ongoing lack of conviction. Nevertheless, advancers had a 3-to-1 lead over decliners at the NYSE and a 5-to-2 lead at the Nasdaq.
Nonfarm Payroll Revisions
Today's release of revisions to nonfarm payrolls for the April 2023-March 2024 period showed that there were 818,000 fewer nonfarm payroll positions than previously thought. This created some concern that the labor market has been softening for a longer period than previously anticipated. However, equities had a muted response to this news.
Bond Market Reaction
The stock and bond markets also had muted reactions to today's $16 billion 20-year bond auction, which met good demand, and the release of the minutes from the July 30-31 FOMC meeting. The minutes highlighted the Fed's comments that a rate cut was "plausible" at the meeting, suggesting a September cut was all but guaranteed.
The 10-year note yield settled four basis points lower at 3.78%, and the 2-year note yield declined seven basis points to 3.92%.
Stock Performance
The upside bias in the stock market was supported by shares of Target (TGT), which surged after reporting earnings and raising its full-year earnings outlook. TJX (TJX) also traded higher after reporting earnings and raising its full-year comparable sales guidance. TGT and TJX were among the top-performing stocks in the S&P 500, boosting the consumer staples (+0.6%) and consumer discretionary (+1.2%) sectors.
Year-to-Date Performance
- Nasdaq Composite: +19.4% YTD
- S&P 500: +17.8% YTD
- S&P Midcap 400: +9.7% YTD
- Dow Jones Industrial Average: +8.5% YTD
- Russell 2000: +7.1% YTD
Economic Data Review
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index: -10.1% (Prior: 16.8%)
Upcoming Economic Data
Thursday's economic lineup includes:
Guru Stock Picks
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Today's News
Snowflake (SNOW, Financial) reported Q2 Non-GAAP EPS of $0.18, beating estimates by $0.02. Revenue reached $868.82 million, a 28.9% year-over-year increase, also surpassing expectations by $18.67 million. Despite this, shares fell 8.51% as the company authorized an additional $2.5 billion for stock repurchase through March 2027. Investors remain cautious due to competition threats and a longer path to profitability.
Apple (AAPL, Financial) is experiencing leadership changes as Matt Fischer, the vice president in charge of the App Store, plans to leave in October. Phil Schiller, responsible for the App Store, is making these changes in response to regulatory pressures to allow alternative stores and payment methods on Apple devices. Carson Oliver will take over the App Store group, while Ann Thai will manage the new team for alternative distribution.
Franklin Resources (BEN, Financial) shares fell 11% following reports that federal prosecutors are investigating an executive at its Western Asset Management unit for "cherry-picking" trades. This criminal probe is being led by the U.S. Attorney's Office for the Southern District of New York, with the SEC conducting a parallel investigation. Co-Chief Investment Officer Ken Leech has gone on leave after receiving a Wells Notice, indicating potential enforcement action.
Zoom (ZM, Financial) reported Q2 Non-GAAP EPS of $1.39, beating estimates by $0.17, with revenue of $1.16 billion, a 1.8% year-over-year increase. The company provided a positive outlook for Q3 and the full fiscal year 2025, expecting total revenue to be between $4.630 billion and $4.640 billion. Despite the positive earnings, the stock has struggled amid concerns about growth and competition.
Wolfspeed (WOLF, Financial) reported Q4 Non-GAAP EPS of -$0.89, missing estimates by $0.01, and revenue of $201 million, a 14.8% year-over-year decline. For Q1 of fiscal 2025, the company targets revenue between $185 million and $215 million, below the consensus estimate. Shares have been affected by ongoing losses and lower-than-expected revenue guidance.
Urban Outfitters (URBN, Financial) posted Q2 GAAP EPS of $1.24, beating estimates by $0.24, and revenue of $1.35 billion, a 6.3% year-over-year increase. Despite the positive earnings, shares fell 3.57% as investors remain cautious about the retail sector's overall performance and future outlook.
Japan Tobacco (OTCPK:JAPAY) acquired the remaining shares of Vector Group (VGR, Financial) for $15.00 per share in cash, totaling approximately $2.4 billion. The acquisition will make Vector Group a wholly-owned subsidiary of JT Group, significantly expanding Japan Tobacco's presence in the U.S. market and strengthening its financial position.
Synopsys (SNPS, Financial) reported Q3 Non-GAAP EPS of $3.43, beating estimates by $0.14, with revenue of $1.53 billion, a 13.3% year-over-year increase. The company expects record full-year revenue growth of approximately 15%, driven by strong execution and business momentum.
Occidental Petroleum (OXY, Financial) saw a slight increase of 0.4% in trading, but shares remained below $60 throughout August. Analysts speculate that Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway may have decided not to add to its nearly 30% stake in the company, despite past purchases that set a price floor for the stock.
Masimo Corp. (MASI, Financial) saw the largest increase in short interest among Russell 3000 stocks with market capitalizations over $5 billion. Short interest at the single-stock level has continued to climb in recent months, particularly in consumer staples, utilities, and healthcare sectors.
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