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Friday, August 15

Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) +10.4%. Eli Lilly and Co (LLY) +1.8%. Berkshire Hathaway Inc (BRK.B) +0.7%. 

Recent market movements are significantly influenced by economic data releases and geopolitical developments. The U.S. retail sales for July increased by 0.5%, aligning with expectations, while import prices rose unexpectedly by 0.4%. This inflationary pressure has led to speculation regarding the Federal Reserve's potential interest rate cuts in September; however, a hotter-than-expected Producer Price Index (PPI) report showing a rise of 3.3% year-on-year is causing traders to reassess their positions.

In Japan, GDP growth exceeded forecasts at an annualized rate of 1% for Q2, prompting discussions about possible tightening measures from the Bank of Japan amid persistent inflation concerns that could lead to future policy adjustments as early as October. Conversely, China's recent economic indicators showed slowing industrial production and disappointing retail sales figures that fell short of expectations—raising concerns over domestic demand amidst ongoing tariff uncertainties.

Geopolitical factors also play a crucial role today as markets await outcomes from the high-stakes summit between U.S President Donald Trump and Russian President Vladimir Putin concerning Ukraine peace talks—a development anticipated to impact global risk sentiment positively or negatively depending on its outcome.

VanEck Semiconductor ETF (SMH) [-1.0%]
Elliott Management has established put options against the VanEck Semiconductor ETF, reflecting a bearish outlook on the semiconductor sector and the broader market, including the S&P 500 and Nvidia. This strategy accompanies an increased stake in various ETFs and companies. Concurrently, the US Producer Price Index for July reported yesterday rose significantly, suggesting rising inflationary pressures that may affect Federal Reserve interest rate decisions relevant to the semiconductor sector represented by SMH. Intel Corp shares surged on news of potential government investment for domestic manufacturing expansion, yet overall market sentiment remains cautious due to ongoing cost pressures impacting technology stocks. Notably, the top contributors to SMH's performance experienced significant declines, with Applied Materials Inc reporting strong quarterly results but issuing a weak fourth-quarter outlook, which negatively influenced related firms such as Lam Research Corp and KLA Corp in after-hours trading.

iShares MSCI Japan ETF (EWJ) [+1.7%]
The iShares MSCI Japan ETF (EWJ) has seen a price increase of 1.7% in pre-market trading on Friday. Recent reports indicate that Japan's economy grew stronger than expected in the second quarter of 2025, with GDP expanding both quarter-over-quarter and year-over-year. This growth was primarily driven by robust exports. Additionally, the annualized GDP growth rate surpassed consensus estimates, suggesting a positive economic trajectory. Expectations are rising that the Bank of Japan may consider tightening its monetary policy in response to these improving conditions. The movement in USD/JPY contributed notably to the ETF's performance, while key holdings such as SONY and SFTBY also recorded significant gains, further supporting the ETF's upward movement.

AMAT | -12.9% | -17.5B
Applied Materials Inc | Semiconductor Materials & Equipment
Applied Materials Inc has experienced a significant decline in its stock price, dropping nearly 13% following its Q3 earnings report. While the company reported adjusted earnings per share of $2.48, exceeding estimates, and revenues of $7.30 billion, also surpassing expectations, the stock reacted negatively. This marked the first time since 2001 that AMAT gapped down by such an extent post-earnings. The company's guidance for Q4 was lowered, projecting net sales between $6.20 billion and $7.20 billion, down from an expected $7.32 billion. Analysts have responded with multiple downgrades; Deutsche Bank lowered its price target to $170 from $200, while Bank of America downgraded from Buy to Neutral with a new target of $180. Concerns regarding exposure to the Chinese market and company-specific challenges were also highlighted in social media discussions. In premarket trading today, AMAT was down approximately 14%.

NU | +9.1% | +5.7B
Nu Holdings Ltd | Diversified Banks
Nu Holdings Ltd's shares have increased following the release of its Q2 financial results. The report, published recently, highlighted a net profit of 637 million, marking a 42% year-over-year increase, with an annualized return on equity of 28%. The consolidated loan book stood at 27.3 billion, with a 90-day default ratio of 6.6% in Brazil. Additionally, the company reported earnings per share of 0.13, matching analyst expectations, while quarterly sales reached 3.668 billion, reflecting a 28.75% increase from the previous year. The customer base expanded to 122.7 million, up 17% year-over-year. Eric Young has been appointed as Chief Technology Officer, bringing experience from Snap, Google, and Amazon.

UNH | +10.0% | +27.6B
UnitedHealth Group Inc | Managed Health Care
UnitedHealth Group Inc has experienced a notable price increase, coinciding with a significant rise in the Managed Health Care sector. Key developments include Berkshire Hathaway's acquisition of over 5 million shares, valued at approximately $1.57 billion, disclosed in a recent regulatory filing. This investment has contributed to a surge in UnitedHealth's stock during after-hours trading. Additionally, David Tepper's Appaloosa Management has increased its stake in the company by 1,300%, now holding 2.45 million shares worth $665 million. Michael Burry's Scion Asset Management has also invested around $115.4 million in UnitedHealth shares and calls. The substantial institutional interest, highlighted by social media discussions surrounding Buffett's strategic move, has further fueled positive sentiment towards the stock, resulting in an increase of over 10% since Thursday.

RBLX | -5.8% | -4.4B
Roblox Corp | Interactive Home Entertainment
Roblox Corp's stock has experienced significant selling pressure, declining in premarket trading. A recent note from Oppenheimer highlighted major near-term risks linked to a growing online movement against the company, contributing to a premarket drop. Concurrently, a lawsuit filed by Louisiana Attorney General Liz Murrill alleges that Roblox facilitates child sexual exploitation and lacks adequate safety measures. This lawsuit claims the platform enables the distribution of child sexual abuse material, seeking injunctive relief and civil penalties. Concerns are amplified by social media discussions urging parents to remove their children from the platform, reflecting a heightened sentiment around safety issues. Additionally, recent conversations have described Roblox as a "hunting ground" for predators, with traders showing notable interest in purchasing puts on the stock, reacting to the negative developments surrounding the lawsuit.

LRCX | -4.5% | -606.6M
Lam Research Corp | Semiconductor Materials & Equipment
Lam Research Corp's stock price declined by approximately 4.5% in pre-market trading, following a drop of nearly 3.9% in after-hours trading. This movement coincided with the release of results and guidance from Applied Materials (AMAT), which reported revenue exceeding estimates but elicited a negative market reaction. Concurrently, social media discussions highlighted AMAT's Q2 2025 earnings, which surpassed expectations, alongside a comparative analysis with Lam Research. This analysis suggested a more favorable outlook for AMAT in the short term, while positioning Lam Research as a better long-term investment. Additionally, Tradr ETFs announced the launch of two leveraged single-stock ETFs that will include Lam Research, set to begin trading in August 2025, targeting sophisticated investors focused on high-conviction strategies in technology.

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