Core Viewpoint - Small-cap U.S. stocks may be experiencing a resurgence after a prolonged period of underperformance, with recent data indicating potential positive trends for small-cap investors [1] Performance Summary - The iShares Russell 2000 ETF (IWM) has increased by 6.3% over the past month, compared to a 2% gain in the SPDR S&P 500 ETF Trust (SPY) [2] - Year-to-date, SPY is up approximately 10%, while IWM has advanced about 5.7% [2] - Early-year weakness in small caps was largely attributed to President Trump's tariff announcements, which adversely affected smaller companies [2] Market Dynamics - Bank of America's client flow data indicates near-record demand for small-cap stocks, with clients purchasing $1.5 billion worth of small and micro-cap stocks and ETFs in the past week [3] - The Federal Reserve is expected to cut interest rates in September, with a 97.6% probability of a 25-basis point cut, which could benefit small-cap stocks and ETFs [4] Earnings Analysis - For the small-cap S&P 600 index, Q2 earnings are up 8.6% year-over-year, with revenues increasing by 3.4% [5] - 61.1% of small-cap companies beat EPS estimates, and 72.4% exceeded revenue estimates [5] - In comparison, S&P 500 companies reported a 12.4% increase in earnings and 6.0% higher revenues, with 79.9% beating EPS estimates [6] Valuation Insights - The Russell 2000 is currently trading at a P/E ratio of 32.75, up from 27.79 a year ago, indicating that small caps are not cheap and may be overvalued [8][9] - The Nasdaq 100 Index has a P/E ratio of 32.97, while the S&P 500 Index is at 25.15, reflecting a relative valuation perspective [9] Economic Context - U.S. GDP grew by 3.3% in Q2 2025, rebounding from a 0.5% decline in Q1, driven by stronger consumer spending and private investment [10] - Job openings fell to 7.181 million in July, below expectations, which may signal potential weakness in the labor market [11] Investment Opportunities - Value and blend small-cap ETFs have outperformed growth ETFs over the past month, with notable performers including: - Invesco S&P SmallCap 600 Pure Value ETF (RZV) – Up 11.0% - Invesco S&P SmallCap Value with Momentum ETF (XSVM) – Up 9.9% - iShares US Small Cap Value Factor ETF (SVAL) – Up 9.1% [12]

Core Insights - Hewlett Packard Enterprise (HPE) reported revenue of $9.14 billion for the quarter ended July 2025, reflecting an 18.5% increase year-over-year [1] - The earnings per share (EPS) was $0.44, down from $0.50 in the same quarter last year, but exceeded the consensus estimate of $0.43 [1] - The reported revenue surpassed the Zacks Consensus Estimate of $8.78 billion, resulting in a revenue surprise of +4.07% [1] Financial Performance Metrics - Revenue from Financial Services was $886 million, exceeding the average estimate of $870.59 million, with a year-over-year change of +0.8% [4] - Revenue from Corporate Investments and other was $194 million, slightly below the average estimate of $199.88 million, showing a significant year-over-year decline of -26% [4] - Revenue from Hybrid Cloud reached $1.48 billion, compared to the estimated $1.51 billion, marking a +14.2% increase year-over-year [4] - Server revenue was reported at $4.94 billion, surpassing the average estimate of $4.67 billion, with a year-over-year growth of +15.4% [4] - The elimination of intersegment net revenue and other was reported at -$98 million, slightly better than the estimated -$99.71 million, but showed a year-over-year decline of -25.8% [4] Earnings from Operations - Earnings from Operations in Financial Services were $88 million, exceeding the average estimate of $79.73 million [4] - Earnings from Operations in Hybrid Cloud were $87 million, below the average estimate of $90.8 million [4] - Earnings from Operations in Server were $317 million, slightly below the average estimate of $324.32 million [4] - Earnings from Operations in Corporate Investments and other were reported at -$14 million, in line with the average estimate of -$14.02 million [4] Stock Performance - HPE shares have returned +14.1% over the past month, outperforming the Zacks S&P 500 composite's +3% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Eagle uh here on results. Gabrielle Fon Rouge has the results. Gabby.>> Yeah, American Eagle reporting revenues of um hold on, we still have it coming in now. Uh 1.28% billion on estimates of 1.24% billion and that's a big EPS beat 45 cents on 21 cents. Um so, um this has been a interesting quarter for American Eagle.It had a huge uh marketing campaign with Sydney Sweeney. Obviously, that had some blowback, but what the company said is that it's been their best to date. Um, something else that we're looking ...

Market Outlook & Earnings - The market is primarily driven by earnings, with raised earnings expectations leading to increased S&P targets for the current and subsequent years [3] - Corporates are demonstrating the ability to generate earnings and margins despite concerns about macro data and the labor market [4] - Earnings momentum is a key factor, with strong earnings performance in previous quarters suggesting a bullish market even amidst policy concerns [7] - The market's focus remains on the fundamentals of the corporate sector, particularly earnings growth [5] Future Growth Projections - Earnings growth for 2025 is projected to be 115%, exceeding previous expectations [4] - Earnings growth for 2026 is projected to be 134% [5] - By the end of 2026, the earnings increase is expected to be significant, with a potential 10% gain next year [16] - S&P target by the end of the year is 6400, possibly 6700, and 7400 by the end of next year [16] Risk Factors & Considerations - A primary risk is the potential decline in margin growth and free cash flow due to tariffs, which could impact the market's higher multiple regime [15] - Tariffs could negatively impact retail sector earnings, although recent retail earnings have exceeded expectations [9] - Bond yields globally could potentially trigger a 5-10% sell-off, which is considered a normal market fluctuation [17]

Well, my next guest says the latest tariff developments haven't changed his market playbook into year end. He sees tech and growth continuing to lead the S&P higher with opportunities broadening out as rate cut approach approach. Joining me now is Scott Croner, US equity strategist at city.Scott, you know, I'd love for you to just walk through what you think the market is reacting to here. At first blush, I thought, oh my gosh, stocks are going to sore because now we don't have potentially the handcuffs of ...

Joining us right now is Jeremy Seagull. He's chief economist at Wisdom Tree and professor ameritus of finance at University of Pennsylvania's Wharton School of Business. And Jeremy, we're we're down on this first trading day of September probably because of questions about the tariffs, but I don't know, we're we're also at relatively high levels.How are you feeling about things right now. Yeah. And probably because of September, right, being being the historically really the worst worst month of the of the ...

Financial Performance - Gap Inc reported second-quarter earnings of $0.57 per share, surpassing earnings estimates but falling short of revenue expectations at $3.73 billion [1] - The company is experiencing pressure from potential tariffs and weakness in its women's athletic wear subsidiary, Athleta, but steady performance from Banana Republic, Old Navy, and its namesake label is helping to manage costs [1] Stock Performance - Gap's shares have increased by 1.1% to $21.91 and are on track for their seventh win in eight sessions, marking a fourth consecutive weekly gain [2] - The stock is still recovering from a significant bear gap of 20.2% that occurred on May 30, and the 60-day moving average has shifted from resistance to support this week [2] Analyst Sentiment - Analysts are divided on Gap's outlook, with six out of 17 firms rating it a "buy" or better, while the rest recommend a "hold" [3] - Some firms, including Jefferies and Wells Fargo Securities, have issued bearish notes, while J.P. Morgan Securities and BofA Global Research have raised their price targets [3] Options Trading Activity - Options traders are showing a bearish sentiment today, with 14,000 puts traded, which is six times the typical volume for this time of day [4] - The weekly 8/29 21-strike put is a popular choice among traders, indicating new positions are being opened there [4]

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