Mid-Morning Look

Wednesday, September 03, 2025

U.S. stocks are recovering after posting their worst daily decline since the 1^st of August, getting a boost overnight from Alphabet (GOOGL) shares, which are up over 8% to all-time highs following a positive antirust ruling, boosting the S&P 500 and Nasdaq particularly today. US Federal Judge Amit P. Mehta ruled that GOOGL won’t have to sell Chrome; orders them to share information with competitors to address monopoly; Google is not required to stop payments to Apple and others for preloading Google products (the gist). Outside of strength in large cap tech, Treasury yields in the U.S. slipped following the lower JOLTs job opening report as the 10-yr yield fell -6.2bps to 4.215% (30-yr -6.7bps to 4.90%) while the dollar declines vs. rival currencies as well. Job openings fell from 7.4M in June to 7.2M in July, below the consensus forecast of 7.2M. This is consistent with other indicators suggesting a softening labor market and comes ahead the important ADP private payrolls Wednesday and Nonfarm Payrolls Friday. A weaker jobs report will likely give the Fed the further ammo it needs to cut rates in 2 weeks (while market expectations remain firm for a 25-bps cut). Energy stocks are leading lower, tracking oil to the downside on reports ahead of a weekend meeting of OPEC+ producers that are expected to consider another increase in production targets in October. Precious metals the opposite, with gold prices hitting fresh all-time highs above $3,600 an ounce today. Few earnings reports on deck tonight worth watching (CRM, HPE, AEO), but the macro picture with jobs data this week remains the key market driver.

• U.S. July factory orders fell (-1.3%) vs. consensus (-1.4%) and vs June (-4.8%); July factory orders ex-transportation +0.6% vs June +0.4% (prev +0.4%); July factory orders ex-defense (-1.1%) vs June (-4.7%); U.S. July Durables orders unrevised at -2.8%; U.S. July nondefense cap orders ex-aircraft unrevised at +1.1%; July shipments unrevised at +0.7%.

• In Oil Refiners: Bank America upgraded VLO to Buy from Neutral saying the refiner is better positioned than they were then due to the Light-Heavy outlook (raised tgt to $179 from $152) and downgraded PSX to Neutral from Buy saying while still sees its SOTP value embedded in their midstream, the NGL outlook has grown dimmer this year with less US liquids growth expected and downstream overbuild beginning, and the chemicals outlook has dampened considerably.
• In Software: ZS posted strong Q4 billings beat by $57M/5% vs the $20M/3% TTM average, Q4 ARR growth of 22% y/y, crossing the $3B mark and was steady with last quarter while guided Q1 about in line on revenue and margins; management retired billings guidance, total billings grew 32% YoY in the quarter, supported by ramped reps and upselling. HUBS was upgraded to Outperform from Market Perform at Bernstein with an unchanged price target of $606 as sees a more favorable risk/reward with the company’s macro issues stabilizing and the stock’s valuation having come down.

• CPB +4%; shares rallied on mixed results/guidance; Q4 sales rose 1% y/y to $2.32B vs. est. $2.33B, and forecast annual sales and profit below Wall Street estimates, pressured by weak demand for snacks and ready-to-eat meals as well as higher costs from tariffs.
• GOOGL +8%; shares surged after a U.S. judge ruled against breaking up the Google parent, clearing a major regulatory overhang. The ruling by Judge Amit Mehta allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers
• HQY +4%; reported Q2 revenue of $325.8M (+9% Y/Y), topping consensus of $320.7M while Non-GAAP net income per share of $1.08 topped ests on EBITDA of $151.1M (+18% Y/Y) beat consensus of $135.3M, helped in part by strong gross margin performance of 71% (versus its 67% est.)
• M +19%; raised its annual outlook and reported its best comparable sales growth in 12 quarters; raises annual net sales between $21.15B-$21.45B, compared with its prior target of $21B-421.4B and raises EPS view to $1.70-$2.05 from $1.60-$2.00 after better quarterly results.
• REVG +7%; Q3 sales of $644.9M topped expectations of $630.9M while they raised their full year guidance, expecting net income for the year to come within a range of $95-$108M from a previously expected $88-$107M.
• SMR +13%; Canaccord raised PT to $60; SMR also announced its support for ENTRA1 Energy’s landmark agreement with the Tennessee Valley Authority (TVA) to deploy up to 6 gigawatts of NuScale’s small modular reactor (SMR) capacity across TVA’s seven-state service region.

• DLTR -6%; shares fell after reporting a top and bottom line Q2 beat, but forecasts Q3 adj. profit to be flat sequentially due to rising tariff-related costs; said Q2 cost of sales rose to nearly $3B from $2.67B y/y, due to tariffs and higher discounts on some items; did raise FY sales/EPS guidance.
• NIO -6%; a day after weaker earnings results and general weakness in China stocks this morning.
• SFD -4%; files for offering of 16M shares of common stock by selling stockholders.
• WVE -18%; after posted interim data from its ongoing early-to-mid stage trial testing WVE-006 for the treatment of alpha-1 antitrypsin deficiency, a rare genetic disorder; said patients who received multiple 200 mg doses reached protein levels that could lower their risk of liver and lung diseases.