Market Today: Micron Surges on Strong Earnings, Meta Unveils New AR Glasses

Market Overview

Major Indices Performance

• Dow, S&P 500, and Russell 2000 traded in negative territory for most of the day.
• Nasdaq managed to stay positive, buoyed by NVIDIA's performance.

Market Internals

• Decliners outpaced advancers by a better than 2-to-1 margin at the NYSE and Nasdaq.
• The equal-weighted S&P 500 declined 0.6%.
• The Russell 2000 declined 1.2%.
• Only two S&P 500 sectors gained: utilities and information technology, both up 0.5%.

Sector Performance

• Energy sector (-1.9%) struggled the most, tracking oil prices that fell despite geopolitical tensions.
• Health care sector (-0.9%) was hurt by losses in Amgen (AMGN, Financial), which reported disappointing drug data.
• Other lagging sectors included cyclical materials (-0.6%), financial (-0.6%), and industrials (-0.5%).

Consumer Discretionary Sector

• Tesla (TSLA, Financial) gained 1.1%, but this was offset by a pullback in Amazon.com (AMZN), down 0.7%.
• Ford (F) and General Motors (GM) declined 4.1% and 4.9%, respectively, following downgrades by Morgan Stanley.
• Rivian Automotive (RIVN) also saw a significant drop of 6.8% due to similar concerns.
• Homebuilders dragged despite stronger-than-expected new home sales in August, with KB Home (KBH) declining 5.4% after a disappointing earnings report.

Treasury Market

• The 2-yr note yield remained unchanged at 3.55%.
• The 10-yr note yield increased by five basis points to 3.78%.
• The $70 billion 5-yr note auction saw a high yield of 3.519%, matching the when-issued yield.

Market Performance Year-to-Date

• Nasdaq Composite: +20.5%
• S&P 500: +20.0%
• Dow Jones Industrial Average: +11.3%
• S&P Midcap 400: +11.1%
• Russell 2000: +8.4%

Economic Data Review

• MBA Mortgage Applications Index: +11.0% week-over-week
• August New Home Sales: 716K (consensus 695K); previous revised to 751K from 739K

Upcoming Economic Data

• 08:30 ET: Q2 GDP -- third estimate (consensus 3.0%; prior 3.0%)
• 08:30 ET: August Durable Orders (consensus -2.9%; prior 9.9%)
• 08:30 ET: Weekly Initial Claims (consensus 224,000; prior 219,000)
• 10:00 ET: August Pending Home Sales (consensus 1.0%; prior -5.5%)
• 10:30 ET: Weekly natural gas inventories (prior +58 bcf)
• 13:00 ET: $44 billion 7-yr Treasury note auction results

Overseas Markets

• Europe: DAX -0.4%, FTSE -0.2%, CAC -0.5%
• Asia: Nikkei -0.3%, Hang Seng +0.7%, Shanghai +1.2%

Commodities

• Crude Oil: -1.78 @ 69.78
• Natural Gas: +0.02 @ 2.81
• Gold: +9.90 @ 2685.80
• Silver: -0.26 @ 32.10
• Copper: unchanged @ 4.49

NVDA,AMGN,TSLA,AMZN,F,GM,RIVN,KBH

Guru Stock Picks

Warren Buffett has made the following transactions:

• Reduce in BAC by 2.58%

Today's News

Micron Technology (MU) shares surged 10% in extended trading after reporting fourth-quarter results and guidance for the first quarter of fiscal 2025 that exceeded expectations. The memory maker earned an adjusted $1.18 per share, with revenue rising 93.3% year-over-year to $7.75B. The company's adjusted gross margin was 36.5%, beating the 34.7% consensus estimate. Western Digital (WDC, Financial) and Seagate Technologies (STX, Financial) also saw gains following Micron's strong performance.

Amgen (AMGN, Financial) shares fell 5% after releasing Phase 3 results for its drugs rocatinlimab and Uplizna. While Uplizna showed efficacy in treating generalized myasthenia gravis, rocatinlimab's performance in treating atopic dermatitis was less competitive compared to other approved drugs like Sanofi's (SNY) Dupixent and AbbVie's (ABBV) Rinvoq. Analysts expressed concerns over rocatinlimab's competitiveness in an increasingly crowded market.

Meta Platforms (META, Financial) CEO Mark Zuckerberg announced several key developments at the Meta Connect 2024 event, including the Orion prototype mixed reality glasses. The company also introduced the Meta Quest 3s virtual reality headset, priced at $299.99, and slashed the price of its 512GB variant to $499.99. Additionally, Zuckerberg showcased new AI voice features, highlighting Meta's ongoing focus on artificial intelligence.

Goldman Sachs analysts recommended buying Tesla (TSLA, Financial) call options ahead of its third-quarter earnings report and Robotaxi event. Tesla's call options account for 17% of all S&P 500 options volumes, surpassing Nvidia (NVDA, Financial). The EV giant is expected to unveil its full self-driving technology and business outlook at the upcoming Robotaxi event.

Investors in the energy drink sector have been cautious as recent Nielsen data showed a slowdown in sales. UBS analysts noted that consumers are becoming more cautious with discretionary purchases, including energy drinks. This trend has impacted category growth, leading to heightened competition among brands.

OpenAI Chief Technology Officer Mira Murati announced her departure from the company. Murati, who has been with the Microsoft (MSFT, Financial)-backed startup for over six years, expressed her desire to explore new opportunities. OpenAI is currently in the process of raising additional funds.

Eli Lilly (LLY, Financial) and Novo Nordisk (NVO, Financial) are leading the race to develop oral obesity drugs, with potential new entrants like Pfizer (PFE, Financial) and Roche (RHHBY) also in the fray. Oppenheimer analysts suggested that a switch to over-the-counter status for these drugs could be a valuable strategy to maintain brand equity beyond patent expiry.

Barclays analysts highlighted the upcoming U.S. presidential election as a top concern for equities. They identified stocks that could benefit from either outcome, including Becton Dickinson (BDX) and Baker Hughes (BKR) for a Trump win, and Knight-Swift Transportation (KNX) and CF Industries (CF) for a Harris win.

Jefferies Financial Group (JEF) reported Q3 GAAP EPS of $0.75, missing estimates by $0.03, with revenue of $1.68B also falling short by $30M. The company's performance was driven by a 42.4% year-over-year increase in revenue.

Piper Sandler warned of potential volatility in shares of Okta (OKTA) and ServiceNow (NOW) after the FBI raided the headquarters of IT giant Carahsoft. Both companies have significant federal contracts routed through Carahsoft, raising concerns about potential disruptions to deals in the pipeline.

Paramount Global (PARA) declared a $0.05 per share quarterly dividend, maintaining its previous payout. The dividend is payable on January 2 to shareholders of record on December 16.

Walt Disney (DIS, Financial) has launched a password crackdown on its Disney+ streaming service, following Netflix's (NFLX) successful "paid sharing" initiative. The move aims to convert freeloading users into paying subscribers, potentially boosting Disney's revenue.

Armada Hoffler (AHH) announced an underwritten public offering of 7M shares of its common stock, with an additional 1.05M shares available for purchase. The proceeds will be used to repay loans and for general corporate purposes.

Lightspeed Commerce (LSPD) soared 13% after reports that the company is exploring options, including a possible sale. The Canadian payments software firm has engaged JPMorgan to solicit interest from potential bidders.

Medpace Holdings (MEDP) and Fortrea Holdings (FTRE) saw declines after Jefferies downgraded both companies due to pressures on biotech funding. Analysts recommended reducing exposure to contract research organizations focused on biotechs and early-phase clinical trials.

GuruFocus Stock Analysis

• When Buffett Meets Bannister by Smead Capital Management
• Intuit Has a Robust Moat With Undervalued Growth Catalysts by Oliver Rodzianko
• There Is Light at the End of the Tunnel for Alibaba by Wright's Research
• Humana: A Beaten-Down Health Care Stock to Re-Emerge as Inflation Fades by Akim Guerreiro