HAPPY WEDNESDAY TO THE STREET
Chair Kevin Warsh's Federal Reserve just voted 12-0 to raise rates for the first time since 2023.
The quarter-point hike targets inflation that has worsened since the war with Iran began, and 16 of 18 officials see another one coming this year.
President Trump asked for a rate cut. Warsh apparently only heard the word "rate."
🟨 | US stocks were mixed today, with the Fed moving as expected, and crude oil prices cooling from recent highs.
📈 | One Notable Gainer: SpaceX (SPCX) rose after scheduling its next Starship test flight for Sept 22.
📉 | One Notable Decliner: JB Hunt (JBHT) sank after warning Q3 earnings could fall as much as 10%.
— Brooks & The Street Sheet Team
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
Market Movers
INTEL, EXPEDIA, LUMENTUM
📈 | Intel (INTC) jumped on a report SK Hynix (SKHY) is in talks to make memory chips with it in the US.
📈 | Lumentum (LITE) rallied as AI infrastructure stocks rebounded from a losing streak.
📉 | Diamondback Energy (FANG) slid as oil prices fell on a report of rising US inventories.
📈 | FTAI Aviation (FTAI) approved a $500M share buyback.
Tomorrow's Trade Idea, Today
TRACK RECORD
Stock Spotlight
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Next Stop: Buy
Analyst Thomas Wadewitz sees a second straight year of strong volume growth in 2027, based on the firm's read of key customer markets.
He expects intermodal freight volume to rise 3.5% year over year in 2027.
Priced to Move
Volume is only half the haul. UBS's analysis of intermodal and merchandise pricing against the truckload market points to a stronger tailwind from price. Put simply, Wadewitz thinks the railroad can move more cargo and charge more to move it.
Then there's the merger. Union Pacific plans to combine with Norfolk Southern (NSC) to create the first US transcontinental railroad. Wadewitz expects a tough regulatory review with an uncertain outcome, but views approval as upside optionality for the stock.
Coast-to-Coast Consensus
The Street already has a ticket to ride, with 18 of 27 analysts rating the stock a Buy or Strong Buy.
Shares are firmly in the green this year, but UBS says this train hasn't left the station.
Do you own any shares of Union Pacific Corporation (UNP)?
OVERHEARD ON THE STREET
🛍️ | US retail sales jumped 1.2% in August, beating the 0.7% gain economists expected.
🛢️ | Continental Resources signed a preliminary deal to develop a Venezuelan oil patch holding an estimated 30B barrels.
🛒 | Uber (UBER) expanded its Costco (COST) delivery partnership on Uber Eats to 47 states, up from 17.
🇪🇺 | European Commission President Ursula von der Leyen backed making Canada the EU's first associate member.
🏦 | Apollo Global Management (APO) warned that hyperscaler debt is getting riskier, with default insurance costs climbing.
TUESDAY’S POLL RESULTS
Do you own any shares of Eli Lilly and Company (LLY)?
▇▇▇▇▇▇ 🐂 Yup, I’m holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I’m interested
And, in response, you said:
🐂 Yup, I’m holding — “Not only has it been good growth in my portfolio, there are also dividends on top of that.”
🐻 Nope, not interested — “Pharma is too vulnerable to regulatory changes and class action litigation.”
👀 No, but I’m interested — “Longer-term hold investment!”
