Channel Calendar

This Week – The earnings are much lighter from here and mainly retail. HD and WMT the only important names.

Tuesday: PPI, HD earnings

Wednesday: CPI

Thursday: Retail Sales, Philly Fed, Jobless Claims, WMT and DE earnings

Friday: Housing Starts. Goolsbee from Fed speaks

Torrent Trading Observations

• Quiet weekend

• CLOSED above 5320 with VIX back to 20 takes waterfall off the table and calms the waters

• HD tomorrow, CPI Wed, and then WMT DE and now magnified claims Thurs

• Would think we are likely to get some sort of retest in the coming weeks, but we shall see

• 5320/5240 support.   5390 next resistance

• Hiring for low-wage workers cooling

Upgrades – LL, BLND, BRO, LLY, GSBD, PAR, PYPL, PGR, PRU, HOOD, TTWO, ZNTL

Downgrades – BOH, BHF, SATS, HI, ITI, JBI, LEV, PCRX, PLL, PPC, QCOM, TGI

Wave Watch

Mkts YTD

• DOW +4.73%

• S&P +12.68%

• Nasdaq +13.4%

Futures

• DOW +35

• S&P +10

• Nasdaq +37 

Mainstream Metrics

10 Year - Busy week of inflation and economic data

GOLD

BITCOIN

Consumer/Financial Healthcare

KEY - +18% on news scotia bank will take a 15% stake for ~$2.8B. The US/Canadian bank tie ups have been largely successful over time.

RILY – After Short Sellers on Twitter have been pounding this Investment Bank as largely a fraud, today the stock is down 47% on DOJ inquiries.

GS initiates some food/consumer staples names with KHC, HSY at sell and MDLZ, CAG, and GIS at Buy.

Baird on Industrial Real Estate – Top picks COLD, EGP, FR, PLYM

Baird on Restaurants – Consumer spending is getting selective so concentrate on go to chains like CMG, DPZ, and WING. They also see modest risk on HD and LOW results as expectations are too high.

SBUX attracted a second activist with Starboard taking a stake and pushing for mgmt. to take steps to boost the stock price - WSJ

ABNB is mentioned positively in Barron’s – the recent pullback is a buying opportunity given a relatively cheap valuation, strong secular fundamentals, and a robust balance sheet 

Drug price negotiations: the White House on Thurs will unveil the results of price negotiations on 10 of the biggest drugs, a key component of the Inflation Reduction Act – Politico

LLY - up in premarket trading Monday after Deutsche Bank upgraded the stock to buy from hold, calling the drugmaker a “high growth unicorn” following its second-quarter results.

Technology

AAPL – Foxconn recently hired ~50K employees at its factory in Zhengzhou to prepare for production of the iPhone 16.

Nvidia’s massive software footprint will ensure it doesn’t lose any meaningful share in AI chips for a long time - WSJ

Industrials 

Hillenbrand (HI) downgraded to neutral from buy at DA Davidson

Janus International Group (JBI) downgraded to Peer Perform from Outperform at Wolfe Research

JetBlue (JBLU) trading down 5% - announces private offering of $400M of convertible senior notes due 2029

Piedmont Lithium (PLL) downgraded to neutral at Macquarie

Triumph Group (TGI) downgraded to hold at Jefferies

TSLA has stopped taking orders for the cheapest Cybertruck model while the $100K version is available for immediate delivery – Reuters

HE shares fell 14% premarket after the utility owner issued a going-concern warning and pegged losses from the estimated accrual of liabilities from one of the worst wildfires in the United States at $1.7 billion.

Still oversold despite the rally, and extreme on a couple of models

And

Hedge funds back to net long

For the bulls - slow rate-cutting cycles very good if we can stay in that mode

Rapid Review

Openwater Opinion