Closing Recap

Thursday, September 25, 2025

U.S. stocks opened sharply lower, though rebounded this afternoon paring losses to hold around the 6,600 level for the S&P 500 (SPX), but was still down for a 3^rd straight day as markets await key inflation data tomorrow morning with August PCE prices. Today’s data showed an improvement in GDP growth and lower jobless claims. Healthcare (XLV -1.6%) was a big drag in the S&P 500 especially in MedTech after the U.S. Commerce Department said on Wednesday it has opened new national security investigations into the import of personal protective equipment, medical items, robotics and industrial machinery. Energy (XLE +0.9%) was the only sector closing higher today. Outside of tomorrow’s upcoming inflation data, market concerns surround Washington, D.C., as Democrats and Republicans are at an impasse with just days to go before the federal government shuts down. Congress is set to return to Capitol Hill Monday, giving lawmakers just two days to reach a deal that will keep the government from shutting down starting Wednesday. Republicans are demanding that Senate Democrats help them pass a stopgap bill that squeaked through the House last week. Any such bill will require 60 votes to be adopted. U.S. markets may have finished lower today but are still on track for broad market gains in September. @RyanDetrick noted, November has never been lower when the S&P 500 was higher in May, June, July, August, and September. But October and December are down on average. Something for everyone.  Also, for the last 13-years, for both SPX and QQQ, Octobers have been 7 greens, 6 reds (but down the last 2-years), Novembers 12 greens, 1 red and Decembers 8 greens, 5 reds. Smallcaps underperform as the Russell 2000 declined for the 4^th time in 5 trading days after record highs 9/19.

• Durable Goods Orders for August rose 2.9% m/m, compared with the -0.3% decrease expected and -2.8% in the prior month (revised from -2.8%). Excluding transportation, new orders gained 0.4% last month, excluding defense, new orders advanced 1.9% after July’s -2.3% (revised from -2.5%). Core capital goods orders (nondefense, excluding air): +0.6% vs. -0.1% consensus and +0.8% in July (revised from +1.1%).
• Weekly jobless claims dropped by 14K to 218K vs. 238K consensus and 232K prior (revised from 231K); the 4-week moving average was 237,500, a decrease of 2,750 from the prior week’s average of 240,250 (revised from 240,000); continuing claims dipped to 1.926M from 1.928M in the prior week (revised from 1.920M) and also came in lower than the 1.930M consensus.
• U.S. international trade in goods deficit narrowed to (-$85.5B) in August’s advance estimate from the revised (-$102.8B) in July and compares with the (-$94.4B) shortfall expected. Exports of goods stood at $176.1B in August, $2.3B less than July. Imports came in at $261.6B, $19.6B less than the prior month.
• Existing Home Sales for August 4.00M unit rate (consensus 3.96M), vs July 4.01M (prev 4.01M); Aug inventory of homes for sale 1.53M units, 4.6 months’ worth; U.S. Aug national median home price for existing homes $422,600, +2.0% from Aug 2024.

• Treasury yields rose following better economic data this morning, stayed elevated after an auction this afternoon and ahead of tomorrow’s PCE data. The U.S. sold $44B in 7-year notes at high yield 3.953% vs. 3.947% when issued prior (biggest tail since Aug 2024) with bid-to-cover ratio 2.40 (vs. 2.49 prior auction), as primary dealers take 12% of U.S. 7-year notes sale, direct 31.58% and indirect 56.42%.
• Bitcoin and other cryptocurrencies fell as investors turned their attention to coming economic data following a flash crash earlier this week. Bitcoin was down -3.5% below $110,000, bringing losses over the past seven days to over -5% (now off 11% from record high of just above $123,000 in August). The second largest crypto by market value, Ether, fell over -7% below $3,900 while Ripple’s XRP, and Solana fell as well ahead of Friday’s personal consumption expenditure data (PCE), the Federal Reserve’s preferred inflation measure, which could influence the central bank’s next interest-rate decision.

• In Autos: EU car registrations edged down by 0.1% compared to the same period last year, despite marking a second consecutive month of positive growth with a monthly year-over-year increase of 5.3%, reported the ACEA. BYD Co (BYDDF) sold 3x as many new cars in the EU last month than in August 2024, surpassing U.S. rival TSLA for the second consecutive month, data from European auto lobby ACEA showed. Tesla’s EU sales dropped 36.6%, squeezing its market share to 1.2% from 2% a year ago, while BYD’s sales were up 201.3% to give it 1.3% market share. STLA sales were up 2.2%.
• In Auto Suppliers: ADNT was upgraded from Equal Weight to Overweight at Wells Fargo and raised tgt to $31 from $24 saying the company should benefit from a North American recovery in limited volume production with added help from its "strong transplant relationships. Also believes Adient’s North American production footprint is also an advantage.

• In Restaurants: SBUX said it will close stores and eliminate 900 jobs in a $1 billion restructuring effort as the company amps up a turnaround plan under new Chief Executive Officer Brian Niccol; said that most of the affected positions are located in North America. WEN was downgraded to Sell from Neutral at Northcoast with $7 tgt saying channel checks indicate Wendy’s is facing a "leadership vacuum" while its marketing is not working, which is driving product launch delays.
• In Food & Beverages: UNFI was upgraded to Outperform at BMO Capital and raise tgt to $36 saying they believe the company is executing its network optimization strategy with better-than-expected customer retention which provides visibility and increases its confidence that UNFI can meet or exceed its HSD% EBITDA growth targets.

• In Office Furniture: SCS reported Q2 results as adj EPS $0.45 vs est. $0.36, adj EBIT $75.3Mm vs est. $66.5Mm on revs $897.1Mm vs est. $873.7Mm, gross margin 34.4%.

• In Coal (HCC, METC, BTU, ARLP, AMR) the administration of President Donald Trump expects most of the nation’s coal-fired power plants to delay retirement to help deliver the vast amount of electricity needed to fuel artificial intelligence, Energy Secretary Chris Wright told Reuters on Thursday. Keeping those often half-century-old coal plants running is part of a broader strategy to increase the country’s power output that will also include boosting nuclear energy and allowing backup power plants to operate around the clock.

• In Crypto: CIFR announced a 10-year high-performance computing (HPC) colocation agreement with Fluidstack, a premier AI cloud platform that builds and operates HPC clusters valued at about $3B in contracted revenue over the initial 10-year term and includes two five-year extension options. In addition, Google will backstop $1.4 billion of Fluidstack’s lease obligations to support project-related debt financing; shares declined after announces proposed offering of $800M of 0% convertible senior notes. CLSK announced that it has expanded its capital strategy by opening a new $100M Bitcoin-backed credit facility with Two Prime. This financing brings Cleanspark’s total collateralized lending facilities to $400M, providing additional non-dilutive capital to accelerate data center growth.
• In Banks: Citigroup (C) announced deal to sell 25% stake in Grupo Financiero Banamex to Mexican billionaire Fernando Chico Pardo for $2.3 billion, marking another step toward its plan to take the unit public; MPB and FCOB jointly announced that they have entered into a definitive agreement pursuant to which Mid Penn will acquire 1st Colonial in a cash and stock transaction valued at approximately $101M.

• CAPR said that during a recent meeting, the U.S. FDA agreed to offer ‘further regulatory flexibility’ if the company resubmits a marketing application for its lead asset, Deramiocel.
• IMRX shares rose after reported 86% overall survival at nine months in first-line pancreatic cancer patients treated with Atebimetinib in combination with mGnP; announces 86% overall survival observed at 9 months in first-line pancreatic cancer patients treated with Atebimetinib + mGnP vs. standard of care benchmark is 47%; also announced public common stock offering.
• KOD was upgraded to Equal Weight from Underweight at Barclays and raised tgt to $17 from $7 saying Roche’s Phase 2 vamikibart plus ranibizumab data in diabetic macular edema provide important clinical validation Kodiak’s for KSI-101.
• LLY halted a study of an experimental drug, which is designed to prevent obesity patients from losing too much muscle, due to strategic business reasons, according to a U.S. registry of clinical trials. LLY was testing the drug, bimagrumab, alone or in combination with Lilly’s tirzepatide, the active ingredient in its blockbuster obesity treatment, Zepbound.
• VRTX was upgraded to Outperform from Market Perform at Leerink based upon a MEDACorp Journavx survey, as anticipates strong adoption and upward pressure on reset consensus pain revenue expectations in 2026-plus; also, the company’s cystic fibrosis franchise is likely to deliver solid growth.

• In Medical Devices: Last night, a posting to the Federal Register disclosed that the Secretary of Commerce had commenced a 232 investigation in early September on the imports of personal protective equipment (PPE), medical consumables and medical equipment including devices. The probe also covers pacemakers, insulin pumps, coronary stents, heart valves, hearing aids, prosthetics, blood glucose monitors, orthopedic appliances, computed tomography scanners and magnetic resonance imaging machines. Shares of GEHC, ILMN, BAX, ISRG, MDT, SYK, DXCM, PODD were all weaker.

• In Chemicals: FUL shares dropped after Q3 results as revs fell -2.8% y/y to $892M, vs. est. $893.9M; Q3 adj Ebitda was $171M, up 3% y/y driven principally by the net impact of pricing and raw material cost action; sees FY25 revs to be down 2% to 3%; organic revenue for fiscal 2025 is now expected to be flat to up 1%. Ag chemicals MOS, NTR, CTVA, CF shares declined midday after Bloomberg reported the Department of Agriculture and Department of Justice will investigate suppliers of crop inputs such as seeds and fertilizers for potential antitrust violations
• In Defense sector: ahead of a potential partial government shutdown in 6-days as no new deal has been reached in Washington DC, shares of gov’t IT service names BAH, CACI, LDOS, SAIC saw weakness today. Note during a shutdown, DoD cannot solicit or award new contracts. Work on previously funded contracts can continue. Stop-work orders may be issued if Fed Civs are required for contract oversight, execution.
• In Steel sector: Nippon Steel Corp. said it will invest $300M in two plants run by the recently acquired United States Steel Corp., setting up a new recycling facility and expanding production via the introduction of new product lines in the key U.S. market. WS Q1 results were slightly above ests (adj EPS $0.77 vs est. $0.76, adj EBIT $54.9Mm vs est. $52.4Mm on revs rose 5% y/y to $872.9Mm vs est. $834.6Mm) while gross margin increased by $14.8M y/y to $115.2M, helped by higher direct spreads and higher direct volumes.
• In Uranium: UEC was downgraded to Market Perform from Outperform at BMO Capital noting it has been the best performing stock in its coverage over the last quarter, up ~140% since early June as sentiment in the sector continues to improve, particularly for U.S. domestic uranium producers.
• In Rare Earth sector: The Information noted President Trump’s administration is in talks to take stakes in multiple critical minerals companies, according to industry consultants, where government support comes in exchange for payments or equity. The negotiations largely involve Department of Energy grants and loans for companies that mine and process the metals and components used in batteries. Shares of MP, USAR, CRML were among names moving higher on report. https://tinyurl.com/ms5w6fys
• In Metals & Mining: after tumbling nearly -17% on Wednesday following the tragic mud rush incident at the company’s giant Grasberg Block Cave and lowered forecasts, Scotia downgraded FCX shares today to Sector Perform, though Bernstein upgraded shares to Outperform as believes investors have overly punished FCX and the knock-on of copper macro has pushed ANTO above its target price.

• In Software: SAP is the subject of a European Union antitrust probe into whether the company distorted competition for maintenance and support services related to a management program it sells – Bloomberg reported. BB Q2 revs rose 2.7% y/y to $129.6M, above ests $119M and the co prior view of $115M-$125M while raised its year rev outlook to $519M-$541M from prior $508M-$538M view and Ebitda view to $82M-$101M from prior $72M-$87M on better earnings. ORCL initiated at Sell at Rothschild & Co Redburn with $175 tgt saying the market is materially overestimating the value of the firm’s cloud revenues.
• In AI/Data Centers: CRWV expanded its partnership with OpenAI in a new deal worth up to $6.5B, bringing the total value of their agreements to $22.4 billion, the latest in a series of billion-dollar deals OpenAI has signed to secure computational power.
• In EMS Sector: JBL reported Q4 adj EPS $3.29 above ests $2.88 and better revs of $8.3B vs. est. $7.54B and issued guidance above current Wall Street estimates but shares fell.
• In IT Services & Consulting: ACN said it expects US federal spending cuts on consultants to slow its growth next year after it beat expectations for revenue in Q4 – had reported Q4 adj EPS $3.03, vs. consensus $2.98 and revs $17.6B vs. est. $17.36B; reports Q4 new bookings of $21.3B and generative AI new bookings of $1.8B for the quarter and $5.9B for the year. IBM shares were active after HSBC said it’s achieved a world-first breakthrough in deploying quantum computing in financial markets. HSBC said that it used International Business Machines (IBM) most-advanced Heron quantum processor to attain a 34% improvement in predicting how likely a bond will trade at a given price