Closing Stock Market SummaryCooler-than-expected CPI data sent the stock market higher today. The three main indices saw some up and down price action but ultimately closed with sizable gains. The Nasdaq and S&P 500, which breached the 4,200 level, closed just below session highs.
The moderation in both CPI and core CPI was the main driving factor for the market today. It fueled the notion that the Fed will be less aggressive with its rate-hike path and switch to a rate-cut cycle sooner rather than later. Total CPI was unchanged month-over-month and core CPI was up 0.3%.
The mega caps, growth stocks, and cyclical sectors led the way after those areas sold off heavily in recent sessions. The Vanguard Mega Cap Growth ETF (MGK), up 2.9%, closed ahead of the broader market. The Russell 3000 Growth Index (+2.7%) closed ahead of the Russell 3000 Value Index (+1.9%). The PHLX Semiconductor Index (SOX) closed up 4.3%.
S&P 500 sector performance reflected a risk-on mindset. The materials (+2.9%), consumer discretionary (+2.9%), communication services (+2.8%), and information technology (+2.8%) sectors topped the leaderboard.
The buying was broad-based with all 11 S&P 500 sectors closing in the green with gains ranging from 0.5% (utilities) to 2.9% (materials). The Invesco S&P 500 Equal Weight ETF (RSP) jumped 2.1% on the day.
Market breadth showed a strong skew towards advancing issues. Advancer led decliners by a roughly 6-to-1 margin at the NYSE and a less than 3-to-1 margin at the Nasdaq.
Pushing back against the market's notion of a policy pivot in the near future, Minneapolis Fed President Kashkari (2023 FOMC voter) said he thinks the terminal rate is 3.9%, adding that the Fed is "far far far away" from declaring victory on inflation. Meanwhile, Chicago Fed President Evans (not an FOMC voter) said he expects rates to top out at 4.0% but also said, "... if things get better more quickly, we can not raise rates quite as much..."
Treasury yields fell sharply immediately after the CPI report came out. The 2-yr note yield, which was at 3.27% just before the release, dropped to 3.08% in its wake before settling the day at 3.19%. The 10-yr note yield, which was at 2.80% just before the release, fell to 2.69% in its wake but gave back just about everything and settled at 2.79%.
Before tomorrow's open, Canada Goose (GOOS), Cardinal Health (CAH), Hanesbrands (HBI), Six Flags (SIX), US Foods (USFD), and Warby Parker (WRBY) are all set to report earnings.
Also on Thursday, market participants will receive the July PPI ( consensus 0.3%; prior 1.1%) and core PPI (consensus 0.4%; prior 0.4%) at 8:30 a.m. ET. At the same time, weekly initial jobless claims ( consensus 263,000; prior 260,000) and continuing claims (prior 1.416 million) will be released. At 10:30 a.m. ET, weekly EIA Natural Gas Inventories (prior +41 bcf) will be released.
Reviewing overnight developments:
- Total CPI was unchanged month-over-month ( consensus +0.2%), leaving it up 8.5% year-over-year versus 9.1% in June. Core CPI, which excludes food and energy, was up 0.3% month-over-month (consensus +0.5%), leaving it up 5.9% year-over-year versus 5.9% in June.
- The key takeaway from the report is that it supports the peak inflation view, which in turn supports the market's hope that the Fed will temper its aggressive rate-hike approach in coming months and ultimately transition to a rate-cut cycle in 2023, perhaps as early as the first half of 2023.
- Weekly MBA Mortgage Applications Index showed 0.2% increase versus the prior increase of 1.2%.
- June Wholesale Inventories rose 1.8% ( consensus 1.9%) versus the prior revised increase of 1.9% (from 1.8%).
Dow Jones Industrial Average: -8.3% YTD
S&P 400: -9.9% YTD
S&P 500: -11.7% YTD
Russell 2000: -12.3% YTD
Nasdaq Composite: -17.8% YTD
After Hours Summary: DIS +6.5% on earnings and will launch ad-supported tier for Disney+; SONO -18.6%, RRGB -16.4%, BMBL -12.3%, APP -10.7% lower on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: VCSA +31.6%, MTTR +14.6%, NOTV +12.4%, ENVX +11.4%, DIS +6.5% (also will launch ad-supported tier for Disney+ on Dec. 8; also ups prices for no-ads options), AOSL +6.4%, VZIO +5.3%, ACHR +5.2%, CACI +4.9%, STKL +4.1%, BROS +3.3%, DHT +3%, CPNG +2.7%, ACVA +2.1%, FNV +1.5%, PAAS +0.6%, MFC +0.3%
Companies trading higher in after hours in reaction to news: ENVX +11% (awarded follow-on US Army contract), NTRA +4.5% (files pre-submission to FDA for its Panorama non-invasive prenatal test), GPRK +3.5% (increases dividend), NL +1.4% (special dividend of $0.35/sh), DCPH +1.2% (announces publication of INTRIGUE Phase 3 study of QINLOCK), AB +0.6% (reports July AUM), HY +0.2% (CFO to retire), COIN +0.1% (being investigated over staking programs, according to Bloomberg)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SONO -18.6% (also CFO to step down, names new CFO), RRGB -16.4%, BMBL -12.3%, APP -10.7%, MQ -9.1%, ENS -5.6%, COOK -5%, AKA -4.4%, AVT -2%, STAA -1.6%
Companies trading lower in after hours in reaction to news: ATNX -37.8% (commences stock offering), CERE -9.5% (commences $250 mln stock offering), MAIN -3.9% (commences $50 mln stock offering), AXON -3.2% (names new CFO), BNL -3% (commences 13 mln share offering; also provides update on Q3 acquisitions activity), LNDC -2.9% (rebrands as Lifecore Biomedical, names new CEO), KRG -2.8% (increases dividend), BTBT -1.8% (stock offering), AAPL -0.2% (inks agreement with Futuro Studios to add original content to its Podcasts app, according to Bloomberg), MSFT -0.2% (laying off hundreds of contracted recruiters and talent acquisition staff, according to Business Insider), WBX -0.1% (acquires COIL Inc, an EV charging installation service), EVGO -0.1% (files for $750 mln mixed securities shelf offering; also stock offering)
- Rio Tinto (RIO1 TH) +1.9%
- Brenntag (BNR TH) +1.6%
- Brenntag 2Q Oper Ebitda Beats Estimates
- Ahold Delhaize (AHOG TH) +1.1%
- Ahold Delhaize Suspends Plans for Sub-IPO Bol.com in 2H
- TUI (TUI1 TH) +1%
- Travel Giant TUI Sees Holiday Demand Solid for Rest of Summer
- Prysmian (AEU TH) +0.5%
- Prysmian Raised to Buy at Intesa Sanpaolo; PT 39.20 euros
- Telefonica (TNE5 TH) +0.3%
- Telefonica’s Risk of a Junking Is Growing as Debt Woes Persist
- Daimler Truck (DTG TH) -0.9%
- Watch Auto Suppliers as Bridgestone Guidance Misses Estimates
- Equinor (DNQ TH) -0.9%
- VW (VOW3 TH) -0.9%
- Lufthansa (LHA TH) -1.1%
- Lufthansa Keys on Efficiency to Be Competitive: Company Outlook
- Nokia (NOA3 TH) -1.3%
- Rheinmetall (RHM TH) -1.4%
- Carrefour (CAR TH) -1.4%
- Ferrari (2FE TH) -1.6%
- Rational (RAA TH) -1.8%
- Evotec SE (EVT TH) -6.5%
- Lonza Now Top Life Sciences Pick at Morgan Stanley, Evotec Cut
DAX:
- Brenntag (BNR TH) +1.8%
- Brenntag 2Q Oper Ebitda Beats Estimates
- Continental (CON TH) +0.4%
- Autos Deep in Red as Continental Slides: EMEA Industrials Wrap
- Bayer (BAYN TH) -0.5%
- AMLO Says He Met With Bayer CEO Werner Baumann
- Infineon (IFX TH) -0.6%
- Watch Chip Stocks as TSMC’s July Sales Climb 50% From Year Ago
- Deutsche Post (DPW TH) -0.7%
- VW (VOW3 TH) -0.9%
- Daimler Truck (DTG TH) -0.9%
- Watch Auto Suppliers as Bridgestone Guidance Misses Estimates
MDAX:
- Evonik (EVK TH) +2%
- Evonik Boosts FY Sales Forecast
- Aroundtown (AT1 TH) +0.9%
- Varta (VAR1 TH) +0.7%
- GEA Group (G1A TH) +0.6%
- GEA Group 2Q Adjusted Ebitda Beats Estimates
- Thyssenkrupp (TKA TH) +0.5%
- Uniper (UN01 TH) -0.7%
- K+S (SDF TH) -0.9%
- Commerzbank (CBK TH) -0.9%
- Rheinmetall (RHM TH) -1.4%
- Evotec SE (EVT TH) -4.7%
- Lonza Now Top Life Sciences Pick at Morgan Stanley, Evotec Cut
SDAX:
- Jenoptik (JEN TH) +4.8%
- Jenoptik 1H Revenue Beats Estimates
- Heidelberger Druck (HDD TH) +4.6%
- Heidelberger Druck Reports ‘Convincing’ 1Q Numbers, Baader Says
- Ceconomy (CEC TH) +0.9%
- Metro (B4B TH) -0.6%
- Deutz (DEZ TH) -0.8%
Stocks fell in Asia on Wednesday following a Wall Street retreat and caution persisted ahead of US inflation data that will shape investor expectations for further Federal Reserve interest-rate hikes. A gauge of Asian equities dropped for the second day, with technology stocks the biggest drag. Chinese shares wavered as traders evaluated slower-than-anticipated consumer and factory inflation in the world’s second-largest economy. US contracts fluctuated following a drop in the S&P 500 for a fourth session. Micron Technology Inc. became the latest chipmaker to warn about slowing demand, fanning economic concerns and spurring a slide in the technology-heavy Nasdaq 100. Treasury yields and a dollar gauge were steady, crude oil traded at around $90 a barrel, and both gold and Bitcoin fell. The two-year Treasury rate exceeds the 10-year by nearly 50 basis points. The inversion, around deepest since 2000, is viewed as a sign of a looming recession under the Fed’s monetary-tightening campaign to curb inflation. A report Wednesday is expected to show headline US consumer-price inflation cooled but stayed elevated in July, while the core reading may have quickened on an annual basis. How the figures affect views on Fed tightening will be key for risk sentiment. In China, consumer price inflation accelerated in July to 2.7%, the highest levelin two years, but missed economists’ expectations. The producer price index climbed 4.2%, below the median forecast and down from June. Elon Musk sold $6.9 billion of shares in Tesla Inc., the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc. US After Hours TTD +18.5%, ARRY +9.5%, HRB +4.5%, SMCI +3.2% higher on earnings; SG -23.2%, RBLX -16.4%, PRPL -14%, REAL -11.5% lower on earnings
Nikkei -0,75% Hang Seng -2,07% CSI -0,86% Shanghai -0,37% Shenzen -0,18%
Eur$ 1,0214 CNH 6,7612 CNY 6,7569 JPY 134,99 GBP 1,2084 CHF 0,9537 RUB 61,0994 TRY 17,9210 WTI$ 90,19 Gold 1,789,70-2,3% BTC 22,965 -0,80% ETH 1,682,16 -0,80%
S&P -0,17% Nasdaq -0,32% EuroStoxx -0,38% FTSE -0,32% Dax -0,40% SMI -0,60%
Macro :
- Zero Russian Winter Gas May Spur 20%+ Cut to Euro Stoxx 50 EPS
- China July Consumer Prices +2.7% Y/y; Est. +2.9%
Keep an eye on :
- ABN NA : ABN AMRO 2Q Profit Beats Estimates
- ARL GY : Aareal Bank 2Q Operating Profit EU61M Vs. EU41M Y/y
- AGS BB : Ageas 2Q Net Income Beats Estimates
- AD NA : *AHOLD DELHAIZE SUSPENDS PLANS FOR SUB-IPO BOL.COM IN 2H
- ALC SW : Alcon 2Q Core EPS Beats Estimates
- BAYN GY : AMLO Says He Met With Bayer CEO Werner Baumann
- BOTHE BB : Bone Therapeutics to Acquire Majority Participation in Medsenic
- BP/ LN : Bunge, BP to Sell Brazil JV, Mubadala Possible Bidder: Valor
- BNR GY : Brenntag 2Q Oper Ebitda Beats Estimates
- COIN US : Coinbase 2Q Rev. $808.3M, Est. $854.8M
- CRBN NA : Corbion 1H Adjusted Ebitda EU89.9M Vs. EU77.1M Y/y
- CTPNV NA : CTP 1H Net Rental Income EU211.5M Vs. EU160.3M Y/y
- ROO LN : Deliveroo 1H Gross Transaction Value Misses Estimates
- EDF FP : EDF Filed Claim With French Court for About EU8.34 Billion
- EOAN GY : E.On 1H Adjusted Ebit Beats Estimates
- EVK GY : Evonik Boosts FY Sales Forecast
- 2317 TT : Taiwan Wants Foxconn to Drop Stake in China’s Unigroup, FT Says
- G1A GY : GEA Group 2Q Adjusted Ebitda Beats Estimates
- HHFA GY : Hamburger Hafen Maintains FY Ebit Forecast
- ITP FP : Inter Parfums 2Q EPS Misses Estimates
- JEN GY : Jenoptik 1H Revenue Beats Estimates
- LEG GY : LEG Immobilien Maintains FY FFO I Forecast
- 994 HK : Lenovo Profit Beats Estimates While PC Slump Claims Chipmakers
- LEO GY : Leoni 2Q Adjusted Ebit EU14M Vs. EU13M Y/y
- MAJ NA : Majorel Won’t Reduce Headcount After Merger with Sitel, CEO Says
- MSFT US : Microsoft Asks Teams to Rein In Some Expenses, Sources Say -- WSJ
- NOEJ GY : Norma 2Q Adjusted Ebit EU22.3M Vs. EU36.1M Y/y
- NURI : Berlin-Based Digital Bank Files For Insolvency Amid Global Woes
- PRU LN : Prudential 1H Adjusted Operating Profit Misses Estimates
- RMG LN : Royal Mail Postal Union CWU Announces Four Days of Strikes
- SPM IM : *SAIPEM SAYS CEO DIDN'T SIGN ANY DEAL TO EXIT COMPANY
- SQZ LN : Kistos Won’t Make a Firm Offer for Serica
- 9984 JP : SoftBank Buyout Talk Resurfaces After Record Loss Piques Market
- STM FP : Santander Bank Polska Raised to Hold at Erste Group
- SQN SW : Swissquote FY Pretax Profit Forecast Misses Estimates
- TLX GY : Talanx 2Q Net Income Beats Estimates
- TLGO SM : Spain’s Talgo to Supply, Maintain Trains for Egypt: Ministry
- TSLA US : Musk: Will Buy Tesla Shares Again If Twitter Deal Fails
- TSLA US : Elon Musk Sells Total $6.89 Billion Worth of Tesla Shares
- TUI1 GY : TUI 3Q Net Loss EU356.7M Vs. Loss EU934.8M Y/y
- VTSC GY : Vitesco 2Q Ebit Beats Estimates
- WMG US : Warner Music Drops on Disappointing 3Q Streaming Revenue
- WIE AV : Wienerberger 2Q Ebitda Beats Estimates
>>> Up
* Jyske Raised to Buy at Nordea; PT 425 kroner
* Linde Raised to Buy at Stifel; PT $356.43
* Lonza Raised to Overweight at Morgan Stanley
* Safestore Raised to Buy at HSBC; PT 1,414 pence
>>> DOwn
* Altice USA Cut to Hold at HSBC; PT $11
* Autostore Cut to Sell at SpareBank; PT 14 kroner
* Eezy Cut to Reduce at Inderes; PT 4.80 euros
* Evotec SE Cut to Underweight at Morgan Stanley; PT 32 euros
* Evotec SE ADRs Cut to Underweight at Morgan Stanley; PT $16
* IWG Cut to Add at Peel Hunt; PT 240 pence
* XP Power Cut to Hold at HSBC; PT 2,430 pence
>>> Initiation
* Acerinox Rated New Equal-Weight at Barclays; PT 11 euros
* Aperam Rated New Underweight at Barclays; PT 29 euros
* Baltic Classifieds Group Rated New Neutral at Davy
* Bytes Technology Rated New Buy at Liberum; PT 550 pence
* NSI NV Rated New Buy at Berenberg; PT 40 euros
* OnTheMarket Rated New Neutral at Davy
* Outokumpu Rated New Overweight at Barclays; PT 6 euros
* Pets at Home Rated New Buy at Jefferies; PT 425 pence
* Softcat Rated New Hold at Liberum; PT 1,550 pence
>>> Call
* Cazoo Double-Upgraded as Positive Catalyst Emerges: Berenberg
* Heidelberger Druck Reports ‘Convincing’ 1Q Numbers, Baader Says
* Lonza Now Top Life Sciences Pick at Morgan Stanley, Evotec Cut
* NSI ‘Changing Gears’ on Growth, Rated New Buy at Berenberg
* Pets at Home Rated New Buy at Jefferies on Strong Growth Outlook
* Signify Has Challenges, But Priced In, Morgan Stanley Upgrades
After Hours Summary: TTD +18.5%, ARRY +9.5%, HRB +4.5%, SMCI +3.2% higher on earnings; SG -23.2%, RBLX -16.4%, PRPL -14%, REAL -11.5% lower on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: TTD +18.5%, EVBG +9.7%, ARRY +9.5%, ARLO +8.5%, HALO +8.5%, OSUR +8.5% (also announces strategic transformation, including new CFO and board changes), CPRX +8.2%, TBLA +7.2%, JXN +5.1% (also increases dividend), RVNC +5%, CRCT +4.6% (also authorizes new $50 mln share repurchase program), VLD +4.6%, HRB +4.5% (also increases dividend, announces $1.25 bln share repurchase auth), ZLAB +4.4% (also names new COO), LRN +3.8%, AXON +3.5%, SMCI +3.2%, EXEL +3%, INO +2.4%, ONTO +1.5%, VUZI +1.3%, CELH +0.9%, GBDC +0.6%, GO +0.4%, MASI +0.4%, ATCO +0.3%, WK +0.3%
Companies trading higher in after hours in reaction to news: LOTZ +28.1% (SFT to merge with LOTZ), SFT +9.4% (SFT to merge with LOTZ), TOI +8.6% (announces $110 mln convertible note investment by Deerfield Mgmt, also reports earnings), MCFT +6.9% (evaluating strategic alternatives for its NauticStar business, reaffirms FY 22 outlook), CLPT +6.7% (receives 510k clearance for its ClearPoint Maestro Brain Model), SNCR +4.8% (Street Cred Capital to become a distributor of its Personal Cloud solution), EDR +3.7% (to sell Diamond Baseball Holdings to Silver Lake), AVA +0.4% (announces several senior leadership changes), BGS +0.3% (files mixed securities shelf offering), ACN +0.2% (acquires YSC Consulting)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SG -23.2%, RBLX -16.4%, SEER -14.6%, PLBY -14.3%, PRPL -14%, KIND -13%, REAL -11.5%, HYLN -10.5%, ANGI -10.4%, VIR -9.8%, RRR -8%, RXT -7.7%, LFST -7.6%, BLI -7.4%, AZTA -7%, MGNI -6.1%, ABCL -5.5%, WISH -5.4% (also CFO to become both CFO/COO), MAXR -5.3% (also selected by LHX for the design/production of 14 spacecraft platforms), COIN -5.2%, PETQ -4.4%, WYNN -3.8%, BE -3.7%, CERT -3.5%, ALLO -3.5%, MNKD -3.4%, PLUG -2.9%, U -2.8%, WELL -2.4%, AKAM -2.3%, IPAR -1.5%, KOD -1.3%, SAIL -0.6%, DAR -0.5%, CCXI -0.4%, ZD -0.4%, MODN -0.3%, BBDC -0.2%, SWX -0.2%, MLNK -0.1%, ALC -0.1%
Companies trading lower in after hours in reaction to news: MIRM -10.1% (commences $80 mln stock offering), VRNA -2.2% (commences offering of 10 mln ADSs), BKKT -1.6% (names new CFO), REV -1.4% (wants courts to allow formation of equity committee, according to WSJ), SOPH -1% (files $200 mln mixed securities shelf offering), NTNX -0.6% (to reduce global headcount by 270 employees, or 4% of workforce), MRCY -0.5% (receives $12 mln order from defense prime contractor), ASTL -0.4% (reports recent fire on one of its coal conveyors), OMI -0.3% (announces renewed partnership and new collaboration with Allina Health), IVZ -0.1% (reports July AUM), LMT -0.1% (awarded up to $524 mln US Navy contract modification)