Market Snapshot
| Dow | 44922.27 | +10.45 | (0.02%) | | Nasdaq | 21313.57 | -314.82 | (-1.46%) | | SP 500 | 6411.37 | -37.78 | (-0.59%) | | 10-yr Note |
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| | NYSE | Adv 1541 | Dec 1193 | Vol 967.79 mln | | Nasdaq | Adv 1566 | Dec 2944 | Vol 8.49 bln |
Industry Watch
| Strong: Real Estate, Consumer Staples, Materials, Health Care, Utilities, Materials, Financials |
| | Weak: Communication Services, Information Technology, Energy, Consumer Discretionary, |
Moving the Market
The market eagerly anticipates Fed Chair Powell's Friday speech
July Housing Starts data boasts encouraging headline figure but weakness in single-unit starts and permits
Mega-cap underperformance weighing on the market
| Market retreats on mega-cap weakness
19-Aug-25 16:35 ET
Dow +10.45 at 44922.27, Nasdaq -314.82 at 21313.57, S&P -37.78 at 6411.37
[BRIEFING.COM] The stock market pulled back today as sharp losses in mega-cap and technology names outweighed strength in blue-chip stocks, which had briefly lifted the DJIA (flat) to a record high of 45,207.39 before retreating. The S&P 500 (-0.6%) also retreated today after a brief stint above its baseline, and the tech-heavy Nasdaq Composite (-1.5%) never saw positive territory.
Losses today were not particularly widespread. The information technology (-1.8%), communication services (-1.2%), consumer discretionary (-0.4%), and energy (-0.2%) sectors were the only sectors that retreated, but a clear trend of mega-cap underperformance had an outsized effect on the market.
The technology sector finished as the worst-performing S&P 500 sector, facing significant pressure in its largest chipmaker components, NVIDIA (NVDA 175.64, -6.37, -3.50%) and Broadcom (AVGO 294.91, -10.85, -3.55%), while Microsoft (MSFT 509.77, -7.33, -1.42%) and Apple (AAPL 230.56, -0.33, -0.14%) also lost ground. Today's losses trimmed the sector's month-to-date gains to a meager 0.2%.
A strong showing from Intel (INTC 25.31, +1.65, +6.97%), after news that Softbank Group made a $2 billion investment in the company, was not enough to markedly improve the technology sector or the PHLX Semiconductor Index, which finished with a 1.6% loss.
Weakness in Meta Platforms (META 751.48, -15.89, -2.07%) and Alphabet (GOOG 202.49, -1.80, -0.88%) kept the communication services sector below its baseline for the entirety of the session, while Tesla (TSLA 329.31, -5.85, -1.75%) and Amazon (AMZN 228.01, -3.48, -1.50%) erased an early gain in the consumer discretionary sector.
The Vanguard Mega Cap Growth ETF retreated 1.6%. Meanwhile, the S&P 500 Equal Weighted Index (+0.4%) outpaced the market-weighted S&P 500 (-0.6%).
Separately, the energy sector saw a modest loss as crude oil futures settled 1.6% lower at $61.77 per barrel.
While the major averages closed with losses after a steady retreat, a solid performances across several other sectors mitigated some of the pressure the mega-caps created. The real estate (+1.8%), utilities (+1.0%), consumer staples (+1.0%), health care (+0.4%), materials (+0.5%), financials (+0.2%), and industrials (+0.2%) sectors closed with gains.
Sector performance indicates a rotation in play. Money was taken off the table, but not all of it left the room. Investors turned to more defensive stocks ahead of Fed Chair Powell's Friday address at the Jackson Hole Symposium.
A proclivity to protect against risk today also left small-cap stocks overlooked, with the Russell 2000 retreating 0.9%.
Additionally, the DJIA (flat) outperformed the S&P 500 (-0.6%) and Nasdaq Composite (-1.5%), aided by the positive response to Home Depot's (HD 407.14, +12.44, +3.15%) earnings report, which featured an earnings miss but a reaffirmation of the fiscal year outlook. Lowe's (LOW 256.36, +5.47, +2.18%), Target (TGT 105.36, +0.41, +0.39%), and TJX (TJX 134.62, +1.56, +1.17%) are set to report their earnings before the open tomorrow.
On the geopolitical front, Politico reported that the White House is planning a trilateral meeting between Presidents Trump, Putin, and Zelensky in Budapest, though the market has still largely ignored developments on this topic.
U.S. Treasuries climbed on Tuesday, reclaiming their modest losses from the start of the week. The 2-year note yield settled down two basis points to 3.75%, and the 10-year note yield settled down four basis points to 4.30%.
- Nasdaq Composite: +10.4% YTD
- S&P 500: +9.0% YTD
- DJIA: +5.6% YTD
- S&P Mid Cap 400: +2.1% YTD
- Russell 2000: +2.1% YTD
Reviewing today's data:
- Housing starts increased 5.2% month-over-month in July to a seasonally adjusted annual rate of 1.428 million units (Briefing.com consensus: 1.311 million), with single-unit starts up 2.8% and multi-unit starts up 9.9%. Building permits decreased 2.8% month-over-month to a seasonally adjusted annual rate of 1.354 million units (Briefing.com consensus: 1.390 million), with single-unit permits up 0.5% and multi-unit permits down 8.2%.
- The key takeaway from the report is that there wasn't much strength in single-unit starts or permits, which is relatively disappointing in the context of a housing market that needs more affordable, single-family homes for sale. In fact, single-unit starts were down in all regions except the South (+13.2%).
Market poised for lower finish
19-Aug-25 15:25 ET
Dow -42.16 at 44869.66, Nasdaq -334.34 at 21294.05, S&P -44.50 at 6404.65
[BRIEFING.COM] As the market enters the final half hour of the session, the major averages continue their steady retreat, charting new lows for the day.
While there was a fair share of stock-specific headlines today, none were influential enough to steer the market off of its downward path.
Politico reports that the White House is planning a trilateral meeting between the presidents of the U.S., Russia, and Ukraine in Budapest. The developments around the war in Ukraine have done little to sway the market, but a definitive end to the conflict could be seen as a positive, though this is likely still some time away.
Additionally, the market will look to several big box retailers' earnings reports before the open tomorrow for inspiration, with Lowe's (LOW 255.96, +5.08, +2.02%), TJX (TJX 134.47, +1.41, +1.06%), and Target (TGT 105.15, +0.20, +0.19%) set to report.
Major averages at session lows
19-Aug-25 14:55 ET
Dow -62.24 at 44849.58, Nasdaq -314.76 at 21313.63, S&P -43.00 at 6406.15
[BRIEFING.COM] The S&P 500 (-0.7%), Nasdaq Composite (-1.5%), and DJIA (-0.2%) trade at session lows.
Today's session has been mired by widening losses in the communication services (-1.2%) and information technology (-1.9%) sectors, with the tech sector now holding a slim 0.1% month-to-date gain.
The PHLX Semiconductor Index is down 1.7%.
Elsewhere in the technology world, The New York Times reports that OpenAI is in discussions to sell shares of the company, which would value it at $500 billion.
S&P 500 slips as PLTR, ORCL, COIN drag; PLD gains on Mizuho upgrade
19-Aug-25 14:30 ET
Dow -79.10 at 44832.72, Nasdaq -306.51 at 21321.88, S&P -43.38 at 6405.77
[BRIEFING.COM] The S&P 500 (-0.67%) is in second place on Tuesday afternoon, down about 43 points.
Briefly, S&P 500 constituents Palantir Technologies (PLTR 158.13, -15.90, -9.14%), Oracle (ORCL 236.45, -12.62, -5.07%), and Coinbase Global (COIN 305.17, -15.56, -4.85%) dot the bottom of the standings despite a dearth of corporate news.
Meanwhile, Prologis (PLD 109.86, +4.42, +4.19%) is one of today's better performers, moving higher after Mizuho upgraded the stock to Outperform citing discounted valuation and macro tailwinds.
Gold slips ahead of Jackson Hole as rate-cut bets, diplomatic progress pressure safe-haven demand
19-Aug-25 14:00 ET
Dow -6.69 at 44905.13, Nasdaq -285.47 at 21342.92, S&P -36.47 at 6412.68
[BRIEFING.COM] The tech-heavy Nasdaq Composite (-1.32%) is in last place on Tuesday afternoon, down 285 points.
Gold futures settled less than $19.30 lower (-0.6%) at $3,358.70/oz, the decline reflected caution ahead of the Fed's annual Jackson Hole symposium, where investors are looking for signals on the next policy move with markets pricing an 84% chance of a 25 bps cut at the September meeting. Diplomatic progress involving the U.S., Ukraine, and European allies also eased safe-haven demand, adding to the pressure on the yellow metal.
Meanwhile, the U.S. Dollar Index is up about +0.1% to $98.22.
Nexstar-Tegna deal strengthens local TV position amid cord-cutting challenges (NXST)
On August 8, the Wall Street Journal reported that Nexstar Media Group (NXST) was in advanced talks to acquire Tegna (TGNA), triggering a surge in TGNA’s stock price, with shares soaring nearly 30% in mid-day trading. Today's announced buyout price of $22 per share, while only a 9% premium over TGNA’s closing price on August 18, represents a substantial 31% premium over the 30-day average stock price ending August 8, prior to the WSJ report.
- The all-cash transaction, valued at $6.2 bln including TGNA’s net debt, reflects a multiple of approximately 7.3x TGNA’s trailing 12-month adjusted EBITDA. This valuation appears reasonable, aligning with industry norms for media acquisitions and offering NXST a strategic opportunity to scale without overpaying. The deal, unanimously approved by TGNA’s board, is financed through a mix of new financing, cash on hand, and revolver borrowing capacity, with TGNA’s debt to be refinanced or assumed at closing.
- Strategically, the acquisition positions the combined entity to compete more effectively against Big Tech and legacy media giants amid ongoing cord-cutting trends. Upon closing, expected in 2H26, NXST and its partners will operate 265 full-power TV stations across 44 states, covering 132 of the nation’s 210 Designated Market Areas (DMAs) and reaching approximately 80% of U.S. TV households. The deal expands NXST’s footprint into key markets like Atlanta, Phoenix, Seattle, and Minneapolis, while strengthening its presence in nine of the top 10 DMAs and 41 of the top 50, enhancing its scale and influence in local broadcasting.
- Financially, the merger is poised to deliver significant benefits, with NXST projecting annual net synergies of approximately $300 mln through revenue enhancements and operating expense reductions, the majority expected within the first year post-closing. The combined entity will offer advertisers a broader, more competitive array of local and national broadcast advertising solutions, capitalizing on its expanded reach and diverse portfolio. NXST anticipates the deal will be more than 40% accretive to its standalone adjusted free cash flow in the first 12 months after closing, with plans to deploy excess cash flow to reduce leverage from an estimated 4x at closing to current levels by 2028.
- Despite the deal’s promise, risks remain, particularly around regulatory approval from the FCC given the scale of consolidation in the local TV sector. However, the Trump administration’s push for deregulation, led by FCC Chairman Brendan Carr, is likely to ease ownership restrictions, reducing anti-competitive concerns for a deal that does not involve major network owners. Public interest groups may raise objections about reduced local news diversity, but the regulatory environment appears favorable, increasing the likelihood of approval.
NXST’s $6.2 bln acquisition of TGNA offers compelling strategic and financial advantages, creating a leading local media company with unmatched scale and advertising potential. With high odds of regulatory approval under a deregulation-friendly administration, the deal positions NXST to drive significant shareholder value while navigating the evolving media landscape.
Amer Sports slips despite beat-and-raise Q2 report; Wilson CEO exit overshadows upbeat outlook (AS)
Amer Sports (AS -5%) is trading lower today after reporting its Q2 results this morning. This Finland-based athletic company with brands like Arc'teryx, Salomon, and Wilson, reported EPS upside. It has not missed EPS expectations since going public in February 2024. Revenue increased 23.4% yr/yr to $1.24 bln, also above expectations. In addition to the upside results, it guided Q3 revenue above consensus and raised its FY25 EPS and revenue guidance. FY25 EPS is now expected to be $0.77-0.82 from $0.67-0.72, while revenue is expected to increase 20-21% yr/yr compared to 15-17%, which computes as $6.22-6.27 bln. Despite the beat-and-raise report, the stock is trading lower, and we think part of that could be Wilson's CEO stepping down.
- Its outdoor performance segment had the most robust growth this quarter, with revenue increasing 35% yr/yr to $414 mln. This is a nice acceleration from the 25% increase in Q1. The results were driven by a strong performance in Salomon's footwear, apparel and bags and socks. Management noted that Salomon brand momentum continues to accelerate across all regions, with EMEA and Americas accelerating "meaningfully." The acceleration is nice to see, as management continues to note that Salomon footwear is inflecting globally and sees a significant growth opportunity in all three of its major consumer regions. As a result, the company raised the revenue guidance for this segment pretty significantly to 22-25% from "mid-teens."
- Its Technical Apparel segment was led by Arc'teryx, with revenue increasing 23% yr/yr to $509 mln. Growth was fueled by a 31% D2C expansion, including a 15% omni-comp. This stands out as management noted it was facing the toughest two-year stacked comp comparison of 2025. Footwear continues to be Arc'teryx's fastest growing category, growing faster than the overall brand. Looking forward, Arc'teryx has an exciting pipeline for shoe launches in 2H25, with management believing footwear will be a large and profitable growth avenue for Arc'teryx. A final positive here is that AS raised its FY25 revenue guidance for the segment to +22-25% from 20-22%, including continued strong omni-comp growth.
- Its Ball & Racquet segment continued its growth trend of double digits. Revenue increased 11% yr/yr to $314 mln. While management cautioned this double digit growth is not sustainable, it did raise FY25 revenue guidance for the segment to 7-9% from mid-single digits. That said, we think this segment may be weighing on shares today, as the company announced that Wilson's CEO Joe Dudy has decided to step down. Management noted that Mr. Dudy was instrumental in many key achievements, recently growing the brand to over $1 bln in annual revenue and setting the stage for its next growth inflection, driven by Tennis 360.
Overall, AS delivered another solid quarter, extending its streak of earnings upside since going public in February last year. The company raised FY25 EPS and revenue guidance, raised segment level revenue, and issued Q3 revenue above estimates despite a higher than expected tariff rate. So why is the stock lower today? We think investors are viewing Wilson's CEO Joe Dudy stepping as a negative. Additionally, the stock jumped to highs following its Q1 report in May. It has since been trading in a narrow range between $36-39. The stock has fallen slightly below that range on this report.
Palo Alto Networks eases concerns about CyberArk deal with robust guidance (PANW)
Palo Alto Networks (PANW +5%) is trading nicely higher after reporting a solid beat for Q4 (Jul). The cybersecurity giant posted its largest EPS beat in the past three quarters. Revenue rose 15.8% yr/yr to $2.54 bln, which just a bit better than expected. We got our first look at FY26 guidance. PANW typically guides in-line, so it was great to see upside guidance for both Q1 (Oct) and FY26. Importantly, the guidance does not include the announced CyberArk deal.
- The company saw double-digit growth across all geographies, with the Americas growing 15%, EMEA up 19%, and JAPAC growing 13%. Demand for cybersecurity remains strong as customers seek PANW out to secure their cloud and AI transformation journeys. Adoption of GenAI is happening faster than any previous technology trend.
- Next-Generation Security ARR grew 32% yr/yr to $5.60 bln vs $5.52-5.57 bln prior guidance as PANW continues to see very healthy growth. PANW had strong contributions across its portfolio, particularly SASE, XSIAM and software firewalls. PANW noted that its software firewall offerings, each with very large TAMs, continue to gain momentum and reinforce its conviction in achieving $15 bln in NGS ARR by FY30 on a standalone basis.
- RPO was another bright spot after being a letdown in Q3. It grew 24% yr/yr to $15.8 bln vs $15.2-15.3 bln prior guidance. This above range number was good to see after coming in at the low end in Q3. This was PANW's highest RPO growth in seven quarters despite being at a significantly larger scale. PANW saw customers making significant commitments in Q4 as reflected by a large deal volume, net new platformizations and RPO growth.
- During Q4, many of the deals its teams had been working on during FY25 came to fruition. PANW described its Q4 bookings growth as turning the corner as it was the highest in 2.5 years. This growth is driven by deals across its platforms and also as a result of strong renewals and upsells. It is early days, but PANW sees the quality of revenue, ARR and retention being consistently higher across its platform customers.
- PANW also provided some color on the CyberArk deal. By combining CyberArk's leadership in identity security with PANW's industry-leading security platforms, PANW is confident it will be able to offer the most complete integrated security offering on the market. PANW has nearly 10x the number of core sellers, which means it will be able to expand CyberArk's presence into PANW's much larger 75,000 customer base. PANW is targeting adjusted FCF of 40+% plus for the combined company in FY28, the first full year post-integration.
So why is the stock higher? We think a big part is the robust guidance. PANW is known for being conservative with guidance, so to guide to the upside was unusual and shows confidence. Also, sentiment has been low since the CyberArk deal was announced on July 30, leading to a pullback in the stock. Another big positive was the robust NGS ARR and RPO numbers. And finally, we think management eased some concerns about the CyberArk deal. PANW said it was making the deal from a position of strength. Given the robust guidance, we think they have a good case to make. This guidance eases concern that the deal was being made to make up for a slowdown in growth.
Home Depot misses Q2 EPS and sales expectations, but reaffirms FY26 outlook amid rate cut hopes (HD)
Home Depot’s (HD) Q2 earnings report marked a second consecutive quarter of missing EPS expectations, ending a streak of over five years of consistent upside surprises, alongside a slight sales miss. CFO Richard McPhail attributed the shortfall to persistent macroeconomic uncertainty and elevated interest rates, which continue to suppress demand for larger, discretionary home improvement projects, keeping them on hold as consumers remain cautious.
- Despite the modest downside in Q2, HD reaffirmed its FY26 guidance, projecting an EPS decline of approximately 2%, revenue growth of about 2.8%, and comparable sales growth of roughly 1%. This reaffirmation has helped mitigate investor disappointment over the sluggish Q2 performance, particularly as market sentiment is buoyed by the prospect of a Federal Reserve interest rate cut in September 2025, which could alleviate pressure on big-ticket spending and stimulate demand in the home improvement sector.
- Comparable sales showed a positive shift, returning to growth at +1.0% in Q2, a notable improvement from the prior quarter’s -0.3% decline. This uptick was driven by resilient demand for smaller home improvement projects, with the average ticket rising 1.4%, reflecting consumer willingness to spend on modest upgrades despite economic headwinds. However, this was partially offset by a 0.4% decline in comparable customer transactions, indicating that while spending per visit increased, overall foot traffic remained slightly subdued.
- The Pro business, catering to professional contractors, has been a key pillar of strength for HD, offsetting softer performance in the DIY segment. However, the company’s Q2 earnings release notably emphasized strength in smaller projects over Pro business momentum, suggesting a potential slowdown in this segment’s growth compared to prior quarters. This shift in focus may indicate that while the Pro ecosystem remains robust, it could be facing similar macroeconomic pressures impacting larger project demand.
HD's Q2 results reflect ongoing trends: muted demand for big-ticket projects persists due to high interest rates and economic uncertainty, but smaller projects continue to drive resilient performance. The company’s confidence in maintaining its FY26 outlook, bolstered by steady demand for smaller-scale improvements and the potential for lower interest rates, supports a cautiously optimistic view for investors moving forward.
Performance Food Group had strong finish to FY25 last week with return to EPS upside (PFGC)
With earnings season wrapping up last week, we thought it'd be a good time to circle back to some names that might have gotten overlooked amid the flood of earnings reports. Today, we wanted to take a look at Performance Food Group (PFGC), which operates through its Foodservice, Convenience, and Specialty segments to supply customers across North America in the food-away-from-home industry. PFGC saw a nice jump following its Q4 (Jun) results on August 13.
- A positive in its Q4 report was that the company reported its largest EPS beat since Q4 of last year, following 3 consecutive quarters of a miss. Additionally, revenue increased 11.2% yr/yr to $16.9, a good bit above analyst expectations. PFGC saw strong underlying trends in all three of its segments and were boosted by the addition of José Santiago and Cheney Brothers.
- Turning to segment performance, Foodservice, which markets and distributes food and food-related products to independent and chain restaurants, is PFGC's largest segment and revenue driver. Revenue increased 20% yr/yr to $9.2 bln, accelerating from Q3 (Mar). Management noted that while restaurant foot traffic improved month-by-month, it declined yr/yr in Q4. That said, its Foodservice organization was able to offset the headwind with new accounts and increased penetration into existing accounts. As a result, its organic independent case growth was 6%. Notably, it saw an acceleration in both independent and chain businesses with higher profit contributions.
- Its Convenience segment, which supplies a full range of consumer products such as snacks, groceries and beverages to convenience stores, drug stores and grocery retailers, was impressive in Q4. Management noted that while the backdrop for the total c-store industry remains consistently difficult, the segment saw sales growth accelerate in each quarter of FY25. In particular, Core-Mark (acquired in 2021), continues to grow case volume despite total industry case declines, driven by a combination of increased foodservice programs to existing customers and new account wins. Additionally, Core-Mark has signed agreements with several new customers, and PFGC will be onboarding these stores in Q2-Q3 of FY26. Finally, its Specialty segment, which distributes to vending operators, office locations and venues such as theaters, saw a nice recovery, with sales increasing 4.2% yr/yr compared to a 0.2% decline in Q3.
- Looking ahead, the company issued FY26 revenue guidance above consensus at $67-68 bln. In terms of inflation, it expects low-single to mid-single digit inflation in FY26 and noted that increases in beef and seafood offset price decreases in FY25. Additionally, the company sources the majority of its inventory from domestic suppliers and does not expect a material impact from tariff increases.
Overall, we thought it was a good time to revisit PFGC given its strong close to FY25 last week. What stands out is the return to EPS upside and revenue coming in above expectations following a miss in Q3. All three segments showed solid acceleration in the quarter, with Specialty delivering a notable recovery. Investors appeared encouraged by the upside FY26 revenue guidance and the strong momentum the company carries into FY26, particularly in light of the mixed reports from food names over the past couple of weeks.
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