A daily market update from FS Insight — what you need to know ahead of opening bell
“There’s always beauty, if you know where to look.” — Patrick Ness
Overnight
S&P 500 falls, snapping 8-day winning streak Barron’s
Dollar hits year’s low as traders prepare for rate cuts FT
Netflix stock marks record close; behind the rally Barron’s
China says ‘Please stop buying our bonds’ WSJ
Saudi wealth fund brings era of easy money to an end FT
Qatar Airways signals appetite for more deals after Airlink investment FT
E.U. to hit Teslas imported from China with 19% tariffs FT
Shein sues Temu for copyright infringement, says it’s an ‘unlawful enterprise’
Nvidia launches new GPU TR
Eli Lilly says Zepbound sharply reduces diabetes progression WSJ
Ozempic and Wegovy use among patients with depression needs more scrutiny, researchers say MW
Hilco Global, a Chicago-based liquidator of obsolete inventories, hunts for capital in push to build merchant bank FT
Citadel nabs Goldman tech chief in latest poach from Wall Street BBG
OpenAI inks multiyear deal with Condé Nast for its magazine brands’ content HR
Rocket explodes at Britain’s new Shetland spaceport FT
A nation of workaholics has a new fixation: working less WSJ
Ukraine passes law to ban ‘pro-Kremlin’ orthodox church FT
Chart of the Day
![Look Here, Not There](https://cdn2.fsinsight.com/wp-content/uploads/2024/08/image-345.png)
MARKET LEVELS
Overnight |
S&P Futures +2
point(s) (+0.0%
) Overnight range: -2 to +11 point(s) |
APAC |
Nikkei -0.29%
Topix -0.21% China SHCOMP -0.35% Hang Seng -0.69% Korea +0.17% Singapore +0.1% Australia +0.16% India +0.27% Taiwan -0.85% |
Europe |
Stoxx 50 +0.33%
Stoxx 600 +0.22% FTSE 100 +0.15% DAX +0.31% CAC 40 +0.29% Italy +0.39% IBEX +0.06% |
FX |
Dollar Index (DXY) +0.1%
to 101.55 EUR/USD -0.14% to 1.1114 GBP/USD -0.09% to 1.3022 USD/JPY +0.63% to 146.17 USD/CNY +0.09% to 7.1356 USD/CNH +0.23% to 7.1334 USD/CHF +0.15% to 0.8553 USD/CAD -0.07% to 1.3611 AUD/USD -0.1% to 0.6738 |
Crypto |
BTC -0.08%
to 59265.74 ETH -0.34% to 2581.08 XRP -0.03% to 0.5967 Cardano +2.18% to 0.3522 Solana -0.72% to 141.26 Avalanche +1.82% to 22.94 Dogecoin +0.1% to 0.1039 Chainlink +0.75% to 10.32 |
Commodities and Others |
VIX +1.32%
to 16.09 WTI Crude -0.88% to 73.39 Brent Crude +0.35% to 77.47 Nat Gas -0.55% to 2.19 RBOB Gas -0.01% to 2.256 Heating Oil +0.76% to 2.28 Gold -0.32% to 2506.02 Silver +0.38% to 29.55 Copper +0.53% to 4.181 |
US Treasuries |
1M -0.1bps
to 5.3074% 3M -2.2bps to 5.1473% 6M +2.1bps to 4.9293% 12M -0.0bps to 4.4258% 2Y +1.2bps to 3.9957% 5Y +0.7bps to 3.6943% 7Y +0.5bps to 3.728% 10Y +0.6bps to 3.8123% 20Y +0.6bps to 4.1797% 30Y +0.7bps to 4.0677% |
UST Term Structure |
2Y-3
M Spread widened 1.8bps to -117.8
bps 10Y-2 Y Spread narrowed 0.6bps to -18.8 bps 30Y-10 Y Spread widened 0.1bps to 25.4 bps |
Yesterday's Recap |
SPX -0.2%
SPX Eq Wt -0.4% NASDAQ 100 -0.24% NASDAQ Comp -0.33% Russell Midcap -0.66% R2k -1.17% R1k Value -0.44% R1k Growth -0.07% R2k Value -1.34% R2k Growth -1.0% FANG+ -0.09% Semis -1.31% Software +0.22% Biotech -0.02% Regional Banks -1.87% SPX GICS1 Sorted: Cons Staples +0.53% Healthcare +0.37% REITs +0.06% Comm Srvcs +0.03% Cons Disc -0.02% SPX -0.2% Utes -0.25% Indu -0.29% Tech -0.32% Fin -0.33% Materials -0.38% Energy -2.65% |
USD HY OaS |
All Sectors +7.1bp
to 377bp All Sectors ex-Energy +6.7bp to 351bp Cons Disc +7.4bp to 333bp Indu +5.8bp to 278bp Tech +7.6bp to 361bp Comm Srvcs +6.2bp to 650bp Materials +5.9bp to 352bp Energy +8.1bp to 302bp Fin Snr +7.1bp to 334bp Fin Sub +4.5bp to 244bp Cons Staples +5.9bp to 320bp Healthcare +9.5bp to 411bp Utes +6.9bp to 224bp * |
Date | Time | Description | Estimate | Last |
---|---|---|---|---|
8/21 | 2PM | Jul 31 FOMC Minutes | n/a | 1.0 |
8/22 | 9:45AM | Aug P S&P Manu PMI | 49.5 | 49.6 |
8/22 | 9:45AM | Aug P S&P Srvcs PMI | 54.0 | 55.0 |
8/22 | 10AM | Jul Existing Home Sales | 3.93 | 3.89 |
8/22 | 10AM | Jul Existing Home Sales m/m | 1.03 | -5.35 |
8/23 | 10AM | Jul New Home Sales | 625.0 | 617.0 |
8/23 | 10AM | Jul New Home Sales m/m | 1.3 | -0.6 |
8/26 | 8:30AM | Jul P Durable Gds Orders | 3.9 | -6.7 |
8/27 | 10AM | Aug Conf Board Sentiment | 99.55 | 100.3 |
MORNING INSIGHT
Good morning!
As we are rebranding our monthly webinar, we are introducing a new section of 5 top stock ideas:
- The new top stock ideas follow the similar methodologies we use to identify Super SMID Granny ideas
- Essentially, we aim to identify the most timely stock ideas by cross-referencing the trend analyses, quantamental works, and technical studies.
- In more detail, the framework is composed of 4 factors to narrow down to tactical buys:
– fundamentals, using the DQM model managed by “Tireless Ken”
– momentum rating-based weighted-average performance over the recent period
– technical strength measured by price >20 DMA, 20 DMA vs 200 DMA and combos
– Mark Newton’s judgement on technical outlook. - Click HERE for more.
TECHNICAL
Super SMID Granny Shots
Applovin – APP
-Rally back to challenge this past Spring’s highs might cause temporary resistance near $88.50, but the strength of this comeback since early August is intermediate-term bullish for APP, representing base-building that should eventually give way to a breakout back to $100, then $116
-Despite a lack of progress since May, APP has still risen nine out of the last 10 months, and looks well positioned to rally back to new all-time highs
-Pullbacks in September should be held near initial support at $85 and provide an appealing risk/reward opportunity.
Click HERE for more.
CRYPTO
Macro conditions have been ideal for a rally, yet BTC has struggled to break out, underperforming equities. We suspect government sales of 10k seized BTC are a major contributor to this relative weakness. However, we believe this pressure will ease soon, reducing the short-term bearish outlook. Additionally, we explore shifting trends in the presidential prediction markets.
Click HERE for more.
First News
Inconvenience in Store. The proposed takeover of 7-Eleven’s Japanese owner is likely to face major antitrust hurdles from both Washington and Tokyo. As the largest-so-far foreign takeover of a Japanese company, it would be a litmus test of the country’s commitment to corporate reforms aimed at holding up shareholders’ rights – and profits. It would also be another turn through the M&A spin cycle for Couche-Tard while writing yet another chapter in a years-old merger history. Semafor
Makers of Fun Pictures, Take Note. Japan’s content exports have surged in recent years, reaching 4.7 trillion yen. The rapid growth is driven by the skyrocketing global popularity of anime and manga. For comparison, Japan’s semiconductor industry exports 5.7 trillion yen’s worth in chips, while its steel industry exports 5.1 trillion yen’s worth. The content industry has risen to rival some of Japan’s core industrial heavyweights and the country’s government is keen to further nurture the global appeal of its native content. In some projections, the content industry could potentially eclipse the chips and steel sectors, and even approach the scale of Japan’s vaunted automotive industry, which boasts 13 trillion yen in exports. This may depend on such momentous factors like how long the final story arc of the hit anime series One Piece runs, and whether the legendary animator Hayao Miyazaki can be persuaded to step away from making yet another acclaimed animated film.
Speaking of the value of storytelling: while their rivals at Sony and Microsoft have frittered away a generation generating ever more vibrant screens and dynamic games, using the very best graphics-card technology (often made by a little-known company called Nvidia) to give their offerings the gloss of gob-smacking verisimilitude, Nintendo – a decidedly old-school outfit founded in 1889 by a craftsman and originally produced handmade playing cards – has quietly raked in over $10 billion in annual revenue recently despite offering decidedly untrendy, purposefully bare-bones graphics. Profit last year stood at $3.3 billion, well over Sony’s $2 billion, despite a mere $11.4 billion in revenue compared to Sony’s $29.1 billion. What’s the secret? Nintendo invests all in gameplay and embodied narrative, i.e. the action within the games, and leaves Nvidia-heavy pixel-wrangling to the rest. Nikkei Asia, Sherwood News
Space Race. Russia’s space industry has been facing financial challenges lately, operating at a loss and on track to launch the fewest number of rockets since 1961, the year of Yuri Gagarin’s historic spaceflight. Just this past Thursday, Russia conducted only its ninth orbital launch of 2023 from Kazakhstan’s Baikonur Cosmodrome, a stark decline compared to previous years. A major factor behind this drop in launch activity is the loss of Western customers, who’ve taken their business elsewhere following Russia’s invasion of Ukraine. Per Roscosmos, the Russian space agency, the cancellation of these international contracts came at a cost of 180 billion rubles (~$2.1 billion) to the organization. The Russian space industry is now facing the prospect of not breaking even financially until 2025, as it grapples with the aftermath of these lost launch contracts and the broader economic challenges stemming from Russia’s pariah status.
Speaking of a different kind of space, between 2009 and 2023, the total square footage of shelving in supercenters is down by 5%, while in supermarkets it’s fallen by 3.3%. The reduction in available shelf space has intensified the already fierce competition among brands and products vying for a spot on those shrinking retail aisles.
To manage the scarcity of shelf real estate, retailers have long charged brands so-called slotting fees – prices that must be paid to secure a product placement. While some popular brands avoid them through sheer ubiquitousness and negotiating power, the average company can expect to pay, on average, anywhere from $100 per item per store, up to five- or six-figure sums just to get their products onto the shelves. Ars Technica, WSJ
Clock the Police. The adoption of EVs by municipal police departments is happening faster than anticipated on the back of police officers’ growing appreciation of EV’s superior acceleration powers compared to traditional ICE vehicles. Tired of being outpaced by the instant torque of privately operated electric motors, many police departments have turned to models like the Tesla Model Y, drawn by its range and power. According to data published by the Michigan State Police’s precision driving unit, which evaluates vehicles for law enforcement nationwide, the Chevrolet Blazer EV and Ford Mustang Mach-E can go from 0 to 100 mph in just 11 seconds – half the time of gas-powered alternatives available to the police. The NYPD has already amassed a fleet of ~200 EVs, and the department’s chief fleet officer has reported maintenance cost savings of 60-70% compared to the gas-powered patrol cars.
This comes in stark contrast with the experience of Herz, which recently saw its CEO resign while it’s selling off 30,000 EVs this year, due to punishingly high repair-and-maintenance costs, after posting a loss of $392 million in Q1 2024. What’s the catch? One explanation is that the police both drives more carefully than car renters and has mechanics who are better at preventive and timely maintenance. No word on the Amalgamated Policemen’s Union issuing stock. The Atlantic