Market Performance
The stock market had a mixed showing on the first day of the new week. The S&P 500 (-0.3%), Nasdaq Composite (-0.9%), and Russell 2000 (-0.04%) settled with losses, while the Dow Jones Industrial Average (+0.2%) closed at a new record high.
Investor Sentiment
The mixed showing reflected some trepidation following last week's solid gains in reaction to Fed Chair Powell's dovish remarks. There wasn't much news to respond to, and investors are in vacation-mode ahead of Labor Day, contributing to the muted action.Market Breadth
At the NYSE, advancers led decliners by an 11-to-10 margin, while at the Nasdaq, decliners led advancers by the same margin.Notable Stock Movements
- NVIDIA (NVDA 126.46, -2.91, -2.3%) was an influential laggard ahead of its earnings report after Wednesday's close. This price action was related to consolidation activity, which also weighed down other mega cap and semiconductor-related names.
- Meta Platforms (META 521.12, -6.88, -1.3%) and Broadcom (AVGO 159.62, -6.74, -4.1%) were among standouts in that respect.
Sector Performance
The information technology sector (-1.1%) logged the biggest decline among the six S&P 500 sectors that closed lower. The consumer discretionary sector was the next worst performer, dropping 0.8%. Meanwhile, the energy sector showed relative strength, gaining 1.1% amid rising oil prices.Commodities
WTI crude oil futures settled 3.4% higher at $77.42/bbl following retaliatory strikes over the weekend by Israel and Hezbollah. Additionally, Libya's eastern government has announced it will stop oil production, according to Bloomberg.Treasury Yields
Treasury yields settled little changed from Friday. The 2-yr note yield rose two basis points to 3.82%, and the 10-yr note yield settled one basis point higher at 3.82%.Year-to-Date Performance
- S&P 500: +18.1% YTD
- Nasdaq Composite: +17.8% YTD
- S&P Midcap 400: +10.9% YTD
- Russell 2000: +9.4% YTD
- Dow Jones Industrial Average: +9.4% YTD
Economic Data Review
- July Durable Goods - ex transportation: -0.2% (consensus 0.1%); Prior was revised to 0.1% from 0.5%
- July Durable Orders: 9.9% (consensus 4.0%); Prior was revised to -6.9% from -6.6%
Upcoming Economic Data
- 9:00 ET: June FHFA Housing Price Index (prior 0.0%)
- June S&P Case-Shiller Home Price Index (consensus 6.0%; prior 6.8%)
- 10:00 ET: August Consumer Confidence (consensus 100.0; prior 100.3)
Overseas Markets
- Europe: DAX -0.1%, FTSE market closed, CAC -0.2%
- Asia: Nikkei -0.9%, Hang Seng +1.1%, Shanghai +0.0%
Commodities Prices
- Crude Oil: +2.55 @ 77.42
- Nat Gas: -0.05 @ 2.13
- Gold: +7.90 @ 2554.90
- Silver: +0.18 @ 29.99
- Copper: +0.01 @ 4.22
NVDA, META, AVGO, SPY, QQQ, IWM, DIA, AAPL, AMZN, MSFT, GOOGL
Guru Stock Picks
Scott Black has made the following transactions:
- Reduce in FI by 7.33%
- Sold out in PVH
- Add in OSTO:ALIV SDB by 24.73%
- New position in CI
Today's News
Nvidia (NVDA, Financial) is set to release its Q2 earnings report this week, with significant attention from investors. Bank of America has suggested that investors may be underestimating the risk of a potential disappointment and recommends hedging through S&P 500 puts rather than Nvidia-specific options. Morgan Stanley highlighted strong demand for Nvidia's H200 chips, despite some delays in its upcoming Blackwell line of GPUs. The options market is implying a potential 9% upside for Nvidia's stock on its earnings day.
Trump Media & Technology Group (DJT, Financial) has registered up to 5.1M shares of stock for eventual sale by certain shareholders. The stock was down 3.6% on Monday. The registration includes shares for WorldConnect IPTV Solutions, JedTec, and MZ Group. Former President Donald Trump holds 114.75M shares, which could be divested after his six-month lockup period ends on Sept. 20.
Trinity Biotech (TRIB, Financial) saw its stock surge 44% in post-market trading on Monday after the company increased its 2024 sales guidance and expanded manufacturing capacity for its TrinScreen HIV test. The company also ramped up production for its FlexTrans viral transport medium due to increased demand stemming from the mpox outbreak.
Albertsons (ACI, Financial) faces a challenging future if its $25 billion sale to Kroger (KR, Financial) is blocked by the Federal Trade Commission. The standalone strategy might involve layoffs, store closures, or market exits, according to the company's attorney. The trial to block the deal began on Monday.
Apple (AAPL, Financial) announced that Chief Financial Officer Luca Maestri will step down from his role, with Kevan Parekh set to replace him starting January 1, 2025. Maestri has been instrumental in doubling the company's revenue during his tenure. Parekh has been with Apple for 11 years and currently serves as Vice President of Financial Planning and Analysis.
Ark Invest analysts expressed excitement over recent robotaxi developments by Baidu (BIDU, Financial) and Waymo (GOOG, Financial). Waymo's new robotaxi, developed by Geely’s ZEEKR, will feature fewer cameras and lidar sensors, reducing costs significantly. Waymo has ramped up to over 100,000 autonomous rides per week, while Baidu averaged about 75,000 rides per week in Q2.
SentinelOne (S, Financial) is set to announce its Q2 earnings results on Tuesday, August 27th. The consensus EPS estimate is -$0.00, and the revenue estimate is $197.38M. The company has consistently beaten EPS estimates over the last two years and has seen mixed revisions for revenue estimates over the last three months.
Oppenheimer analysts downgraded the energy sector (XLE) from market weight to underweight, citing a lack of inflationary tailwinds and a low percentage of stocks above their 200-day average. The sector has seen a failed breakout, indicating buying fatigue. Stocks like APA Corp. (APA), Chevron Corp. (CVX), Halliburton Co. (HAL), and Occidental Petroleum Corp. (OXY) were highlighted as sell-rated.
PDD Holdings (PDD, Financial) fell sharply after Q2 results fell short of expectations. Revenue grew 86% year-over-year but missed estimates by $610 million. The company warned of future revenue growth pressures and increased competition, leading to a 15.88% drop in premarket trading.
CAVA Group (CAVA, Financial) reached a new high on Monday, continuing its strong run in 2024. The company has impressed investors with its Q2 earnings report and guidance raise, driven by new restaurant openings and same-restaurant sales growth. CAVA's market cap now places it 8th in the restaurant sector.
BlackRock (BLK, Financial) and Apollo Global Management (APO) are in talks to provide debt financing for the merger of Amazon (AMZN) aggregators Branded and Heyday. The new company, Essor, would be valued at over $1B and focus on acquiring distressed e-commerce companies.
International Paper (IP) announced that Tom Hamic will become the Executive Vice President and President of North American Packaging Solutions, effective September 1st. Hamic has been with the company since 1991 and most recently served as Chief Commercial Officer.
Petrobras (PBR) saw an 8.9% rise as Morgan Stanley upgraded the stock to Overweight, citing the company's strong cash flow and resilient offshore oil assets. The analyst noted that Petrobras has the best offshore oil assets in the industry, with strong cash generation providing ample funding for dividends.
Papa John's (PZZA) rose 6% amid takeover speculation involving Restaurant Brands (QSR). A jet owned by 3G, a major investor in Restaurant Brands, was noted to have visited Louisville, the headquarters of Papa John's, sparking rumors of a potential acquisition.
L3 Technologies (LHX) was awarded a $587.4M contract for electronic warfare test articles and fleet prototypes. The contract includes various prototypes and simulators, highlighting the company's strong position in defense technology.
Paramount Global (PARA) is looking to sell 12 non-core TV stations, potentially raising $500 million to $1 billion. The stations, located in markets like New York and Philadelphia, are expected to attract interest from private equity firms and other broadcasters.
GuruFocus Stock Analysis
- Harris, Trump and the Future of Corporate Taxes by John Dorfman
- Restaurant Brands International Is Undervalued Following Recent Pullback by Blue Chip Portfolios
- Amazon: Still Attractive After Earnings by Kenio Fontes
