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AppleTV+ looks to expand its library of studio titles. (0:16) Amazon Prime Day notches record numbers. (1:00) Tesla slides into top 10 in EU registrations. (4:34)
This is an abridged transcript of the podcast.
Our top story so far. Apple (NASDAQ:AAPL) has held discussions with Hollywood studios about licensing more of their movies to boost its Apple TV+ streaming service.
Bloomberg says Apple TV+, which received 72 Emmy nominations for its shows such as “The Morning Show,” “Palm Royale,” “Slow Horses,” and “Masters of the Air,” is attempting to increase its library of content both in the U.S. and internationally.
Apple has never disclosed how many subscribers it has for its streaming service, but recent estimates have put it around 25 million. Apple has said that it has more than 1 billion subscriptions across its platform, which includes those who subscribe to Apple News+, iCloud, Apple Music, and more. These subscriptions live as part of Apple’s Services segment, which generated $23.9 billion in revenue for the most recent quarter.
Also in the megacap arena, Amazon (AMZN) announced that Prime Day 2024 generated record sales and more items sold during the two-day event than any previous Prime Day event.
Millions more Prime members shopped the two-day shopping event compared to Prime Day 2023.
Amazon said: “Members shopped deals from popular brands like Sol de Janeiro, Apple, Dyson, and Ring, as well as small businesses, including TruSkin, ALOHA, Blueland, and Native Pet, with members in the U.S. able to shop more deals on small business products than ever before.”
Notably, independent sellers sold more than 200 million items during the Prime Day event.
In today’s trading, a rebound in tech and growth premarket was short-lived. Solid results from Taiwan Semi (TSM) on AI demand eased the panic in the chip sector, but there was still some selling pressure.
After starting higher, the Nasdaq (COMP.IND) is down 0.5%. It’s coming off its worst session since 2022.
On the economic front, the July Philly Fed index jumped more than expected, coming in at 13.9 from 1.3 in June. The consensus was for a small rise to 2.7. New orders were at 20.7, up sharply from the prior reading of -2.2.
And weekly initial jobless claims rose by +20,000 to 243,000, more than the 229,000 expected and 223,000 in the previous week.
Ian Shepherdson, economist at Pantheon Macro, said the pick-up in jobless claims “was driven by a combination of shutdowns at auto plants and disruption caused by Hurricane Beryl” and noted that the Philly Fed numbers were “encouraging, with the shipments, new orders, delivery times, and employment components all rising sharply.”
Among active stocks today, Domino’s Pizza (DPZ) sank after it missed revenue estimates and suspended guidance on international store counts. Revenue increased 7.1% year-over-year to $73.1 million during the quarter, primarily due to higher supply chain, U.S. franchise advertising, and U.S. franchise royalties and fees revenues. Total domestic store comparable sales growth was +4.8% vs. +4.9% consensus.
Domino’s also said it expects it will fall 175 to 275 stores below its 2024 goal of 925+ net stores in international, primarily as a result of challenges in both openings and closures being faced by Domino’s Pizza Enterprises, one of its master franchisees. It is temporarily suspending its guidance of 1,100+ global net stores “until the full effect of DPE’s store opens and closures on international net store growth are known.”
D.R. Horton (DHI) narrowed guidance for both revenue and home closings. But it also announced a new $4 billion stock buyback program.
The homebuilder now expects fiscal 2024 revenue of ~$36.8 billion to $37.2 billion, compared with its earlier forecast of $36.7 billion to $37.7 billion. The consensus is $36.9 billion. Guidance for home closings was revised to 90,000-90,500 from its previous guidance of 89,000-91,000. Cash flow from homebuilding operations is still expected to be ~$3 billion.
TD Cowen upgraded Fortinet (FTNT) to Buy from Hold, citing “solid” channel checks. Analyst Shaul Eyal says that channel checks suggest that a bottoming cycle is occurring in security appliances.
In other news of note, battery-electric cars accounted for 14.4% of the European car market in June, down from 15.1% the previous year. At the same time, hybrid-electric vehicles increased their market share to 29.5% from 24.4%. The combined share of gas and diesel cars fell to 47.1% from 49.6%.
In the first half of 2024, total car registrations increased by 4.5%, reaching nearly 5.7 million units. But registration volumes remain relatively low (-18%) compared to pre-pandemic levels. The bloc’s largest markets all showed positive but modest performance, with Spain, Germany, Italy, and France all recording growth.
The year-to-date market share leaders in Europe by registrations are Volkswagen Group (OTCPK:VLKAF) at 26.0%, Stellantis (STLA) at 18.0%, Renault Group (OTCPK:RNSDF) at 10.9%, Toyota Motor (TM) at 7.8%, and Hyundai (OTCPK:HYMTF) at 7.8%. Rounding out the top 10 are BMW (OTCPK:BMWYY) at 6.3%, Mercedes-Benz (OTCPK:MBGAF) at 5.0%, Ford Motor (F) at 2.9%, Volvo Cars at 2.7%, and Tesla (TSLA) sliding in at 2.2%. Of note, Tesla’s market share in Europe has dropped slightly this year, per the ACEA registration data.
And in the Wall Street Research Corner, we are just past the peak of broader market returns, and caution is warranted going into the historically low-flow month of August. That’s according to Goldman Sachs tactical strategist Scott Rubner.
July 17 “typically marks the end of summer BBQ/pool/pirate themed party, for the S&P 500 since 1928,” Rubner says. “The S&P has hit 38 new all-time highs, on pace for the 2nd most closing highs in ~100 years, only 1995 is shaping up to be stronger.”
“Blow-off top completed (up 13 in 15 sessions), summer slipper engaged,” he said. “The pain trade is no longer higher from here. I am not buying the dip.”
“July, Friday, option expiration is a good barometer to unclench this massive dealer long gamma position, and the market will be able to move more freely into lower trading liquidity and vacations starting next week.”
“August is the month for the largest equity outflows. It is clear to me that the passive inflows have slowed,” he said.
Looking at positions, Rubner says that his charts are “at max length” with little room for more buying.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.