Our top 10 things to watch Thursday, Aug. 31
1. The personal spending and income report point to a slight rebound in inflation with July's core PCE price index advancing 4.2% year over year, a slight uptick from the 4.1% seen in June but in line with expectations.
2. Salesforce (CRM) is seeing multiple price-target increases from analysts after reporting a very strong quarter that demonstrated management's ability to balance growth with profitability. Shares jumped 6% after the report.
3. Broadcom (AVGO), the Club's newest holding, will report Thursday after the close. We previewed what we're looking for in the quarter.
4. Dollar General (DG) getting hammered this morning after reporting weak results and slashing forward guidance. Weakness seen in home, seasonal, and apparel categories, partially offset by growth in the consumables category. Once again, we're reminded that it's more important than ever to have the right product mix as the consumer is more focused on goods than services.
5. On the other hand, Costco (COST) reported August sales numbers on Wednesday, with net sales growth accelerating to 5% on a year-over-year basis, up from 4.5% in July and 0.4% in June. Total same store sales accelerated for the second month in a row.
6. Cybersecurity firms CrowdStrike (CRWD) and Okta are both higher ahead of Thursday's session following strong results Wednesday that outpaced analyst estimates, while also providing better-than-expected forward guidance. OKTA is making a far stronger move than CRWD this morning, but it's important to remember that OKTA was only up about 7% this year coming into the print, whereas CRWD was already up over 40%.
7. UBS raises its price target on Club name Stanley Black & Decker (SWK) to $110 from $100 noting that the rate of gross margin expansion is the key metric for investors and "remains positive."
8. Five Below (FIVE) shares are also lower. Though the reported results were slightly ahead of expectations, guidance for the current quarter was less than the Street estimates and management reduced its full-year earnings forecast "to reflect an anticipated increase in shrink reserves." Street remains largely positive on the name despite price-target cuts as a result of guidance.
9. Shopify (SHOP) merchants will soon be able to offer buyers a "Buy with Prime" option. By making to easier for Shopify merchants to use Amazon's fulfillment networks, the deal should also help Amazon (AMZN) by improving the operating leverage of its network.
10. Reports citing Nvidia's recently filed 10Q highlighted that during the second quarter, Washington had implemented "additional licensing requirement for a subset of A100 and H100 products destined to certain customers and other regions, including some countries in the Middle East." Management noted on the recent earnings call that they did not anticipate "an immediate [negative] material impact to our financial results," it shows Nvidia (NVDA) offerings are simply unrivaled and artificial intelligence has reached the point of being a national security issue.
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