Market Snapshot
| Dow | 44911.82 | -34.30 | (-0.08%) | | Nasdaq | 21628.39 | +6.80 | (0.03%) | | SP 500 | 6449.15 | -0.65 | (-0.01%) | | 10-yr Note |
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| | NYSE | Adv 1517 | Dec 1218 | Vol 1.00 bln | | Nasdaq | Adv 2487 | Dec 2051 | Vol 8.28 bln |
Industry Watch
| Strong: Consumer Staples, Industrials, Consumer Discretionary, Financials, Information Technology |
| | Weak: Communication Services, Energy, Materials, Real Estate, Utilities, Health Care |
Moving the Market
September rate cut expectations continue to drive the market ahead of Fed Chair Powell's Friday address
Lack of macro drivers today as the market awaits a slate of earnings reports from major retailers later in the week
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Sideways session as market awaits Fed clarity
18-Aug-25 16:35 ET
Dow -34.30 at 44911.82, Nasdaq +6.80 at 21628.39, S&P -0.65 at 6449.15
[BRIEFING.COM] The stock market drifted sideways throughout the entirety of today's session as a light batch of headlines and the anticipation of key drivers later in the week culminated in a palpable lack of conviction. The S&P 500 (flat), Nasdaq Composite (flat), and DJIA (-0.1%) traded in a tight range, never staying decidedly above or below their flatlines and failing to challenge record high levels from the previous week.
The market is awaiting the Fed’s Jackson Hole Symposium that kicks off on Thursday, with Fed Chair Jerome Powell's Friday address arguably the most anticipated development of the week. There is currently an 83.2% probability of a 25-basis point cut at the September FOMC meeting, according to the CME FedWatch Tool. Market participants will be listening closely to see if Mr. Powell plays into the market’s prevailing view or tries to temper it.
President Trump's Friday meeting with Russia's President Putin did not produce any immediate agreements, but it led to more talks in Washington, this time with European leaders, including the Ukrainian president. The hope is now that a trilateral meeting between leaders from the U.S., Ukraine, and Russia will take place soon.
Today's action, or lack thereof, reflected an uncertainty in the market's direction as it relates to economic policy, with little corporate or earnings news to stimulate excitement.
Breadth figures were relatively even throughout the session, with advancers outpacing decliners by a roughly 5-to-4 margin on the NYSE and a roughly 11-to-9 clip on the Nasdaq.
Five S&P 500 sectors finished in positive territory, led by the industrials sector (+0.4%), which saw a substantial gain in one of its smaller components, Dayforce (DAY 66.62, +13.74, +25.98%), after Bloomberg reported that Thomas Bravo is in talks to acquire the company.
The consumer discretionary sector (+0.4%) also captured a nice gain as Tesla (TSLA 335.16, +4.60, +1.39%) was the best-performing mega-cap stock on an otherwise lackluster day for the Magnificent 7.
The information technology (+0.1%), financials (+0.1%), and consumer staples (+0.1%) sectors rounded out the five advancing sectors. The real estate (-1.0%), communication services (-0.7%), energy (-0.6%), materials (-0.6%), utilities (-0.5%), and health care (-0.2%) sectors closed with losses.
The communication services sector spent the entirety of the session among the worst-performing sectors, nursing a loss in Meta Platforms (META 767.37, -17.86, -2.27%) that saw the Vanguard Mega Cap Growth ETF (-0.1%) close with a modest loss.
The health care sector spent most of the day at the top of the leaderboard in what at the time appeared to be a continuation of last week's trend, but lost its momentum.
CVS Health (CVS 70.16, +1.57, +2.29%) traded higher after UBS upgraded the stock to Buy from Neutral with a target of $79. While not in the S&P 500, Novo Nordisk A/S (NVO 53.78, +1.36, +2.60%) generated some early buzz after its Wegovy drug was approved for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis. The company also announced it will offer its GLP-1 drugs, Ozempic (for diabetes) and Wegovy (for weight loss), at a cash price of $499 per month to self-paying patients through GoodRx (GDRX 5.12, +1.39, +37.27%).
Despite the broader market losing much of last week's momentum, smaller-cap stocks continued their trend of outperformance. The Russell 2000 advanced 0.4% today, and the S&P Mid Cap 400 gained 0.2%.
Retailers also traded generally higher today in anticipation of some key names reporting earnings this week, including Walmart (WMT 100.68, +0.68, +0.68%), Costco (COST 979.35, +7.31, +0.75%), Home Depot (HD 394.70, -4.68, -1.17%), and Target (TGT 104.97, +1.95, +1.89%). The SPDR S&P Retail ETF finished with a gain of 0.9%.
U.S. Treasuries started the week on a slightly lower, but generally quiet, note. The 2-year note yield settled up one basis point to 3.77% and the 10-year note yield settled up one basis point to 4.34%.
- Nasdaq Composite: +12.0% YTD
- S&P 500: +9.7% YTD
- DJIA: + 5.6% YTD
- Russell 2000: +2.9% YTD
- S&P Mid Cap 400: +1.9% YTD
Reviewing today's data:
- The NAHB Housing Market Index fell to 32 in August (Briefing.com consensus 34) from 33 in July.
Market awaiting more consequential developments
18-Aug-25 15:30 ET
Dow -42.77 at 44903.35, Nasdaq -2.95 at 21618.64, S&P -2.20 at 6447.60
[BRIEFING.COM] The major averages are little changed from previous levels as the market enters the final half hour of trading.
President Trump and Ukrainian President Volodymyr Zelenskyy are currently meeting with a coalition of European leaders at the White House to discuss a peace negotiation between Ukraine and Russia, with a trilateral meeting between the three presidents a proposed next step.
The negotiations have not had much effect on the direction of the market, which has drifted sideways as the market anticipates more tangible drivers later in the week.
Major averages mixed
18-Aug-25 15:00 ET
Dow -36.11 at 44910.01, Nasdaq +6.27 at 21627.86, S&P +0.06 at 6449.86
[BRIEFING.COM] The S&P 500 (flat), DJIA (-0.1%), and Nasdaq Composite (flat) sit in a mixed fashion on an uneventful Monday session.
The health care sector (flat) spent much of the morning as the top-performing S&P 500 sector but has since seen its gains erased, with its largest component, Eli Lilly (LLY 699.69, -1.54, -0.22%), now facing a loss on the day.
Meanwhile, the consumer discretionary sector (+0.4%) now leads the advancing sectors, as Tesla (TSLA 334.94, +4.38, +1.32%) sees the lion's share of what little mega-cap strength is around today.
Elsewhere in the sector, Bloomberg reports that Starbucks (SBUX 92.66, +2.06, +2.27%) will raise salaries 2% this year as part of an initiative to improve customer experience within its stores.
S&P 500 dips; First Solar jumps on tax credit boost, EQT slides on downgrade
18-Aug-25 14:30 ET
Dow -43.97 at 44902.15, Nasdaq -13.86 at 21607.73, S&P -4.97 at 6444.83
[BRIEFING.COM] The S&P 500 (-0.08%) is in second place on Monday afternoon, down about five points.
Briefly, S&P 500 constituents First Solar (FSLR 220.57, +20.62, +10.31%), The Trade Desk (TTD 55.12, +3.00, +5.76%), and lululemon athletica (LULU 206.56, +8.10, +4.08%) pepper the top of the standings. FSLR shares are rallying after the U.S. issued favorable safe harbor tax credit guidance that eased retroactivity fears, preserved key incentives, and boosted clarity for utility-scale projects, removing a major overhang for the sector, while LULU continues last week's strength.
Meanwhile, EQT Corp. (EQT 50.16, -2.69, -5.09%) is today's worst laggard, slipping after Roth Capital downgraded shares to Neutral warning that gas oversupply may pressure prices through 2026.
Gold slips as peace hopes, rising yields curb safe-haven demand
18-Aug-25 14:00 ET
Dow -47.19 at 44898.93, Nasdaq -27.79 at 21593.80, S&P -5.52 at 6444.28
[BRIEFING.COM] The Nasdaq Composite (-0.13%) is in last place on Monday afternoon, down about 28 points.
Gold futures settled less than $4.60 lower (-0.1%) at $3,378.00/oz, driven by a modest easing of safe-haven demand amid improving risk sentiment and rising yields. Market optimism around a potential Ukraine peace deal, coupled with expectations of a U.S. Federal Reserve interest-rate cut in September, has reduced gold's relative appeal, particularly as global equities rally and corporate earnings remain strong.
Meanwhile, the U.S. Dollar Index is up +0.3% to $98.14.
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.
Novo Nordisk partners with GoodRx to offer affordable GLP-1 Drugs in a challenge to Eli Lilly (NVO)
Novo Nordisk A/S (NVO) is trading sharply higher following the announcement that the company will offer its GLP-1 drugs, Ozempic (for diabetes) and Wegovy (for weight loss), at a cash price of $499 per month to self-paying patients through GoodRx (GDRX). This move is expected to enhance accessibility for uninsured or underinsured patients, potentially boosting sales volume for these blockbuster drugs.
Concurrently, GDRX is surging on the news, as the addition of Ozempic and Wegovy to its platform is anticipated to serve as a substantial top-line growth catalyst. GDRX was already distributing Eli Lilly’s (LLY) competing GLP-1 drugs, Mounjaro (diabetes) and Zepbound (weight loss), positioning it as a key player in the growing market for these therapies. The inclusion of NVO’s drugs further strengthens GDRX’s platform, likely driving increased user engagement and transaction volume.
- Furthermore, last Friday, NVO announced that the FDA granted accelerated approval for Wegovy (semaglutide 2.4 mg) for a new indication: the treatment of adults with noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) with moderate to advanced liver fibrosis. This approval, based on the Phase 3 ESSENCE trial, demonstrated that 63% of patients treated with Wegovy achieved resolution of steatohepatitis without worsening liver fibrosis, compared to 34% on placebo, yielding a statistically significant 29% difference in response rate.
- This new indication significantly expands Wegovy’s addressable market beyond obesity, tapping into a patient population with a serious liver condition that lacks robust treatment options. The approval is likely to bolster Wegovy’s sales growth by attracting new patients and reinforcing its clinical versatility. However, the accelerated approval status may require further confirmatory trials, which could pose risks if outcomes are not as favorable. Nonetheless, this development underscores NVO’s commitment to expanding its therapeutic portfolio.
- NVO’s diabetes and obesity programs have lagged behind LLY’s in recent quarters. On August 6, NVO reported 1H25 results, with Diabetes and Obesity Care sales increasing 16% yr/yr, driven by a robust 56% growth in Obesity Care (primarily Wegovy) and an 8% rise in GLP-1 diabetes sales (Ozempic and Rybelsus). In contrast, LLY’s Q2 results showcased Mounjaro’s global sales soaring 68% to $5.20 bln and Zepbound’s U.S. sales skyrocketing 172% to $3.38 bln compared to the same period in 2024.
- Several factors contribute to this gap. LLY has benefited from aggressive pricing strategies, a stronger U.S. market presence, and fewer supply constraints for Mounjaro and Zepbound compared to NVO’s challenges with Wegovy and Ozempic shortages. Additionally, LLY’s tirzepatide (the active ingredient in Mounjaro and Zepbound) targets both GLP-1 and GIP receptors, potentially offering superior efficacy, which has resonated with prescribers and patients. NVO has also faced headwinds from compounding pharmacies offering cheaper, non-FDA-approved versions of semaglutide, eroding market share.
- The launch of Ozempic and Wegovy on GDRX represents a strategic move by NVO to regain competitive ground. By partnering with GDRX, NVO enhances the affordability of its GLP-1 drugs for self-paying patients, potentially capturing a larger share of the uninsured or high-deductible plan market. This pricing strategy could drive higher prescription volumes, particularly for Wegovy, which has faced accessibility challenges due to high list prices (often exceeding $1,300 per month).
- However, this approach may come at the cost of lower margins, as the $499 price point is significantly below the standard cash price. While increased volume could offset reduced per-unit profitability, NVO’s gross margin (currently around 84%) may face pressure if GDRX sales cannibalize higher-priced channels.
NVO’s decision to offer Ozempic and Wegovy at $499 per month on GDRX, coupled with Wegovy’s new MASH indication, positions both NVO and GDRX for potential growth. This development provides NVO with a much-needed catalyst to boost GLP-1 sales and regain competitive footing, while GDRX benefits from increased platform traffic and revenue. For both companies, this partnership appears to be a win-win.
Everus is a recent spin-off, a lesser known play on data center buildout (ECG)
With it being a slow news day today and with earnings season wrapping up last week, we thought it'd be a good idea to take a closer look at names that might have gotten overlooked with the large amount of earnings recently. Today, we wanted to take a closer look at Everus Construction (ECG), a provider of construction services with two operating segments: Electrical & Mechanical (E&M, 71% of contract revs) and Transmission & Distribution (T&D, 29%).
- On August 12, Everus reported a 31% yr/yr and 11% sequential increase in Q2 revs to $921.5 mln, which blew away analyst expectations for the second consecutive quarter. The EPS upside was also quite significant in Q1 and again in Q2. Top line growth was driven by continued strength in its E&M segment, as well as improved results in its T&D segment. ECG remains very excited by momentum across many of its key end markets.
- Total backlog at the end of Q2 was $3 bln, up 24% yr/yr and up 7% from the end of 2024. ECG was particularly pleased with the balanced backlog growth across both E&M and T&D as both segments posted solid 20+% yr/yr. Backlog at the end of Q2 was down modestly from its record Q1 levels. However, its backlog can be lumpy quarter to quarter. Also, its backlog includes some larger multiyear projects, many of which are just getting started.
- Everus said it was particularly pleased with favorable trends in its T&D business, driven by spending plans from many key customers. It is seeing strength across the utility end market, notably in its underground submarket, as Everus is evaluating several opportunities in its pipeline. Everus noted that the need to upgrade and expand power transmission infrastructure in the US is clear given the projected growth expected in the coming years.
- The company continues to see favorable opportunities in most submarkets, and mentioned data center and hospitality specifically. In particular, Everus is seeing very strong demand trends from data centers. The company is deeply involved in the long-term planning with many key customers, giving it good visibility. Also, ECG is well-positioned in key geographic locations where the data center buildout is ramping up.
We think Everus has been a bit overlooked and is not on a lot of radar screens. It was spun off from MDU Resources (MDU) in October 2024, so it has not even been a year since becoming independent. Also, as a spin-off, it did not get the same level of notoriety that an IPO typically generates. We also think analysts are still finding their footing in terms of that to expect from Everus. Analyst models were caught off guard following a Q4 miss, which we think caused them to be too conservative with their estimates going forward. And that was evident with ECG reporting back-to-back blowout results in Q1-Q2. We think ECG deserves to be on more radar screens as a lesser known electrical distribution and data center play.
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