August 18th Market Overview

Happy Monday

Markets taking a breather after some solid gains last week. Powell's Jackson Hole speech Friday could validate or crush those September cut bets.

Home Depot kicks off retail earnings tomorrow w/ Walmart and Target reporting later this week. Clean energy names got some great news from Washington. A lot of catalysts setting up this week for sure.

Let's dig in...

Summary

Clean Energy Avoids Policy Disaster
Solar and wind stocks rallied after Trump's tax credit rules came in lighter than feared. Sunrun and First Solar jumped, the sector dodged Washington's axe.

Google Pays Up for AI Infrastructure
Expanded TeraWulf $WULF investment to $3.2 billion for data centers. TeraWulf jumped on $6.7 billion in locked-in revenue as tech giants scramble for compute power.

Credit Cards Hit the Wall
Americans switched to debit for the first time in four years. Home Depot, Walmart, and Target earnings will show if consumers are tapping out.

Fed Cut Bets at Fever Pitch
Markets bet on September cuts with 85% odds while bonds signal chaos. Powell's Jackson Hole speech Friday decides if they're right.

Market Overview

U.S. Stock Indexes, Past Three Sessions

Stock Spotlight

Novo Nordisk $NVO ( ▲ 4.14% ) 
won FDA approval for Wegovy to treat liver disease affecting 22 million Americans. The drug now works for weight loss and liver conditions, doubling its patient pool.

Duolingo $DUOL ( ▲ 13.05% ) 
got a KeyBanc upgrade to overweight with a $460 target. Analysts say AI fears are overblown and viral marketing keeps users hooked.

Target $TGT ( ▲ 2.05% ) 
gained after Evercore ISI added it to their outperform list ahead of earnings. Analysts expect better-than-feared results.

Sunrun $RUN ( ▲ 10.35% ) 
jumped as RBC Capital upgraded to outperform with a $16 target. Clearer tax credit rules removed the biggest risk to solar installers.

Big Name Updates

Apple $AAPL ( ▼ 0.04% ) 
lost ground to Samsung in the US smartphone market. Samsung jumped from 23% to 31% share in Q2 while Apple dropped from 56% to 49% as foldable phones gain traction.

Tesla $TSLA ( ▲ 1.46% ) 
slashed UK lease fees by up to 40% as sales crater. The Times reports aggressive pricing as competition heats up in international markets.

Meta Platforms $META ( ▼ 2.04% ) 
fell on its fourth AI reorganization in six months. The constant reshuffling shows the company still can't figure out how to make AI work across its platforms.

Other Notable Company News

MicroStrategy $MSTR ( ▼ 0.85% ) 
bought 430 more bitcoins for $51.4 million at an average $119,666 per coin. The corporate bitcoin strategy continues despite crypto volatility.

ServiceNow $SERV ( ▲ 6.54% ) 
acquired Vayu Robotics to add AI navigation for delivery robots. Khosla Ventures gets warrants while Vinod Khosla joins the board.

First Solar $FSLR ( ▲ 9.63% ) 
became UBS's top pick with earnings expected to grow from $12 to $32 per share by 2027. US manufacturing gives it an edge as trade wars rage.

CrowdStrike $CRWD ( ▼ 0.66% ) 
got downgraded by Evercore ISI to $425 target. The global outage fallout continues hurting the cybersecurity stock.

Sector Watch

Bond Market

The 10-year Treasury yield hit 4.344% as the yield curve steepens to multi-year extremes. It’s simple: bond traders bet on Fed cuts while inflation expectations stay sticky.

• Short and long-term rate gap widest in years signals policy confusion

• September cut odds at 85% despite economy showing mixed signals

Policy Watch

Fed Policy
Minutes drop Wednesday before Powell's Jackson Hole speech Friday sets the tone for September rate decisions.

Economic Data
Credit card balances hit $1 trillion before finally cracking - debit spending up 6.6% vs credit's 5.7% in the first reversal in four years. EU exports to US crashed to 2023 lows in June as trade tensions escalate. This consumer pullback sets the stage for Home Depot, Walmart, Target earnings this week.

Trade & Tariffs
Trump may unveil chip tariffs this week as tech export restrictions remain on the table.

Geopolitical
Trump hosted Zelensky with major European leaders (Merz, Macron, Meloni, Von der Leyen, NATO's Rutte) after Friday's Putin summit where he urged Ukraine toward a peace deal. Modi called Putin as India navigates between Washington and Moscow.

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What to Watch

Jackson Hole Symposium 
Powell's Friday speech decides if September cuts happen. The Fed chair loves using this venue for major announcements, so every word gets dissected.

Retail Earnings Reality Check
Home Depot reports Tuesday, Walmart and Target later this week. First test of consumers since credit card spending cracked. Watch for tariff talk and spending weakness.

Clean Energy Momentum 
Tax credit clarity has solar and wind stocks running. First Solar and Sunrun lead the charge - can the rally last or is this just relief?

Bitcoin Support Battle 
Needs to hold $115,000 or more liquidations coming. Bessent's comments about treasury reserves still weighing on crypto.

AI Infrastructure Arms Race 
Google's TeraWulf deal shows how desperate cloud giants are for compute power. Watch for similar partnerships as the spending war heats up.

Thanks for reading 🙂

- John

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