HAPPY WEDNESDAY TO THE STREET
Palantir (PLTR) CEO Alex Karp went scorched-earth today, saying enterprises are "livid" that AI labs have "completely, irresponsibly, oversold" their models. Companies are paying for tokens that create no value, he argued, while handing over their IP and their alpha.
Nothing says late cycle like the loudest critic of AI hype running an AI company.
🟨 | US stocks were mixed to start July. The DJIA continuing its record run, while the tech-heavy Nasdaq Composite slid on chip profit-taking.
📈 | One Notable Gainer: Meta (META) surged on news it's building a cloud business to sell excess AI compute.
— Brooks & Cas
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
HAS INFLATION ALREADY PEAKED?
Remember when gas hit $4.50 and everyone braced for runaway inflation? Well, Kalshi traders, for their part, have relaxed. With the Strait of Hormuz partially reopened and pump prices back to $3.84, speculators now see just a 28% chance inflation tops 4.2% this year. The bet: peak inflation is already in the rearview.
Market Movers
GENERAL MILLS, SANDISK, NIKE
📈 | General Mills (GIS) topped fiscal Q4 estimates and set a $3B cost-savings target through 2030.
📉 | Sandisk (SNDK) slid after more than tripling last quarter.
📈 | Nike (NKE) rose after fiscal Q4 results beat despite a 12% drop in China sales.
📉 | Alcoa (AA) fell after unveiling a $4.1B deal for South32's bauxite, alumina, and aluminum assets.
📈 | Progress Software (PRGS) popped nearly 20% after beating on Q2 results and guiding Q3 above estimates.
Tomorrow's Trade Idea, Today
SECOND OPINION
Stock Spotlight
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The Overhang Lifts
Jefferies just flipped bullish on Abivax, upgrading the French biotech to Buy on fresh data for its ulcerative colitis drug obefazimod.
Analyst Faisal Khurshid says the numbers clear the single biggest cloud hanging over the stock.
Cancer Fears, Answered
The worry was cancer. Earlier this month Khurshid stepped to the sidelines after early trial data showed malignancy cases with no clear explanation.
But the new readout seems to settle it. Cancer rates among patients matched what you would normally expect in people with ulcerative colitis.
Better still, more than 1 in 3 patients who did not respond at first reached remission after about 10 months. The efficacy story strengthens with each data drop, the analyst says.
Room To Run
Abivax shares ripped higher yesterday following the release of the data. But Jefferies thinks the move still has legs.
The Street mostly agrees. 10 of 12 analysts covering the stock rate it Buy or Strong Buy, according to LSEG. The market read the chart. This time it read the biopsy.
Do you own any shares of Abivax (ABVX)?
OVERHEARD ON THE STREET
🌎 | The US declined to renew USMCA with Canada and Mexico, keeping the pact alive, but triggering annual reviews that could reopen negotiations.
🏦 | New Federal Reserve Chair Kevin Warsh called inflation "too high" but gave no clear signal on the July rate decision.
🤖 | Ford (F) is rehiring hundreds of engineers to fix quality issues AI could not handle, joining IBM (IBM) in walking back AI-driven layoffs.
📱 | SpaceX (SPCX) showed investors a prototype AI handset slimmer than an iPhone, running xAI tech on a Qualcomm (QCOM) Snapdragon chip ahead of its IPO.
TUESDAY’S POLL RESULTS
Do you own any shares of Block (XYZ)?
▇▇▇▇▇▇ 🐂 Yup, I’m holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I’m interested
And, in response, you said:
🐂 Yup, I’m holding — “I’m one of the 50% employees that the Jack let go. Jack can f*** off, but I want the stock to go up. (I believe that the stock will go up.)”
