HAPPY FRIDAY TO THE STREET
Federal Reserve Chair Kevin Warsh spoke at Jackson Hole. Fittingly for the venue, the new Fed Chair finally used his outside voice. After a July presser that left bond traders guessing, Warsh called inflation elevated, recommitted to the 2% target, and suggested the next move on rates could be up.
Dove in hawk’s clothing? President Trump’s ongoing support would suggest so. But with Warsh now speaking his mind, we’ll soon find out if he walks the walk or just talks the talk.
🟥 | US stocks slid today on Warsh’s comments to finish the week mixed. The S&P 500 and Nasdaq Composite are down from Monday’s opening bell, while the DJIA added 0.5%.
📉 | One Notable Decliner: PayPal (PYPL) sank after Advent and Stripe walked away from a buyout, per Bloomberg.
— Brooks & The Street Sheet Team
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
Market Movers
MARVELL, WORKDAY, NVIDIA
📉 | Marvell Technology (MRVL) guided current-quarter gross margin below consensus.
📈 | Workday (WDAY) beat on the top and bottom lines in Q2.
📉 | Nvidia (NVDA) gave back ground after a near-9% rally the prior session.
📈 | Elastic (ESTC) guided full-year earnings above analyst expectations.
📉 | Rubrik (RBRK) posted gross margin below consensus despite beating on revenue and earnings.
Tomorrow's Trade Idea, Today
BONVOY-AGE
Stock Spotlight
Stock: Marriott International (MAR)
Firm: Melius Research
Current Price: $351
Price Target: $405
Implied Upside: 15%
Looking for more upside? Street Sheet Research members get 3 stock picks from the Top 30% of analysts with 30%+ implied upside each week. Subscribe today.
Late Checkout
Summer is over and the guests are heading home. But Melius Research analyst Conor Cunningham thinks Marriott should stay a while longer.
The analyst sees Marriott deserving a higher valuation as loyalty profits climb and the company works with hotel owners to strengthen their economics.
Swipe Right
Marriott’s asset-light franchise model throws off cash without the burden of owning the buildings. Meanwhile, Bonvoy is the industry's largest loyalty program with nearly 300M members.
New long-term credit-card deals with JPMorgan Chase (JPM) and American Express (AXP) could add more than $100M in annual fees by 2028, analysts predict, a stream tied to cardholder spending rather than travel volumes.
Analysts see earnings of $11.71 a share this year and $13.11 in 2027, growth of roughly 17% and 12%, respectively.
Rate Card
The stock has outrun the S&P 500 this year, and at 27.5x next year's earnings the valuation is the main hangup for bears like Neuberger Berman's Kevin McCarthy.
But Parnassus portfolio manager Andrew Choi counters that the premium is earned by the quality and visibility of the earnings. Management has promised to return over $4.5B to shareholders through buybacks and dividends this year.
Not a bad rate for an extra night.
Do you own any shares of Marriott International (MAR)?
OVERHEARD ON THE STREET
📺 Apple (AAPL) raised the price of Apple TV to $14.99 a month, with Apple One climbing to $21.95.
🕊️ Iran's foreign minister said renewed talks with Washington remain possible if US pressure eases.
🏦 The US Treasury proposed cutting off Egyptian bank Banque Misr's UAE branches from the US financial system to increase pressure on Iran.
🛢️ Chevron (CVX) is close to a deal to add two Venezuelan heavy-oil fields to its portfolio.
🏭 The EPA plans to scrap federal public-notice rules for air permits, letting data centers skip community input.
THURSDAY'S POLL RESULTS
Do you own any shares of Salesforce (CRM)?
▇▇▇▇▇▇ 🐂 Yup, I'm holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I'm interested
And, in response, you said:
🐂 Yup, I'm holding — “Hoping (and praying); that I at least get my investment back, still in the red, but willing to hang on for more potential 'upside'.”
🐻 Nope, not interested — “Salesforce has looked good on paper for quite some time, and has a broad market, yet over the past four or so years it has not shown it can generate revenue efficiently on these assets.”
👀 No, but I'm interested — “I can see where it would be a useful tool for many.”
