Mid-Morning Look

Friday, August 15, 2025

So far, very similar action to yesterday where market breadth favors decliners (most S&P sectors in red) while major averages are being buoyed by large cap tech strength as we look to close the week out with more gains. The Dow Jones Industrial Average joined the S&P 500 and Nasdaq, hitting record highs this week following big gains in Dow component UnitedHealth (UNH) after Berkshire Hathaway (among other influential investors) raised its stake in the health insurer according to quarterly 13F filings. Meanwhile, economic data continues to prove solid as July retail sales rose by an expected 0.5%, but a spike in import prices raised concerns that U.S. tariffs could fuel inflation in the months ahead. Wall Street’s main U.S. stock indexes are on track for their second week of gains, lifted by expectations that the Fed could restart its monetary policy easing cycle with a 25-basis-point interest rate cut in September (in-line CPI data Tuesday has overshadowed a much hotter PPI on Thursday). A heavy dose of economic data after 8:30 as well today saw consumer sentiment (UoM sentiment) unexpectedly fall for the first time since April and inflation expectations rose on lingering anxiety about the impact of tariffs; industrial production slipped more than expected and inflation expectations advanced. Looking to next week, the focus will stay on the Fed as Powell gives his address at the annual Jackson Hole Economic Symposium while some top retailers are expected to report earnings (WMT, HD).

• July retail sales rose +0.5%, in-line with consensus while July Retail Sales Ex-autos/gasoline +0.2% vs June +0.8% (prev +0.6%). Retail Sales Ex-autos/gas/building materials/food services +0.5% vs June +0.8%; July Retail Sales Ex-gasoline +0.5% vs June +0.9%.
• July industrial output slipped (-0.1%), slightly below the consensus for unchanged and down vs June +0.4%; July industrial output ex cars/parts -0.1% vs June +0.5% and July mining output -0.4% (June -0.3%), utilities output -0.2% (June +1.8%). Capacity use rate 77.5%, in-line and down vs June 77.7%.
• July export prices rose +0.1%, in-line with consensus and below June +0.5% while July import prices +0.4% (cons. Unchanged) vs June -0.1%.
• June Business Inventories +0.2%, in-line with consensus and vs. the May unchanged; June business sales +0.5% vs May -0.4%; June retail inventories ex-autos revised to -0.1%.
• University of Michigan surveys of consumers sentiment prelim Aug slides to 58.6, below consensus 62.0 and the final July 61.7; current conditions index prelim Aug 60.9 (consensus 67.9) vs final July 68.0 and expectations index prelim Aug 57.2 (consensus 56.5) vs final July 57.7
• University of Michigan surveys of consumers 1-year inflation outlook prelim Aug rises to 4.9% vs final July 4.5% and the 5-year inflation outlook prelim Aug 3.9% vs final July 3.4%.

• Managed care stocks seeing strength: UNH shares jumped after quarterly 13F filings showed several high-profile investors, including Warren Buffett’s Berkshire Hathaway, Michael Burry’s Scion Asset, and David Tepper’s Appaloosa were among those taking stakes in the health insurer in Q2 lifting shares. Shares of other managed care companies CI, ELV, HUM, CNCand MOH also saw strength on hopes the beaten-up sector, down between 40-50% this year on ACA changes, may be turning a corner with investors.
• Semi equipment giant AMAT shares tumbled after reported in-line Q3 results but guided Q4 softer $6.7B (consensus $7.32B), attributing the sequential guide down to $500M China sales decline (expected vs 90 days ago vs peer’s up H/H) and $500M lower leading-edge sales. Smaller rival KLAC, which also has a significant presence in China, said last month it expects softer demand as US/China trade tensions weight. AMAT was downgraded from Buy to Neutral at Bank America (KLAC, LRCX, MKSI shares fell in reaction).
• In Restaurants: WING was upgraded from Outperform to Strong Buy at Raymond James w/ $420 PT saying they remain confident that comps can begin to improve through September and accelerate further through Q4 as comparisons ease and also believe Smart Kitchen is a game changer. QSR downgraded to Hold from Buy at Argus saying the company’s second quarter earnings shortfall brings to light the difficult operating environment fast food chains are navigating as thrifty consumers tighten their belts. NDLS was downgraded to Hold from Buy at Benchmark following earnings results.

• DHI +1%; shares of homebuilders DHI and LEN rising after Berkshire Hathaway revealed new stakes in both in 13F filings last night; 7M share stake for LEN and 1,4M for DHI.
• NU +15%; shares rallied on earnings as Q2 EPS $0.13 vs. est. $0.14; Q2 revs $3.7B vs. est. $3.67B; said in Q2 expanded customer base to nearly 123 million with over 4.1 million net additions, and maintaining activity rate above 83%.
• NUE +6%; shares rose after Warren Buffett’s Berkshire Hathaway raised his passive stake by 14.9% to 6.6Mm shares.
• OPEN +10%; announced Carrie Wheeler steps down as Opendoor CEO & chair; appoints Shrisha Radhakrishna as President and interim leader as searches for next CEO.
• PGEN +43%; rises as the FDA approves its Papzimeos drug to become the first and only treatment for recurrent respiratory papillomatosis.
• TWLO +5%; shares rose after news it will be added the S&P MidCap 400 index on 8/19, replacing AMED.
• UNH +10%; after quarterly 13F filings showed several high-profile investors, including Warren Buffett’s Berkshire Hathaway, Michael Burry’s Scion Asset, and David Tepper’s Appaloosa were among those taking stakes in the health insurer in Q2 lifting shares.

• FLO -3%; reported slightly weaker Q4 revs/Ebitda while cutting its FY25 adjusted EBITDA view to $512M-$538M from $534M-$562M while saying ex Simple Mills, now sees Fy25 adj EBITDA $482M-$505M vs. prior view $504M-$529M; also cuts FY25 CapEx view.
• GAMB -15%; was downgraded to Hold at Truist following results last night as the firm noted Q2 was in-line while GAMB acquired a land-based entertainment platform, but ’25 EBITDA guidance moved down -7%, on Google algo changes and AI SEO impacts.
• GLOB -13%; shares declined, downgraded at JP Morgan saying Q2 last night was fine, but 2H revenue outlook was reduced by -2% while EPS was protected with a modest raise, implying a lackluster FY25 exit rate of -9% revenue growth.
• RBLX -7%; following news late Thursday that Louisiana Attorney General Liz Murrill had filed suit against the video-game company; it alleges lack of safety controls to protect children
• SNDK -2%; reported a beat on revenue and EPS in the quarter and guided revenues for FQ126 above consensus, but shares slipped based on a below consensus GM guide of 29% at midpoint vs 30% consensus due to $10M-$15M in underutilization charges and $60mn in fab startup costs in the qtr.