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Wednesday, August 20

Noteworthy macro moves today: Ethereum +3.2%. 

Recent economic data releases have significantly influenced market sentiment, particularly regarding inflation and central bank policies. The UK's annual inflation rate rose to 3.8% in July, surpassing expectations of 3.7%. This increase was driven by higher transport costs and increased prices for food services; it has implications for the Bank of England's future monetary policy decisions as it may prompt a reassessment of interest rates amidst rising price pressures.

In Germany, producer prices fell more than anticipated by 1.5% year-on-year in July—the sharpest decline since June 2024—indicating ongoing deflationary trends that could affect European Central Bank (ECB) strategies moving forward as they navigate between supporting growth while managing inflation targets set at around 2%. Meanwhile, Eurozone headline inflation remained steady at approximately 2%, aligning with ECB goals but highlighting mixed signals within different sectors.

Market participants are also closely monitoring geopolitical developments related to peace talks involving Ukraine which might influence broader risk sentiments across financial markets if progress is made toward resolution or stability in energy supplies from the region. Additionally, attention turns toward upcoming Federal Reserve minutes expected later today along with Fed Chair Jerome Powell’s speech scheduled during the Jackson Hole Economic Symposium on Friday—a key event likely shaping U.S monetary policy outlooks amid fluctuating labor demand indicators.

Ethereum (ETH/USD) [+3.2%]
Ethereum (ETH/USD) is currently experiencing volatility, with its price moving up by 3.2% since Tuesday. The broader cryptocurrency market faces significant selling pressure, as Bitcoin has fallen below 113,000 and Ethereum hit an intraday low of 4,070.54. This downturn follows over 523 million in outflows from Bitcoin spot exchange-traded funds, driven by macroeconomic uncertainties, including a recent rate cut by the Reserve Bank of New Zealand. Social media discussions reveal notable transactions, such as Fidelity's spot Ethereum ETF selling 36,250 ETH for 156.3 million and SharpLink and Bitmine purchasing 196,000 ETH valued at approximately 887 million. Additionally, BlackRock's iShares Ethereum Trust ETF has surpassed 11 billion in year-to-date inflows. Despite this institutional interest, sentiment has turned negative as traders began booking profits following record highs, with ETH declining over 12% from its peak.

iShares U.S. Aerospace & Defense ETF (ITA) [-1.1%, -72.0M]
The iShares U.S. Aerospace & Defense ETF (ITA) experienced a decline of 1.1% in pre-market trading. Key holdings contributed negatively to this performance, with AXON dropping significantly and contributing to the overall downturn. Boeing (BA) and Huntington Ingalls Industries (HII) also saw decreases, albeit to a lesser extent. Kratos Defense & Security Solutions (KTOS) faced a notable decline, while Lockheed Martin (LMT) recorded a slight drop. These movements among the ETF's holdings reflect a challenging environment for the aerospace and defense sector.

TGT | -10.3% | -4.5B
Target Corp | Consumer Staples Merchandise Retail
Target Corporation's shares have dropped significantly following its recent quarterly earnings report. The company announced adjusted earnings per share of $2.05, slightly above analyst estimates, while net sales reached $25.21 billion, surpassing expectations. However, comparable sales fell by 1.9%, and the company anticipates a low-single-digit decline in full-year sales. This marks the 11th consecutive quarter of flat or declining sales. Additionally, Michael Fiddelke has been appointed as CEO, effective February 1, 2026, succeeding Brian Cornell, who will transition to executive chair. Social media sentiment reflects disappointment regarding the company's internal promotion strategy and ongoing retail challenges, particularly concerning tariffs. The stock has experienced a notable decline of approximately 10.5% since Tuesday.

GES | +25.6% | +228.8M
Guess? Inc | Apparel Retail
Guess? Inc. has announced a definitive agreement for a take-private transaction valued at approximately $1.4 billion, including debt, with Authentic Brands Group. Under this agreement, shareholders, excluding the Rolling Stockholders, will receive $16.75 per share in cash, which represents a significant premium to the stock's closing price on March 14, 2025. Authentic Brands Group will acquire 51% of Guess's intellectual property, while the current management will retain 49% and continue to operate the business. The transaction is anticipated to close in the fourth quarter of the 2026 fiscal year, subject to regulatory approvals and customary conditions. Until the transaction is finalized, Guess plans to maintain its quarterly cash dividend of $0.225 per share.

EL | -8.0% | -2.4B
Estee Lauder Companies Inc | Personal Care Products
Estee Lauder Companies Inc reported a significant decline in fourth-quarter sales, with skin care sales dropping substantially, makeup down notably, and hair care decreasing sharply. The company recorded a net loss of $546 million, or $1.51 per share, a marked increase from the previous year's loss. Adjusted earnings came in at $0.09, aligning with analyst expectations. The revenue for the quarter was $3.41 billion, slightly exceeding estimates but reflecting a year-over-year decrease. Organic sales also fell significantly, with the company projecting adjusted earnings per share for fiscal 2026 below consensus estimates and anticipating profit headwinds from tariffs. Following these announcements, Estee Lauder's stock experienced a notable pre-market drop attributed to declining skin care revenue, particularly in the Asia-Pacific region.

ALC | -11.1% | -4.4B
Alcon AG | Health Care Supplies
Alcon AG's shares are down significantly following a revision of its fiscal year 2025 sales guidance, now projected at 10.3 to 10.4 billion, reduced from the previous range of 10.4 to 10.5 billion. The company reported second-quarter earnings with diluted EPS of 0.35, down from 0.45 in the same period last year, while core EPS was 0.76, slightly above estimates of 0.72. Revenue for the quarter reached 2.58 billion, missing consensus expectations of 2.64 billion. Additionally, Alcon anticipates a gross tariff impact of approximately 100 million for the year, expected to pressure net sales costs. Following the earnings report, the stock moved down 6.4% within an hour.

MU | -5.2% | -6.6B
Micron Technology Inc | Semiconductors
Micron Technology Inc. is facing notable premarket weakness, with a reported decline of over 5%. This follows Intel's stock drop amid discussions of the U.S. government potentially taking equity stakes in chipmakers, which could include Micron alongside Intel and TSMC. Social media posts indicate that U.S. Commerce Secretary Lutnick is considering trading cash grants for shares in companies receiving funding under the CHIPS Act, with Micron being a key player in these discussions. Additionally, recent conversations highlight that Micron has increased its market share to 21%, coinciding with Samsung's HBM4 chips moving into pre-production. The Nasdaq 100 Index has also declined slightly, reflecting broader market sentiment that may be influencing Micron's recent price movement.

TJX | +4.0% | +6.3B
TJX Companies Inc | Apparel Retail
TJX Companies, Inc. reported its Q2 FY26 results, posting a diluted earnings per share (EPS) of 1.10, exceeding the consensus estimate of 1.01. Net sales reached 14.40 billion, surpassing expectations of 14.13 billion, reflecting a year-over-year increase of nearly 7%. Consolidated comparable sales grew by 4%. The company raised its fiscal 2026 EPS guidance to a range of 4.52 to 4.57, up from a previous estimate of 4.34 to 4.43, indicating a projected increase of 6% to 7% compared to the prior year's 4.26. TJX anticipates third-quarter comparable sales growth of 2% to 3%, with a full-year projection of 3%. The expected pretax profit margin remains between 11.4% and 11.5%. Discussions on social media highlighted these financial results, further amplifying interest in TJX's performance amidst broader market activities.

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