Group 1 - Dow's stock experienced a decline of over 2% following a bearish adjustment from an analyst, contrasting with a 0.2% rise in the S&P 500 [1] - Jefferies' Laurence Alexander lowered Dow's price target from $28 to $23 per share while maintaining a hold recommendation [2] - The downgrade was influenced by ongoing supply chain issues and the potential delay in increased demand due to interest rate cuts [3] Group 2 - Alexander suggested that Dow's management would need to continue reducing capital expenditures due to ongoing pressures, which, along with anticipated restructuring measures in 2026, could negatively impact the company's fundamentals [4] - Dow has faced significant challenges, including a recent 50% cut to its quarterly dividend, which led to increased selling pressure from investors [5] - The chemical industry is currently in a down cycle, struggling with oversupply issues and negative sentiment exacerbated by current tariff policies [5][6]

Group 1: Market Overview - The job market showed significant weakness in August, with only 22,000 jobs created against expectations of 75,000, marking the first net job loss since December 2020 [3] - Following the weak jobs report, investors shifted towards Treasuries, leading to a sharp decline in Treasury yields, with 2-year yields dropping to a three-year low and 10-year yields falling by 14 basis points [2] - The Federal Reserve is anticipated to cut interest rates by at least a quarter point this fall due to the economic weakening and uncertainty surrounding inflation [2][3] Group 2: Tariff Implications - Recent court rulings deemed the majority of new tariffs illegal, escalating the issue to the Supreme Court, which adds to market uncertainty [4] - If the ruling stands, it could significantly impact markets and bonds, as the U.S. may need to repay collected tariffs, increasing volatility in U.S. bond markets [5] Group 3: Investment Strategies - The Neuberger Berman Short Duration Income ETF (NBSD) aims to provide reliable income with a short-duration investment-grade profile, appealing in volatile market conditions [7] - NBSD invests in a diverse range of sectors and bond types, including both fixed- and floating-rate investment-grade bonds, as well as asset-backed and mortgage-backed securities [8] - The fund's management employs both qualitative and quantitative factors in security selection, focusing on underpriced bonds while maintaining a majority in investment-grade bonds [9]

Group 1 - The US jobs market showed significant weakness in August, with only 22,000 jobs added, a decrease from 73,000 in July and below the expected 75,000 [1] - Year-to-date job additions total 619,000, down from over 1.1 million during the same period last year [1] - The unemployment rate increased to 4.3% from 4.2%, with revisions indicating a loss of 13,000 jobs in June, marking the first decline since December 2020 [2] Group 2 - Federal Reserve Chairman Jerome Powell expressed concerns that the labor market is becoming a greater issue than inflation, aligning with the recent job data [4] - Powell hinted at a potential interest rate cut in September to stimulate economic growth, influenced by the weak labor market data [5] - Signs of a slowdown include fewer job openings, softer wage growth, and longer job searches, indicating a shift in employer hiring strategies due to economic uncertainty [9]

Labor Market Overview - Nonfarm payrolls increased by only 22,000 in August, significantly below the expected rise of 75,000, indicating a slowdown in job creation [2][3] - The unemployment rate rose to 4.3%, reflecting a broader trend of labor market weakening [2][3] Revisions and Historical Context - The July payroll increase was revised up to 79,000, while June saw a net loss of 13,000 after a downward revision of 27,000 [3][4] - The recent changes in payroll figures come after the dismissal of former BLS Commissioner Erika McEntarfer, which has raised concerns about the integrity of the data [4][12] Sector Performance - The federal government reported a payroll reduction of 15,000, while the health care sector added 31,000 jobs and social assistance contributed 16,000 [6] - Manufacturing and wholesale trade both experienced declines of 12,000 jobs, highlighting weaknesses in these sectors [6][9] Economic Indicators and Federal Reserve Expectations - Markets are anticipating a 25-basis-point interest rate cut by the Federal Reserve, with a 12% probability of a half-point cut being priced in [3][7] - Despite weak job creation, average hourly earnings increased by 0.3% for the month, with an annual gain of 3.7%, slightly below the forecast [5] Broader Labor Market Trends - The household survey indicated an increase of 288,000 employed individuals, but the number of unemployed also rose by 148,000, leading to a higher unemployment rate [10] - The labor force participation rate edged up to 62.3%, with a total labor force increase of 436,000 [10] Controversies and Future Outlook - The upcoming release of annual benchmark revisions has been a source of controversy, particularly regarding the accuracy of post-Covid employment data [11] - National Economic Council director Kevin Hassett expressed expectations for the August payroll count to be revised higher, noting historical trends of initial counts being revised lower [13]

Market Overview - U.S. stock futures showed mixed performance following positive moves on Thursday, with major indices fluctuating [1][2] - Investors are anticipating a weak non-farm payrolls report, with expectations of only 75,000 new jobs in August [1][7] Economic Indicators - The 10-year Treasury bond yield is at 4.16%, while the two-year bond yield is at 3.59% [2] - The CME Group's FedWatch tool indicates a 99.4% probability of the Federal Reserve cutting interest rates in the upcoming meeting on September 17 [2][8] - The ADP National Employment Report showed only 54,000 jobs added in August, significantly lower than July's 106,000 and below the 65,000 median forecast [4] - Initial jobless claims rose by 8,000 to 237,000, exceeding expectations of 230,000 [4] Sector Performance - Most sectors in the S&P 500 closed positively, with industrials, communication services, and consumer discretionary stocks leading gains [3] - Utilities stocks, however, ended lower, diverging from the overall market trend [3] Company-Specific News - Broadcom Inc. (AVGO) shares rose 9.34% after reporting third-quarter revenue of $15.95 billion, surpassing estimates of $15.83 billion [12] - DocuSign Inc. (DOCU) saw an 8.45% increase following better-than-expected second-quarter results and an upward revision of its FY26 sales guidance [12] - Lululemon Athletica Inc. (LULU) dropped 17.41% after mixed second-quarter results and a lowered full-year outlook, now expecting revenue between $10.85 billion and $11 billion [12] - Guidewire Software Inc. (GWRE) climbed 12.91% after surpassing $1 billion in annual recurring revenue [12] Analyst Insights - Analysts are closely monitoring the August employment report as it will influence the Federal Open Market Committee's interest rate decision [7][9] - Market sentiment is leaning towards a rate cut, with over 90% probability priced in, despite mixed economic signals [8][9] - Wells Fargo's report indicates a slowing U.S. economy, with concerns over government deficit funding impacting market strategies [9][10]

Labor Market Analysis - The bond market anticipates a non-farm payroll number around 100,000; exceeding this figure might counter the previous month's negative revision of -258,000 [1] - A non-farm payroll number below 50,000 could increase the likelihood of a 50 basis point rate cut by the Federal Reserve [3] - The speaker notes that the non-farm payroll data may not be entirely accurate, but it is the primary information available for analysis [2][5] Bond Market and Interest Rate Expectations - Two-year Treasury yields were at 396 basis points and 10-year yields were at 438 basis points before the previous month's non-farm payroll report [4] - Since the last report, the two-year and ten-year yields have moved mostly sideways to slightly lower [4] - The market will closely watch the upcoming non-farm payroll report, despite potential inaccuracies, as it is the key data point available [5]

Core Viewpoint - The Russell 2000 has experienced a significant rebound of nearly +9% in the last month due to favorable macroeconomic conditions, including potential interest rate cuts and clearer tariff policies, which are expected to enhance investor sentiment towards small-cap U.S. companies [1]. Company Summaries Cars.com (CARS) - Cars.com stock is currently priced at $12, which is 40% below its 52-week high of $20. The company has faced challenges due to high interest rates, inflation, and tariffs impacting consumer demand for vehicles [2]. - Earnings estimates for Cars.com have seen slight upward revisions for fiscal years 2025 and 2026. The stock trades at 7X forward earnings, with EPS expected to increase by 4% this year and projected to rise by 32% in FY26 to $2.35. The Average Zacks Price Target of $17.17 indicates a potential upside of nearly 35% [3]. OppFi (OPFI) - OppFi is priced at $10 and has gained over +30% year-to-date, yet remains 40% below its 52-week high of $17. Analysts maintain a bullish outlook, with an Average Zacks Price Target of $14 suggesting a 36% upside [8]. - The stock trades at 7X forward earnings, with FY25 EPS expected to increase by 49% to $1.49. Recent revisions have shown a 15% increase in FY25 EPS estimates following strong Q2 earnings results. Annual earnings are projected to rise by 4% in FY26 to $1.48 per share, supported by sales projections exceeding $600 million [9][10]. Quad Graphics (QUAD) - Quad Graphics is trading at $6, just above penny stock status, and is a provider of commercial printing solutions. The Average Zacks Price Target suggests a potential return to its 52-week peak of $9 [12]. - The company is profitable and trades at 6X forward earnings. EPS revisions have increased, forecasting a 13% rise in FY25 and a further 15% increase in FY26 to $1.11 per share. Additionally, Quad Graphics offers a 4.5% annual dividend yield [13][14]. Conclusion - The favorable macroeconomic environment is expected to accelerate growth for these companies, making them attractive investment opportunities within the Russell 2000 [15].

Group 1: Apple Inc. (AAPL) - Apple shares have increased by 40% over the past three years but are currently trading below their 52-week high of $260, presenting a buying opportunity [3] - The company has over 2.35 billion active devices, contributing to steady growth in services, which now account for more than 25% of its revenue [4] - Despite missing out on developing proprietary AI models, Apple generates $96 billion in free cash flow, allowing for potential acquisitions to enhance its AI capabilities [5] - The strong ecosystem and profitability of Apple provide a solid investment case, allowing time to develop its AI strategy [6] Group 2: Airbnb (ABNB) - Airbnb's stock has not reflected its growth, but the company continues to expand and increase sales, indicating potential for stock price appreciation [7] - The platform has diversified its offerings beyond short-term rentals, including longer-term stays and various services, enhancing its market presence [8][9] - Revenue growth remains in double digits, with a 13% year-over-year increase in the second quarter, and the company has generated $1 billion in free cash flow at a 31% margin [10][11] - Despite market concerns over decelerating growth and regulatory hurdles, Airbnb's business continues to thrive, suggesting that stock performance will eventually align with business success [12] Group 3: RH (formerly Restoration Hardware) - RH is positioned to benefit from potential Federal Reserve interest rate cuts, which could positively impact the housing market and related purchases [13] - The company has returned to growth with a 12% revenue increase in the first quarter, despite challenges in the housing market [14] - RH is expanding geographically and into new business verticals, including guesthouses and restaurants, which could significantly broaden its market [15] - The stock is currently trading at around 15 times next year's expected earnings, indicating it may be undervalued, with potential for a surge following upcoming earnings reports [16]

Core Insights - A lower interest rate environment is expected to stimulate economic activity, boosting oil demand and prices, while also reducing borrowing costs for shale explorers like Crescent Energy [1] - The U.S. Federal Reserve is anticipated to cut interest rates, with over 80% market consensus for a cut in September [1] - However, a simple rate cut may not reverse the downward trend in oil prices, as projected by the EIA, which estimates Brent crude oil prices to decline from $71 per barrel in July to an average of $58 per barrel in Q4 2025 and around $50 per barrel in early 2026 [2][10] Oil Price Forecast - The decline in oil prices is largely driven by increased oil inventory builds following OPEC+ members' decision to accelerate production increases, which is independent of U.S. interest rate movements [3] - Geopolitical factors, such as U.S. pressure on India to reduce oil purchases from Russia, combined with global trade uncertainties, could significantly hurt U.S. oil demand, further impacting oil prices and revenues for companies like Crescent Energy [4] Company Performance - Crescent Energy's shares have increased by 32.6% over the past year, outperforming the industry growth of 12.8% [9] - Other U.S. shale explorers, including Chevron and Exxon Mobil, are also vulnerable to declining oil prices, with Chevron's Q2 2025 earnings dropping 40% year-over-year due to lower oil prices [5][6] - Exxon Mobil has seen a notable decline in year-to-date earnings as of June 2025, attributed to weak crude prices [6] Valuation and Earnings Outlook - Crescent Energy is currently trading at a forward 12-month earnings multiple of 6.66, significantly lower than the industry average of 21.26 [11] - The Zacks Consensus Estimate for Crescent Energy's near-term earnings has improved over the past 60 days [12] - Crescent Energy currently holds a Zacks Rank 3 (Hold) [13]

Investors will pay close attention to the PCE inflation report due at 8:30 a. m. Eastern time this morning.Let's talk more about the markets with Kevin Mann, president and chief investment officer at Henan and Walsh Asset Management. Kevin, um, first of all, I just want to get your view on the market. This is last obviously trading day of August.Um, you've studied this S&P rebound from the fifth worst start to the year to where we are today, back to record highs. How much longer do you think the rally can l ...