$BBBY Can’t Pay! - Regardless of what the market thinks, $BBBY is a bad business. Some suppliers are halting shipments altogether after the retailer fell behind on payments. The retailer has previously said it is struggling with cash and inventory optimization, and ordering missteps left it with a glut of goods that will have to be sold at markdowns.
FDIC Issues Cease and Desist to FTX - “Based upon evidence collected by the FDIC, each of these companies made false representations, including on their websites and social-media accounts, stating or suggesting that certain crypto-related products are FDIC insured or that stocks held in brokerage accounts are FDIC insured." 'Nuff said.new - earnings calendar
new - technical briefing
S&P 500 futures lost some ground in the second half of the week after the RSI entered overbought territory. The resistance at 4,330 hints at a short-term pullback toward 4,180, where we expect bulls to drive upward inertia unless they eye 4,100 first. Further distribution might provide a second opportunity to long the 4,000 base provided bears regain control of 4,080 and 4,020. A rally above 4,330 could get the index back on track to 4,500.
Nasdaq’s bear market rally hit a supply zone near 13,760 last week, which is now local resistance. Lack of commitment to breach the 13,000 mark could turn it into a bullish stronghold for a rebound towards the 14,000 handle. If RSI momentum continues to weigh on the index, we expect a move towards 12,700 to be quite probable. Breaking below could carry ND down to June’s peak at 12,260.
WTI crude has found local support at $85.60. When combined with the top at $101, a battleground between bulls and bears seems to have commenced. The fluctuations in momentum somewhat confirm this narrative. Price action around $95 may establish an origin to guide short-term moves up or down. A fall below the supply zone could trigger long liquidations toward $82.
Winners and Losers
Regis ($RGS) soared +64% after renegotiating its debt the prior week. The debt maturity was extended by over two years. The firm’s CEO is expected to provide a new strategy update ahead of corporate earnings on August 23.
Bed Bath & Beyond ($BBBY) plummeted -35% as the meme stock peaked its short squeeze and fluctuated through the week.
Party City ($PRTY) climbed +54% as it got caught in the "meme" crosshairs. Its surge isn't connected with any fundamental news, and the retailer targeting the party supplies market has been struggling financially.
Save Foods ($SVFD) plunged -48% after announcing an $11.7MM share issuance representing nearly its entire market cap, much larger than initially disclosed.
Walmart ($WMT) popped +6% after reporting better than expected earnings, setting the tone for other retailers. The numbers showed high inventories and the necessity to cut profit margins to move merchandise as consumers face tougher financial conditions.
Palo Alto Networks ($PANW) is expected to return to profitability. The consensus EPS estimate is for $0.21 on $1.54B in earnings as the company expects an improvement in subscription-based revenues.
Intuit ($INTU) reports earnings, and it is getting attention as the owner of Turbotax, due to recent changes to the US tax code. The firm is forecast to report earnings of just $0.03 compared to last year's $1.28, but a Zacks survey shows earnings are expected to grow at 16.3% this year.
NVIDIA ($NVDA) has been trending lower joining the rest of the firms that are not expected to benefit from the CHIPS Act. Its earnings are also expected to disappoint at $0.36, compared to $0.89 last year. However, the focus will now shift to supplying cloud systems, which have performed much better than gaming over several months.
Markets declined last week. The Dow Jones Industrial Average stayed flat at -0.2%, the S&P 500 fell 1.2%, while the NASDAQ fell 2.6%. Oil continued its steep decline, quoting $89.72 for front month contracts.
New data revealed collective optimism about the state of the economy. While recession worries have been stoked by high inflation, supply bottlenecks and Fed rate hikes, household finances remain strong.
The July retail sales report showed that overall spending was flat in June, with many retailers forced to markdown inventories. Online sales were up sharply, while restaurant sales also ticked higher, indicating a balance between goods and leisure spending. Services inflation remains as sticky as ever.
Consumer sentiment is depressed, reflecting the pain from high gas and grocery prices along with higher borrowing costs. However, historically low consumer confidence has not been accompanied by historically low consumer spending, which leads us to believe inflation may taper, but will still persist in the medium-term.
Initial jobless claims came in at 250,000 last week. This was lower than the prior week's reading, breaking a three-week uptrend in new claims. Numbers are still historically healthy, as 250,000 is lower than 91% of all weekly jobless claims readings over the last 42 years. But, initial jobless claims are 50% above the lows in March, reflecting some deterioration in employment conditions.