Closing Recap

Thursday, August 14, 2025

U.S. stock markets remain incredibly resilient, managing to finish little changed despite a shockingly “hotter” producer price (PPI) inflation report for July, sending Treasury yields and the dollar higher, weighing on both gold and Bitcoin, but leaving Wall Street investors with another ho hum reaction as they again “buy the dip” in the S&P 500 and Nasdaq.  After back-to-back days of massive market gains, the Smallcap Russell 2000 was the biggest casualty of this morning’s significantly “hotter-than-expected” PPI inflation report, raising some caution about the potential of less aggressive rate cuts in coming months (lower rates seen as most beneficial for SMID companies), but large cap tech helped keep major averages higher on Thursday.

Overall, stocks managed mixed results, “holding the line” so to speak despite today’s sharply higher-than-expected PPI inflation outcome, as the market remains confident in a September 2025 rate cut. What can change that view? Well, we still have another jobs report before the Fed September 16-17 meeting (another lousy jobs reading will likely keep cuts on track, but a higher reading could create a pause, especially after today’s PPI data). We also get another round of inflation data with CPI, PPI, and PCE data to see if July was one off, or more to fear. Now despite the next FOMC in September 16-17, The Fed 2025 Jackson Hole symposium will take place next week between 8/21-8/25 – so we likely get a good gauge where Powell stands on cuts at that point. After today’s reading, there remains a 94% chance for a 25bps cut (6% for no cut vs. yesterday where 6% was for a 50bps cut), a 55% of an October cut and December dropped down to a 42% chance of a cut – CNBC. Major averages holding near record highs heading into August options expiration tomorrow.

Despite notable negative market breadth on Thursday and many of the eleven S&P sectors finishing in the “red”, major averages still hung in as strength in the mega cap tech Mag7 names (AMZN, GOOGL, META, MSFT as well as ORCL, NFLX) continued to offset the broader market weakness. Market concentration remains a major concern as the biggest names in tech make up the bulk of the S&P 500 index market capitalization as according to @GlobalMktObserv on “X”, “The US stock market concentration BUBBLE is skyrocketing: Top 10 stocks account for A RECORD 40% of the S&P 500’s market cap. The huge RISK is that the top 10 will also drive the market to the downside as it did in the 2022 bear market.” If the mega cap tech names roll over, instead of remaining a “safe haven” for economic and tariff concerns, things could get interesting.

Investor sentiment: Despite markets at all-time highs just a day ago, sentiment is not showing signs of bullishness as the bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -16.3 vs -8.3 last week with Bulls falling to 29.9% from 34.9%, Neutrals rise to 24% from 21.9% while Bears rise to 46.2% from 43.2%. In another data point, This week’s NAAIM Exposure Index dropped to 85.66 from last week’s 96.25 – 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.

• Weekly Jobless Claims fell to 224,000 from 227,000 prior (and vs. consensus 228,000) as the 4-week moving average climbed to 221,750 from 221,000 prior week; continued claims fell to 1.953M from 1.968M prior week and the insured unemployment rate unchanged at 1.3%.

• Gold prices and crypto prices declined following a bounce in the dollar and Treasury yields after the July PPI data were much higher than expected. December gold prices fell. December gold settles lower by -$25.10/oz, or -0.74%, at $3,383.20. Bitcoin was even more volatile, hitting overnight fresh record highs of $124,480, before tumbling following the hotter PPI reading this morning, hitting lows around $117,500 with Ethereum also ending lower by over 3% to under $4,600 on rising inflation fears.
• Treasury yields jumped (and bonds fell) as the PPI data weighs as inflation hurts long bond prices; the 10-yr yield pushed higher up over 5.3bps to 4.293% and the 2-yr +5.4bps to 3.741%. The US dollar index (DXY) gained +0.4%, paring its recent losses back to 98.25 in choppy trade in recent weeks.

• In Restaurants: NDLS shares tumble after cuts FY25 revenue view to $487M-$495M from $503M-$512M (est. $509.46M) while guides FY25 comparable restaurant sales up 2.5%-4% after reporting both top and bottom line Q2 results below consensus; RRGB shares rose after better Q2 results as adj EPS $0.26 vs. est. (-$0.15); Q2 revs $283.7M vs. est. $281.7M; Q2 adj EBITDA $22.4M vs. est. $17.4M.
• In Retail Services: IBTA shares tumbled after reporting Q2 revenue of 86MM (-2% Y/Y) and EBITDA of $17.9MM missed Street expectations by -5% and -12%, respectively citing disruptions from its sales reorganization and slower scaling of new performance marketing clients as key headwinds, and guided Q3 revs to $79-$84M (-17% Y/Y at midpoint) and EBITDA to $9.5-$13.5MM, both well below the Street.
• In Footwear & Apparel: BIRK Q3 EPS topped estimates citing strong demand for its clogs and shoes at full price, and said it was well placed to manage the hit from a 15% U.S. tariff on European imports, but said it expects a weaker dollar to impact Q4 revenue, margins; though, still stuck to its annual forecasts for margin and revenue on strong demand despite price hikes to offset tariff impact.

• In Machinery & AG: DE shares fell after results as Q3 EPS/sales topped consensus (though sales fell -8.6% y/y) but narrows FY net income guidance to $4.75B-$5.25B from prior $4.75B-$5.5B; said customers remain cautious amid ongoing uncertainty; q3 3q production & precision agriculture down -16%, small agriculture & turf sales down -1%, construction & forestry sales down -5%.
• In Multi Industry: Barclay’s said they see a favorable risk/reward at GEV, MMM, NVT, PNR, ROK and are more cautious FTV, ITW, JCI, OTIS, ROP. Electric utility capex, DC ‘white space’, Resi / Consumer, FA and T&M look like attractive exposures. Alongside that, they downgrade ratings on ITW to Underweight from EW, cut FTV to Equal Weight from Overweight and upgraded ALLE to EW from UW.
• In Aerospace & Defense: BAH announced it was awarded a five-year, single-award task order with a $1.58B ceiling to provide intelligence analysis related to countering weapons of mass destruction. KTOS was upgraded to Buy from Neutral at BTIG with an $80 price target saying with the company having been down selected for the Marine Corps’ MUX TACAIR program, the firm has conviction that Kratos could see significant growth at Unmanned Systems in the coming year. LUNR shares fell late after pricing $300 mln 2.5% 5-yr convertible bonds; initial conversion price set at approx $13.11, 25% above stock’s last close. The co announced $250 mln deal for general purposes, including operations, and R&D.
• In Chemicals: Bank America made several changes in the chemicals sector in Q2 earnings recap: the firm downgraded CF to Underperform on cycle risk, valuation, and looming ammonia oversupply; also downgrade GPRE to Underperform. They upgraded RPM and SHW to Neutral from Underperform calling them strong franchises, higher multiples, exposure to lower interest rates. Also upgraded DOW to Neutral saying the stock is oversold as estimates revised materially lower and dividend halved.
• In Metals & Mining: Thyssenkrupp (TKAMY) cut its full-year sales and investment forecasts citing weak demand for its products as tariffs disrupt global trade in autos, machines and building materials; now expects FY sales to fall (-5% to 7%), down from prior view for sales to drop by up to (-3%) and investment plans were cut to between 1.4B-1.6B euros from 1.6B-1.8B euros prior.
• In Packaging & Materials: AMCR shares fall after posting Q4 EPS $0.20, below the $0.22 estimate (and prior year $0.21) on revs $5.1B, above the $4.78B estimate; said expects fiscal 2026 adjusted EPS growth of 12-17% and free cash flow of $1.8-1.9B and plans capex $850M-$900M (BALL, CCK down as well); LAC reports wider net loss in Q2, hurt by higher operating expenses.

• In Crypto: Bitcoin got a boost overnight from mounting interest rate-cut bets, reaching a new record high on Wednesday evening of $124,480, before tumbling following the hotter PPI reading this morning, hitting lows below $118,000. BLSH shares rebound after closing at $68 Wednesday in IPO debut, above the IPO pricing of $37, but below the $90 opening price and the intraday high of $118. WLF shares soared after GOOGL backs $1.8B in Fluidstack lease obligations to support TeraWulf’ s 200 MW HPC colocation agreements. Google to receive warrants for ~41M shares, gaining ~8% equity stake in TeraWulf.
• In Payments: DLO shares jumped after Q2 EBIT beat by 19% on strong volumes, net take rate expansion q/q and better cost discipline; guidance raised implying 45% y/y growth in TPV and adj EBITDA in 2025. Bank America said its total card spending rose 3.5% Y/Y in the week ending Aug 9, up from 3.0% the prior week and averaging 1.8% in July. They note the continued pickup supports their view that the economy may be re-accelerating.
• In FinTech: Adyen (ADYEY) shares fall after its half-year net revenue missing market expectations and trimmed annual growth guidance; expects that previously announced slight acceleration of its topline growth will be "unlikely" due to a slowdown in market volume growth expected to persist through the remainder of the year; seeing weakness in other payment names PYPL, XYZ
• In Banks: Reuters reported midday that Royal Bank of Canada (RY) and Bank of Montreal (BMO) have placed their Canadian payments joint venture up for sale, in a deal that may value the business as highly as $2B, four people familiar with the matter said.

• ARAY reported a solid F4Q with a $4 MM or 3% beat on revs, but missed EBITDA with $9.4 MM, 7% below cons of $10.1 MM.
• ARWR announced that it has elected to receive approximately $50M of Arrowhead stock and about $50M in cash from SRPT, satisfying the payment of a $100M milestone owed to Arrowhead.
• ATNF shares fell after entering sales agreement, may offer & sell up to $500 million common stock.
• BEAM said the FDA has granted regenerative medicine advanced therapy (RMAT) designation to its experimental cell therapy, BEAM-101, for the treatment of sickle cell disease.
• KOD was upgraded to Neutral from Underweight at JP Morgan saying the company is entering a very catalyst-rich period over the next ~two-years with key pivotal data for Tarcocimab, KSI-501, and KSI-101.
• LLY signed a deal worth up to $1.3 billion with privately held Superluminal Medicines to discover and develop drugs targeting cardiometabolic diseases and obesity.
• MASI shares fell on competition fears after AAPL said it will bring a blood oxygen measurement feature to some of its watch models via a software update after receiving approval from the U.S. government amid a protracted legal dispute over the technology.
• SDGR discontinued its ph1 study called SGR-2921 of a potential treatment for acute myeloid leukemia or high-risk myelodysplastic syndromes, citing patient deaths linked to the treatment.
• SOLV 8.8M share Spot Secondary priced at $73.65.
• VSTM announced positive, updated safety and efficacy data and late-breaking presentation details of partner GenFleet Therapeutics’ Phase 1/2 study in China of GFH375.

• In Internet & Media: EBAY was downgraded to Hold from Buy at Argus saying valuation has become stretched in the current environment as the company continues to experience difficult macroeconomic conditions. In Publishing: MH posted higher Q1 revenue and a swing to profit, citing sales increases in its higher education business; posted swing to net income of $502,000, from a loss of $9.4M the year prior, while revs rose to $535.7M from $523M y/y. TTD shares slipped after a report in the Information noted Amazon’s most direct rival in handling ad sales across the web, the Trade Desk, could be in danger of losing one of its most valuable clients—Walmart. https://tinyurl.com/7vabat5b

• In Optical sector: COHR shares tumbled on lower guidance, seeing Q1 EPS $0.93-$1.13 on revs $1.46B-$1.6B, below the consensus $1.14 and $1.6B after weaker Q4 results. Separately said it will sell its aerospace and defense business to Advent for $400M.
• In Data Centers: CRWV shares tumbled ahead of its IPO lockup period today where early investors and co insiders will be able to sell their shares for the first time since cloud computing co’s Mar IPO beginning on Fri, Aug 15. About 84% of CRWV’s Class A shares outstanding, or roughly 300 mln shares, will become eligible for sale, per the offering prospectus.

• Mizuho raised their AI Server outlook with 1) strong May-July Taiwan AI Server ODM revenue from Wistron up 59% q/q, with Wiwynn/Foxconn up 23% q/q, positive for JulQ NVDA and DELL (key ODM Wistron partner), 2) Significant near-term ramps at xAI, CRWV, and OCI, while MSFT leading hyperscaler ramps as we recently noted, 3) strong GB200/300 ramps in OctQ/JanQ (positive DELL, MU with HBM and CRDO) position NVDA for upside, 4) China granted licenses could drive 300-500K+/yr of GPUs for AMD in C26E. We are raising our Server/GPU estimates with Rubin tailwind into 2H26E. Maintain OP, raising estimates/PT on NVDA, DELL, AMD, CRDO as key beneficiaries in 2H25.