Morning in New York: foreign policy agenda remains in the center of attention of the markets

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The foreign policy agenda remains in the focus of markets after Donald Trump's talks with Vladimir Zelensky and leaders of leading European countries. The central theme of the talks was security guarantees for Ukraine, which, according to its president, involve the purchase of US arms worth about $90 billion through European partners. The final details of the agreements should be settled within the next few weeks. Mechanisms for providing these guarantees by European countries in coordination with the US were also discussed. Trump emphasized that peace talks could begin even amid ongoing hostilities, effectively moving away from his previous position on the need for an immediate ceasefire. In parallel, the American president held a telephone conversation with Vladimir Putin, during which the parties expressed their readiness to support direct talks between Moscow and Kiev. The US leader announced his intention to organize a separate meeting between Putin and Zelensky, which could be followed by a trilateral summit with US participation, which is seen as a first step towards a potential settlement of the three-and-a-half-year conflict.

A significant event in the macro calendar will be the statistics on the construction sector for July. The consensus assumes a 1.7% decline in the volume of construction starts after a 4.6% increase a month earlier. Forecasts for the number of building permits issued assume a 0.2% decline after June's 0.1%. These releases will help gauge housing sector dynamics in the face of macroeconomic uncertainty and high debt rates.

Home Depot (HD), Medtronic (MDT), Viking Holdings (VIK) and Xpeng (XPEV) will report quarterly results before the main session opens. Toll Brothers (TOL) and Keysight Technologies (KEYS) will report at the postmarket.

Futures on US indices demonstrate moderately negative dynamics. We assess the balance of risks for the upcoming session as neutral with an average level of volatility. We focus on the S&P 500 movements in the range of 6400-6500 points (from -0.6% to +0.6% to the closing level of the previous session).

- SoftBank has agreed to purchase shares of Intel (INTC) for $2 billion in order to build advanced chip manufacturing facilities in the United States. On this news quotes of INTC rose by 5.4% after the end of the main trades the day before.

- Quotes of XP (XP) reacted negatively to the quarterly report, although the company's earnings per share amounted to 2.46 South African rand against a consensus of 2.35. Revenue fell short of forecasts at 4.57 billion South African rand, coming in at 4.46 billion. Net profit rose 18% YoY to a record 1.3 billion, with client assets reaching $1.4 trillion.

- Tesla (TSLA) has started producing the six-seat Model Y L with an extended wheelbase in China. The price of the car will start from 339 thousand yuan ($47.2 thousand), the acceptance of orders has already started, and the first deliveries are expected in September. At the same time, the company's sales in China in July decreased by 8.4% YoY.

- OpenAI has offered Indian customers the most affordable ChatGPT Go plan at Rs 399 ($4.6) per month, reflecting its desire to expand its presence in the price-sensitive market.

- Palo Alto Networks (PANW) reported fiscal fourth-quarter earnings per share of $0.95 on average forecasts of $0.89, and revenue was in line with expectations at $2.5 billion. Operating margin exceeded 30% for the first time, while recurring revenue from next-generation technologies increased 32%. The company's shares rose 5.9% on the post-market on the back of the report.

August 18 trading on American stock exchanges ended without significant changes. S&P 500 fell by a symbolic 0.01%, and Nasdaq 100 added the same amount. The Dow Jones declined 0.08%, while the Russell 2000 rose 0.35%. Of the "Magnificent Seven" stocks, Tesla (TSLA: +1.39%) was the most positive. Cyclical consumer staples (XLY: +0.4%) and industrial companies (XLI: +0.39%) traded better than the market. The real estate industry (XLRE: -0.94%) and the communications sector (XLC: -0.61%) were outsiders.

The NAHB Housing Market Index for August declined to 32 from 33 in July, with a consensus of 34. The service sector business activity index from FRB New York in the sector came in at -11.7, signaling a continued recession and negative business climate (-39.3) coupled with stagnant employment, moderate growth in wages and resource prices.

The US President announced new import duties on steel and semiconductors. The White House continues to put pressure on India over Russian oil purchases. Trade negotiations between Washington and Brussels remain an additional factor of uncertainty: the final agreement is held back by disagreements over digital regulation.

- Shares of GoodRx Holdings (GDRX: +37.3%) rose sharply after announcing a partnership with Novo Nordisk (NVO: +2.5%) under which GoodRx will offer Wegovy and Ozempic drugs at $499 per month, about half their current recommended retail price.

- Dayforce (DAY: +26%) shares jumped on reports that investment fund Thoma Bravo is in talks to buy the company and take it off the stock exchange. The deal could be announced in the coming weeks.

- Quotes of Soho House & Co (SHCO: +14.9%) rose after confirmation of an agreement to buy the company by a consortium of investors at $9 per share in cash, which implies a significant premium to the previous closing price of $7.64. After the purchase is finalized, the issuer will receive non-public status.

This article was AI-translated and verified by a human editor