Macro Events & News
Wednesday’s CPI data initially sparked optimism as it met expectations, but the bullish momentum faded throughout the day as it became clear that inflation had actually increased. On Thursday, lackluster PPI data and comments from Fed Chair Powell, suggesting there may be no further rate cuts this year, raised concerns that disinflation might be over and inflation could resurge. Friday’s Retail Sales data showed economic resilience but wasn’t enough to offset the selloff driven by the earlier CPI, PPI, and Powell’s remarks. For the week, all major indexes ended lower: the Dow down 0.70%, the S&P 500 down 1.32%, and the Nasdaq down 2.24%.
Watchlist News
Google (Nasdaq:GOOG) 3% ▼
A couple of analyst price target updates, one was a cut (to $212) and another bump (to $220). Web Summit in Europe over the week raised concerns over developing advance AI.
august bear notes
The previous $177–$180 range was an attractive entry point, and last week’s news has not altered the thesis.
Meta (Nasdaq:META) 5% ▼
A base seemed to be forming around $580 despite concerns that a Trump administration might be unfavorable toward Meta. However, regulatory and legal developments have weighed on the stock. Meta faced an $841 million fine from the EU, reduced prices for ad-free subscriptions in Europe, and limitations on personalized ads in the region. Additionally, the FTC advanced its antitrust lawsuit involving WhatsApp and Instagram. On a brighter note, analysts raised their price targets, activist investor ValueAct disclosed a $1 billion stake, and Meta plans to introduce ads on Threads in early 2025.
Meta, along with other big tech companies, has a history of navigating EU regulatory challenges and is likely to appeal or innovate to overcome these hurdles. A Trump administration could prove beneficial, as it is expected to adopt a more business-friendly stance at the DOJ & FTC and may address EU’s unfair targeting of US tech companies under the guise of regulatory policy.
august bear notes
Micron (Nasdaq:MU) 13% ▼
Micron faced pressure after market-intelligence firm Edgewater Research highlighted weaker DRAM demand. Adding to the concerns were fears that beneficiaries of the Chips Act, including Micron, might face challenges in receiving funds due to the change in administration.
This presents a strong entry point, as fears have led to Micron being oversold. The anticipated distribution of Chips Act funding by year-end should provide a boost to all companies involved.
august bear notes
Shopify (Nasdaq:SHOP) 22% ▲
Posted strong Q3 2024 results beating top and bottom line expectations. Revenue growing 26% YoY, better than expected Gross Merchandising Volume, and solid Free Cash Flow. Guided for similar revenue YoY growth rate in Q4.
Better than expected results and reaction but the valuation makes it a bit rich. Forward PE is in the triple digits with plenty of uncertainty coming in 2025 with a new administration and hints of inflation returning and a slowing economy.
august bear notes
Tesla (Nasdaq:TSLA) 7% ▼
There was no significant news, and the stock started strong but lost momentum as the “Trump trade” faded and broader macroeconomic factors pushed the market lower. Despite negative headlines about another Cybertruck recall and the potential loss of the EV credit, the stock stabilized on Friday, leaving room for a potential run back to $360.
The only notable change is that CEO Elon Musk now has a direct line to the White House and a role in the incoming administration. It remains to be seen how this will impact Tesla’s business, which continues to face significant challenges in demand and further contributes to the absent CEO narrative.
august bear notes
Workday (Nasdaq:WDAY) <1% ▲
The price spiked to $278 before selling off, with little news to justify the move. UBS Securities highlighted growing demand for Workday as IT budgets begin to loosen. Earnings are scheduled for November 26.
Interesting action and should be trading in a range until earnings. Additionally, it remains a strong candidate for S&P 500 inclusion during the next rebalance.
august bear notes
