Closing Recap

Thursday, August 21, 2025

It was a quiet day on Thursday, with U.S. stocks slipping again on thin volumes ahead of tomorrow Jackson Hole Fed symposium, headlined by Fed Chairman Powell’s keynote speech at 10:00 am. The S&P 500 (SPX) posted its 5^th straight day of declines and the Nasdaq 100 (QQQ) its 6^th straight day of losses (longest streak since October 2022) – both off recent all-time highs for both as momentum names and big 20205 winners saw some lightning up in shares over the last week. NYSE breadth was negative again with decliners outpacing advancers by a 1.7:1 margin as Consumer Staples, Consumer Discretionary, REITs and Technology were the biggest laggards while Energy and Materials gained. It was a quiet afternoon overall following some weaker economic data this morning and Fed speakers. Oil prices gained along with the dollar, while crypto assets and gold ended lower. While we are in the dog days of summer there are a lot of one-off events worth watching starting with the obvious Chair Powell speech tomorrow 10AM, followed by earnings in tech next week including NVDA, PSTG, NTNX, and CRWD 8/27, DELL 8/28, ZS 9/2 CRM 9/3 and AVGO 9/4 as well as Wall Street conference season in the beginning of September.

What to expect from Powell tomorrows: Fed Chairman Jerome Powell could potentially adopt a more cautious, hawkish tone at the Jackson Hole symposium, signaling a shift from the earlier expectation of a 25-basis-point rate cut. Recent hotter-than-expected PPI data have raised concerns about persistent inflation, while a weakening jobs market adds pressure to the Fed’s dual mandate. With another jobs report, CPI, PPI, and PCE data due before the September 17 FOMC meeting, Powell may emphasize a "wait-and-see" approach, highlighting the need for further evidence to balance inflation control and labor market stability. While a market-crashing "mic drop" moment like a few years ago seems unlikely, if Powell prioritizes inflation as the bigger threat, it could provide enough ammo for markets to dip, especially given the Fed’s recent data-driven flexibility. If he chooses to focus more on the weakening jobs outlook, that could give stocks markets what they want to hear.

While the main course is tomorrow with Fed Chairman Powell, there were still plenty of Fed speakers sprinkled throughout the day opining about the economy and rates:

—Kansas City Fed President Jeffrey Schmid said on Thursday there seems no rush to cut interest rates, with inflation still above the central bank’s 2% target and the labor market still in solid shape. “I think we’re in a really good spot and I think we really have to have very definitive data to be moving that policy right now,” said Schmid, a voter on interest rate policy this year.

—Cleveland Fed President Beth Hammack said today she does not see imminent case for cutting rates based on current data and doesn’t think Fed policy is far from neutral policy, no need for stimulative policy. While the headlines grabbed market attention, note she is not a 2025 FOMC policy voter (she does vote in 2026).

—Federal Reserve Bank of Atlanta President Raphael Bostic said on Thursday that he still thinks the U.S. central bank can cut its interest rate target once this year, while noting there’s a lot of uncertainty around that view as the economy undergoes considerable change. Bostic said the forecast he offered earlier in the year of one rate cut was “kind of still where I am,” speaking before the Metro Atlanta Chamber.

The U.S. and the European Union reach a trade deal and release terms: Tariffs: 1) US to impose 15% tariffs on most EU imports, 2) US to lower auto tariffs once the EU passes matching tariff-cut legislation, 3) from Sept 1, US will apply only MFN tariffs on EU aircraft/parts, generics, chemical precursors, and scarce natural resources, 4) the EU to eliminate tariffs on all US industrial goods and grant preferential access for US seafood/agriculture. Energy & Tech Purchases: 1) EU to buy $750B in US LNG, oil, and nuclear products, 2) the EU to purchase at least $40B in US AI chips. In Investment & Cooperation: 1) the EU firms to invest $600B in US strategic sectors by 2028, 2) both sides to negotiate rules of origin to ensure benefits remain bilateral, 3) exploring cooperation on steel and aluminum market protections, 4) joint commitment to tackle digital trade barriers; EU pledges not to adopt network usage fees, and 5) considering measures for secure supply chains, including tariff-rate quota solutions.

Sentiment Readings: This week’s NAAIM Exposure Index jumped to 98.15 from last week’s 85.66 – which was the highest reading since the 99.30 on 7/2 – recent trough from 4-17 of 35.16 – Last Quarter Average (Q2) of 73.28. Also, The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -14 vs -16.3 last week. Bulls fall to 30.8 % from 29.9%, Neutrals rise to 24.4% from 24%, Bears fall to 44.8% from 46.2%.

• The Philadelphia Fed business conditions August slipped -0.3 (below consensus 7.0) and down sharply vs July 15.9; the prices paid index August 66.8 up from July 58.8; new orders index August -1.9 vs July 18.4; employment index August 5.9 vs July 10.3; six-month business conditions August 25.0 vs July 21.5.
• July Existing Home Sales rose 2% to 4.01M unit rate above consensus 3.92M and vs June 3.93M; the July inventory of homes for sale 1.55M units, 4.6 months’ worth; the July national median home price for existing homes $422,400, +0.2% from July 2024; Existing Home Sales all cash in July made up 31% of all transactions vs. 27% y/y – days on mkt 28 vs. 24.
• S&P Global August flash manufacturing PMI at 53.3 (vs 49.8 in July); U.S. S&P Global August flash services PMI at 55.4 (vs 55.7 in July); U.S. S&P Global August flash composite PMI at 55.4 (vs 55.1 in July).
• July leading economic indicators fell (-0.1%), in-line with consensus.

• December gold slipped -$6.90 or 0.2% to settle at $3,381.60 an ounce, edging lower behind strength in the U.S. dollar ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium for signals on U.S. policy direction. The euro was -0.35% at $1.1610 and the Japanese yen weakened 0.6% against the greenback to 148.24 per dollar.

• In Beauty and Consumer Staples: COTY shares tumbled after reporting a wider-than-expected Q4 loss while LFL sales came in at -9% (vs. est. -8.9%), with declines in both the Consumer Beauty segment (-12%) and Prestige business (-7%), with adj. EBITDA at $126.7M (below cons. $130.5M); also issues weaker guidance in F1H26 with LFL sales -6.5% to -4.5% and EBITDA implied -17.5% to -13.5%.
• In Housing: RKT’s Redfin said Roughly 58,000 U.S. home-purchase agreements were canceled in July, equal to 15.3% of homes that went under contract last month. That’s up from 14.5% a year earlier and marks the highest July rate in records dating back to 2017. Roughly 1 in 7 U.S. home purchases fall through.

• In Food, Delivery/ride hailing: CART was downgraded to Underperform from Neutral at Wedbush and cut its tgt to $42 from $55 citing competition concerns. CBRL shares declined on rebranding; as Cracker Barrel unveils new logo and it’s not pleasing everyone.
• In Casino & Gaming: FanDuel (FLUT) announced it will partner with the CME Group to offer event contracts including "benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, Cryptocurrencies, and key economic indicators such as GDP and CPI.”

• In Energy E&P and Equipment: SOBO was downgraded to Underweight at JP Morgan saying a more muted EBITDA growth profile, paired with fewer near-term catalysts, collectively underpin a less attractive outlook versus midstream peers at this juncture. Utility stocks were weak, but there were significant pullbacks in electric utilities PCGand EIX which underperformed the broader sector.

• In Insurance: SLQT reported Q4 revs $345.1M vs. est. $334.1M on better adj Ebitda of $2.7M vs. est. (-$2.17M) while guided Fy Ebitda $120M-$150M vs. est. $141.9M and revs $1.65B-$1.75B vs. est. $1.7B; ALL July Catastrophe loss were -$184M, or -$145M after-tax
• In Banks: Piper assumed coverage of three Hawaiian banks: CPF (Overweight, $35 PT), BOH (Neutral $71 PT), FHB (Neutral, $26 PT) saying all of the banks appear well positioned to improve profitability by increasing NII, despite low-single-digit loan and deposit growth outlooks, due to ongoing NIM expansion driven by fixed asset repricing / remixing and incremental funding cost relief with additional Fed rate cuts. TFC was downgraded to Equal Weight from Overweight saying investors have waited long enough to not be given another 5-yr. plan that involves many strategies that look like peers from years ago.
• In REITs: TWO shares fell after settling litigation with Pine River via a one-time $375M cash settlement and cut its quarterly dividend to $0.34 from $0.39. In Research, Goldman Sachs with a few rating changes as they downgraded KRC to Sell from Neutral as they expect low office tenant retention rates, high levels of available office space in its West Coast markets, and high capitalized interest will create significant headwinds in 2026 and drive multiple compression. Separately, they downgraded EXR to Neutral (from Buy) as its storage demand remains muted and see no near-term catalyst.

• GILD slips after Reuters reported that CVS decided not to add Gilead’s new HIV prevention drug Yeztugo to its commercial plans for now citing clinical, financial, and regulatory reasons for decision. Gilead still negotiating with CVS over Yeztugo; U.S. list price more than $28,000/year.
• IONS said Dawnzera™ (Donidalorsen) approved in the U.S. as first and only RNA-targeted prophylactic treatment for hereditary angioedema; Dawnzera will be available in U.S. in coming days.
• NVAX announces convertible debt refinancing; $225M of convertible notes due in 2031 issued; said refinancing continues maturity of most existing debt.
• SRPT refinances $700 million convertible notes due 2027; swaps about $700M of its 1.25% convertible bonds due 2027 for $602M of new 4.875% convertible bonds due 2030, plus some stock and cash.
• TRVI was Initiated at Overweight and $18 PT at Morgan Stanley saying they see a multi-billion-dollar opportunity for Trevi’s Haduvio, a de-risked and differentiated chronic cough candidate.

• In Industrials: NDSN shares rallied after reported Q3 sales above, driving a $0.12 operational beat, led by higher margins and stronger organic sales in the MFS segment while annual guidance range was reaffirmed with sales tracking slightly below the midpoint while adj. EPS is pacing slightly above.
• In rare Earth sector: shares of MP, CRML, UUUU, USAR gained late day after Reuters reported the Trump administration weighs plan to reallocate $2B in chips act funding for critical minerals, as the admin aims to give commerce Secretary Howard Lutnick greater oversight of minerals financing decisions.

• In Marketing & Advertising: APP shares got a bounce after Wells Fargo raised its tgt to $491 saying July APP advertiser web traffic +40% y/y; says plenty of room to grow w/multi-channel attribution platforms; avg size of new customers increasing and continued momentum positive into ’26 GA, raise ests modestly.

• In Software: MNDY was downgraded to Neutral from Buy at Bank America saying third party data suggests SEO-driven website visits sank by an avg of 23.5% Y/Y in Q2, with Y/Y declines accelerating to -25% in July as pressure likely driven by Google’s expanding integration of AI Overviews.
• IT Hardware: HPE was upgraded to Overweight from Equal-Weight at Morgan Stanley as saying the recently closed Juniper deal will be an earnings upside; reiterating its Overweight rating on DELL and raising its PT to $144 (from $136) and believe the July quarter earnings setup is most compelling for OW-rated HPE and DELL, followed by EW-rated PSTG, and then EW-rated NTAP and EW-rated HPQ.

• For NVDA the Financial Times reported following remarks made by U.S. commerce secretary Howard Lutnick related to chip exports that officials found "insulting," a group of Chinese regulators have moved to restrict the sales of H20, Nvidia’s (NVDA) China-specific AI processor.
• Bank America noted, China imported $5.2B of semiconductor equipment in July, up 13% yoy/up 10% m/m; front-end imports were $3.8bn, up 10% y/y and up 11% m/m; YTD, front-end China imports are up 2% y/y, led by etching at +55% y/y
• FORM was downgraded to Neutral at Citigroup in transfer of coverage saying the growing demand of advanced packaging, and especially HBM, is driving ~20% higher probe cards intensity, and Citi views FORM as a key beneficiary thanks to its strong position at SK Hynix and differentiated technology. That said, muted smartphone and PC markets are pressuring both revenue and margins.