Closing Recap

Monday, August 11, 2025

Stocks opened higher initially to start the week, with the Nasdaq making fresh intraday record highs, but couldn’t hold its gains as traders pared bets heading into key inflation data tomorrow morning, with stocks ending just off their lows. U.S. stock markets declined despite President Trump extending a deadline for higher tariffs on China, while gold prices were still down following his declaration that there would be no tariff on gold bars. Semis were active following news of Nvidia and AMD‘s deal to pay the government 15% of their sales of artificial-intelligence chips to China (according to reports). Global stocks had had a remarkable 4-month run up, while investors have recently been ignoring warnings of markets being “expensive” and calls on Wall Street for a potential cooling off period (see Wall Street strategist commentary below). Momentum driven stocks/sectors have been doing the heavy lifting during this 4-month stock market surge (over 30% for the Nasdaq during this time), with gains for semiconductors (SOX, NVDA), AI plays such as data centers, power/nuclear stocks, crypto (Bitcoin, Ethereum), and mega cap (TSLA, AMZN, NVDA, GOOGL, META), which have been the big momentum plays. Weaker economic data such as jobs and slowing GDP/economic growth have been dismissed with the focus more on a rising likelihood of Fed rate cuts going forward and strong earnings momentum. Still, market gains have been very concentrated on a few sectors with all the growth, namely technology and communications.  Tariffs have also not been the disaster Wall Street had forecasted back in April; in fact, the U.S. is brining in record revenues from tariffs. This afternoon, U.S. President Donald Trump signed an executive order extending the China tariff deadline for another 90 days (until Nov 9^th), a White House official reported, (not unexpected). Focus now on CPI inflation tomorrow with Consumer Price Index (CPI) headline tomorrow at 8:30 am et M/M ests for July are to rise an est. +0.2% (prior +0.3%) while on a y/y basis headline to rise est. +2.8% (prior +2.7%). The core CPI, Ex Food & Energy M/M for July est. is to rise +0.3% (prior +0.2%) and Y/Y to rise +3.0% (prior +2.9%). Bitcoin surged, gold tumbled, oil was flat, and the dollar gained ahead of the report.

• @FactSet noted on “X”, “The forward 12-month P/E ratio for $SPX is 22.1, which is above the 5-year average (19.9) and above the 10-year average (18.4).”
• Citigroup raised its year-end S&P 500 index target to 6,600 from 6,300, betting on corporate earnings strength fueled by benefits from President Donald Trump’s tax and spending bill, it said on Friday.
• UBS this morning raised its 2025 year-end index target to 6100 from 5500 and sets S&P 500 2026 year-end index target at 6800 saying recognizes that US economic & company health has been better than expected in the recent past. Worst-case scenarios on tariffs have not been realized, confidence in fiscal support and a weaker dollar have mitigated the earnings impact, spreads are tight, and flows have remained supportive. UBS’ numbers convey that the headwinds it had been expecting have belatedly arrived and sit heavy on the cyclical horizon. US’ growth inflation mix is likely to worsen. Along with dampening earnings growth expectations, this should also lift equity volatility, which, in turn, would challenge the flow driven momentum trade buoying valuations. This drives US to call the market lower in the near-term and to expect it to remain below current levels even by end ’25. UBS then sees a smart recovery in H2 ’26.
• Stifel said as markets charge to all-time highs (with very extended valuations), they are left to wonder what can break up the "party like its 1999" atmosphere? The lesson of history is that it is usually a sudden economic slowdown, which is what it forecast for 2H 2025. Slowdowns come in different forms and this one is stagflation, which is already noticeably slowing consumer spending (0% growth YTD for 68% of the economy) as the AI CAPEX build-out (which occurs, for the most part, only once) and tariff front-running support growth. Valuation doesn’t matter until it does (E.G., 1929, 1999, 2021) and Stifel is uncomfortable with the S&P 500 +32% off the April 7 intraday low in a month as the economy slows to a crawl (6M annualized real GDP is already 1.2%). "Hopium" is a powerful drug, but it abstains by recommending investors overweight Defensive Value (Staples, Healthcare, Utilities, Quality) in front of a sudden (likely Q325, a few months in advance of late-2025 GDP) S&P 500 correction of as much as -14% from the recent high to its 5,500 S&P 500 target price.

• U.S. crude oil futures settle at $63.96/bbl, up 8 cents, 0.13%, while Brent Crude futures settle at $66.63/bbl, up 4 cents, 0.06%. Oil held steady after tumbling last week ahead of a summit between the US and Russian leaders later this week. Investors appear to be betting for chances of an end to the war between Ukraine and Russia. The Euro hit fresh 5-day lows vs the dollar below $1.16 before paring losses while Treasury yields slipped 1 bps to 4.27%.

• In Food sector: HSY fell, hurt by rising cocoa prices; Cocoa futures traded on ICE exchange ​​settled up $466, or 5.8%, at $8,444 a metric ton, having gained 6% last week while London cocoa ​​rose 5.5% to 5,713 pounds per ton.

• In Online Travel/Lodging: SABR was upgraded to Outperform at Bernstein saying this past quarter was one to forget, with a profit miss, guidance cut and shares -38% on the day; but at these levels, however, Bernstein considers it oversold. Bernstein expects booking growth to stabilize in the low single digits, after a moderately stronger 2026 on agency migrations.
• In Autos: Ford Motor Co (F) invests $2B in Louisville plant, securing 2,200 jobs; said plans $5B EV investment with focus on low-cost models; to launch $30,000 midsize electric pickup in 2027.

• In Lithium sector: Shares of ALB, SQM, LAC, SGML, and others jumped along with lithium prices after battery giant Contemporary Amperex Technology halted operations at a major mine in China, stoking speculation Beijing may suspend other projects as it tackles overcapacity.
• In Metals & Mining: Gold miner Barrick (B) shares fell as Q2 gold production and sales volumes missed consensus estimates as operations at the Loulo-Gounkoto mine were suspended and the Carlin mine had a shutdown at the Gold Quarry roaster. In copper, FCX was upgraded to Overweight from Equal Weight at Morgan Stanley with an unchanged price target of $48 saying shares are not pricing in the benefits that will accrue to Freeport from the copper tariffs. FNV shares tumble as revenue miss overshadows record earnings ($1.24/$369.4M vs. $1.13/$378M).
• In Chemicals: NTR was upgraded to Overweight from Neutral at JP Morgan and raised tgt to $68 from $56 saying they would rather own fertilizer companies today than petrochemical companies, saying the latter face oversupply conditions with shrinking spreads due to weakening oil prices and large capacity additions. OEC was downgraded to Underweight at JP Morgan as expects rubber black pricing negotiations to conclude with flat to lower prices for 2026, which may lead to negative share price reactions for the carbon black companies.
• In AG Space: ADM, BG shares got a bounce early as soybean prices rose % after U.S. President Trump said he hoped China would quadruple its soybean buying from the United States. Wheat and corn also rose as traders expected that more Chinese purchases of U.S. farm products could be part of any eventual U.S.-China trade deal.

• In Business Services: IMXI shares rose as WU entered into a definitive agreement to acquire the company in an all-cash transaction at $16.00 per IMXI share, representing a total value of approximately $500M.
• In FinTech: MLNK announced it would be acquired by funds advised by affiliates of Centerbridge Partners, L.P. in an all-cash transaction that values MeridianLink at an enterprise value of approximately $2.0B, with MeridianLink holders to receive $20 per share in cash. ALTS announced a $1.5 billion registered stock deal and concurrent private placement to buy $WLFI tokens from World Liberty Financial. Overall, 200 million shares will be issued by ALTS at $7.50 apiece, implying 16.4% discount to stock’s last close.
• In Consumer Lending: UPST shares fell after announcing a private offering of $500 million of convertible bonds due 2032 saying proceeds will be used to repurchase a portion of its convertible bonds due 2026 and to pay cost of capped calls, derivative transactions to offset dilution.

• IOBT announced clinical improvement in PFS demonstrated in pivotal phase 3 trial of Cylembio plus KEYTRUDA for the treatment of first-line advanced melanoma, but statistical significance narrowly missed. In a 407-patient, late-stage study, the vaccine led to improvement in progression-free survival in patients with advanced skin cancer.
• LGND announced a $400 million offering of convertible bonds due 2030 in a private placement.
• SRPT, REPL, CAPR among drug companies weaker on news Vinay Prasad is returning to the FDA to resume his role overseeing vaccine, gene therapy, and blood product regulation, according to a spokesman for the Department of HHS. It is not clear whether he will still serve as the FDA’s chief medical officer. During his three-month tenure, Prasad tightened Covid-19 vaccine eligibility, increased scrutiny of gene therapies, and halted shipments of Sarepta Therapeutics’ Elevidys treatment.
• Cannabis stocks rise (MSOS, CURLF, TCNNF, CGC, CRON, TLRY) after U.S. President Trump said his administration is looking at reclassifying marijuana as a less dangerous drug, potentially easing criminal penalties and reshaping its federal standing. Under the Controlled Substances Act, marijuana is listed as a Schedule I substance, meaning it has a high potential for abuse and no current accepted medical use.
• In Medical Equipment: Activist investor Engine Capital has urged medical equipment maker AVTR to refresh its board with new directors, a letter on Monday showed. Engine Capital owns about 3% of the outstanding shares of Avantor. OMI shares fell on results as Q2 adj EPS $0.26 vs. est. $0.27 on revs $681.9M with adj Ebitda $96.6M vs. est. $128.8M.
• Medical Research: Shares of penny stock EQ jumped after announces up to $50M financing to advance EQ504, a novel aryl hydrocarbon receptor modulator, into the clinic

• In Software: DOCN shares slip as announces $500M convertible notes offering due 2030; MNDY shares tumbled on results as Q2 EPS $1.09 topped the $0.86 estimate on better revs $299M vs. est. $293.58 but narrows its FY25 revenue view to $1.22B-$1.23B from $1.22B-$1.26B (est. $1.22B) and sees FY25 operating income $154M-$158M. SPNS shares rose after Calcalist reported that Formula Systems is in advanced talks to sell control of the software company at a valuation of about $2 billion.

• AMD and NVDA shares slip after the WSJ reported both chip makers have agreed to pay 15% of their revenue from chip sales to China to the U.S. government, Bloomberg reported citing a person familiar with the matter. This will be part of a deal with the Trump admin to secure their licenses to export.
• MU shares advanced after guidance; raised their Q4 fiscal 2025 guidance, increasing revenue expectations to $11.2B +/- $100M, previous guidance $10.7B +/- $300M and raises 4Q adjusted eps view to $2.85, plus or minus $0.07 from $2.50 +/- $0.15 and vs. consensus $2.77; also raises non-GAAP gross margins to 44.5% +/- 0.5% vs prior guidance 42.0% +/- 1.0% citing improved DRAM pricing, among other things.
• INTC CEO Lip-Bu Tan is set to visit the White House on Monday after U.S. President Donald Trump called for his removal last week.