Channel Calendar

Monday: Japan Carry Trade

Tuesday: Trade balance, CAT, TAP, YUM, UBER, ABNB earnings

Wednesday: HLT, DIS, LYFT earnings

Thursday: Jobless Claim, Fed’s Barkin

Friday: Weekend 

Torrent Trading Observations

• Market building on big Thursday bounce chalked up to renewed soft-landing narrative traction following initial claims.

• Nothing on the US economic calendar today and no Fedspeak scheduled.

• Inflation in focus next week with PPI on Tuesday and CPI on Wed

• Warren Buffett's Berkshire Hathaway [markets.businessinsider.com] now owns more short-term Treasurys than the Federal Reserve.

• Next week brings Jul-end US earnings (not just HD but AMAT, CSCO, and WMT too).  Thus far companies tied to consumer all have had conservative guidance. 

• Over 50% of the Nasdaq-100 names trade below their 200 day moving average.

• 5120 support need to reclaim 5320 to calm the waters - wide berth

Wave Watch

Fear/Greed Index = 26/100

Mainstream Metrics

10 Year

GOLD

BITCOIN

Consumer/Financial Healthcare

Kansas City Fed President Jeff Schmid is optimistic that inflation is nearing the Fed’s 2% target, thanks to some encouraging new data

G - reported solid upside on EPS and sales and the full-year guide moves higher

GPS - is changing its ticker from “GPS” to “GAP”. Effective on Thurs, Aug 22, 2024, the company’s common shares will trade on the NYSE under new symbol

EXPE - Stock up 8% but fading after reported upside on the key Q2 KPIs (EPS, EBITDA, sales, and bookings), but mgmt, warns the month of July brought “a more challenging macro environment and a softening in travel demand” and this is prompting them to reduce guidance for the year (although the guidance update wasn’t as bad as feared”

ELF - shares drop 9.0% in premarket trading after the cosmetics company’s boosted full-year adjusted earnings per share guidance trailed consensus estimates. Analysts flagged the conservative nature of the outlook, though Truist Securities viewed any weakness as a buying opportunity .

SG - soar 23% in premarket trading after the salad restaurant chain boosted its full-year revenue forecast. William Blair said the company “easily topped” expectations on all key metrics.

Technology

Barclays strategists upgraded their view on growth stocks to positive, noting that the selloff across equities has become “somewhat dislocated” from what is still a mild economic softening.

TSMC - reported strong July sales on AI tailwind. the bullish July revenue number from TSMC is probably the single most important data point of the morning as this should help bolster tech sentiment (the +45% Y/Y growth in Jul sales, coupled w/SMCI’s bullish sales guidance from earlier in the week, suggests AI-linked spending remains quite robust). 

TTWO – No major surprises…up after reiterating guidance… the prior F25 guide is maintained and they continue to talk about bookings growth in F26 and F27. With mounting macro concerns, also worth noting that video games have an element of counter-cyclicality

SNOW - is considering a partnership w/Cohere that would help the software maker generate more revenue from data scientists and AI researchers – The Information

AKAM - up with focus on increased Compute guidance and Delivery stability. We like the combination of solid growth, strong margins and the growing mix of security and compute, which could start to improve total growth.

AAPL - will soon introduce a new Mac mini that will contain the M4 chip and be about the same size as an Apple TV set-top box – Bloomey

AMZN / SHOP - AMZN - has eliminated a major fee imposed on merchants selling products on its website - Fortune

DOCN gains 5% after the software company reported 2Q results that beat expectations and raised its full-year adjusted EBITDA margin forecast.

RXT shares are up 3.6% after the infrastructure software company reported second-quarter results that beat expectations and gave an outlook. Analysts see the results as strong given a difficult backdrop.

Industrials 

 Cintas (CTAS) Rated New Neutral at Redburn; PT $670

General Dynamics (GD) Raised to Overweight at Morgan Stanley; PT $345

L3Harris (LHX) Cut to Equal-Weight at Morgan Stanley; PT $257

Mueller Water (MWA) Cut to Hold at TD Cowen; PT $20

ROAD - reports Q3 top/bottom beat. Low end of FY24 guide > consensus. Stock bid +3% pre-mkt.

Sealed Air (SEE) Cut to Hold at Jefferies; PT $35

Tetra Tech (TTEK) Chairman and CEO Dan Batrack discloses sale of 17.9K shares.

DAL - put out an 8K Thurs afternoon disclosing that the recent IT outage will subtract ~$380M from Q3 revenue while adding $170M in expenses and lowering fuel costs by ~$50MM

Credit spreads concerning

With the selloff in MegaTech, valuations down a lot, but still above 10yr median

While market looks for Fed cuts - a reminder, typically defensives lead early on

Reminder - when the Vix gets up here (above 28-29), really should hold your nose and buy

Rapid Review

Openwater Opinion