| | | Market Snapshot
| Dow | 44173.64 | +585.06 | (1.34%) | | Nasdaq | 21052.20 | +403.45 | (1.95%) | | SP 500 | 6329.94 | +91.93 | (1.47%) | | 10-yr Note |
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| | NYSE | Adv 2245 | Dec 500 | Vol 1.09 bln | | Nasdaq | Adv 3447 | Dec 1095 | Vol 7.38 bln |
Industry Watch
| Strong: Information Technology, Communication Services, Utilities, Materials |
| | Weak: Energy |
Moving the Market
Strong performance in mega-cap names leading the rebound from Friday's lows
Increasing probability of a 25-basis-point September rate cut now standing at 85.5%
Steady mechanical trade unfolding following this morning's "buy the dip" action
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Major averages mount solid start to rebound effort
04-Aug-25 16:25 ET
Dow +585.06 at 44173.64, Nasdaq +403.45 at 21052.20, S&P +91.93 at 6329.94
[BRIEFING.COM] A healthy dose of "buy the dip" optimism propelled the stock market to sound opening gains, while a lack of developments on the trade front or elsewhere helped the major averages carry the bulk of these gains through to the close.
Broad-based buying interest saw ten S&P 500 sectors close in positive territory, with the communication services (+2.6%), utilities (+1.7%), information technology (+2.2%), materials (+1.4%), and health care (+1.3%) sectors all finishing with gains above 1.0%.
Gains in the communication services and information technology sectors were underpinned by strong leadership in their mega-cap components. NVIDIA (NVDA 180.00, +6.28, +3.6%), Alphabet (GOOG 195.75, +5.80, +3.1%), Meta Platforms (META 776.37, +26.36, +3.5%), and Microsoft (MSFT 535.64, +11.53, +2.2%) all did their part in leading a rebound from Friday's retreat.
Tesla (TSLA 309.26, +6.63, +2.2%) also captured a nice gain following reports of a lucrative new compensation package for CEO Elon Musk, though a weaker showing from Amazon (AMZN 211.65, -3.10, -1.4%) limited the growth of the consumer discretionary sector.
While mega-cap stocks provided much of the early buzz, stocks of all sizes advanced today, and small-cap stocks actually outperformed the broader market. The Russell 2000 posted a gain of 2.0%, while the S&P Mid Cap 400 added 1.2%.
Breadth figures were decidedly positive, with advancers outpacing decliners by a greater than 5-to-1 ratio on the NYSE and a greater than 3-to-1 ratio on the Nasdaq.
The only notable point of weakness came in the energy sector (-0.4%), which faced pressure amid a 1.6% decrease in oil prices to $66.28 per barrel after OPEC+ agreed to increase its output by 547,000 bpd in September.
For the most part, stocks rebounded nicely from Friday's lows, and while a lack of headlines helped preserve the early gains, the market will have trade developments to navigate ahead of the new August 7 deadline for several key partners.
The market also anticipates a heavy week of earnings reports, with this morning's reports just a fraction of the companies set to report. Commscope (COMM 14.49, +6.70, +86.0%), which also sold its Connectivity and Cable Solutions to Amphenol (APH 108.63, +4.32, +4.1%) for $10.5 billion in cash, Energizer (ENR 28.06, +5.92, +26.7%), and Wayfair (W 73.54, +8.32, +12.8%) all scored big gains following their earnings reports.
Another session like today could see the S&P 500 (+1.5%) and Nasdaq Composite (+2.0%) challenge record high levels from last week, but the market will have more developments to navigate this week to establish today's advance as a continuing trend.
U.S. Treasuries began the week on a modestly higher note, padding their big, post-NFP gains from Friday. The 2-yr note yield slipped two basis points to 3.68%, while the 10-year note yield settled down two basis points to 4.20%
- Nasdaq Composite: +9.0% YTD
- S&P 500: +7.6% YTD
- DJIA: +3.8% YTD
- S&P Mid Cap 400: +0.7% YTD
- Russell 2000: -0.8% YTD
Reviewing today's data:
- Factory orders slumped 4.8% month-over-month in June (Briefing.com consensus: -5.1%) following an upwardly revised 8.3% increase (from 8.2%) in May. Excluding transportation, factory orders increased 0.4% month-over-month following a 0.3% increase in May. Shipments of manufactured goods jumped 0.5% on the heels of a 0.2% increase in May.
- The key takeaway from the report is that the weakness in factory orders in June was largely concentrated in transportation equipment orders, so the headline isn't as bad as it appears at first blush; however, some extra attention will be paid next month to new orders for nondefense capital goods excluding aircraft—a proxy for business spending—to see if the weakness in June (-0.8%), which followed a 1.9% increase in May, persists.
Solid start to earnings heavy week
04-Aug-25 15:25 ET
Dow +586.13 at 44174.71, Nasdaq +384.23 at 21032.98, S&P +87.25 at 6325.26
[BRIEFING.COM] The S&P 500 (+1.4%), Nasdaq Composite (1.9%), and DJIA (+1.3%) trade in a tight range near session highs as the market enters the final half hour of trading.
Broad-based buying interest pushed many stocks to early gains, and there has been a lack of economic data or trade developments to distract from the early advances.
While this morning's batch of earnings reports was not as heavy as those to come this week, there are still some notable movers.
Energizer (ENR 27.94, +5.80, +26.2%), Wayfair (W 73.62, +8.40, +12.9%), and Freshpet (FRPT 70.95, +5.10, +7.74%) all trade higher after beating EPS expectations, while shares of Commscope (COMM 14.68, +6.89, +88.5%) surged following a healthy EPS beat, raised guidance, and a definitive agreement to sell its Connectivity and Cable Solutions segment to Amphenol (APH 108.11, +3.80, +3.64%) for $10.5 billion in cash.
Energy sector lags
04-Aug-25 15:05 ET
Dow +508.41 at 44096.99, Nasdaq +369.73 at 21018.48, S&P +81.14 at 6319.15
[BRIEFING.COM] The major averages remain little changed from their opening highs as the market looks to close today's session on a definitively higher note.
Breadth figures still favor advancers over decliners by a greater than 5-to-1 ratio on the NYSE and a greater than 3-to-1 ratio on the Nasdaq, while ten sectors continue to trade in positive territory.
The energy sector (-0.6%) is the sole decliner, with its losses modestly widening throughout the session. The sector faces pressure from a lower price of oil after OPEC+ agreed to increase its output by 547,000 bpd in September. The price of crude oil is down $1.24 to $66.09, returning to its 50-day moving average (66.58).
Meanwhile, the communication services sector (+2.5%) broadens its gains as the day's best-performing S&P 500 sector, with strong performances in Meta Platforms (META 775.64, +25.64, +3.4%) and Alphabet (GOOG 195.76, +5.81, +3.1%) underpinning the gains.
S&P 500 climbs 1.3% as IDXX soars on earnings; ON tumbles on weak outlook
04-Aug-25 14:25 ET
Dow +377.65 at 43966.23, Nasdaq +497.15 at 21145.90, S&P +81.81 at 6319.82
[BRIEFING.COM] The S&P 500 (+1.31%) is in second place on Monday afternoon, up more than 80 points.
Briefly, S&P 500 constituents IDEXX Labs (IDXX 676.01, +140.47, +26.23%), Williams-Sonoma (WSM 198.58, +10.91, +5.81%), and Monolithic Power (MPWR 830.64, +45.02, +5.73%) pepper the top of the standings. IDXX is far and away the best performer in the average today, after delivering a strong Q2 earnings beat and raising full-year guidance well above consensus, driven by accelerating demand for its new veterinary diagnostics technologies.
Meanwhile, onsemi (ON 49.28, -7.54, -13.27%) slides to the bottom of the average after issuing a tepid Q3 outlook that suggests only modest sequential growth, disappointing investors hoping for a stronger recovery in its core automotive and industrial markets.
Gold extends rally on soft jobs data, Fed cut bets, and dollar slide
04-Aug-25 14:00 ET
Dow +464.09 at 44052.67, Nasdaq +373.67 at 21022.42, S&P +79.05 at 6317.06
[BRIEFING.COM] The Nasdaq Composite (+1.81%) is near HoDs, in first place among the major averages with about two hours to go on Monday.
Gold futures settled $26.60 higher (+0.8%) at $3,426.40/oz, extending last week's rally after weaker-than-expected July jobs data increased interest for a Federal Reserve rate cut in September. The softer labor print pulled Treasury yields lower and pressured the dollar, both of which supported gold. Risk sentiment was also dampened by growing uncertainty around U.S. tariff policy and the independence of government economic data, adding to the metal's safe-haven appeal.
Meanwhile, the U.S. Dollar Index is down -0.4% to $98.73.
Wayfair sharply higher after Q2 results, really seems to have turned a corner on turnaround
Wayfair (W +11%) is trading sharply higher today after reporting its Q2 results this morning. This home furnishings retailer reported its largest EPS beat in 7 quarters. Revenue grew 5% yr/yr to $3.27 bln, which marks its highest growth rate since early 2021. Just as encouraging, after not providing quarterly revenue guidance last quarter, W provided Q3 revenue guidance, with revenue expected to grow low-to-mid single digits. Revenue has been down low single-digits to flat yr/yr over the last six quarters, so investors are encouraged to see that management is confident in maintaining current growth.
- Revenue growth was driven by strong performance across all of W's brands and geographies. Its US business was up over 5% yr/yr, a nice acceleration from 1.6% in Q1. Its international segment was up 3% yr/yr, showcasing the momentum W is seeing in Canada, UK, and Ireland following the closure of its German business. Additionally, order growth was up 10% sequentially despite the complex operating backdrop.
- The nice step up in order and the top-line growth is partially from W's long-cycle initiatives, including Wayfair Verified, Wayfair rewards and Wayfair's new retail locations. Wayfair verified gives customers a catalog of items that reflect a higher quality than others. These items have converted over 25% better and have generated higher repeat purchasing behavior compared to non-verified items.
- Wayfair rewards is also leading to more direct traffic. W has seen the largest number of installs since 4Q20, and the percentage of US revenue from the app continues to climb steadily to all-time highs.
- May marked one year of W's first large format store in the Chicago DMA. While W noted that the sales halo in the metro area has been significant, the impact on categories where W is less known for is even more pronounced. For example, W saw over a 50% increase in lower ticket purchases like kitchen accessories, and a more than 35% increase in home improvement purchases, like bathroom renovations or kitchen cabinets.
- CastleGate, W's inbound logistics and ocean freight operations, continues to be a bright spot. W saw a 40% yr/yr increase in total volume through its CastleGate network, as it helps keep suppliers fulfillment costs down. The percentage of revenue that comes from products shipped out of W's fulfillment centers (CastleGate penetration) was roughly 25%, up around 400 bps yr/yr.
Overall, this was a great quarter for W. While its largest EPS beat in 7 quarters is encouraging, investors are also pleased to see W report its highest revenue growth in 4 years. W's initiatives like the recent opening of its retail stores and CastleGate networks are clearly driving results. W really seems to have turned a corner after having negative to flat top-line growth over the last six quarters.
Freshpet heads nicely higher despite guidance cut, which was less-than-feared (FRPT)
Freshpet (FRPT +8.5%) is trading nicely higher following its Q2 earnings report this morning despite some rough spots. The best part was that this supplier of refrigerated, premium dog and cat food reported a big EPS beat on a GAAP basis. However, revenue was a bit light and, more troubling, FRPT lowered its FY25 revenue guidance to +13-16% from +15-18% while reaffirming adjusted EBITDA guidance at $190-210 mln.
- Freshpet concedes it's facing a more challenging consumer sentiment backdrop. However, the silver lining is that it continues to significantly outperform the dog food category. FRPT has been accelerating its advertising and distribution programs, reducing cap-ex (FY25 guidance lowered to $175 mln from $225 mln), and strengthening its operations, which has driven a healthy improvement in adjusted gross margin.
- Looking back over the past six months, FRPT says it's now apparent that the dog food category has faced a sizable headwind for the first time in years. FRPT is being impacted by consumers hesitating to trade up their dog food, defer visits to the vet, decline medical treatments for their pets, and defer getting a new dog or replacing a recently deceased dog. Return to office mandates and the high cost of housing have not helped either.
- In order to attract more value buyers, Freshpet is looking to expand its presence in the warehouse club channel. It recently expanded its test in a leading club retailer and is now in 125 stores with more likely to be added. Also, FRPT is launching a new complete nutrition bag product and rolling out new multi packs and bundles of rolls and bags later this year. It also offers subscriptions, which provide lower prices.
- In terms of the lowered FY25 revenue guidance, FRPT is assuming macro and consumer uncertainty stays relatively the same. In terms of cadence, FRPT expects a sequential increase in sales per quarter as it invested more heavily in media in Q2 to drive household penetration growth in the second half. FRPT will be launching a new marketing campaign, adding more value-oriented offerings in the fall, and expects to increase distribution.
- Looking longer out, the company removed its $1.8 bln prior target for FY27 sales, to adjust for the recent slower growth; however, it still expects to continue to deliver growth significantly in excess of the dog food category. At the same time, FRPT expects FY26 cap-ex will be the same or lower than FY25. The majority of cap-ex spend is focused on the installation of new capacity to support demand in the out years.
So why is the stock higher despite the lowered FY25 guidance? The stock has been weak and a lot of bad news has been priced in. We think investors were already bracing for a guidance cut and were relieved the cut was not more severe. The common wisdom is that consumers tend to continue to spend on their pets even in times of economic hardship. However, that rule is clearly not absolute. Freshpet is on the high end of the pet food price spectrum and attracting new customers in this macro environment is becoming more difficult given its position as a premium brand. We like the steps FRPT is taking in terms of value-packs and subscriptions, but near term results are likely to remain pressured.
Amazon pulls back despite upside; AWS was a bit lackluster compared to Azure and Google Cloud (AMZN)
Amazon (AMZN -9%) is pulling back pretty sharply despite reporting strong upside with its Q2 report. AMZN reported its fifth consecutive $0.20+ EPS beat while revs jumped 13.3% yr/yr to $167.7 bln, its strongest yr/yr growth since 4Q23. AMZN also provided upside revenue guidance for Q3. Despite all of this, it seems investors are a bit letdown by its AWS segment. It is growing nicely, but not the gangbusters we are seeing from peers Azure and Google Cloud.
- Let's start with the Stores segment. AMZN saw growth of +11% CC in North America to $100.1 bln, an acceleration from +8% CC in Q1. International sales surged 16% yr/yr to $36.8 bln. However a lower dollar helped there. Growth was +11% CC, but still a nice improvement from +8% CC in Q1. AMZN says it has not yet seen diminishing demand surrounding tariff concerns, but a lot is still unknown.
- Amazon AWS segment sales rose 17.5% yr/yr to $30.87 bln with growth in both its generative AI business and non-generative AI offerings as companies turned their attention to newer initiatives, bring more workloads to the cloud etc. However, it sounds like analysts were a bit disappointed in the growth from AWS. Just this week, we saw +39% CC growth from Azure and Google Cloud reported +32% revenue growth last week.
- When asked why the #2 and #3 players were growing more, AMZN noted it has a meaningfully larger business with its AWS segment. AMZN also said it varies by quarter, sometimes AWS is growing faster. These are all really just moments in time. AWS also said it has better operational performance, in terms of availability, durability, latency etc. AMZN explained that AWS has more demand than capacity right now, so it could be doing more revenue. AMZN also says its AWS segment currently has a $123 bln annual run rate, yet it's still early in this industry and AMZN remains very bullish.
- Turning to Advertising Services, segment revenue grew +22% CC to $15.69 bln, an acceleration from +19% CC in Q1, +18% CC in Q4, +19% CC in Q3. Growth was driven by sponsored products as it saw strong traffic in its Stores. AMZN also recently announced a momentous partnership with Roku, giving advertisers access to 80 mln connected TV households. It also announced an integration between Disney's Real-Time Ad Exchange and Amazon DSP.
Overall, the headline numbers were very good, but investors are getting hung up on the somewhat lackluster AWS growth. We just saw a report this week from Microsoft (MSFT) and last week from Alphabet (GOOG). Their Azure and Google Cloud units were just rocking the top line growth. In fairness, AWS is larger so it's tougher to grow at same amounts, but still. Investors were not as impressed with AWS as its peers and this is weighing on shares.
Boot Barn Holdings takes strong first step into FY26 with upside JunQ, SepQ off to a good start
Boot Barn Holdings (BOOT) is trading higher today after reporting its Q1 (Jun) results last night. This western apparel and boot company bounced back nicely following a miss in Q4 (Mar) to report its largest EPS over the last year. Revenue increased a healthy 19.1% to $504 mln, which was above analyst expectations. Additionally, the company issued upside revenue guidance for Q2 (Sep). What tells us management is confident going forward is it raised its FY26 revenue guidance to $2.10-2.18 bln, following downside guidance last quarter at $2.07-2.15 bln.
- From a merchandising perspective, BOOT saw broad-based growth across all categories, led by its ladies' Western boots and apparel businesses, which comped in the positive mid-teens. Its men's Western boots and apparel business comped in the positive high single digits. On a consolidated level, same store sales grew a healthy +9.4%, a nice acceleration from +6.0% in Q4.
- Its denim business was particularly strong in the quarter, with comps in the positive high teens. Despite the strong comps in many of its merchandising categories, management felt that denim was worth calling out, as it is a standout category for the company and states that the company is "going to be a denim destination."
- We saw similar denim strength from peer Levi Strauss (LEVI) when it reported its Q2 (May) results earlier in July. LEVI reported high single digit comps and upside results for Q2. Importantly, the two companies share a higher price point, so the robust comp growth is an encouraging sign to investors despite lower consumer confidence.
- In terms of tariffs, its pricing strategy remains consistent with the previous quarter. It has seen price increases from vendors, which is reflected in the new MSRP of its apparel. For its exclusive brands, BOOT is holding off on price increases to gauge price elasticity. With that said, it provided some nice color for the start of Q2, noting that it continues to see strength across its categories. Same store sales increased +11.7% in the month of July.
Overall, BOOT's start to FY26 was encouraging with nice upside results and raised FY26 revenue guidance. While its results were driven by strength in all its merchandising categories, its denim category was a particular standout. Given its higher price point, it is nice to see the robust growth in comp sales, which is similar to what we saw with LEVI. The company deserves credit for performing well despite the lower consumer confidence.
Roku's Q2 upside overshadowed by slower Q3 Platform growth guidance and margin concerns (ROKU)
Roku’s (ROKU) Q2 earnings report showcased a solid beat on EPS and revenue expectations while the streaming company also guided Q3 revenue to $1.2 bln, slightly above consensus estimates. However, the stock is facing sharp selling pressure post-earnings, driven by a combination of lower Platform segment gross margins, a modest slowdown in anticipated Q3 growth, and persistent concerns over profitability and elevated valuation multiples. These factors overshadowed the upside results, reflecting investor skepticism about ROKU’s ability to sustain growth while addressing margin compression and achieving consistent profitability.
- The Platform segment, ROKU’s primary growth engine, delivered a solid performance with revenue climbing 18% yr/yr to $975 mln, fueled by strength in video advertising and the strategic acquisition of Frndly, which bolstered subscription revenue. Key growth drivers included ROKU’s efforts to diversify ad demand through deeper integrations with third-party demand-side platforms (DSPs) and enhanced programmatic advertising capabilities, leveraging first-party data to improve advertiser ROI.
- However, Platform gross margin declined 2.3 percentage points to 51.0%, primarily due to higher content distribution costs and investments in ad tech infrastructure. This margin compression raised concerns about the scalability of ROKU’s high-growth strategy, particularly as competitive pressures in the streaming ad market intensify.
- For Q3, ROKU guided Platform revenue growth to 16%, a step-down from Q2’s 18%, signaling a slight deceleration that tempered investor enthusiasm. The company also projected FY25 Platform gross margin at approximately 52%, down from 53.5% in FY24, reflecting ongoing investments in content and ad technology alongside competitive pricing pressures. This guidance disappointed investors expecting stronger margin expansion.
- ROKU remains unprofitable on a GAAP operating income basis, posting an operating loss of $23.3 mln in Q2, though this marked a significant improvement from the $71.2 mln loss in 4Q24. Despite positive free cash flow of $392 mln (TTM basis) and better expense control, ongoing operating losses continue to weigh on investor sentiment. The persistent gap between revenue growth and bottom-line improvement underscores the challenges of scaling a platform business in a competitive and cost-intensive market.
ROKU capitalized on a healthy advertising market in Q2, a tailwind likely to persist into Q3, supporting its platform-driven growth. However, concerns over declining Platform margins, a modest growth slowdown, and ongoing profitability challenges are overshadowing the upside results, driving the sharp post-earnings sell-off.
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