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

MARKET LEVELS

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