Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,626.02 ( ⬆️ 0.54%)

Nasdaq Composite @ 17,683.98 ( ⬆️ 0.65%)

Bitcoin @ $60,141.22 ( ⬆️ 2.22%)

Hey Scoopers,

Happy Monday! Here’s what we’re covering today:

👉 Adobe stock falls 8.5%

👉 Moderna sell-off accelerates

👉 Chip stocks drive market rally

So, let’s go 🚀

Market Wrap

Equities rose on Friday, with the S&P 500 and the Nasdaq Composite posting their strongest week of 2024 ahead of the upcoming Federal Reserve meeting. While the S&P 500 rose 4%, the Nasdaq Composite gained 5.9% last week.

Companies in utilities, communications, and industrials led broader market gains, with each sector adding 1%.

Investors continue to increase their exposure to the tech sector, which helped drive the recent rally. Chipmakers such as Super Micro Computer and Arm Holdings added 3.4% and 5.9%, respectively—meanwhile, Alphabet and Uber advanced by 1.8% and 6%, respectively.

Wall Street is now looking ahead toward the Fed’s policy meeting on Sept. 17-18, during which the central bank is largely anticipated to lower interest rates by 25 basis points. Currently, the Fed’s target rate is 5.25% to 5.5%.

Economic data reflecting a moderation in inflation also supported the case for a rate cut. The consumer price index in August came in at 2.5% on an annualized basis, the lowest level since February 2021. Wholesale prices, meanwhile, rose 0.2% in August, coming in line with expectations.

Trending Stocks 🔥

Boeing - The stock fell 3.69% after factory workers went on a strike and rejected a new labor contract. The work stoppage will impact the production of several airplanes.

Aptiv PLC - The auto parts company gained close to 3% after a regulatory filing showed CEO Kevin Clark purchased 30,000 shares last week.

RH - The stock rallied over 25% after the home furnishing retailer reported earnings per share of $1.69 and revenue of $830 million, compared to estimates of $1.56 and $825 million, respectively.

Adobe Misses Revenue Guidance

Adobe reported its fiscal Q3 of 2024 (ended in August) results last week, after which it fell 8.5% on Friday. While it beat consensus estimates for sales and earnings, its Q4 guidance disappointed Wall Street.

In Q3, Adobe reported:

👉 Revenue of $5.41 billion vs. estimates of $5.37 billion

👉 Earnings per share of $4.65 vs. estimates of $4.53

In the current quarter, Adobe forecasted revenue between $5.5 billion and $5.55 billion, with EPS between $4.63 and $4.68. Comparatively, analysts expect revenue at $5.61 billion with earnings per share of $4.67.

In Q3, August’s largest business segment, Digital Media, which includes Creative Cloud subscriptions that use generative artificial intelligence, grew 11% year over year to $4 billion. The company’s subscription sales also rose 11% to $5.18 billion in Q2.

Adobe stock has trailed the broader markets in 2024 and is now down 7.5% year-to-date.

Moderna Slumps 40% in 2024

Last week, Moderna disclosed plans to cut $1.1 billion in expenses by 2027 and win approvals for multiple new products as it charts a path forward in a post-Covid world. The biotech giant expects ten new product approvals through 2027 but would also pause work on certain products in its pipelines and scrap others.

Additionally, it would trim research and development spending to between $3.6 billion and $3.8 billion in 2027, down from $4.8 billion in 2024. The stock fell over 15% following the announcement and is now down to 40% year-to-date.

Recent company updates seem to have restated vital elements of the bull thesis and reflect a worsening financial position. Moreover, the bulk of its cost savings won’t be achieved until 2027, further delaying company profitability until 2028.

Moderna expects to report positive operating cash flow in 2028 and $6 billion in sales, delaying its profitability goals by two years.

While it expects sales between $2.5 billion and $3.5 billion in 2025, Moderna emphasized new product launches would drive the top line higher by 25% annually between 2026 and 2028.

Moderna reported record sales of $18.43 billion in 2022, while its top-line numbers in the last 12 months have fallen to $4.9 billion.

Trending Stocks Last Week

Three of the 11 sectors in the S&P 500- utilities, real estate, and consumer staples- reached 52-week highs on Friday. While utilities and consumer staples also touched all-time highs, the real estate sector is still down 13% below record levels.

Walmart is the largest stock in the consumer staples sector, rising 18% in the last month and 53% in 2024. Utilities were led by Vistra, up 5.8% on Friday and 121% in 2024.

Elsewhere, semiconductor stocks rallied last week to help boost the tech-heavy Nasdaq 100 index by almost 6%. Arm Holdings was the largest gainer in the tech-heavy index, which rose 26%, followed by Broadcom at 21%, Super Micro at 19%, and Nvidia at 16%.

Tech giants like Amazon and Tesla rose over 9% while Microsoft surged 7%. Beyond big tech, companies such as Warner Bros. Discovery and climbed 15% and 13%, respectively, last week.

Headlines You Can't Miss!

The Fed’s next move is still an open question

DirecTV and Disney reach deal to end blackout

Pfizer’s cancer drug shows positive trial results

China’s retail sales and industrial data miss August estimates

Bitcoin network hits record level of power

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DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.