August 19th Market Overview

Happy Tuesday

Tech took a hit today while everything else was pretty flat. Nvidia, Palantir, AMD all gave back gains as money rotated into utilities and healthcare. SoftBank dropped $2 billion on Intel which was the big story.

Housing data came in way stronger than expected too. Market's basically at all-time highs so some rotation makes sense and imo is very healthy in this environment.

Let's dig in...

Today's Big Picture

Tech Rotation Hits Selective Targets 
The Nasdaq's 40% run since April hit a wall as investors took profits in Nvidia, Palantir, and Advanced Micro Devices. This was selective the Dow barely declined while money rotated into utilities and some healthcare. The action signals healthy rebalancing near all-time highs, not sentiment breakdown.

Intel Secures Dual Rescue Package Intel 
landed a $2 billion SoftBank investment just as the U.S. government considers a 10% stake. This coordinated support validates the turnaround strategy and provides capital for foundry ambitions at a critical juncture.

Housing Market Shows Real Strength 
July housing starts came in at 1.428 million, well above the 1.3 million economists expected. That's the fastest growth since December 2023, which tells us builders are responding to genuine demand despite higher rates. Home Depot $HD kept its full-year outlook even after missing earnings, signaling management thinks current slowness is just timing.

Market Overview

U.S. Stock Indexes, Past Three Sessions

Stock Spotlight

Intel $INTC ( ▲ 5.53% ) 
SoftBank is investing $2 billion at $23 per share as the U.S. government considers a 10% stake through grant conversions. This dual backing validates the foundry strategy. Masayoshi Son recently met CEO Lip-Bu Tan about the contract chipmaking business, with potential for larger future deals.

Viking Therapeutics $VKTX ( ▲ 1.33% ) 
Obesity pill trial data showed only 12.2% weight loss with high dropout rates from side effects. Market cap fell from over $4 billion to $2.7 billion. The results were supposed to make this a takeover target, but instead cement Eli Lilly $LLY and Novo Nordisk $NVO dominance.

Home Depot $HD ( ▲ 3.79% ) 
The company missed both earnings and revenue estimates for the first time since 2014. Adjusted EPS of $4.68 missed the $4.72 estimate, while revenue of $45.28 billion fell short of expectations. But management kept full-year guidance intact, saying large projects are "on hold, not cancelled."

Palo Alto Networks $PANW ( ▲ 1.4% ) 
Revenue hit $2.5 billion while adjusted EPS of $0.95 beat the $0.89 estimate. Next-Gen Security ARR reached $5.6 billion. The company raised full-year revenue guidance to $10.475-$10.525 billion.

Big Name Updates

Nvidia $NVDA ( ▲ 1.72% ) 
Morgan Stanley identifies Nvidia as the most under-owned megacap tech stock by institutions. The ownership gap widened by 92 basis points in Q2 - the largest among big tech. Nvidia is developing a new AI chip for China more powerful than its current H20 model, though it will need export licenses.

Tesla $TSLA ( ▲ 6.22% ) 
Austin robotaxi trial shows the service costs about half of Uber's fares while running on technology one-tenth the cost of Waymo's infrastructure. The trial comes ahead of September robotaxi launch.

Apple $AAPL ( ▲ 1.27% ) 
The company is ramping iPhone production across five India factories, including new Tata and Foxconn plants. All iPhone 17 models including Pro versions will be manufactured in India for the first time ahead of next month's launch.

Other Notable Company News

Novo Nordisk $NVO ( ▲ 2.76% ) 
won Canadian approval for Ozempic to reduce kidney failure risk in type 2 diabetes patients, expanding the addressable market beyond weight loss.

DigitalBridge $DBRG ( ▲ 4.01% ) 
is building a $25 billion "Frontier" campus in Texas spanning 3.7 million square feet across 10 data centers with 1.4 gigawatt capacity for AI workloads.

Lululemon $LULU ( ▲ 4.75% ) 
faces potential earnings headwinds of $0.90-$1.10 from de minimis trade exemption elimination, with analysts cutting price targets to $205 from $225. The company relies on Canadian distribution for half of U.S. e-commerce revenue.

Starbucks $SBUX ( ▼ 0.2% ) 
is giving all North American salaried employees a 2% raise as CEO Brian Niccol standardizes compensation.

Sector Watch

Bond Market

The 10-year Treasury yield edged lower to 4.306% as tech weakness sparked modest flight-to-quality buying. S&P Global Ratings affirmed the U.S. AA+ credit rating, pointing to "robust tariff income" offsetting fiscal expansion.

• The rating agency warned it could cut the rating if deficits expand or Fed independence erodes

Policy Watch

Federal Reserve
Jackson Hole takes center stage with Powell's Friday speech serving as the key inflection point for September rate cut expectations. Fed funds futures show high odds of a quarter-point cut, but Powell may avoid giving markets the clear dovish signal they're seeking.

Trade Policy
The Trump administration expanded steel and aluminum tariffs to include 407 additional product categories covering construction materials and machinery. Treasury Secretary Bessent indicated tariff revenues will be revised substantially higher with proceeds helping reduce deficits.

Energy Policy

• Agriculture Department will exclude wind and solar projects from rural loan guarantee programs

• New restrictions limit solar array sizes for farmers in separate loan programs

• Changes represent broader effort to unwind renewable energy federal support

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What to Watch

Retail Earnings This Week Lowe's 
$LOW reports Wednesday morning, Target $TGT Wednesday, Walmart $WMT Thursday. These will show if Home Depot's weakness is company-specific or industry-wide. Watch for pricing power and inventory comments.

Powell at Jackson Hole Friday
His speech could signal whether September rate cuts are certain or still data-dependent. Markets already expect a cut, so watch for pace and magnitude hints.

Intel Government Deal Details 
Specifics on the potential U.S. stake in Intel $INTC will show how serious Washington is about chip manufacturing. The structure and terms matter for the stock.

Ukraine Peace Talk Progress 
Trump's Putin-Zelensky meeting could affect defense stocks and energy prices. European defense names already fell on peace hopes.

Thanks for reading 🙂

- John

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