Intel shares extended gains following a report that the struggling chipmaker is in talks to add Advanced Micro Devices as a foundry customer. Zeng Yu / VCG via Getty Images Close Key Takeaways Major U.S. equities indexes were little changed Thursday afternoon on the second day of the U.S. government shutdown, as the tech sector rose while most others declined. Intel (INTC) shares extended gains following a report that the struggling chipmaker is in early talks to add rival Advanced Micro Devices (AMD) as a ...

Core Insights - Fair Isaac (FICO) announced a new program that allows it to provide credit scores directly to mortgage lenders, bypassing traditional credit bureaus [3][4] - This move is expected to significantly reduce costs for lenders, potentially saving them up to 50% on FICO score fees [3][4] - The announcement led to a decline in shares of major credit bureaus Equifax and TransUnion, which fell by 9% and 12% respectively, while Fair Isaac's shares rose by about 20% [2][4] Company Impact - Fair Isaac's new FICO Direct Mortgage License Program enables tri-merge resellers to access and distribute FICO scores directly, eliminating reliance on Equifax, TransUnion, and Experian [3][7] - The change is described as a "turning point" in the mortgage industry regarding how credit scores are delivered and priced [3] Industry Implications - The decision to bypass major credit bureaus could reshape the mortgage scoring landscape, threatening a critical revenue stream for these bureaus [4] - The move reflects a significant shift in the competitive dynamics of the credit scoring industry, as lenders may prefer direct access to scores to reduce costs [4]

Core Insights - Fermi's shares surged 55% on their first trading day, closing at $32.53 after an IPO price of $21, with an additional 7% increase in after-hours trading, indicating strong investor interest in AI-related stocks [2][3] - The company is developing a large AI data center campus in Texas, with plans for 15 million square feet of capacity and 11 GW of power from various sources, expecting to break ground in March [4][7] - Fermi is unique as it operates as a real estate investment trust (REIT), which typically requires profit distribution to investors, but it does not expect to have leasable property until the end of next year [5][8] Industry Context - The success of Fermi's IPO reflects ongoing strong demand for AI-related stocks, following a trend of significant gains in the sector over the past three years [3][7] - Other AI-related IPOs have also seen remarkable first-day performances, such as Figma's 250% increase and Coreweave's over 200% rise since its debut [3] - Fermi's single-site portfolio contrasts with other data center REITs that offer diversified property holdings, highlighting its unconventional approach in the market [8]

Core Insights - Cal-Maine hosted its first-ever quarterly earnings conference call, marking a significant milestone in the company's history as it aims to enhance its investor relations strategy [2][3][7] Group 1: Company Developments - Cal-Maine, the largest egg producer in the U.S., initiated quarterly earnings calls to improve visibility and investor engagement, despite the SEC not mandating such calls [3][4] - The company is diversifying its product offerings beyond traditional eggs, focusing on higher-profit prepared foods and specialty eggs, including cage-free and organic varieties [8][9] - Cal-Maine's recent acquisition of Echo Lake Foods, which sells pre-cooked egg products, aligns with its strategy to expand into additional food formats [9] Group 2: Industry Context - The move to hold earnings calls comes shortly after President Trump suggested that companies should only report results biannually, a proposal aimed at reducing administrative burdens [5][8] - The trend of increased disclosure and communication with investors is seen in other companies as well, with some opting for more frequent updates to enhance their narratives [4][8]

Core Insights - The S&P 500 has historically risen during government shutdowns, with the last decline occurring in 1990 [2][6] - The current government shutdown, the first in six years, has not significantly impacted the stock market, as the S&P 500 was up 0.3% during the shutdown [2][4] - Investors have generally prioritized corporate earnings and macroeconomic trends over budget-related disruptions, indicating a resilient market outlook despite the shutdown [4][6] Market Performance During Shutdowns - Over the past 50 years, the average S&P 500 return during government shutdowns has been a decline of 1.6%, with the worst shutdown in 1979 resulting in a loss of over 6% [2][4] - The longest shutdown in history lasted from December 22, 2018, to January 25, 2019, during which the S&P 500 rose more than 10% as investors focused on the Federal Reserve's dovish policy shift [4][6] Economic Impact and Forecasts - Economists estimate that the current shutdown could reduce economic growth by 0.1 to 0.2 percentage points for each week it lasts [9] - The shutdown halts the release of key economic data, which may hinder the Federal Reserve's decision-making process regarding interest rates [10][11] - Limited visibility on economic indicators could lead to a cautious approach from policymakers regarding anticipated rate cuts [12] Investor Sentiment - Recent data center deals have reassured investors about strong AI demand, contributing to a generally optimistic outlook for the upcoming third-quarter earnings season [7] - Individual investors remain cautiously optimistic about the stock market despite the uncertainties introduced by the shutdown [7]

Core Insights - The U.S. stock market is nearing record highs, primarily driven by the surge in AI-related stocks [2][4] - The majority of top-performing S&P 500 stocks this year are linked to the AI boom, with companies like Seagate Technology and Western Digital seeing their shares nearly triple in value [3][4] - The "Magnificent Seven" stocks, which represent one-third of the S&P 500, are significantly influencing the broader market's performance [4][6] AI Market Dynamics - The AI boom is identified as the main driver of the recent bull market, with investment portfolios increasingly reliant on AI stock performance [4][7] - Major tech companies are expected to report substantial capital expenditure (CapEx) increases, with estimates for hyperscalers' infrastructure spending rising to $490 billion [8][9] - The circular investment model among AI companies, where they invest in each other, is evolving, but poses risks if the business environment changes [10][12] Investment Sentiment and Risks - Despite concerns about a potential AI bubble, investor sentiment remains strong, with tech companies demonstrating sufficient benefits from AI to maintain confidence [12][13] - The AI sector is not currently financed by debt, which differentiates it from previous market bubbles, providing a more stable foundation for growth [13] - However, there are ongoing worries that negative developments could quickly shift investor sentiment, impacting stock valuations [12][13]

Core Insights - Amazon has rebranded its private food labels under a new brand called Amazon Grocery, aiming to attract cost-conscious consumers as they seek savings on food [2][9] - The introduction of Amazon Grocery follows a 15% increase in sales of company-branded products, indicating a growing consumer preference for private-label items [2][5] - The new brand includes products from Amazon Fresh and Happy Belly, with most items priced under $5, enhancing accessibility for budget-conscious shoppers [2][4] Consumer Impact - Major retailers, including Walmart, recognize that consumers are financially strained and are looking for ways to save, with store-brand goods being a viable option for both consumers and companies [4][6] - Bank of America reported that private-label brands are, on average, $2 cheaper than their branded counterparts, further driving consumer interest in these products [5] - Other food companies, such as Albertsons and Casey's General Stores, are also expanding their private label offerings to cater to the rising demand for store brands [6][9]

Market Performance - Major U.S. equities indexes recovered from early losses, with the S&P 500 adding 0.3% and the Dow gaining 0.1%, both reaching all-time highs. The Nasdaq climbed 0.4%, finishing just short of its closing record [3] - Shares of renewable energy provider AES surged nearly 17% following reports of a potential acquisition by Global Infrastructure Partners, which could be valued at around $38 billion [4][8] - Pharmaceutical stocks, including Eli Lilly, Biogen, and Regeneron Pharmaceuticals, extended gains after Pfizer became the first major drugmaker to comply with the White House's push to lower medication prices in the U.S. [5][6] Company Developments - Corteva's shares tumbled 9.1% after announcing a plan to split its crop protection and seed businesses into two independent companies, expected to be completed by the second half of 2026 [7][8] - Micron Technology's shares advanced close to 9%, alongside Seagate Technology and Western Digital, due to anticipated demand growth for data storage supporting AI [6] - Gartner's stock fell 4.5% as the government shutdown affected sentiment across the advisory industry, despite the U.S. federal government accounting for less than 5% of its revenue [9] Strategic Moves - Interpublic Group's stock lost 5% after being named the exclusive creative and media partner for Bayer's consumer health business, while also facing pressure from ongoing regulatory approval processes for its merger with Omnicom [10]

Core Insights - Walmart plans to eliminate synthetic dyes and 30 other artificial ingredients from its private-label products by January 2027, aligning with a broader trend towards natural alternatives in the food industry [1][5][7] - This initiative may influence the consumer foods market significantly, as Walmart's size and private-label popularity could encourage other retailers to adopt similar practices [2][3] Group 1: Walmart's Initiative - Walmart is working to remove synthetic dyes from all its private-label products, including brands like Great Value and Marketside, by January 2027 [1][5] - The retailer aims to eliminate 30 additional ingredients, such as certain preservatives and artificial sweeteners, from its store-brand foods [1][5] Group 2: Industry Impact - Walmart's decision may prompt other food companies to follow suit, especially as the Trump administration has advocated for reduced use of additives and synthetic dyes [2][4] - The shift towards natural ingredients is part of a larger trend, with other companies like PepsiCo, Kraft Heinz, and Tyson Foods also reformulating their products [4][6] Group 3: Consumer Demand - There is a growing consumer demand for simpler, more familiar ingredients, which Walmart is responding to by adjusting formulations and sourcing alternative ingredients [7] - The popularity of private-label foods is increasing as consumers seek cost-effective options, further driving the need for reformulation in the industry [3]

Core Insights - AES shares surged by 16% following reports of acquisition talks with BlackRock's Global Infrastructure Partners, potentially valuing the deal at $38 billion, marking it as one of the largest infrastructure takeovers in history [1][5]. Financial Overview - AES is currently burdened with $29 billion in debt, which would be included in the acquisition deal [2]. - The acquisition talks are in advanced stages, but a final agreement has not yet been reached [2]. Industry Significance - The potential deal highlights the increasing interest in renewable energy providers as investors anticipate rising demand for power to support AI and cryptocurrency mining [3]. - AES has established contracts with major tech companies, including Google, Amazon, and Microsoft, to supply power for their AI data centers [2]. Historical Context - BlackRock acquired Global Infrastructure Partners last year for approximately $12.5 billion, which included $3 billion in cash and 12 million BlackRock shares [3]. - Prior to this, GIP had a $6.2 billion partnership deal to take the Minnesota-based energy company Allete private [3].