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Tuesday, September 2

Noteworthy macro moves today: US Dollar Index +0.9%. S&P 500 Index (US) -1.3%. Nasdaq 100 Index (US) -1.6%. Noteworthy US mega-cap moves today: NVIDIA Corp (NVDA) -2.7%. Broadcom Inc (AVGO) -2.6%. Alphabet Inc (GOOGL) -2.2%. 

The US Dollar Index has rebounded sharply, rising nearly 0.7% as global bond yields climb amid a sell-off in UK Gilts and concerns over fiscal credibility within the UK government. This surge is accompanied by increased Treasury yields across various maturities, with the benchmark 10-year yield reaching its highest level since July at approximately 4.28%. The market anticipates that these developments may influence Federal Reserve policy decisions regarding interest rates.

In Europe, inflation data released today showed Eurozone consumer price inflation unexpectedly rose to 2.1% for August from July's rate of 2%, which was above expectations and suggests potential challenges for monetary easing by the European Central Bank (ECB). ECB board member Isabel Schnabel indicated there might be no need for further rate cuts given this uptick in inflationary pressures.

Additionally, Japan’s long-term bonds have seen fluctuations following comments from BOJ officials about gradual tightening amidst ongoing economic uncertainties related to tariffs and trade agreements with the US. As investors await wage data later this week that could significantly impact domestic monetary policy outlooks, Japanese equities are under pressure due to broader risk aversion reflected in currency movements against safe-haven assets like gold.

iShares 20+ Year Treasury Bond ETF (TLT) [-1.4%]
The iShares 20+ Year Treasury Bond ETF (TLT) has experienced a price decline of 1.4% since Friday. This movement coincides with an increase in the 10-year Treasury yield, which rose by approximately 6 basis points to 4.28%. The 2-year Treasury yield also increased nearly 3 basis points, while the 30-year bond yield climbed over 5 basis points to 4.974%. A global selloff in government bonds has contributed to a broader risk-off sentiment, negatively affecting equities and strengthening the dollar. Notably, the US 30-year Treasury bond has dropped significantly, reflecting a daily return decline. Additionally, TLT went ex-dividend at $0.328083 per share. Recent social media discussions highlight a consensus trade of long 2-year and short 30-year Treasuries, with a noted shift in central bank holdings favoring gold over U.S. Treasuries for the first time in three decades.

SPDR S&P 500 ETF Trust (SPY) [-1.0%]
The SPDR S&P 500 ETF Trust has declined by nearly 1.0% since Friday, when it closed at $644.95. September has historically been the weakest month for U.S. equities, with the ETF averaging losses of approximately 0.98% over the past two decades. Following a strong August characterized by five all-time highs, the S&P 500 has never recorded positive returns in September. Recent social media discussions highlighted that SPY has averaged a -4.4% return in September over the last five years, particularly in post-election years. Significant contributors to the ETF's performance include Nvidia, Amazon, Microsoft, Apple, and Meta, all reporting negative returns. Additionally, a recent court ruling invalidating several tariffs from the previous administration has raised concerns regarding market stability. Concurrently, the strengthening of the USD amid rising bond yields reflects a risk-averse sentiment among market participants.

PEP | +4.3% | +9.2B
PepsiCo Inc | Soft Drinks & Non-alcoholic Beverages
Elliott Investment Management has acquired a stake of approximately $4 billion in PepsiCo, positioning itself among the company's top five active investors. The activist investor intends to advocate for operational changes and strategic restructuring to enhance PepsiCo's financial performance. Elliott's presentation to the Board suggests a review of the bottling network and brand portfolio, noting underperformance in the North American beverage division and slowing growth in the food division. The proposed changes could unlock significant shareholder value, with Elliott projecting potential stock price appreciation of over 50% if implemented. Additionally, PepsiCo has recently increased its stake in Celsius with a $585 million investment, reflecting its strategy to expand within the beverage sector.

STZ | -8.3% | -2.3B
Constellation Brands Inc | Distillers & Vintners
Constellation Brands has revised its fiscal 2026 outlook significantly. The updated guidance for comparable EPS is now set between 11.30 and 11.60, down from the previous range of 12.60 to 12.90, which was already below consensus estimates. The company anticipates a decline in enterprise organic net sales by 6% to 4%. Additionally, the forecast for FY26 free cash flow has been lowered to between 1.3 billion and 1.4 billion, down from 1.5 billion to 1.6 billion. These adjustments are attributed to macroeconomic headwinds impacting consumer demand, particularly with a noted decline in high-end beer purchases among Hispanic consumers. Despite these challenges, a recent social media post highlighted strong performance in FY25, driven mainly by the Beer Business, which achieved its 15th consecutive year of volume growth, with Modelo Especial showing nearly 5% growth in depletions.

AVGO | -2.2% | -3.0B
Broadcom Inc | Semiconductors
Broadcom Inc. (AVGO) has experienced a decline of 2.2% since the previous close, mirroring a broader market downturn. The VanEck Semiconductor ETF has also dropped significantly, reflecting negative sentiment across the semiconductor sector. Concurrently, the Nasdaq 100 Index has decreased, indicating a challenging macroeconomic environment. Broadcom is set to report its third-quarter fiscal 2025 results on September 4, with analysts projecting earnings of $1.66 per share, an increase from $1.24 in the prior year. Cantor Fitzgerald recently raised its price target for the company from 300 to 350 while maintaining an Overweight rating. Discussions on social media have highlighted the upcoming earnings report and significant economic indicators scheduled for release this week, such as the ISM Manufacturing PMI and JOLTS Job Openings.

UTHR | +42.2% | +8.1B
United Therapeutics Corp | Biotechnology
United Therapeutics Corporation announced that its TETON-2 study of nebulized Tyvaso (treprostinil) Inhalation Solution has successfully met its primary efficacy endpoint for treating idiopathic pulmonary fibrosis (IPF). The phase 3 study, which involved 597 patients, demonstrated statistically significant superiority of Tyvaso over placebo, with an absolute change in forced vital capacity of 95.6 mL from baseline to week 52 (p < 0.0001). Benefits were observed across various subgroups, and significant improvements were noted in several secondary endpoints. Treatment with Tyvaso was well-tolerated, with no new safety signals reported. United Therapeutics plans to utilize these results to support a supplemental new drug application to the FDA for IPF indications.

INTC | -2.9% | -2.9B
Intel Corp | Semiconductors
Intel Corp's stock has dropped significantly in pre-market trading, paralleling a broader market decline. The VanEck Semiconductor ETF has also experienced a notable decrease, reflecting sector-wide weakness that may affect Intel. Additionally, the Nasdaq 100 Index has moved lower, indicating a general downturn in the tech-heavy market. Recently, Intel received $5.695 billion in accelerated funding from the U.S. Department of Commerce under the CHIPS Act, which included amendments that removed certain obligations. The company issued 274.6 million shares to the Department of Commerce and granted a warrant for an additional 240.5 million shares. Furthermore, discussions on social media highlighted Intel's agreement to provide the U.S. government with a 10% stake in the company and its CFO's remarks about maintaining 51% ownership of its Foundry for five years to avoid triggering government warrants.

NVDA | -2.6% | -109.9B
NVIDIA Corp | Semiconductors
NVIDIA Corp's stock has declined as part of a broader market downturn. The Nasdaq 100 Index has dropped significantly, reflecting negative sentiment that may influence NVIDIA's price movement. Despite reporting a substantial year-over-year revenue increase, concerns have arisen regarding the company's reliance on two undisclosed customers for a significant portion of its revenue. Additionally, NVIDIA's guidance for the third quarter did not factor in contributions from China, which may have tempered enthusiasm. Competition is intensifying, particularly with Alibaba developing an AI chip to reduce dependence on NVIDIA technology amid U.S. export restrictions. Analyst activity shows 17 Buy ratings and one Hold rating for NVIDIA, with an average price target suggesting potential upside, yet skepticism persists about its growth prospects compared to competitors like Micron. Social media sentiment reflects these mixed views, highlighting both optimism and caution regarding NVIDIA's future performance.

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