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Thursday, August 15

Some of the largest macro moves in the market today include: US 2Y Treasury Bond -0.3%. USD/CNH +0.6%. US 10Y Treasury Bond -0.7%. Some of the largest moves among US mega-cap stocks include: Walmart Inc (WMT) +8.6%. Amazon.com Inc (AMZN) +2.9%. Broadcom Inc (AVGO) +1.9%. 

Recent economic data from the United States has shown a significant improvement, with initial jobless claims falling to 227,000 and retail sales rising by 1% in July. This positive labor market trend contrasts previous expectations of an increase in unemployment benefits claims and suggests stronger consumer spending than anticipated.

In China, several key indicators have pointed towards ongoing economic challenges. Industrial production growth slowed to its lowest rate since March at 5.1%, fixed-asset investment grew less than expected at 3.6%, and the surveyed unemployment rate rose slightly to 5.2%. Additionally, new home prices saw their steepest decline since June 2015 despite government efforts to stabilize the property sector.

The People's Bank of China (PBoC) announced adjustments in its monetary policy operations but delayed renewing medium-term lending facility funds until later this month while injecting liquidity through reverse repos as part of broader measures aimed at addressing credit contraction amid persistent weaknesses in China's real economy.

SPDR S&P 500 ETF Trust (SPY) [+1.0%]
The SPDR S&P 500 ETF Trust (SPY) has seen an increase of 0.8% in pre-market trading, buoyed by several economic indicators. US Retail Sales for July rose by 1%, surpassing expectations, which reflects stronger consumer spending. Additionally, the Import Price Index for July unexpectedly increased by 0.1%, suggesting inflationary pressures. Among the ETF's holdings, notable contributors included Amazon, Microsoft, Nvidia, Walmart, and Apple, with each showing positive returns. Walmart's strong Q2 results and adjusted fiscal outlook further supported market sentiment. Initial Jobless Claims fell to 227,000, indicating resilience in the labor market, while the Consumer Price Index (CPI) report revealed a year-over-year increase of 2.9%, the lowest since March 2021, fueling speculation about potential interest rate cuts by the Federal Reserve. Despite mixed signals from manufacturing indices, these developments have fostered a generally positive outlook for the S&P 500.

Silver (XAG/USD) [+3.4%]
Silver prices have risen, trading at 28.06 per troy ounce, reflecting increased demand amid market dynamics. This uptick follows recent U.S. inflation data, which showed a slowdown to 2.9%. The dovish sentiment surrounding expectations of upcoming rate cuts from the Federal Reserve is bolstering interest in precious metals like silver. Investors are gravitating toward safe-haven assets due to economic uncertainties and anticipated monetary easing measures for the September Fed meeting.

WMT |+7.3%|+43.5B
Walmart Inc. reported robust second-quarter results, achieving an adjusted EPS of 0.67, exceeding the consensus estimate of 0.64. Quarterly sales reached 169.3 billion, surpassing the forecast of 168.6 billion and reflecting a year-over-year increase of 4.8%. U.S. same-store sales rose by 4.2%, while global e-commerce sales surged by 21%. The company raised its fiscal year 2025 adjusted EPS outlook to a range of 2.35 to 2.43 from a previous estimate of 2.23 to 2.37. Additionally, Walmart's revenue guidance for fiscal year 2025 was adjusted to between 663.7 billion and 670.1 billion, up from 668.3 billion. The gross margin improved to 24.4%, and adjusted operating income increased to 7.9 billion.

CSCO | +7.2% | +14.2B
Cisco Systems Inc shares are experiencing notable upward movement following the release of better-than-expected Q4 earnings. The company reported actual earnings per share (EPS) of $0.87, surpassing the expected $0.85, with revenues reaching $13.6 billion, exceeding the anticipated $13.5 billion. Cisco has set its EPS guidance for FY2025 at $3.52-$3.58 and revenue guidance at $55.0 billion-$56.2 billion. Rosenblatt raised its price target for Cisco from $56 to $58 while maintaining a Neutral rating, and Deutsche Bank adjusted its price target to $53 from $52, continuing its rating. Analysts polled by Capital IQ indicate an average outperform rating for Cisco, with price targets ranging from $46 to $60.

GRAB |-7.4%|-915.2M
Grab Holdings reported second-quarter revenue of 664 million, missing analysts' expectations of 673.3 million. This shortfall was attributed to weaker demand in its ride-share and food delivery services, resulting in a significant decline in shares during premarket trading. The company reaffirmed its full-year revenue guidance for 2024, projecting between 2.70 billion and 2.75 billion, which is below the consensus estimate of 2.77 billion. Adjusted EBITDA for FY24 is anticipated to range from 250 million to 270 million. Additionally, the food delivery segment generated 356 million in revenue, also falling short of estimates. Earnings per share came in at -0.01, matching expectations.

ULTA |+12.1% | +2.1B
Ulta Beauty shares have risen significantly following Berkshire Hathaway's decision to increase its stake in the company. This development has attracted considerable attention, contributing to a notable surge in share price. The positive sentiment surrounding this investment coincides with broader market activity, as evidenced by similar movements in other stocks. Ulta Beauty is also outperforming its sector peers, potentially leading the sector's strength.

TGT |+4.0% | +2.6B
Target Corp is experiencing an upward price movement, aligned with significant gains in the Consumer Staples Merchandise Retail sub-sector. This rise follows strong earnings reported by Walmart, suggesting a favorable environment for retailers, including Target. The company is set to announce its Q2 FY2024 earnings, with an estimated EPS of 2.19, up from a previous estimate of 1.80, and a revenue estimate of 25.2 billion, an increase from 24.8 billion. The earnings call is scheduled for 8:00 AM on August 21, 2024.

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