Mid-Morning Look

Friday, August 30, 2024

US stocks enjoyed pre-market gains ahead of PCE data and a benign inflation allowed gains to extend into the regular session. Expectations of a 25bps Fed cut went to 69.5%, while the implied probability of a 50bps cut moved to 30.5%. Yields and the Dollar index gained after the release (though yields quickly gave up gains) while gold held a modest decline. Oil was hugging the unchanged line early but took a big hit on Reuters headlines indicating multiple OPEC+ sources saying likely to proceed with planned gradual production increase from October. Early market breadth was almost 2:1 in favor of advancers as small caps gained but underperformed versus SPY and QQQ. Early S&P sector ETF leaders were Technology, Consumer Discretionary and Utilities. Energy was the lone S&P sector ETF in the red after the earlier OPEC+ headlines spooked oil. MRVL, MDB, ADSK and DELL gained early on unusually strong volume after posting better earnings in tech.

• US Personal Spending rose 0.5% mo/mo in line with expectations and above the 0.3% previous.
• US Core PCE Price Index rises 0.2% mo/mo in line with expectations and previous.
• US Supercore PCE (ex. Food, energy, housing) +0.1%.
• US Core PCE Price Index rises 2.6% yr/yr versus 2.7% expected and 2.6% previous.
• Chicago PMI 46.1 versus 44.8 expected and 45.3 previous.
• University of Michigan Sentiment (Final) 67.9 versus expected 68.1 and previous 67.8.
• University of Michigan surveys of consumers 1-year inflation outlook final Aug 2.8% vs prelim 2.9% and final July 2.9%.
• University of Michigan surveys of consumers 5-year inflation outlook final Aug 3.0% vs prelim 3.0% and final July 3.0%.

• INTC +7% after overnight news that Intel is discussing various scenarios, including a split of its product-design and manufacturing businesses, as well as which factory projects might potentially be scrapped, said the people, who asked not to be identified because the deliberations are private.

• MRVL +5% following last night’s strong results; Citigroup added Marvell to its ‘positive catalyst watch” heading into Citi’s Sept. 4 TMT conference.

• ADSK +4% following last night’s strong earnings and today’s multiple price target raises.

• UBER +1% Uber plans to step up fight with larger rival Kakao in South Korea; Uber’s rides in Korea jumped almost 80% in first half of 2024.

• EBS +3% (down from earlier +16% gains) after last night’s news that Emergent Bio gets FDA green light for Mpox vaccine.

• LUNR +10% following last night’s news that the company won a $116.9M NASA lunar contract.

• DELL +2% following last night’s Q2 earnings double beat and raised FY25 EPS guidance

• MDB +13% after last night’s strong earnings followed by multiple Buy reiterations and price target raises this morning.

• ANF +0.35% as the retailer continues to rebound slightly from Wednesday’s lows following an upgrade to Buy from Neutral at Citigroup today.

• NVO +1% Novo PR says analysis showed semaglutide reduced risk of cv death.

• LESL +20% after Leslie’s CFO and a Director filed buying $550K worth of stock yesterday.

• MNSO +6% following overnight earnings double beat and announced plans to buyback HK$2B stock.

• JKS -1% following Q2 earnings: EPS $0.29 vs est $0.17 and revs $$3.31B vs est $3.91B; Gross margin 11.1% vs. 15.6% y/y, EST 11.8% (2 ESTs); Solar module shipments 23,822 mw, +34% y/y; reported repurchasing $134.5M worth of ADS.
• ESTC -28% after last night’s results in which the Elastic revealed previously unknown significant sales realignment and execution issues in fiscal Q1. BofA downgraded ESTC to Neutral from Buy, cuts PT to $94 from $140.
• ULTA -2% Shares are lower on last night’s weak earnings but have rallied off pre-market -9% lows. Price targets were lowered by many analysts covering Ulta Beauty along with a downgrade to Outperform from Strong Buy at Raymond James.
• ALNY -7% after Alnylam Presents Detailed Results from the Positive HELIOS-B Phase 3 Study of Vutrisiran in Patients with ATTR Amyloidosis with Cardiomyopathy at the European Society of Cardiology Congress. On conference call Alnylam executive says typo in presentation misstated heart drug benefit.
• BBIO +10% on ALNY trial results; BBIO has a competing drug.
• NCNA Shares are halted -46% (pre-market) right before the start of regular trading. Last night NuCana released an update on their Phase 2 randomized colorectal cancer study that showed it was unlikely to meet the objective.
• TALO -7% The company announced CEO Tim Duncan had unexpectedly stepped down effective 8/29 & a CEO search has begun.
• PALT -36% after the micro-cap software communication company announced that it had won $65M in a verdict against CSCO, that must have fallen short of expectations.
• BIRD -1% after the once hip wool sneaker maker announces a 1 for 20 reverse split; shares are -97% since Nov. 2021 IPO.
• BRY -1% In a PR this morning, Berry Corporation reaffirms a strong liquidity position, balance sheet strength, and ongoing free cash flow generation.
• STLA -0.30% A Chrysler heir proposes to buy the Chrysler/Dodge brands from Stellantis, N.V., and return lost jobs and American ownership. In a 10:15am release, STLA responds, says they are pursuing the spin off of any brands and are committed to its entire portfolio.