Mid-Morning Look

Thursday, August 21, 2025

After a solid rebound off yesterday’s lows on tech weakness, markets are steady to start the trading day as investors eagerly await Fed Chairman Powell’s keynote speech tomorrow at the Jackson Hole Fed symposium tomorrow morning as he is expected to discuss rates, the economy, and monetary policy. Following a recent string of mixed economic data, including a few higher inflation prints (PPI last week, Philly prices paid today), fed fund futures have lowered expectations to 75% for a 25-bps cut in September (down from highs around 98% after last Tuesday’ CPI). Overall, it was not a great day for stock market headline news with ugly economic data after weekly jobless claims rose/4-week average also climbed, while Philly Fed index showed a significant drop from the prior month, below consensus while new orders plunged and inflationary prices paid component jumped. Also, retail giant Wal-Mart (WMT) reported a quarterly earnings miss and lower rev guidance weighing on the shares. While we are in the dog days of summer there are a lot of one-off events that investors will be 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. The momentum unwind was in full swing yesterday morning until the mid-day rally in the group while the QQQ tries to avoid a 6-day losing streak (current 5-day losing streak longest of 2025).

• 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.

• In Aerospace & Defense: BA is in talks to sell as many as 500 jets to China, Bloomberg News reported on Thursday, citing people familiar with the matter. The potential order would be China’s first major purchase of Boeing jets since U.S. President Donald Trump’s visit in his previous term. LMT awarded $720 million contract for JAGM, Hellfire production. Safran (SAFRY) was upgraded to Outperform at Bernstein saying they believe the strength in the aftermarket will support superior earnings growth until the end of the decade/see Safran’s medium-term targets as overly conservative and expect them to be upgraded.
• 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.
• 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

• CRWV +3%; was upgraded to Buy from Neutral with a $180 price target at HC Wainright saying they like the CoreWeave story as a leader in perhaps one of the most influential technology adoption cycles of its time
• DVAX +9%; said its experimental shingles vaccine (Z-1018) generated a similar immune response as GSK’s blockbuster shot Shingrix and a better safety profile in an early-to-mid stage study.
• HPE +2%; was upgraded to Overweight from Equal-Weight at Morgan Stanley as saying the recently closed Juniper deal will be an earnings upside.
• NDSN +5%; 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 mid-point while adj. EPS is pacing slightly above.
• SLQT +32%; 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.
• UUUU +3%; completes production of its first kilogram of dysprosium (Dy) oxide at pilot scale at its White Mesa Mill in Utah as it achieved a purity of 99.9% Dy, well in excess of the 99.5% commercial specification.

• CBRL -11%; on rebranding; Cracker Barrel unveils new logo and it’s not pleasing everyone.
• COTY -19%; 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.
• CSIQ -19%; after Q2 adj EPS loss (-$0.53) on below consensus revs $1.73B (est. $1.9B) saying revs came in below company guidance due to storage shipments shifting to second half and delays in certain project sales; sees Q3 revenue $1.3B-$1.5B below consensus $1.9B and cuts FY25 revenue view.
• GILD -3%; 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.
• MNDY -2%; 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.
• NVAX -11%; as announced convertible debt refinancing; $225M of convertible notes due in 2031 issued; said refinancing continues maturity of most existing debt.
• SN -3%; shares slipped after pricing 5.5M share secondary at $116 per share.
• SRPT -7%; as refinances $700M 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.
• TWO -5%; after settle litigation with Pine River via a one-time $375M cash settlement and cut its quarterly dividend to $0.34 from $0.39.
• WMT -4%; Q2 adj EPS $0.68 misses the $0.74 estimate but revs of $177.40B top the consensus $176.16B; Q2 U.S. comp sales strong up 4.6%; said average spending rose 3.1% from 0.6% y/y; also guided Q3 revs $168B below the $176.3B consensus; raised annual sales grow view to range.