Mid-Morning Look

Thursday, August 14, 2025

After the hottest PPI inflation reading in over 4-years, U.S. S&P futures slipped pre-open, but with only a modest -0.4% decline, holding its ground around the prior day lows. The July producer price index for final demand jumped 0.9% last month after being unchanged in June and was above the +0.2% estimate. Services prices soared 1.1%, the largest gain since March 2022. In the 12 months through July, the PPI increased 3.3% after advancing 2.4% in June. The core PPI, which excludes food & energy jumped even more – but despite the inflation data point (coming out of left field), following a mostly in-line CPI print on Tuesday – major averages managed to rally off lows raising the questions can anything pressure this market right now? Major averages are down only slightly, despite a near 4:1 NYSE breadth lead for decliners over advancers and as all eleven S&P sectors are in the “red” led by materials and REITs, as strength in the Mag7 help the broader market stay afloat (AMZN, MSFT, NFLX, NVDA).  It just goes to show the concentration that a few mage cap tech names have on the broader S&P and Nasdaq helping keep major averages afloat on the day. After a two-day surge in Smallcap Russell 2000, the group leads lower today on fears the PPI cold reduce aggressive rate cut expectation.

Traders erased what had been small but rising bets on a jumbo-sized half-point interest rate cut next month by the Federal Reserve after economic data Thursday showed a stronger-than-expected increase in wholesale prices last month and a drop in new jobless claims last week. It was the strongest PPI MoM reading vs. estimates since February 2021. Traders continue to expect the U.S. central bank will move ahead with a quarter-point cut next month, followed by another in October. U.S. Treasury yields rose on the PPI data, crypto prices tumbled

• 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%.

• 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.
• Solar companies decline between 2% and 6% (RUN, SEDG, ENPH, FSLR, ARRY) after the Trump administration is expected to make it harder for companies to claim federal tax subsidies for renewable energy. The Treasury Department next week will reach a 45-day deadline to revise rules governing who can qualify for clean energy tax credits that the Republicans’ One Big Beautiful Bill Act is phasing out years earlier than planned, Reuters reported.

• BLSH +23%; 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.
• DDS +2%; following earnings results this morning.
• DLO +21%; 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
• RRGB +3%; 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.
• WULF +35%; as 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.

• ATNF -34%; shares fell after entering sales agreement, may offer & sell up to $500 million common stock.
• BABA -3%; Chinese companies also fall after hedge fund Bridgewater Associates exits positions according to 13F filings: Bridgewater exited its position in BABA, BIDU, YUMC, NIO and TAL.
• COHR -21%; 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.
• DE -6%; 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%, construction & forestry sales down -5%.
• IBTA -29%; 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, and guided Q3 revs to $79–$84M and EBITDA to $9.5-$13.5MM, both well below the Street.
• LUNR -13%; shares fell late after having priced an offer of $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, R&D and potential acquisitions.
• MASI -4%; 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 -9%; after 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.
• TPR -16%; shares slumped after guiding FY26 EPS to be in the range of $5.30-$5.45, compared with analysts’ estimates of $5.49 saying the forecast accounts for about $0.60 of incremental hit from tariffs. The company estimates a $160 million hit from the U.S. import duties.
• TTD -5%; 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

Syndicate/IPOs/Offerings:

• Aquestive Therapeutics Inc (AQST) prices 21.25M shares at $4.00 per share.

• Arrowhead (ARWR) 9.265M share Block Trade priced at $19.00

• BioSig Technologies (BSGM) 15.023M share Spot Secondary priced at $3.90

• Klaviyo (KVYO) 6.5M share Spot Secondary priced at $30.22

• Solventum (SOLV) 8.8M share Spot Secondary priced at $73.65