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Friday, September 13

Some of the largest macro moves in the market today include: USD/CNH -0.2%. 

Recent market movements are significantly influenced by expectations of a substantial rate cut from the Federal Reserve. Speculation has intensified following comments and reports suggesting that a 50 basis point reduction in September is possible, leading to notable shifts in currency values, with the US Dollar weakening against several major currencies.

In Europe, industrial production data for July showed a decline as expected while inflation rates in France eased more than initially estimated. The European Central Bank's recent decision to cut interest rates continues to impact markets positively across the region despite mixed economic signals.

Commodity prices have seen upward trends due partly to disruptions caused by Hurricane Francine affecting oil production on the U.S Gulf Coast. This event contributed further strength particularly noted in crude oil futures which continue their rally amidst broader positive sentiment within global equity indices.

SPDR S&P 500 ETF Trust (SPY) [+0.2%]
The SPDR S&P 500 ETF Trust (SPY) experienced a premarket increase of 0.1%, reaching a price of 5612. This follows a positive close for U.S. markets on September 12, with the S&P 500 up 0.75% at 5,595.76, buoyed by expectations for a potential Federal Reserve rate cut. The Producer Price Index (PPI) for August showed a modest rise of 0.2%, prompting speculation about a significant interest rate cut at the upcoming Federal Reserve meeting. Concurrently, initial jobless claims rose to 230,000, reflecting mixed economic signals. Notable contributors to SPY's performance included Oracle, which provided optimistic long-term revenue guidance, and Alphabet Inc., where co-founder Sergey Brin discussed a cautious approach to deploying language models.

Invesco DB US Dollar Index Bullish Fund (UUP) [-0.1%]
The Invesco DB US Dollar Index Bullish Fund (UUP) has declined during the pre-market session. This movement coincides with a 0.41% drop in the U.S. Dollar Index, which fell to its lowest level this year against the yen, reaching approximately 100.95. The decline is attributed to growing expectations for a larger Federal Reserve rate cut, fueled by softer-than-expected Producer Price Index data. Additionally, the dollar index has reached a one-week low, influenced by hawkish comments from Bank of Japan officials. This environment of reduced dollar strength aligns with gains in commodities, particularly gold, which has risen to a record high amid changing monetary policy expectations. The USD/CNH has also declined, reflecting broader market sentiment that correlates closely with UUP's performance.

BA |-4.3%|-4.1B
Boeing Co | Aerospace & Defense
Boeing Co is facing considerable stock pressure as a labor strike initiated by the IAM 751 union commenced at 12:01 AM PT today, following a 96% vote in favor of the action against the company's proposed contract. Analysts from Jefferies estimate that the strike could lead to a monthly free cash flow impact exceeding $1.3 billion. The rejected contract proposed a 25% wage increase, which workers deemed inadequate amid rising living costs. This strike, marking Boeing's first major industrial action in 16 years, is expected to halt production of most aircraft, including the popular 737 MAX. Union leader Jon Holden emphasized the strike's focus on "respect and fighting for our future." Boeing's management had urged acceptance of the contract but now faces additional challenges amid ongoing production delays and quality control issues.

ADBE |-8.4%|-20.1B
Adobe Inc | Application Software
Adobe Inc. reported its third-quarter earnings on September 12, 2024, revealing record revenue of $5.41 billion, exceeding analysts' expectations of $5.37 billion. The earnings per share (EPS) were $4.65, surpassing the anticipated $4.53. Despite these strong results, the company's fourth-quarter guidance projected revenue between $5.50 billion and $5.55 billion, below the consensus estimate of $5.60 billion. This outlook has raised concerns among analysts, leading to a significant decline in Adobe's shares during after-hours trading, with the stock dropping notably shortly after the earnings announcement. Additionally, the company reported a year-over-year revenue growth of 11%, with notable performance in its Creative Cloud and Document Cloud segments. Cash flows exceeded $2 billion during the quarter, according to the CFO's report.

ORCL |+6.2% | +29.0B
Oracle Corp | Systems Software
Oracle Corp has attracted significant attention following its recent announcement of long-term revenue guidance, projecting FY29 revenue of at least $104 billion. This announcement has coincided with a notable increase in share price, rising by over 6%. Several firms have raised their price targets for Oracle, with Guggenheim increasing its target to 200 from 185, Barclays to 202 from 172, and KeyBanc to 190 from 175. The stock's performance reflects positive market sentiment in response to these developments.

MRNA |-3.5% | -909.5M
Moderna Inc | Biotechnology
Moderna Inc has recently experienced a series of downgrades from analysts, with JPMorgan Chase lowering its rating to Underweight and reducing the price target from 88 to 70. OPCO has downgraded the stock to Perform, while Jeffries has lowered its rating to Hold with a price target of 65. Piper Sandler maintained an Overweight rating but cut its price target from 157 to 115. The downgrades coincide with Moderna's announcement of a $1 billion reduction in its research and development budget, reflecting challenges such as disappointing vaccine sales and a revenue forecast below analyst expectations. The company plans to reduce its R&D spending by approximately 20% over the next three years and has delayed its profitability target to 2028. Additionally, five programs in its pipeline have been discontinued, further impacting its outlook. Shares fell significantly at market open, reflecting concerns about the company's financial trajectory.

RH | +20.3% | +1.2B
RH | Home furnishing Retail
RH reported its fiscal Q2 results, achieving an adjusted EPS of 1.69, surpassing the consensus estimate of 1.56. Revenue reached 829.7 million, exceeding expectations of 824.5 million. The company noted a 7% increase in demand during Q2, which accelerated to 12% in August. For FY 2024, RH adjusted its revenue growth forecast to a range of 5% to 7%, down from a prior estimate of 8% to 10%. The anticipated Q3 revenue growth is projected between 7% and 9%, with an adjusted operating margin of 15% to 16% and an adjusted EBITDA margin of 17% to 18%. Following the earnings announcement, multiple brokerages raised their price targets for RH shares. The stock moved significantly higher shortly after the earnings release, reflecting the positive reception of these results and guidance.

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