Market Performance - U.S. stock markets showed resilience despite the first government shutdown in nearly seven years, with major indexes recovering from early declines [1][2] - The Dow Jones Industrial Average rose 0.1% to close at a record high for the second consecutive day, while the S&P 500 increased by 0.3%, also setting a new closing high [2] - The Nasdaq Composite outperformed with a 0.4% rise, nearing its intraday and closing records, and has seen a significant increase of 11.2% in Q3 [2][10] Economic Data and Federal Reserve Outlook - The ADP Employment Report indicated a surprising decline of 32,000 private-sector jobs, the largest monthly drop since March 2023, raising concerns about the labor market [4][5] - U.S. Treasury yields fell following the weak jobs report, with the 10-year yield at 4.106% and the 2-year yield at 3.547%, as investors anticipate a potential Fed rate cut by December [4] - The government shutdown may delay the release of key economic data, complicating the Federal Reserve's decision-making regarding interest rates [5] Upcoming Economic Events - Important economic data releases are scheduled for October, including U.S. International Trade in Goods and Services on October 7 and the advance estimate for GDP on October 30 [6] - A key inflation report (CPI) is set for October 15, followed by the monthly retail sales report on October 16, both critical for the Fed's monetary policy decisions [7] Major Corporate Announcements - Nike, Inc. reported a 1% increase in revenue, surpassing expectations with adjusted earnings per share of $0.49, significantly above the anticipated $0.26 [9][13] - Meta Platforms experienced a nearly 3% decline, continuing a downward trend since its August high, following news of a $14 billion AI infrastructure deal and plans for in-house chip development [13] - Corteva announced plans to separate into two independent companies focused on Crop Protection and Seed, expected to be completed in the second half of 2026 [13] - Rocket Companies completed a $14.2 billion acquisition of Mr. Cooper Group, aiming to enhance homeownership services [13] - Lithium Americas shares surged after the U.S. Department of Energy acquired a 5% stake in the company [13]

Group 1 - The article emphasizes that market corrections develop gradually over time, similar to pressure building in a steam kettle, and that many investors overlook the subtle signs of these corrections [1] - The author has 28 years of experience as a professional trader, analyst, and portfolio manager, and has achieved an average annual return of 17.2% since January 2009 [1] - The author operates a nonprofit investor advocacy firm and provides stock picks through a newsletter sent to subscribers on a weekly basis [1] Group 2 - The article does not provide any specific company or industry analysis, focusing instead on the author's personal investment philosophy and experience [2][3]

Core Insights - Richard Driehaus has been recognized on Barron's All-Century Team for his "buy high and sell higher" investment strategy, which focuses on selecting top momentum stocks [1] - Currently, NVIDIA Corporation (NVDA), Meta Platforms, Inc. (META), and Amazon.com, Inc. (AMZN) are identified as momentum stocks under the Driehaus strategy [1][8] Driehaus Strategy Overview - Driehaus prefers investing in stocks that are increasing in price rather than those in decline, emphasizing the importance of momentum [2] - The American Association of Individual Investors (AAII) uses the percentage 50-day moving average as a key criterion for portfolio creation based on Driehaus' philosophy [2][3] Momentum Indicators - The strategy incorporates a calculation involving the month-end price and the 50-day moving average to assess momentum [3] - Positive relative strength is also a critical indicator, with a positive percentage 50-day moving average signifying an uptrend [3] Stock Selection Criteria - AAII emphasizes strong earnings growth rates and impressive earnings projections to identify potential outperformers [4] - Stocks with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) and a Momentum Score of A or B are prioritized for better upside potential [5][6] Screening Parameters - Stocks must have a last 5-year average EPS growth rate above 2% and a trailing 12-month EPS growth greater than 0 to indicate superior earnings performance [7] - A positive percentage change in the 50-day moving average and relative strength over four weeks signals an uptrend [7] Highlighted Stocks - NVIDIA (NVDA) has a Zacks Rank of 3 and a Momentum Score of A, with an average trailing four-quarter earnings surprise of 3.6% [9][10] - Meta (META) also holds a Zacks Rank of 3 and a Momentum Score of A, with an average trailing four-quarter earnings surprise of 20.5% [11] - Amazon (AMZN) has a Zacks Rank of 3 and a Momentum Score of A, with an average trailing four-quarter earnings surprise of 23% [12]

Group 1: Federal Reserve and Market Reactions - Federal Reserve Chair Jerome Powell is scheduled to speak at Jackson Hole, which has heightened market anticipation and nervousness among investors [3][4] - Analysts indicate that the market is hesitant to invest new capital ahead of Powell's speech, with expectations of a potential September rate cut being uncertain [4] - Current economic data suggests higher inflation and a possible cyclical growth rebound, complicating the outlook for rate cuts and indicating a "higher for longer" interest rate environment [4] Group 2: Meta and Google Cloud Deal - Meta Platforms has entered into a significant six-year cloud computing agreement with Google Cloud, valued at over $10 billion [5][6] - The partnership aims to enhance Meta's AI capabilities while the company develops its own data centers, which will take years to become operational [6] Group 3: Cracker Barrel's Logo Controversy - Cracker Barrel's new logo has sparked controversy, leading to a share price decline of over 7% [7] - The company is also modernizing its restaurant ambiance and menu, which has received mixed reactions from customers [7][8] - Over the past five days, Cracker Barrel's stock has decreased by 11% amid the logo change and other updates [8]

Core Viewpoint - Both Costco and Alphabet are considered good dividend stocks despite their low yields, with Costco being a more stable option and Alphabet offering greater long-term growth potential [2][13][14] Group 1: Costco - Costco has a consistent dividend history, with a payout ratio below 30% and an annual growth rate of around 13% over the past years [5][6] - The latest quarterly dividend was raised to $1.30, resulting in an annual payout of $5.20 and a yield of approximately 0.5% [5] - Costco occasionally pays special dividends, such as a $15 special dividend in early 2024, which can benefit long-term shareholders [6] - The stock trades at over 50 times earnings, reflecting its quality but leaving little margin for error in future performance [7][8] - Despite healthy sales and earnings growth of 8% and 13% respectively in the most recent quarter, the high valuation limits future return expectations [8] Group 2: Alphabet - Alphabet initiated its dividend in 2024, with a small annual payout of $0.84 per share and a yield of around 0.4%, but a payout ratio of less than 10% allows for significant growth potential [9] - The company is heavily investing in AI and cloud infrastructure, which has impacted short-term free cash flow but is aimed at long-term growth [10] - Alphabet's diversified revenue sources, including advertising, YouTube, and Google Cloud, are performing well, contributing to its growth story [11] - The stock trades at about 21 times forward earnings, which is lower than many tech peers and Costco, indicating a favorable valuation [11] - Revenue and operating income increased by 14% year over year in the second quarter of 2025, suggesting potential for substantial future dividend increases [12]

Core Insights - Pinterest, Inc. (PINS) reported modest second-quarter 2025 results, with revenues beating estimates while the bottom line missed expectations, driven by strong year-over-year revenue growth across all regions [1] - The company is focusing on enhancing shoppability and monetization potential through advanced AI tools, which has contributed to top-line growth [1][5] User Engagement and Market Position - Pinterest has carved out a niche in the digital market by catering to users' discovery mindset, which presents opportunities for advertisers as users are open to purchasing [2] - The platform is establishing a unique value proposition for advertisers, improving its advertising capabilities, and offering features like the Verified Merchants Program to enhance shoppability [3] Content and Engagement Initiatives - Pinterest is enhancing actionable content from various sources, resulting in improved engagement metrics such as sessions, impressions, and saves [4] - The company is experiencing healthy traction in emerging verticals like men's fashion, auto, health, and travel, which are contributing to its growth [4] Operational Focus and AI Integration - The focus on operational rigor and the use of sophisticated AI models is expected to yield long-term benefits, with new ad tools being developed to enhance monetization [5] - A partnership with Amazon.com, Inc. aims to capitalize on user commercial intent and increase shoppability on the platform [5] Strategic Acquisitions - The acquisition of The Yes, an AI-powered fashion-shopping platform, is aimed at enhancing the shopping experience and aligning with Pinterest's vision of helping customers find products that match their tastes [6] Financial Performance and Estimates - Pinterest's revenue growth is supported by strong user engagement, with a 17% stock price increase over the past year, although it lags behind the industry growth of 43.5% [11] - Earnings estimates for 2025 have increased marginally to $1.81, indicating bullish sentiment among investors regarding the stock's growth prospects [12] Challenges and Competition - High operating costs are expected to increase due to expansion efforts, which may strain margins [7] - Pinterest faces significant competition from larger companies and smaller firms offering similar content and commerce opportunities [8][9]

This is where they were trading premarket at 7 a.m. ET Thursday. 1. Tesla The move: Elon Musk's EV maker is down about 6% to $313.44 a share after rising slightly over 0.1% on Wednesday. Why: Tesla reported disappointing second-quarter results before the closing bell on Wednesday, with revenue dropping 12% year-on-year — the biggest fall in a decade. Shares rose after the past two earnings reports, despite also being weak. Tesla's, Alphabet's, and IBM's second-quarter earnings are on investors' minds this m ...

Core Insights - The Q2 earnings season is underway, with over 400 companies set to report, including 109 S&P 500 members, indicating a broad sector representation beyond just finance [1][9] - Early results show a positive trend, with companies not only beating lowered estimates but also providing favorable management commentary that may bolster Q3 earnings expectations [2][3] Earnings Performance - As of July 21, 62 S&P 500 members reported Q2 results, showing a +9.3% increase in total earnings year-over-year and +5.8% higher revenues, with 82.3% exceeding EPS estimates and the same proportion beating revenue estimates [4][6] - The current earnings and revenue growth rates for the 62 index members are notably above historical averages, suggesting a strong start to the earnings season [4][5] Future Expectations - Total S&P 500 earnings for Q2 are projected to increase by +6% with +4.3% higher revenues, reflecting a positive outlook for the remainder of the reporting cycle [14][18] - For the Mag 7 group, which includes major companies like Tesla and Alphabet, total Q2 earnings are expected to rise by +11.7% on +11.3% higher revenues [18][20] Company-Specific Insights - Alphabet is expected to report earnings of $2.14 per share on $79.3 billion in revenues, reflecting year-over-year increases of +13.2% and +11.1% respectively, despite facing challenges related to its search business and antitrust concerns [10][11] - Tesla is anticipated to report earnings of $0.40 per share on $22.5 billion in revenues, representing year-over-year declines of -23.1% and -11.9%, influenced by operational challenges in the EV market and market perceptions of Elon Musk [13][14]

Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were above expectations, reflecting a +4.3% year-over-year increase, resulting in a +3% rise in shares [2] Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a decline to -0.2% from May's -0.1%, with negative LEI numbers observed over the past six months, indicating potential recession signals [3][4] Upcoming Earnings Reports - More than 20% of S&P 500 companies are set to report Q2 earnings this week, with Alphabet (GOOGL) and Tesla (TSLA) being key highlights [5] - Alphabet is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla is projected to experience a -23.1% decline in earnings year-over-year and -11.9% in revenues [6] Economic Data Releases - This week will also see the release of Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7]

Group 1: Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Group 2: Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were up +4.3% year over year, resulting in a +3% increase in pre-market trading [3] Group 3: Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a further decline to -0.2% from May's -0.1%, with most LEI numbers negative over the past six months, indicating potential recession signals [4][5] - Upcoming economic reports include Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7] Group 4: Future Earnings Expectations - Alphabet (GOOGL) is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla (TSLA) is projected to experience a -23.1% decline in earnings year over year and -11.9% in revenue [6]