Mid-Morning Look

Monday, August 18, 2025

After finishing higher for a second straight week, major averages are kicking off the week little changed as investors await details of today President Trump/Ukraine Zelensky meeting today and meetings with several EU leaders. Markets also await Friday’s Jackson Hole Fed event, highlighted by Fed Chairman Powell speech. There is also a laundry list of high-profile retailer earnings including Dow components WMT, HD as well as LOW, TGT as well to determine how trade uncertainty and inflation expectations have affected U.S. consumers. August is generally a “weak” tie for markets seasonality, but so far, it’s just been another rally for broader stock markets. Weekend news focused on geopolitics post Trump/Putin summit as Zelenskiy is scheduled to meet Trump (1:15pm) today along with an EU allies (3pm) to discuss peace agreements. Crypto is continuing to sell off, and the yield on the 10-year Treasury note is flat at 4.32%. This week we get FOMC minutes on Wednesday, Jobless Claims & Flash PMIs on Thursday, Jackson Hole Economic Policy Symposium Thursday-Saturday (Powell speaks on Friday), and a slew of consumer earnings. Healthcare adds to its recent outperformance streak/bounce off lows Friday, triggered by the confluence of receding policy uncertainties in the last week plus while solar another upbeat sector after updated tax credit guidance from the U.S government for wind and solar projects was among the best possible outcomes for the sector. Can stocks add to all-time highs as the SPX has seen 18 record finishes this year, while the Nasdaq has scored 20 record highs in 2025, with most coming in recent weeks.

• In Energy: Morgan Stanley with several changes as they downgraded OXY, OVV to Equal Weight from Overweight, downgrade NOG to Underweight and initiated VNOM with an Overweight, $46 tgt. OXY was downgraded noting leverage is still well above peers, OVV now trades in-line on 2025 FCF/equity yield and shareholder returns relative to oil E&P peers, while carrying above-average net debt/EBITDAX; and NOG at Underweight after mgmt reduced growth expectations alongside Q2 results. In gas E&P producers, shares of EQT, AR, RRC were downgraded at Roth Capital as sees oversupply challenging natural gas prices.
• In Retail: a big week coming up for retail earnings as Q2 results wrapping up: HD, AS, LZB on Tuesday, TGT, TJX, LOW Wednesday, WMT, ROST on Thursday. In research, LOW was added to Evercore ISI “tactical underperform” list ahead of the company reporting Q2 results on Wednesday and added TGT to its “Tactical Outperform” list ahead of earnings due on August 20. The firm also added BJ to its “Tactical Outperform” list ahead of its fiscal Q2 earnings release on Friday, August 22. BYON changes name to Bed Bath & Beyond, Inc. and reclaims ticker symbol “BBBY” starting August 28, 2025, while also plans to convert additional Kirkland’s locations into small to midsize format Bed Bath & Beyond and Buybuy Baby stores.

• DAY +25%; shares jumped after Bloomberg reported Thoma Bravo is in talks to acquire the human resources software company, citing people familiar with the matter. The firm is working on a take-private deal that could be announced as soon as the coming weeks https://tinyurl.com/4hp36nvb  
• DUOL +9%; was upgraded to Overweight from Sector Weight with $460 PT at Keybanc saying the AI backlash was a bump in the road, and a combination of viral marketing efforts creates upside risk to estimates over the next 12 months. Citigroup also initiated at Buy and $400 tgt.
• GDRX +33%; shares rise as announces collaboration with NVO to expand access to Ozempic® and Wegovy® for $499-per-month.
• NVO +4%; shares advanced after its blockbuster weight-loss drug Wegovy received US approval to treat a serious form of liver disease (shares of MDGL slipped on headlines).
• SHCO +16%; after a group of investors led by New York-based MCR Hotels is taking members’ club operator Soho House private for a total enterprise value of about $2.7 billion, with shareholders to receive $9 per share (the news confirmed a WSJ report overnight of the M&A deal).
• SNGX +58%; shares rise as the FDA grants Soligenix orphan drug designation for the treatment of Bechet’s disease after reviewing recent phase 2 clinical study results.
• UNH +2%; adding to Friday gains of over 12% after Warren Buffett’s Berkshire Hathaway Inc. and other investors bought shares in the health insurer.
• WULF +6%; announces proposed private offering of $400M of convertible notes saying the proceeds to finance data center expansion and corporate purposes; shares fell initially but reversed higher after GOOGL to boost its stake to ~14% from ~8% as the two expand its Lake Mariner DC campus in Western NY.
• YEXT +11%; as CEO Walrath submits proposal to acquire company at $9.00/shr for value $1.1B.

• FUN -1%; has had a “nightmare” of a summer following its merger with Cedar Fun due to severe thunderstorms and excessive heat, new rides being delayed, competition from new rivals, quality issues and economic uncertainty, the WSJ reported.
• MDGL -2%; om competition fears as NVO said its weight-loss drug Wegovy received FDA approval to treat a serious form of liver disease.
• META -2%; shares decline after record run in shares to new all-time last week.
• NNE -6%; was double downgraded to Sell from Buy at Ladenburg saying credibility has been eroded by missed timelines and broad strategic ambitions and given higher expected costs, significant dilution risk, and increasing competitive pressure, believes risk-reward is skewed to the downside.
• PLTR -2%; mentioned cautiously by Citron Research again (1^st comments on 8/13).
• RBLX -2%; extends recent pullback in shares after last week, Louisiana AG sues Roblox, which alleges lack of safety controls to protect children.