Mid-Morning Look

Monday, August 04, 2025

Weakness remains short lived as stocks rebound to kick off the trading week! U.S. stocks rebounded after equities sold off on Friday, leaving them down for the week as all major indexes were off more than 2% last week with the Russell 2000 the notable laggard, down over 4%. Today, however, a much different picture to start the week, as Friday’s weakness was just another buying opportunity for investors to add to shares on pullbacks, with a broad-based rally early (all sectors higher sans energy on lower oil prices). Hopes of a September rate cut by the Fed surged after disappointing monthly jobs data on Friday and sharply revised lower jobs data the prior 2-months, indicating the jobs picture isn’t nearly as strong as previously thought. Over the weekend not much incremental news on trade/tariffs after higher levies were administered to trade partners Friday. Wall Street remains bullish as Morgan Stanley strategists recommend buying pullbacks and Goldman Sachs highlights the exceptional growth rates of the biggest tech stocks. President Trump said he will announce a new Federal Reserve governor and a new jobs data statistician in the coming days. Heading into another busy week of earnings, 330 of S&P 500 companies have reported numbers so far this season, with 82% notching beats versus estimates compared to 78% in 1Q. The Magnificent 7 grew earnings by 26% year-on-year during 2Q, according to Goldman Sachs strategists, compared with 4% for the remaining 493 constituents of the S&P 500 as per Bloomberg data. Technology, Utility, Communications, Materials all rise over 1% early.

• In Chemicals: CC shares edged higher after the company, along with DD and CTVA, says they have reached an agreement with the state of New Jersey in various litigation matters, including PFAS chemicals and other state directives. Under the settlement, the companies will pay a total of $875 million over a 25-year period. The pre-tax total present value of the settlement payments is about $500M, of which 50% will be paid by CC, 35.5% by DuPont and the rest by Corteva. TROX was downgraded to Neutral from Buy at UBS as volumes/earnings remain more challenged near term, see a recovery further out than we previously expected, and FCF/leverage remains more challenging in a weaker demand environment.

• COMM +82%; shares after the WSJ reported APH is finalizing a deal to buy CommScope’s (COMM) connectivity and cable unit for $10.5B, including debt, citing people familiar with the matter. A deal for the unit, known as CCS, could be announced on Monday. https://tinyurl.com/3f85rnx8  
• ENR +23%; on results; Q3 adj EPS $0.78 vs. est. $0.62; Q3 revs $725.3M vs. est. $693.07M; raises FY25 adjusted EPS view to $3.55-$3.65 from $3.30-$3.50 (est. $3.37) and boosts FY25 revenue view to $630M-$640M from $610M-$630M as now expect Net sales growth in the range of 1% to 3%.
• IDXX +22%; raises 2025 sales forecast to between $4.21B-$4.28B from prior view $4.10B-$4.21B vs. ests $4.15B following better Q2 EPS and sales that topped consensus.
• SCS +57%; HNI agreed to acquire SCS in a cash and stock deal valued around $2.2 billion, as shareholders of Steelcase will receive $7.20 in cash and 0.2192 shares of HNI’s common stock for each share of Steelcase they own. The companies said the implied per share purchase price of $18.30.
• SPOT +5%; said it would increase the monthly price of its premium individual subscription in select markets from September; the subscription price will rise to 11.99 euros ($13.86) per month from 10.99 euros in markets including South Asia, the Middle East, Africa, Europe, Latin America and the Asia-Pacific region.
• TSLA +2%; committee approves award of 96M shares of restricted stock to CEO Musk, which is likely to remove an overhang and should solidify Musk as CEO for Tesla for a while.
• W +7%; posted Q2 adj EPS $0.87 topping the $0.33 estimate as y/y revenue growth of 6% – excluding the impact of (exit from) Germany – marks the highest growth rate seen since early 2021, CEO said.

• BRK -3%; following earnings and Kraft Heinz write-off of $3.8B.
• BRKR -10%; posted Q2 miss and cutting FY EPS guide. Announces expanded cost management initiative, expecting to reduce annual costs by $100 – $120M in FY 2026; Q2 revenue $797M vs $810M est., Q2 EPS 32c vs 42c es; sees FY adjusted EPS $1.95-$2.05, from prior $2.40-$2.48 view and sees FY organic revenue growth -2% to -4% vs +0.91% est.
• FIG -20%; seeing profit taking after surging last week following its IPO debut which priced at $33.
• ON -9%; after results/guidance as Q2 EPS was in-line on better revs while midpoint of Q3 guidance was slightly below consensus estimates; another auto chip player disappointing this quarter (follows TXN, STM recently as well).
• REPL -38%; at STAT News reported FDA’s top cancer drug regulator played key role in rejection of Replimune therapy, officials say. The top regulator of cancer drugs at the Food and Drug Administration interceded during the late stages of a contentious review of a skin cancer therapy from Replimune Group — actions that contributed to the treatment’s last-minute rejection despite support from others inside the agency, STAT has learned.