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Friday, August 23

Some of the largest macro moves in the market today include: Oil (WTI) +1.7%. Gold +0.7%. S&P 500 Index (US) +0.5%.

Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole Economic Symposium is highly anticipated by markets, with expectations that he may signal a shift towards rate cuts. This event has led to cautious optimism in global equity markets and slight movements in bond yields as investors await further guidance on monetary policy.

In Japan, core inflation rose to 2.7% year-on-year in July 2024, marking its highest level since February and supporting the Bank of Japan’s recent hawkish stance. The central bank had previously raised rates for the first time since 2007 amid rising wages and high inflation levels.

Economic data from Canada indicates an expected increase of 1.1% month-over-month in manufacturing sales for July following a decline in June, driven primarily by gains in petroleum products and chemicals sectors.

Vanguard Information Technology ETF (VGT) [+1.3%]
The Vanguard Information Technology ETF (VGT) has increased in pre-market trading on Friday. Significant contributors to this performance include NVIDIA Corp (NVDA), which experienced a notable return, supported by strong earnings expectations driven by AI demand. Microsoft Corp (MSFT) and Apple Inc. (AAPL) also contributed positively, each showing solid returns. Broadcom Inc. (AVGO) added to the gains with a strong performance, while Workday Inc. (WDAY) surged after reporting impressive Q2 results that exceeded earnings estimates and reaffirmed its subscription revenue guidance for FY25, prompting price target upgrades from analysts.

United States Oil Fund LP (USO) [+2.0%]
Crude oil prices have seen upward movement since Thursday, with WTI crude rising significantly. This increase coincides with expectations of an imminent interest rate cut by the U.S. Federal Reserve, which may enhance economic activity and crude oil demand. Despite this, concerns about slowing global demand persist, fueled by geopolitical tensions and mixed manufacturing data from major economies in Europe and Asia. Notably, a significant downward revision of U.S. job creation figures has raised additional concerns regarding global demand. Nevertheless, Commerzbank has characterized the negative market reaction as exaggerated, citing robust gasoline demand. The United States Oil Fund LP has reflected this price movement, increasing by 2.1% since the previous close. UBS analysts anticipate a potential recovery in Brent crude prices into the $85-$90 range in the coming months, despite ongoing challenges.

Workday Inc (WDAY) [+14.7%, +10.4B]
Workday Inc. reported strong Q2 financial results, achieving adjusted earnings per share of $1.75, exceeding the analyst consensus estimate of $1.65. Revenue reached $2.08 billion, slightly above expectations of $2.07 billion. The company noted a 12-month subscription revenue backlog of $6.8 billion, reflecting a 16.1% year-over-year increase, and a total subscription revenue backlog of $21.58 billion, up 20.9% year-over-year. Workday reaffirmed its FY25 subscription revenue guidance between $7.7 billion and $7.725 billion, projecting third-quarter subscription revenue of approximately $1.955 billion, indicating a growth of 16%. Additionally, the board approved a new share repurchase program of up to $1 billion. Following these announcements, analysts have raised their price targets for Workday, with KeyBanc increasing its target to 305 from 275.

Ross Stores Inc (ROST) [+5.9%, +3.2B]
Ross Stores Inc reported strong Q2 2024 results, with GAAP earnings per share of $1.59, surpassing estimates of $1.49 and marking a significant year-over-year increase. Revenue reached $5.29 billion, exceeding the forecast of $5.24 billion and reflecting a notable rise from the previous year's figures. Comparable sales increased by 4%, well above the estimated 2.98%. The company also raised its full-year EPS guidance to a range of $6.00 to $6.13, up from $5.79 to $5.98. Following these announcements, multiple brokerages adjusted their price targets upward, with several setting targets at $175 or higher. After the earnings release, Ross Stores' stock experienced a substantial increase, moving up significantly in after-hours trading.

Nestle SA (NSRGY) [+3.0%, +8.1B]
Nestlé SA announced the immediate departure of CEO Mark Schneider due to underperformance, with Laurent Freixe appointed as his successor. This leadership change follows a board meeting assessing the company's current environment and comes after Schneider's eight-year tenure. Although the announcement initially prompted a slip in shares overseas, it has since coincided with a notable price increase of 3.0%. Freixe, a long-time Nestlé veteran, is expected to refocus on core activities and address challenges in underperforming segments such as health science and frozen foods. The market has responded positively to this shift, as Nestlé outperforms its sector peers amidst competitive pressures from rivals like Unilever.

Cameco Corp (CCJ) [+5.0%, +921.9M]
Cameco Corp (CCJ) experienced a pre-market trading surge of approximately 5.85%. This movement coincides with Kazatomprom's announcement to reduce its 2025 uranium production target by 17%, which is expected to result in a 12% growth compared to 2024. As the largest uranium producer globally, Kazatomprom's output reduction may enhance prices and demand in the uranium market, favoring companies like Cameco. Additionally, Denison Mines Corp (DNN) saw a notable increase, which may also reflect positively on Cameco's performance due to the strong correlation between the two companies. Overall, Cameco is currently outperforming its sector peers.

Roku Inc (ROKU) [+4.1%, +379.7M]
Roku Inc has received an upgrade from Guggenheim, moving from a Neutral to a Buy rating, with a price target set at $75. This shift reflects a more favorable outlook on Roku's performance and growth potential. Concurrently, Roku's stock has increased by 4.6%, aligning with a broader market movement, as the S&P 500 Index has risen by 0.50%. Additionally, Roku is outperforming its sector peers, further highlighting its relative strength in the current market environment.

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