Mid-Morning Look

Friday, September 19, 2025

U.S. stocks looking higher on the final trading day of the week, on track for another weekly gain that saw the S&P 500, Nasdaq, Dow Jones Industrials and now Smallcap Russell 2000 all hit record highs this week, buoyed by tech stock strength and lower interest rates after the Fed cut 25bps Wednesday and called for another 2 cuts this year. The Russell 2000 index hits fresh intraday record high. In fact, Bespoke Invest noted “the small-cap Russell 2,000 just ended a 967-trading day streak without a new all-time high; its second longest ever.” FOMO keeps pushing the market higher in what is typically a bearish month as the S&P 500 has gained 2.7% so far in September, hitting fresh record highs on brisk volumes, with small and mid-caps notably outperforming. The narrative that the Fed is cutting into a soft landing being seen as a very bullish scenario for stocks…but at what point is the good news “baked-in” after more than 30% gains since April (in a straight-line move). Markets await details of a highly anticipated call between China’s Xi and President Trump, with TikTok and trade likely on the agenda today. No economic data today and in earnings FDX rises on results while homebuilder LEN slips on results. Not much market action to start this options expiration Friday, holding in a tight range so far.

• In Industrials: Barclays initiated the North America environmental services sector with a positive industry view and Overweight ratings on GFL ($62 tgt), MEG ($35 tgt), XYL ($165 tgt), WM ($272 tgt), VLTO $120 tgt) and EW ratings on CLH, RSG and WTS and an Underweight on CWST $88 PT as sees steady growth profiles with high FCF generation enabling capital redeployment flexibility (M&A/buybacks), underpinning LT upside bias to estimates.
• In Information Service stocks: RBC Capital noted the pullback in Information Services stocks exposed to the Asset Management and Banking verticals following FDS’s results has created an attractive buying opportunity. In particular, RBC believes SPGI and MCO are well-positioned for a beat-and-raise scenario, driven by strong quarter-to-date issuance and tailwinds from the capital market recovery, the refinancing wall, and tight spreads. For MSCI, robust ABF growth fueled by fund flows should deliver a solid beat, though RBC is closely monitoring potential headwinds to net new subscription sales. Lastly, NDAQ should benefit from strength in U.S. Equity Derivatives, U.S. Cash Equities, and Index revenues.

• KSS +2%; price tgt was raised to 19 from $16 at Citigroup and issued a positive catalyst watch saying easing comp comparisons in 2H and web traffic data indicating a Q3-to-date acceleration have led them to raise Citi’s comp forecast in Q3.
• KVYO +3%; upgraded to Overweight at Morgan Stanley with raised tgt to $50 saying expanding from email marketing to a CRM platform for B2C businesses puts Klaviyo in front of an expanded market opportunity, supporting durable growth.
• LNC +2%; was upgraded to Overweight from Equal Weight at Morgan Stanley (tgt to $58 from $41) saying the company’s turnaround is on track as it shifts to a more capital light business mix
• OKLO +14%; another strong day for small modular reactor nuclear names, specifically OKLO, SMR, LEU, and NNE as they outperform the large nuclear power names.
• QMCO +29%; Quantum compute names seeing a resurgence of buying this week with massive gains for IONQ, RGTI, QUBT, QBTS today and for the week – all rising between 25%-40% this week.

• INTC -3%; after Citigroup downgraded to Sell from Neutral due to valuation and that the stock is pricing in success in its leading-edge foundry business, which they believe has minimal chance to succeed.
• JSPR -4%; announced ~12.3M shares priced at $2.43 for $30M gross proceeds; the offering shares and pre-funded warrants accompanied by warrants to buy up to an additional ~12.3M shares.
• LEN -2%; shares slipped after weaker quarterly results; quarterly revenue came in light and its guidance for the current quarter is disappointing; its EPS miss was driven by lower deliveries, gross margin, higher SG&A, and was offset by stronger multifamily while orders were +12% Y/Y vs consensus +9-10%.
• MU -4%; after Samsung clears Nvidia hurdle for 12-layer HBM3E supply, setting stage for HBM4 battle; Initial supply volumes are limited, but the qualification test pass is expected to support Samsung in the heated AI chip race https://tinyurl.com/3nk34wpz (on track to snap 12-day win streak)
• SCHL -14%; shares stumbled on results after reported a wider adjusted Q1 loss per share than the same period a year ago and posted steeper revenue declines from the year-ago period.