Mid-Morning Look

Thursday, September 04, 2025

U.S. stocks are little changed following tech earnings and a deluge of economic data, as all eyes remain fixed on tomorrow’s Nonfarm payroll report. U.S. listed China stocks tumbled overnight on reports that Beijing wanted to cool a red-hot stocks rally, especially the tech sector, but Wall Street was pointing higher overnight. Oil prices extended their weekly declines after a Reuters report that OPEC+ officials are looking at increasing output targets this weekend, while the dollar was drifting ahead of Friday’s crucial jobs report. There were several economic data points to digest with a slightly weaker ADP private payroll report, but revisions edged slightly higher; jobless claims edged higher, Q2 non-farm productivity revised to +3.3%, best since Q423 and above consensus +2.7%, and labor costs cooled a bit; while lastly ISM services data was strong. Higher global yields weighed on market sentiment to start the week, but a smooth auction of 30-year debt in Japan eased some recent government bond market jitters. Gold prices slipped following a record-breaking rally (highs of $3,640 yesterday), with spotlight now shifting to the U.S. payrolls report for fresh cues on Federal Reserve’s policy path. Lots of software related earnings overnight as AI, CRM, FIG shares fall; ASAN CRDO rise on results. Crypto stocks/sector weak with bitcoin dipping under 110K.

• Weekly Jobless Claims climbed to 237K from 229K prior and vs. consensus 230K; the 4-week moving average climbed to 231K from 228,500 prior week; continued claims fell to 1.940M from 1.944M prior week and the US insured unemployment rate unchanged at 1.3%.
• U.S. Q2 non-farm productivity revised to +3.3%, best since Q423 and above consensus +2.7%, vs. prior +2.4% while Q2 non-farm unit labor costs revised to +1.0% (consensus +1.2%), and vs. prior +1.6%
• U.S. S&P Global August final composite PMI at 54.6 and August final services PMI at 54.5.
• ISM report on U.S. non-manufacturing sector shows PMI 52.0 in August above consensus at 51.0 and topping the 50.1 in July; business activity index 55.0 in August vs 52.6 in July; prices paid index 69.2 in August vs 69.9 in July; new orders index 56.0 in August vs 50.3 in July; and lastly, ISM non-manufacturing employment index 46.5 in August vs 46.4 in July.
• The U.S. trade deficit widened by less than expected to -$78.3B in July, after upward revisions back through January that were larger for exports than imports, leaving smaller deficits. Analysts saw a -$59.1B (was -$60.2) gap in June that marked the narrowest deficit since March of 2023. Analysts saw an all-time wide gap of -$136.4 (was -$138.3B) in March. Exports in July beat estimates by $3.0B, while imports beat estimates by $1.3B. Analysts expect 2025 gains for U.S. trade in goods/services of 4.4% for exports & 5.6% for imports.

• In Managed care: shares of CNC, MOH slid, led lower by Medicaid comments by ELV at Wells Fargo conference saying regarding its Medicaid, “Our operating margin performance is expected to be softer than the outlook that we provided in July. We no longer expect sequential operating margin improvement in the second half of the year.”
• In Autos: BYDDF slashed its sales target for this year by as much as 16% to 4.6 million vehicles, Reuters reported as the Chinese EV giant faces its slowest annual growth in five years. GM is scaling back production at its Spring Hill, Tennessee EV plant, citing slower demand and reduced federal support under the Trump administration. CHPT Q2 results were a bit below expectations despite stronger revenue on lower subscription mix and higher opex, though cash was only a modest outflow.
• In Food & Restaurants: EAT was upgraded to Outperform from In Line at Evercore ISI and raise tgt to $210 from $190 as sees upside to consensus estimates in the near term and sustainable same-store-sales growth potential from Brinker’s improving customer satisfaction measures. DOLE shares were pressured after announced ~11.9 mln shares offloaded by Castle & Cooke Holdings and The Murdock Group at $13.25 as the offering priced at 10% discount to stock’s last close.

• AQST +22%; after saying the FDA will not require an advisory committee meeting to discuss new drug application for Anaphylm; NDA remains on track for FDA PDUFA goal date of January 31, 2026.
• ASAN +4%; after the enterprise work management platform posted second-quarter that topped analysts’ estimates and it raised fiscal 2026 guidance.
• CIEN +22%; shares jumped after Q3 revenue rises 29.4% y/y to $1.22B, beating analyst expectations of $1.175B on better adj net income $96.2M vs. est. $77M while guides Q4 revenue $1.24B-$1.32B above consensus $1.21B and anticipates Q4 adjusted gross margin of 42% to 43%.
• SCVL +18%; shares rise on results as Q2 EPS topped consensus noting with profits beating consensus by double digits and gross margins reaching 38.8% and said August performance “accelerated significantly,” with comparable sales turning positive for the month.
• TROW +6%; as GS will invest as much as $1 billion in TROW and will also partner with the asset manager to offer private market products to retail investors, the companies said. The partnership will give Goldman access to T. Rowe’s retirement-focused client base, which is seen as a stable income stream.

• AI -3%; shares stumble following a significant FQ1 miss, consistent with the pre-announcement, which management attributes to the significant sales reorganization and CEO Tom Siebel’s health issues. The co also guided Q2 significantly below, while FY26 guidance was withdrawn.
• CAL -11%; shares slide after Q2 adjusted EPS $0.35 below estimates $0.56 while guidance remains suspended given the uncertainty in the environment. Caleres expects ongoing gross margin pressure in Brand Portfolio from tariffs for the balance of the year.
• CRM -7%; shares slide as Q2 results largely came in ahead of expectations, fueled by solid performance in core clouds, steady Data Cloud and AI momentum; ARR grew ~$200M q/q (120% y/y) to $1.2B across 6,000 paid deals to date. From a guidance perspective, the top-line wrapped the Street for FQ3/FY26 (raised low-end FY26), pressuring shares despite the FCF growth outlook for FY26 moving higher.
• DOLE -9%; shares were pressured after announced ~11.9 mln shares offloaded by Castle & Cooke Holdings and The Murdock Group at $13.25 as the offering priced at 10% discount to stock’s last close.
• DUOL -3%; after being downgraded to Neutral from Buy at DA Davidson and slashed its tgt to $300 from $500 saying its proprietary data shows Duolingo’s active user growth continuing to decelerate and suggests that active users and subscribers are tracking below Q3 consensus estimates.
• FIG -20%; delivered relatively in-line Q2 results with revenue (+41% y/y) coming in-line with consensus and profitability coming in modestly below…but while revenue growth sustained above 40% y/y in Q2, Q3 and FY25 guidance for growth of 33% and 36.5% y/y, respectively, likely fell short of expectations.
• SAIC -6%; as Q2 revs fell -2.7% y/y to $1.77B, missing the $1.86B estimate citing the decrease largely to contract completions and a ramp down in volume on existing contracts and also lowered its Fy rev outlook to $7.25B-$7.33B from prior $7.6B-$7.75B, while upping its year profit view.
• SNY -7%; after late-stage trial data for its experimental inflammatory disease drug amlitelimab disappointed. Sanofi said amlitelimab met all main goals in the Phase III study, showing statistically significant improvements in skin clearance and disease severity compared with placebo after 24 weeks…but the data looked weak against its best-selling med Dupixent (NKTR shares benefit from data).