US Open: Wall Street rebounds after macro readings, US100 surges 1,3%

• Wall Street rebounds, US100 gains 1%, BigTech companies return to favor today
• US CPI inflation lower than forecast, claims rose - market sees lower chances of another Fed rate hike
• Tapestry (TPRY.US) shares lose 12% - the company is close to acquiring Versace, Michael Kors and Jimmy Choo owner Capri Holdings (CPRI.US), for $8.5 billion, the holding company's shares gain 56% today
• Disney (DIS.US) shares rise 2% despite mixed Q2 results.

A higher-than-forecast number of applications for unemployment benefits - with inflation remaining subdued - pleased the bulls with the prospect of a less hawkish Federal Reserve. Earlier market speculation pointed to a potential rebound in inflation so today's report was received all the more optimistically. At the same time, the labor market continues to remain strong, with low unemployment (the number of continuing applications also fell) - in principle, this is good for the stock market. The indexes have erased a good portion of the recent sell-off, especially seen in the Nasdaq - which has been heavily oversold lately. The market gave a 13% chance of a Fed hike at the September meeting and about 35% at the November meeting. Those numbers dropped to 7.5% and 27%, respectively, after today's macro data reading. 

Claims and inflation in the US

• CPI inflation: Current:  3.2% y/y exp. 3.3% y/y; Previously 3.0% y/y
• CPI inflation: Current: 0.2% m/m exp. 0.2% m/m; Previously 0.2% m/m
• Core inflation: Currently:  4.7% y/y exp. 4.8% y/y; Previously 4.8% y/y
• Core inflation: Currently: 0.2% m/m exp.  0.2% m/m; Previously 0.2% m/m
• Number of US unemployment claims: 248 k exp. 230 k (227 k previously)
• Continuing claims: 1.684 million exp. 1.7065 million (1.70 million previously)

U.S. CPI inflation was 3.2% y/y, core inflation fell to 4.7% y/y. Monthly growth was 0.2% m/m in line with expectations. The rebound was mainly related to a lower base from last year. Source: xStation5 Claims in the U.S. are still performing strongly but show a slow, upward trend - characteristic of the onset of recessions in the past (gray bars). Source: xStation5

S&P500 companies, size reflects market capitalization. Optimism is widespread in the market today. Source: xStation5

The Nasdaq100 Index (US100) managed to recover a good portion of its losses and is approaching 15,500 points, where we see the SMA200 (red line) - at the same time, the RSI indicator is approaching the overbought zone. Source: xStation5

Disney (DIS.US) shares are up 2% even though the company reported lower-than-forecast revenue, with earnings per share down y/y. Earnings per share fell y/y despite $500 million lower y/y cash 'burn' at Disney+ and strong results from theme parks. The number of subscriptions at Disney+ came in well below forecasts due to subscriber churn in India, where the company halted the broadcast of its popular cricket league. EPS only slightly beat forecasts. The market seems to appreciate CEO Bob Iger's contribution and is positive about cost reductions - Iger conveyed that the company may manage to save more than the expected $5.5 billion this year. Investors are also evaluating the company's decision to increase Disney+ subscriptions by 27%, and Netlix's 'inspired' plan to combat password sharing. Both decisions could herald faster streaming profitability, at the expense of lower subscriber numbers.Disney (DIS.US) shares are trying to break the stagnation and exit the downtrend. Source: xStation5

News from companies

• Illumina (ILMN.US) shares are losing - the DNA sequencing company lowered its full-year adjusted earnings per share and revenue guidance. 
• Magnite (MGNI.US) shares lose after the marketing company reported its weaker Q2 earnings and growth outlook, which disappointed Wall Street
• Mirati Therapeutics (MRTX.US) gains as Citi raised its rating on the company to "buy" from "neutral," indicating an attractive earnings-to-risk ratio
• Shares of Penn Entertainment (PENN.US) are retreating because the sports entertainment company was downgraded to a hold from a buy by Truist - the bank indicated it sees significant risk regarding its partnership with ESPN, a Disney brand.
• Plug Power (PLUG.US) shares lose nearly 12% as the green hydrogen company reported results with margins below forecasts; Morgan Stanley indicated that gross margin was -30%
• Capri Holdings (CPRI.US) - a company with luxury brands like Versace and Jimmy Choo gains 56% after agreeing to be purchased by Coach Tapestry for a total value of about $8.5 billion. Tapestry (TPR) shares, meanwhile, are losing 6.2%.
• Certara (CERT.US) shares are losing 12% as analysts lowered their recommendations, pointing to challenges in the services industry. Additionally, the company's Q2 revenue fell short of Wall Street expectations