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Analyst says production pushed to end of ’27 or ’28. (0:16) Jobless claims add more weight to a 25 bps September rate cut. (0:55) Asia sees first case of new strain of mpox. (2:08)
This is an abridged transcript of the podcast.
Our top story so far. Apple (NASDAQ:AAPL) is reputed to be working on a foldable MacBook computer, but some “technical challenges” may have pushed back the release date, a widely watched analyst said.
TF International Securities analyst Ming-Chi Kuo said: “Due to technical challenges with the display and mechanical, the assembly mass production schedule has been pushed back from 1H26 to the end of 2027 or 2028,”
Kuo added that the final display size for the foldable computer has been confirmed at 18.8 inches, and that the company canceled a design with a larger screen size.
In May, Kuo said that estimated shipments for the aforementioned two sizes of the foldable MacBook could top 1M units.
On the economic front, the last piece of labor market data the Fed chief Jay Powell gets before his Friday Jackson Hole speech came in a little dovish. Weekly initial jobless claims rose to 232,000, slightly less than expected.
The reports suggest that “the jump in underlying claims that got underway in mid-April and June has been broadly sustained over the past month or so, but that underlying claims have not crept any higher since then,” according to Pantheon Macro economist Oliver Allen.
“The upward impact on Florida claims from Storm Debbie probably has a bit further left to run. But many of the same indicators that pointed to a jump in claims earlier this year have started to turn more recently, suggesting that underlying initial claims will either plateau or fall back a bit over the next couple of months.”
The claims, along with a smaller-than-expected drop in the July PMI composite, pushed expectations for a rate cut of 50 basis points in September down again. The odds for a half-point cut slipped below 30%.
T.S. Lombard strategists said: “Historically, the Fed has been relatively gradual in policy easing during soft landings, which contrasts with current market pricing. Even if the dual mandate has gained more prominence in recent weeks, the key tail risk for the central bank remains inflation, and this argues for gradualism. Recent Fed speak… echoes this view.”
Among active stocks, companies with products targeting the mpox virus are in focus after Thailand reported the first case in Asia linked to a new mpox strain called clade 1b, which has led to a recent outbreak in Africa.
Thailand said it would report results to the WHO, which has already declared a global emergency over the virus.
Vaccine developers for mpox include Bavarian Nordic (OTCPK:BVNKF) (OTCPK:BVNRY), Emergent BioSolutions (EBS), and Chimerix (CMRX). Developers of mpox therapeutics include GeoVax Labs (GOVX), SIGA Technologies (SIGA), and Tonix Pharmaceuticals (TNXP). Test makers include Co-Diagnostics (CODX), Roche (OTCQX:RHHBY) (OTCQX:RHHBF), Abbott Labs (ABT), and Applied DNA Sciences (APDN).
Snowflake (SNOW) slumped, and analysts remained cautious following the company’s second quarter results.
Morgan Stanley analyst Keith Weiss said a smaller product revenue beat and further deceleration in growth left the second quarter short of the catalyst needed to inflect investor sentiment.
Evercore analyst Kirk Materne said implied second-half guidance still infers product revenue deceleration as headwinds from Iceberg kick in, and there is not enough upside from the new AI products to offset the Iceberg (and Tiered Storage) headwinds in the near term.
Peloton (PTON) rallied as its turnaround plan looked to be gaining momentum. The company broke a nine-quarter streak of declining revenue and narrowed its quarterly loss by 88%, both of which were better than Wall Street’s expectations.
PTON set its revenue guidance at $2.4 billion to $2.5 billion, at its midpoint from FY24 and below the $2.69 billion estimate. Ending paid connected fitness subscriptions are expected to drop 9% YoY, and ending paid app subscriptions are likely to be down 3%.
In other news of note, movie studio Lionsgate (LION) is recalling the latest trailer for Francis Ford Coppola’s highly anticipated “Megalopolis” due to quotes from film critics that were made up.
The twist is that the quotes were negative about Coppola’s earlier films.
The fabricated quotes were regarding supposed bad reviews of “The Godfather,” “The Godfather Part II,” “Apocalypse Now” and “Bram Stoker’s Dracula” in an apparent attempt to undercut any pans of “Megalopolis.”
Lionsgate said: “We offer our sincere apologies to the critics involved and to Francis Ford Coppola and American Zoetrope for this inexcusable error in our vetting process. We screwed up. We are sorry.”
“Megalopolis” is scheduled to be released in theaters on September 27, 2024. The film will also have a global IMAX release around the same time, although details regarding the IMAX screenings are still being finalized. Lionsgate secured the U.S. distribution rights for the film after it premiered at the Cannes Film Festival in May, where it generated significant buzz and mixed reviews.
And in the Wall Street Research Corner, Morgan Stanley’s North America research analysts selected 20 of their highest conviction stocks within each industry.
Analyst Michelle M. Weaver said that although the market has recovered from the summer selloff, “the future remains uncertain as we look to the upcoming jobs report to provide confidence that near term risks to growth have subsided.”
Stock specific risk is still elevated for the S&P 500, currently in the 80th percentile, with about 63% of the returns coming from idiosyncratic factors, she said.
Among the picks are Apple (AAPL), Cummins (CMI), DraftKings (DKNG), Eli Lilly (LLY), Nvidia (NVDA), and Schlumberger (SLB).
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.