Closing Recap

Tuesday, August 19, 2025

U.S. stocks opened higher but saw selling pressure the remainder of the day, led by a pullback in large cap tech stocks (AMZN, GOOGL, META, MSFT, NVDA, NFLX), the same names that have boosted markets the last few weeks as a cautious article grabbed the markets attention. A Bloomberg report today discussed options traders increasingly purchasing “disaster” puts to hedge against a potential plunge in technology stocks. The article highlights growing nervousness among traders about a significant selloff in the tech sector, driven by concerns over market volatility. The tech-heavy Nasdaq 100 Index has surged nearly 40% since an early April low, fueled by major tech companies (see article here https://tinyurl.com/3vd8tuzr ). Outside of the weakness in tech today, retailers were in focus as Home Depot shares rose despite missing quarterly results estimates, while earnings from Lowe’s and big-box retailers Walmart and Target the next two days are expected as investors await more insight on the health of the American consumer and the full results of the tariffs impact on the upcoming holidays sales. Even the Dow Jones Industrial Average erased earlier gains (pulling back off all-time intraday highs of 45,207.39). Stock markets were very complacent on Monday, trading in a narrow range ahead of the annual FOMC Jackson Hole conference this week (Thursday-Sunday), with keynote speech from Fed Chairman Powell on Friday, but stocks were better for sale throughout the day, one of the first days in weeks that there was no “buy the dip” moment. Between weaker jobs data 2-weeks ago and cooler CPI inflation last Tuesday, the Fed has some ammo to talk about rate cuts at the September meeting…but the hotter PPI reading last Thursday cooled off talks of more aggressive cuts. The Fed days away, but some caution (for a change) showed up today on Wall Street. NYSE breadth actually favors advancers over decliners by roughly 1.15:1 margin despite the Spuz -0.75% and Nasdaq -1.6% as Tech doing all the damage (XLK -1.75%, XLC -0.56%)

• US July Building Permits fell -2.8% vs June -0.1% at 1.354M unit rate (below consensus 1.386M) and vs June 1.393M unit rate. July single-family permits +0.5% to 870,000-unit rate; multifamily -8.2% to 484,000-rate.

• December gold futures fell -$19.30, or 0.57% to settle at $3,358.70 an ounce
• Natural gas prices tumbled to 9-month lows on near-record output, ample fuel in stockpiles and forecasts for less hot weather. Nat gas fell 12.4 cents, or 4.3%, to settle at $2.766 per million British thermal units, its lowest close since November 8.
• U.S. Treasury yields slipped across the board, in rangebound trading overall, as investors braced for a key central bank gathering later this week to get a sense of whether the Federal Reserve will resume cutting interest rates next month.
• U.S. two-year yields, which are tied to the Fed’s monetary policy, slipped -1.7 bps to 3.756%, after rising for three straight days. The benchmark 10-year yield also fell, down -3.3 bps at 4.306% and U.S. 30-year yields slipped as well, down -3.7 bps at 4.905%.

• In Auto EV Charging: BLNK reported Q2 revenue of $28.7M (+38% QoQ & –14% YoY) exceeding consensus (~$22M) and reflecting a rebound in product sales (+73% QoQ to $14.5M), and another record quarter of service revenues (+46% YoY to $11.8M).
• In Lodging & Leisure: TH was upgraded to Buy from Hold at Stifel and raised its tgt to $11.00 from $7.50 following TH announcing its first foray into the data center business with a two-year contract valued with minimum commitments of $43M, and its belief that there are several similar deals in TH’s pipeline.
• In Ride Hailing/Delivery: The planned $3.9B takeover of Deliveroo by U.S. meal delivery firm DASH will be reviewed under the European Union’s simplified merger procedure, EU Commission documents showed. The food delivery app companies reached a deal valuing Deliveroo at about 2.9B pounds ($3.92B) in May.
• In Cruise Lines: VIK reported another quarterly beat and saw stable forward pricing (revs +18.5% y/y to $1.88B) while advance bookings for 2026 total $3.883 billion, up 13% y/y, while shares fell as released year-ahead pricing data showing modest year-over-year increases.
• In Casino &Gaming: DKNG shares were active after HOOD announced the launch of professional and college football prediction markets within its mobile application. The new feature allows customers to trade on game outcomes through the company’s Prediction Markets Hub.

• In Industrials: Jefferies out with HVAC earnings wrap noting earnings and 2025 outlooks were broadly ~in line as weaker than expected resi volumes were offset by continued strength in applied systems. Light cml end markets remain ~weak, though solid CARR orders suggest a bottom is likely near. Despite the unexpected NT resi volume weakness, believe 2Q results do not reflect any changes to HVAC fundamentals and remain supportive of LT growth across HVAC end markets with CARR our top pick in the space
• In Machinery: CAT was upgraded to Outperform at Evercore in Machinery sector call, and now moves into their top five favorites (replaces PCAR), as top 5 machinery order now: 1) CMI, 3) PH, 4) CAT and 5) tie with URI The firm said now hearing from contacts, CAT is making overtures to channel of likely reduced discounts during Q425, including learned CAT just reduced discounts on articulated dump trucks.
• In Shipping (SHIP, DSX, GOGL, SBLK): The Baltic Dry Index, which tracks rates for ships carrying dry bulk commodities, fell to a two-week low, falling 58 points, or 2.9%, at 1,964 points, hitting its lowest level since August 5. The Capesize index fell -189 points, or almost 6%, to 3,023 points, also reaching a two-week low; Panamax index gained 7 points, or 0.4%, to 1,637 and Supramax added 8 points to 1,369.
• In the Drone Sector: Needham initiated three names at Buy with UMAC Initiated Buy and $15tgt, ONDS Buy and $5 tgt and AVAV Buy and $300 tgt saying they believe the domestic unmanned aerial systems (UAS) market is entering a multi-year supercycle, driven by a generational shift in defense priorities toward autonomous unmanned platforms. They said their bullish outlook is underpinned by favorable U.S. legislation aimed at accelerating industry momentum.
• In Transports: the WSJ reported Activist investor Ancora Holdings told railroad operator CSX it should pursue a deal with a rival or replace its chief executive if it doesn’t, according to a letter reviewed by The Wall Street Journal. The hedge fund said it is prepared to launch a proxy fight for board seats later this year if CSX doesn’t heed its advice.

• In REITs: BNL and GNL both upgraded to overweight at Keybanc in Net lease REITs and downgraded EPR to Sector Weight noting the Net Lease sector has outperformed broader REITs this year by 1,290 bps, given elevated levels of macro uncertainty, which made the defensive nature of the group relatively appealing. PLD upgraded to Outperform at Mizuho as the firm said it believes the set-up for some Industrial REIT stocks should tactically improve the next 6 months, and it upgrades PLD to Outperform.

• EVH prices proposed offering of $140.0M of convertible senior notes due 2031 to repurchase existing notes and Class A common stock
• IOVA said Health Canada approved Amtagvi to treat certain patients with unresectable or metastatic melanoma.
• PTCT said the FDA declined to approve its drug to treat a rare genetic disorder that causes progressive damage to the nervous system, issuing a complete response letter (CRL) saying substantial evidence of efficacy was not demonstrated for co’s drug called vatiquinone and that an additional study is needed.
• VKTX shares tumbled after saying its experimental oral obesity drug, VK2735, showed statistically significant reductions in body weight compared with placebo and was safe and well-tolerated through 13 weeks of daily dosing; said the drug helped patients lose 12.2% of their body weight on average over 13 weeks (vs. Wal Street ests expecting range of 10% to 15% on average). The rate of gastrointestinal distress was substantial, as roughly 38% of the subjects taking the highest dose ultimately discontinued the medication early while discontinuation rates across all other dose levels were also high.

• In Healthcare Facilities: AVAH was upgraded to Overweight at Barclay’s saying of all the Q2 earnings prints, none made a bigger impression than AVAH’s, calling it a thesis changing quarter that dispelled policy-driven concerns, and showed positive differentiation within the Medicaid landscape.

• In Media & Broadcasting: NXST enters into definitive agreement to acquire TGNA for $6.2B in accretive transaction with Tegna holders to receive $22 per share. However, note that the WSJ reported overnight that SBGI offers to merge broadcast TV business with rival TGNA saying that the deal would value Tegna’s shares at around $25 to $30 apiece https://tinyurl.com/d6dyubkt (so saga may not be over yet)
• In Optical & Networking: FN reported FQ425 sales/EPS of $909.7M/$2.65, above consensus of $883M/$2.64, while shares slumped after saying they expect to see a sequential dip in datacom segment revenue in its fiscal 1Q, citing supply constraints for some critical components. Q4 strength stemmed from Telecom & DCI (+45% y/y) and Auto segments (+49%), while Datacom improved modestly (-12% y/y, +10% q/q) as NVDA transitions 800G to 1.6T.
• In Telecom & Towers: CCI was upgraded from Market Perform to Outperform at BMO Capital and raised tgt to $120 from $115 saying CCI has done the heavy lifting of selling its fiber business and while the deal could take until mid-2026 to close, believes the risk/reward is favorable.

• In Data Centers: VRT was initiated at Sell and $112 tgt at GLJ Research saying while VRT has enjoyed a largely justified multi-year re-rate on the back of AI infrastructure tailwinds, GLJ believes the stock embeds 2027–2028 peak cycle economics completely when unanswered questions around competitive intensity, capacity friction, and true pricing power combine to tilt risk/reward negatively.
• Quantum compute names declined (IONQ, RGTI, QBTS, QUBT): Quantum compute names showing weakness with broader tech. Of note, Martin Shkreli posts write up on yahoo Finance saying, "these stocks should be trading 90% lower than where they are now, and soon, they will be." https://tinyurl.com/mr278z84 (link to Shkreli post on Yahoo Finance).