Stocks Undercut by Mixed Corporate News

The S&P 500 Index ($SPX) (SPY) is down -0.02%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.22%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.10%.

US stocks today are being undercut by mixed corporate news.  Insulet is down more than -9% after weaker-than-expected Q2 adjusted EPS.  Also, Elf Beauty is down more than -14% after forecasting 2025 adjusted EPS below consensus. In addition, Sealed Air Corp is down more than -5% after forecasting weaker-than-expected full-year adjusted EPS.

On the positive side, Akamai Technologies is up more than +10% after reporting Q2 adjusted EPS above consensus.  Also, Expedia Group is up more than +7% after reporting better-than-expected Q2 revenue.  In addition, Trade Desk is up more than +6% after reporting Q2 revenue above consensus and forecasting stronger-than-expected Q3 revenue.

Lower bond yields today are supportive of stocks.  Dovish comments from Boston Fed President Collins knocked bond yields lower and were supportive for stocks when she said, "If the data continue the way that I expect, I do believe that it will be appropriate soon for the FOMC to begin adjusting policy and easing how restrictive the policy is."

The market consensus is that Q2 earnings for the S&P 500 companies will rise +9% y/y.  More than half of the companies in the S&P 500 have reported thus far.  According to Bloomberg, most reporting companies have beaten their earnings consensus, but only 43% have beaten revenue expectations, the lowest percentage in five years.

The markets are discounting the chances at 100% for a -25 bp rate cut for the September 17-18 FOMC meeting and at 62% for a -50 bp rate cut at that meeting.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.22%.  China's Shanghai Composite closed down -0.27%.  Japan's Nikkei Stock 225 closed up +0.56%.

Interest Rates

September 10-year T-notes (ZNU24) today are up +12 ticks.  The 10-year T-note yield is down -5.6 bp at 3.932%.  T-note prices are higher on dovish comments from Boston Fed President Collins, who said Fed rate cuts will come “soon” if consumer prices keep falling.  Also, bond dealer short covering is boosting T-note prices as the dealers progressively lift short hedges they had in place for the August quarterly refunding operation held earlier this week. 

European government bond yields today are lower.  The 10-year German bund yield is down -4.5 bp at 2.222%. The 10-year UK gilt yield is down -4.9 bp at 3.929%.

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 99% for the September 12 meeting.

US Stock Movers

Insulet (PODD) is down more than -9% to lead losers in the S&P 500 after reporting Q2 adjusted EPS of 55 cents, below the consensus of 57 cents.

Intel (INTC) is down more than -2% to lead losers in the Dow Jones Industrials and Nasdaq 100 after Moody’s Ratings downgraded Intel’s senior unsecured debt rating to Baa1 from A3 and lowered its outlook to negative from stable. 

Sealed Air Corp (SEE) is down more than -5% after forecasting full-year adjusted EPS of$2.65-$3.05, the midpoint weaker than the consensus of $2.90. 

EchoStar (SATS) is down more than -12% after reporting Q2 revenue of $3,95 billion, weaker than the consensus of $3.98 billion. 

Elf Beauty (ELF) is down more than -14% after forecasting 2025 adjusted EPS of $3.36-$3.41, below the consensus of $3.42. 

Five9 Inc (FIVN) is down more than -29% after cutting its full-year revenue forecast to $1.013 billion-$1.017 billion from a previous forecast of $1.053 billion-$1.057 billion.

Mitek Systems (MITK) is down more than -31% after cutting its full-year adjusted operating margin estimate to 23%-25% from a previous estimate of 30%-31%. 

Akamai Technologies (AKAM)  is up more than +10% to lead gainers in the S&P 500 after reporting Q2 adjusted EPS of $1.58, better than the consensus of $1.55. 

Expedia Group (EXPE) is up more than +7% after reporting Q2 revenue of $3.56 billion, better than the consensus of $3.53 billion. 

Trade Desk (TTD) is up more than +6% to lead gainers in the Nasdaq 100 after reporting Q2 revenue of $585 million, stronger than the consensus of $578.4 million, and forecasting Q3 revenue of at least $618 million, above the consensus of $604.6 million. 

Eli Lilly (LLY) is up more than +4% after Leerink Partners raised its price target on the stock to $990 from $901.

Solventum (SOLV) is up more than +4% after boosting its full-year adjusted EPS forecast to $6.30-$6.50 from a previous forecast of $6.10-$6.40.

Paramount Global (PARA) is up more than +3% after reporting Q2 adjusted EPS from continuing operations of 54 cents, well above the consensus of 13 cents. 

Doximity (DOCS) is up more than +38% after raising its 2025 revenue forecast to $514 million-$523 million from a previous forecast of $506 million-$518 million, stronger than the consensus of $512.3 million. 

Sweetgreen (SG) is up more than +29% after reporting Q2 revenue of $184.6 million, above the consensus of $180.9 million, and raising its full-year revenue forecast to $670 million-$680 million from $660 million-$675 million, stronger than the consensus of $674.3 million. 

Earnings Reports (8/9/2024)

Dillard's Inc (DDS), Evergy Inc (EVRG), New Fortress Energy Inc (NFE).

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