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Thursday, August 29

Some of the largest macro moves in the market today include: USD/CNH -0.5%. Nasdaq 100 Index (US) +0.9%. Bitcoin +2.2%. Some of the largest moves among US mega-cap stocks include: NVIDIA Corp (NVDA) -3.6%. Apple Inc (AAPL) +1.5%. Berkshire Hathaway Inc (BRK.B) +0.8%. 

Recent economic data from the United States shows that initial jobless claims fell slightly more than expected, while GDP growth for Q2 2024 was revised higher to an annual rate of 3.0%, driven by increased consumer spending and private investments despite a rise in imports. Additionally, core PCE prices rose by 2.8% in Q2, indicating a slowdown compared to the previous quarter.

In Europe, sentiment indicators have shown mixed results; Eurozone economic sentiment improved significantly reaching its highest level in over a year at 96.6 points for August but German inflation rates dropped below expectations with an annual rate falling to 1.9%. This has led to some downward pressure on the euro against other major currencies due to concerns about future ECB policy adjustments.

Equity markets are reacting positively overall with notable gains across various indices including Nasdaq and AEX amid strong earnings reports such as Nvidia's recent performance boosting tech stocks' sentiments globally even though there were slight declines post-earnings announcement reflecting cautious investor behavior ahead of further key economic releases like US labor market data next week.

SPDR Dow Jones Industrial Average ETF Trust (DIA) [+0.6%]
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has seen a price increase of 0.6% since Wednesday. Notable contributors to this performance include Salesforce, which reported strong second-quarter results and raised its full-year earnings forecast, leading to a significant uptick in after-hours trading. Apple is also increasing orders for new iPhones by over 10% in anticipation of robust demand for AI-equipped models, with suppliers preparing for a substantial production cycle. Meanwhile, the US Dow Jones 30 Spot Index is experiencing a slight daily return, although market sentiment remains cautious following Nvidia's disappointing earnings report, which has negatively affected major U.S. indices. Concerns about global oil demand due to geopolitical tensions are also influencing the current market climate.

Nasdaq 100 Index (US) (US100/USD) [+0.9%]
Nvidia's second-quarter earnings report has revealed strong revenue growth, but the company disappointed with a contraction in gross margins and lower-than-expected guidance, resulting in significant declines in its stock price. This negative sentiment surrounding Nvidia has contributed to broader market weakness, leading to a notable drop in the Nasdaq Composite today as tech stocks reacted adversely to these developments. Additionally, ongoing concerns about economic conditions have prompted traders to speculate on potential Federal Reserve interest rate cuts following dovish comments from officials earlier this week. In contrast, the Nasdaq 100 Index has moved up by 0.9% since Wednesday.

NVDA |-3.6%|-106.0B
NVIDIA Corp's stock has declined following its Q2 earnings report, which revealed an adjusted EPS of $0.68, surpassing expectations of $0.64, and revenues of $30 billion, exceeding forecasts of $28.7 billion. Despite these strong figures, the stock dropped significantly post-earnings due to concerns over profit margin compression and delays in Blackwell chip production. Analysts have raised their price targets, with Baird increasing its target to $150 from $120, and Morgan Stanley raising its target from $144 to $150. UBS reiterated a buy recommendation at the same level, while New Street Research set a new target at $143. Additionally, RAJA raised its target from $120 to $140. NVIDIA's revenue guidance for Q3 FY2025 is set between $31.9 billion and $33.1 billion.

CRM |+4.4%|+11.5B
Salesforce Inc. reported second-quarter financial results that exceeded expectations, with adjusted earnings per share of 2.56, surpassing the consensus estimate of 2.36. Revenue reached 9.33 billion, beating the forecast of 9.23 billion, marking an 8.4% year-over-year increase. The company raised its full-year adjusted EPS outlook to a range of 10.03 to 10.11, while providing third-quarter revenue guidance between 9.31 billion and 9.36 billion, slightly below analyst expectations of 9.41 billion. Current remaining performance obligations increased by 10%, totaling 26.5 billion, and the operating margin improved to 33.7%, up from 31.6% year-over-year. Following these results, Salesforce shares experienced a notable uptick in after-hours trading, rising by approximately 4.6%.

DG |-24.3% | -5.0B
Dollar General Corporation reported second-quarter earnings per share of $1.70, missing the analyst consensus estimate of $1.78, and reflecting a decline from $2.13 in the same period last year. The company’s net sales reached $10.21 billion, falling short of the anticipated $10.37 billion, despite a 4.2% year-over-year increase. Same-store sales rose by only 0.5%, significantly below expectations of 2.1%. Following these results, Dollar General revised its fiscal year 2024 earnings guidance down to a range of $5.50 to $6.20 per share from a previous forecast of $6.80 to $7.55, while also lowering revenue growth expectations to a new range of 4.7% to 5.3%. Consequently, shares dropped significantly in premarket trading, reflecting concerns about the financially constrained core customer base amid competition from larger retailers like Walmart and Target.

BBY |+13.9% | +3.0B
Best Buy Co. Inc. reported strong second-quarter results, with adjusted earnings per share of $1.34, exceeding the consensus estimate of $1.16. Revenue reached $9.29 billion, surpassing expectations of $9.23 billion, despite a decline from the previous year’s $9.58 billion. The company raised its fiscal 2025 adjusted EPS guidance to a range of $6.10 to $6.35, up from a prior forecast of $5.75 to $6.20. Additionally, it narrowed its revenue outlook to between $41.3 billion and $41.9 billion. Domestic comparable sales fell by 2.3%, which was better than the anticipated 3.2% decline. Following these announcements, the stock experienced a notable increase, moving up significantly within minutes after the earnings report was released.

OKTA | -12.5% | -1.8B
Okta Inc reported its second-quarter fiscal results, posting an adjusted EPS of 0.72, exceeding the consensus estimate of 0.61 by over 18%. Revenue reached 646 million, surpassing expectations of 632.94 million and reflecting a year-over-year increase of 16%. Subscription revenue was 632 million, up 17% year-over-year. Despite these strong metrics, Okta's shares fell significantly in after-hours trading, dropping over 9%. Analysts have lowered price targets, with firms such as Baird and Truist Securities adjusting their targets to 105 and 95, respectively. The company provided guidance for third-quarter EPS between 0.57 and 0.58 and revenue between 648 million and 650 million, both above analyst estimates. Additionally, Okta raised its annual guidance for FY25 EPS to between 2.58 and 2.63 and revenue to between 2.56 billion and 2.57 billion, both exceeding previous forecasts.

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