Closing Recap

Tuesday, August 12, 2025

US equities faded early ahead of this morning’s CPI release, but so did gold and silver and oil and bitcoin. Pre-CPI Fed watchers saw an almost-90% probability of a rate cut in September and a better-than-50% likelihood of another cut in October with a December implied rate of 3.762%. By the time the data hit, large-cap indices were back to green but stayed close to flat with investors unwilling to make big bets in either direction. The report did not disappoint in terms of market impact with mostly in-line results met with an equities relief rally. The tariff-induced inflation tsunami was more of a ripple, for now, so all is right in the world … nothing to see here … yet. Fed rate probabilities rose beyond pre-data levels with strong expectations for a September cut remaining in place (over 90% post-CPI). Early breadth favored advancers by just over 5:2 as small caps outperformed with IWM (+1.76%) versus SPY (+0.57%) and QQQ (+0.51%). Early sector performance saw Energy (+1.31%), Communications (+1.16%) and Financials (+1.12%) as outperformers among S&P sector ETFs, while Consumer Staples (+0.07%), Real Estate (-0.12%) and Utilities (-0.16%) paced the underperformers only Real Estate and Utilities declining. On a sentiment basis, today’s Fear & Greed Index stood at 63/100 (Greed) versus last week’s 56 (Greed) and last month’s 59 (Greed). A year ago, the index was 24 (Extreme Fear).

In data of note today, on real estate, @bespokeinvest notes Connecticut is the state where supply is the most limited, with active listings down 73% versus pre-pandemic levels. Conversely, Texas, Florida and Tennessee have the largest rise in active listings. Only eight states have more active listings than they did pre-pandemic. In honor of CPI day, some stats: per @charliebilello, US auto insurance rates have jumped by 94% over the past decade versus a 35% rise in overall consumer prices and Shelter CPI was 3.7% today, the lowest since October 2021. Per @KevRGordon, CPI public transportation was +3% mo/mo, the largest jump since May 2022. Separately, on earnings, @DataTrekMB noted Q2 earnings have been so strong that analysts are raising their 2025 S&P500 earnings estimates, while the opposite occurred the past three earnings seasons. Lastly, on AI and economic growth, @RyanDetrich stated AI spending has overtaken consumers as the biggest boost to US GDP. Without it, growth would be near zero.

Heading into the final hour of trading, stocks held gains with breadth expanding to 7:2 in favor of advancers as small caps continued to outperform with IWM (+2.86%) versus SPY (+1.02%) and QQQ (+1.18%). All eleven sector ETFs had moved into the green with Communications (+1.96%), Technology (+1.44%) and Materials (+1.34%) as outperformers and Utilities (+0.29%), Consumer Staples (+0.12%) and Real Estate (+0.07%), the primary laggards. Stay tuned for more earnings as the market breathes a sigh of relief over CPI and prices in a September cut.

Interesting stats: 1) U.S. companies have announced $983.6B worth of stock buybacks so far this year, the best start to a year on record, according to Birinyi Associates data going back to 1982. They are projected to purchase more than $1.1 trillion worth overall in 2025, which would Mark an all-time high – WSJ reported. 2) Kobeissi Letter tweets” The share of credit card debt that is delinquent 90+ days reached 12.3% in Q2 2025, the highest since Q2 2011. This is just 1.4 percentage points below the all-time high. Furthermore, 5.0% of auto loans are now seriously delinquent, only 0.3 percentage points below the record set in Q4 2010. Meanwhile, student loan serious delinquencies spiked 9.4 percentage points over the last 2 quarters to 10.2%, the highest since Q1 2020. US consumers are falling behind on debt payments at rates rarely seen before

• The U.S. government’s budget deficit grew nearly 20% in July to $291 billion despite a nearly $21 billion jump in customs duty collections from tariffs, with outlays growing faster than receipts, the Treasury Department said. The deficit for July was up 19%, or $47 billion, from July 2024. Receipts for the month grew 2%, or $8 billion, to $338 billion, while outlays jumped 10%, or $56 billion, to $630 billion, a record high for the month.

• Oil dipped again overnight with an acceleration to the downside into the CPI release. Though OPEC left its 2025 global demand growth forecast unchanged and raised its 2026 demand growth forecast while also trimming its forecast for non-OPEC+ 2026 supply growth, WTI crude managed only a small bounce before resuming its downward trend. The September contract settle -$0.79/bbl, or -1.24%, at $63.17 while Brent settled lower by $0.51/bbl, or -0.77%, to $66.12.
• Corn prices tumbled to contract lows on the Chicago Board of Trade (CBOT) as the USDA projects record harvest, ballooning its stocks’ outlook for the new-crop season to a seven-year high. December corn settled 13-1/4c lower at $3.94-1/2 a bushel. The USDA projected corn yields will average 188.8 bushels per acre, up from its previous forecast for 181 bpa. USDA said farmers will harvest 16.742 billion bushels of the grain, up from its previous estimate for 15.705 billion bushels. Both forecasts topped analysts’ expectations for yields at 184.4 bpa and production at 15.99 billion bushels.
• Interest rate sensitive two-year Treasury yields fell on Tuesday as July U.S. consumer price inflation came roughly in line with estimates, with limited tariff pressure, boosting bets that the Federal Reserve will cut interest rates in September. The 2-year note yield was last down 2.3 basis points on the day at 3.731%, while the benchmark U.S. 10-year note yield 2.2 basis points to 4.295%.

• In Footwear: ONON shares jumped after posting a 6.5% increase in Q2 revenue and a smaller-than-expected adjusted loss, while gross profit margin rose to 61.5% and raised its full-year guidance on net sales and profitability and annual adjusted EBITDA margin 17%-17.5% vs. prior view of 16.5%-17.5%.
• In Discount Retail: FIVE was upgraded to Buy from Hold at Loop Capital and raise tgt to $165 from $130 saying believes the market is underestimating the company’s near-term earnings power following its recent merchandising and pricing changes under the new CEO.
• In Apparel Retail: HBI shares jumped after the Financial Times reported GIL is close to buying them, potentially valuing the company at about $5B, including debt, The Financial Times reported. The deal talks are at an advanced stage, and an acquisition could be agreed by the end of the week, but the talks are not finalized https://tinyurl.com/y3k7b9uz . Bloomberg added more to the story later saying is weighing a cash and stock offer for HBI that would value the company at about $6 a share https://tinyurl.com/3cx8k7z8
• In Autos: ACVA shares fell after reporting a slight miss for 2Q results as revenue and EBITDA came in $1.9M and $0.2M below consensus, respectively. ACV explained this June was a soft month for wholesale as dealers held back units leading to a 500bps conversion miss compared to what the company expected. Chinese EV auto names were weak NIO, XPEV, LI – Bernstein noted Chinese auto demand surpasses expectations amid strong subsidy support, faces challenging comparisons ahead. Chinese auto demand has exceeded expectations year-to-date but is heading into tougher comparisons, especially from September onwards.

• In Utilities/nuclear: OKLO tgt raised to $90 from $55 at HCW and to $80 from $75 at Wedbush saying recent U.S. initiatives offer strong support for nuclear, accelerating OKLO’s timeline via funding and streamlined regulation. Wedbush said ‘the Trump Administration continues to go all in on AI which will significantly increase the need for computing power which is expected to skyrocket over the next 5-10 years.”
• The U.S. Department of Energy said on Tuesday it has made an initial selection of 11 companies for a pilot program seeking to develop high-tech test nuclear reactors and get at least three of them to begin operating in less than a year. The department selected the following companies: Aalo Atomics, Antares Nuclear, Atomic Alchemy, Deep Fission Inc., Last Energy., Oklo, Natura Resources LLC, Radiant Energy, Terrestrial Energy, and Valar Atomics.
• In Transports: Shares of U.S. airlines soared (AAL, DAL, UAL) after data shows air fares climbed 4% in July, compared with a 0.1% fall last month; in truckers, FWRD shares active following earnings results; in rails, UNP was downgraded to Hold from Buy at Argus following the recent merger with NSC and notes the company faces export challenges amid tariffs.

• In Employment Services: ZIP 2Q revenue and EBITDA beat, 3Q guide brackets consensus, and the company sounds confident that a return to positive revenue growth in 4Q; reported Q2 adjusted EBITDA $9.3M vs. est. $7.4M; Q2 revs $112.2M vs. est. $111.7M; announces new $100M buyback authorization.
• In Payments: AFRM expanded its collaboration with GOOGL’s Google Pay, integrating its payment options with the autofill feature on Chrome’s desktop browser. This partnership allows U.S. consumers to access Affirm’s flexible payment plans seamlessly and conveniently during online checkout. GDOT shares jumped on results as well with Q2 adj EPS $0.40 vs est. $0.18 and better guidance.
• Interesting stat: @KobeissiLetter tweets on “X: that, "US serious delinquencies are skyrocketing: The share of credit card debt that is delinquent 90+ days reached 12.3% in Q2 2025, the highest since Q2 2011. This is just 1.4 percentage points below the all-time high. Furthermore, 5.0% of auto loans are now seriously delinquent, only 0.3 percentage points below the record set in Q4 2010. Meanwhile, student loan serious delinquencies spiked 9.4 percentage points over the last 2 quarters to 10.2%, the highest since Q1 2020. US consumers are falling behind on debt payments at rates rarely seen before."

• CNS preliminary assets under management of $88.6B as of July 31, a decrease of $353M from assets under management of $88.9B at June 30. The decrease was due to market depreciation of $410M and distributions of $152M, partially offset by net inflows of $209M.
• IVZ preliminary month-end assets under management of $2.024T, an increase of 1.2% versus previous month-end. The firm delivered net long-term inflows of $5.8B in the month.
• LAZ preliminary assets under management as of July 31, 2025, totaled approximately $253.7B. The month’s AUM included net inflows of $4.5B, market appreciation of $3.9B, and FX depreciation of $3.2B.
• TROW announced preliminary July month-end assets under management of $1.70 trillion. Preliminary net flows for July 2025 were flat.
• VCTR Total Assets Under Management of $299.8B, other assets of $3.1B, and total client assets of $302.9B, as of July 31, 2025. For July, average total AUM was $300.3B, average other assets were $3.1B, and average total client assets were $303.4B.
• VRTS preliminary assets under management (AUM) of $170.8B and other fee earning assets of $1.8B for total client assets of $172.6B as of July 31, 2025. The reflects market performance and positive net flows in exchange-traded funds and institutional accounts, partially offset by net outflows in U.S. retail fund.

• In Drug Distributors: CAH said it will acquire Solaris Health for about $1.9 billion in cash to expand its specialty business while also reports Q4 adj. EPS of $2.08 per share vs. est. $2.04 on light revs $60.2B and raises its 2026 profit per share forecast to a range of $9.30 to $9.50, from its prior range between $9.10 and $9.30.
• In Insulin sector: TNDM was upgraded to Neutral from Sell at Citigroup saying with shares down ~34% since its Q225 print, wherein management lowered new U.S. pumpers to flat-to-slightly down y/y from up MSD in 2025, the risk/reward on the stock has shifted.

• ASTS shares rose on results and outlook as posted a smaller than expected Q2 EPS loss, on lighter revs but confirms its fully funded plan to deploy 45 to 60 satellites into orbit by 2026 and said it received two additional early-stage contracts for the US government.
• MRCY shares jumped on results following a beat and raise Q2 as adj EBITDA $51.3Mm vs est. $34.3Mm on revs $273.1Mm vs est. $245.4Mm; Raymond James upgraded MRCY to Strong Buy (tgt to $80 from $55) saying Mercury cold be the biggest margin story in the defense space with the potential to drive EBITDA margin growth of 70% over the next two years.

• In Ad Tech sector: DSP shares fell as reported Q2 results with contribution ex-TAC coming in near the midpoint of guidance and EBITDA at the high-end of guidance; but Q3 guidance came in below consensus expectations by approximately $3M, and EBITDA guidance was ~$2M below consensus as Viant was impacted by an agency partner losing a sizable advertiser client. PUBM shares also tumbled after reported Q2 revenue and EBITDA exceeded the high-end of guidance; however, headwinds from another major DSP partner drove Q3 revenue guidance 10% below consensus and EBITDA guidance to ~$6M below consensus. This new DSP headwind stemmed from a significant platform change by the partner, which altered how it values inventory—Citizens Research said they believe this partner is TTD and its transition from Solimar to Kokai.

• In IT Services & Consulting: GDS was upgraded to Outperform at RBC Capital following the favorable monetization and valuation marks achieved through the company’s ABS and C-REIT transactions. The C-REIT transaction augurs favorably for a high teens EBITDA multiple, significantly higher than the current 12.5x.
• In Security Software: PANW was upgraded to Overweight at Piper with $225 tgt saying its more favorable view is predicated on 1) early platformization success that has helped reaccelerate bookings and should prove durable as XSIAM traction, 2) more consistent FCF leverage moving forward, and 3) the acquisition of CYBR.
• In Software: LIF reported a Q2 beat and raise with revenue and EBITDA, respectively, coming in $5.2M (~5%) and $6.9M (~52%) above consensus, while raised its full year outlook, increasing revenue guidance by ~2% and EBITDA by about 10% (adding approximately $7M to revenue and EBITDA).
• In AI Services: BBAI shares fell after Q2 results disappointed as Q2 revs of $32.5M were well below the Street $41.0M estimate while lowering its full year revenue guidance to $125.0M-$140.0M, down meaningfully from $160.0M-$180.0M, previously amid revenue and disruptions in federal contracts.
• In Online Services: SE shares surge on results; Q2 adj Ebitda $829.2M vs. est. $804M; Q2 revs $5.26B vs. est. $5.12Be; said expect Shopee GMV growth momentum to carry into Q3; Q2 E-commerce GMV $29.8B, +28.2% y/y v $28.6B q/q.

• MX announced that YJ Kim has agreed to step down as CEO and as a member of the Board of Directors, effective immediately. Camillo Martino, Chairman of the Board of Directors, has also been appointed Interim CEO; board continues to explore strategic alternatives; CAPEX plans to be cut by over 50% through 2027.
• TXN shares outperformed after the chip makes notified clients of 30% price hikes on over 60,000 chips, or 40% of all products, for industrial control, automotive electronics, consumer electronics, communications equipment and more; shares of other auto chip makers ON, NXPI, STM advanced as well. Bernstein was one of the analysts that noted the price hikes.