- Data from jobless claims and wholesaler stocks supported gains on Wall Street; fears of recession eased
- VIX volatility index loses nearly 10%; Wall Street indexes gain, on wave of rebound in technology companies
- Strong gains at Eli Lilly, after great quarterly results; sell-off at Monster Beverage and McKesson
- Nvidia gains just over 1%; Super Micro Computer deepens yesterday's 20% sell-off by nearly 1.5%
Today's Wall Street sentiment is noticeably better, although we are not seeing euphoria in the stocks of the largest, technology companies and the 1% rise in Nvidia shares still looks relatively low given the magnitude of recent declines, including those of yesterday's session, when the stock once again dived below $100. Recession fears fell after jobless claims came in at 233,000 versus 240,000 forecast and 249,000 previously. At the same time, continuing jobless claims are the highest since the summer of 2021. US wholesale inventories came in line with expectations in 0.2% monthly vs 0.2% in June, but wholesales trade sales plunged -0.6% monthly in July vs 0.3% exp. and 0.4% previously.
Today we are seeing another attempt to unwind yesterday's declines, almost all S&P 500 shares gain. Semiconductor manufacturers and Big Tech companies are gaining. Source: xStation5
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Options market bets indicate that traders are keeping a stronger eye on the 5000-point area, where the 200-session average of the S&P 500 index runs, and volume is accumulating there. Futures quotes are trying to break above the 23.6 Fibonacci retracement (5300 points zone) of the August 5, 2024 upward wave. We see a volume advantage on the side of buyers, who are clearly more active today.
Source: xStation5
Company news
- Piper Sandler analysts lowered Monster Beverage's target price to $46 per share from $59 previously. In the second quarter, the company's sales, priced at a premium to its competitors, rose 2% y/y and earnings per share (EPS) rose 5% y/y, disappointing Wall Street forecasts
- Lumen Technologies (LUMN.US) is trading down more than 20%, after a recent series of exponential increases supported by new investments in fiber optic networks needed for data centers and AI.
- McKeeson (MCK.US) CEO Brian S. Tyler sold 3753 shares worth $2.3 million. The company's quarterly results fell short of expectations, leading the stock price to fall from historic highs. The stock is losing nearly 10% today. Weaker sales indicate that demand for the healthcare giant's solutions is slowing. Barclays, however, expects earnings per share growth of 10% in 2024 and has raised its target price by $20 to $616 per share. The company intends to pay a $15 dividend per share and has authorized a share buyback program of another $4 billion. Revenues rose 6% y/y to $79.2 billion vs. $82.5 billion forecasts (expected 11% y/y growth); earnings per share rose 8% y/y to $7.88 vs. $7.21 forecasts (expected 1% y/y decline). The company raised full-year earnings per share expectations to $31.75, $0.5 higher than last. and higher than analysts' forecasts of $31.74.
- Shares of Warner Bros Discovery (WBO.US) dived more than 10% today. Investors expected $10.07 billion in revenue, the company reported $9.27 billion. Loss per share was $0.36 against $0.22 forecasts. The media giant booked a goodwill write-down of $9.1 billion due to its faltering TV network business, which will require a major transformation. In the second quarter, the company repaid $1.8 billion in debt, which still stands at more than $41.4 billion against the $3.6 billion in cash the company holds.
Warner Bros Discovery shares (D1 interval)
Following weak results, Warner Bros. shares are down to historical lows, below $7 per share.
Source: xStation5
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