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Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟥 | US Stocks Rose on Tuesday. Each of the three major indexes moved marginally lower as investors sat on the sideline, waiting for the release of major tech earnings.

• 📈 | One Notable Gainer: Finance company MSCI saw its stock pop 8% after it reported Q2 earnings that showed year-on-year revenue growth of 14%.

• 📉 | One Notable Decliner: Shares of NXP Semiconductors tumbled 8% after missing second-quarter earnings estimates and reporting a disappointing outlook for the third quarter.

• 🌧️ | Tomorrow's Trade: Raining on the Parade. Scroll down for more.

Plus, do you need help taking control of your financial operations? Take a demo to learn how, and today’s partner will give you a 28" Blackstone Omnivore Griddle.

YESTERDAY’S POLL RESULTS

Are you bullish or bearish on Netflix (NFLX) over the next 12 months?

🟩🟩🟩🟩🟩🟩 Bullish

🟨🟨🟨⬜️⬜️⬜️ Bearish

MARKET MOVERS

Pentair, Danaher, & Comcast

JNJ (-1%) Shares of Johnson & Johnson fell on news that it’s nearing an $8 billion settlement for its talc products that allegedly cause cancer (WSJ)

PNR (+9%) Water treatment company Pentair beat Wall Streat estimates for the second quarter, with a 19% increase in operating income from Q2 2023 (BW)

CCK (+9%) Packaging company Crown Holding reported a second-quarter earnings beat with EPS of $1.81 that exceeded the $1.58 estimates (MI)

DHR (+5%) Danaher, which sells tools and services to drug developers, reported second-quarter numbers that beat Wall Steet estimates (Barron’s)

CMSA (-3%) Shares of Comcast fell after reporting that it missed revenue estimates due to pressure in its film studio and theme park segments (CNBC)

TOGETHER WITH BILL

Take a demo, get a Blackstone Griddle

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OVERHEARD ON THE STREET

CNBC: McDonald’s announced it is extending its $5 value meal in most US markets, saying the deal helped to boost traffic.

AP: Warner Bros. Discovery informed the NBA that it will match Amazon Prime’s $1.8 billion a year offer to air games.

Bloomberg: Apple is trying to exert more control over its production partners in an attempt to rein in Hollywood spending after years of losses.

Reuters: Whole Foods reached an agreement to settle a lawsuit accusing it of illegally firing a worker who refused to remove her BLM facemask.

NYT: Federal transportation officials are investigating Delta Air Lines as the carrier struggles to rebound from the CrowdStrike operations meltdown.

TOMORROW’S TRADE IDEA, TODAY

Raining on the Parade

Record Revenues

General Motors (GM) and Ford (F) are set to see strong quarterly revenue on their respective earnings reports, according to FactSet. The supply chain is normalized post-Covid, and sales prices were better than anticipated. 

Both stocks have seen solid gains this year largely due to profit forecast upgrades and stock buybacks. EPS and earnings multiples have improved as well.

Inventories Are Up

Unexpectedly, the new vehicle market has handled higher-for-longer interest rates better than originally anticipated. Built-up demand stemming from pandemic shortages helped substantially, but the helping hand is starting to weaken. 

Now that inventories are almost back to where they were pre-pandemic, a dip in demand could pose a big problem for automakers.

Pricing Problems

As we move into the second half of 2024, pricing discipline is becoming a big concern, mostly thanks to Stellantis (STLA). The automaker has a huge inventory of aging Jeeps and RAM trucks and has been slashing prices to incentivize consumers. 

GM and Ford may have to cut their prices to remain competitive, but that may not bode well for the momentum they’ve built. This, coupled with the company’s focus on EVs, led Bank of America (BAC) to list GM last in its “Car Wars” report.

TOGETHER WITH BILL

Take a demo, get a Blackstone Griddle

Financial operations heating up? BILL Spend & Expense can help you take control. Automate expense reports, set budgets across teams, and get real-time insights into company spend. Take a demo to learn how and we'll give you a 28" Blackstone Omnivore Griddle—so you can take control of your next barbecue, too.

Request a demo

ON OUR RADAR

WSJ: A House Oversight investigation found that pharmacy benefit managers encourage higher-priced drugs over lower-priced alternatives.

CNBC: Crude oil futures dropped to the lowest level since early June despite escalating tensions between Israel and Houthi militants in Yemen.

WSJ: The FTC is seeking information on how AI may allow companies to vary prices using consumer data on shopping habits.

CNN: A Southwest airplane flew as low as 150 feet from the ground, marking the third case of low altitude from Southwest Airlines this year.

YF: Meta announced its new open-source AI model, and Mark Zuckerberg called on other tech companies to start using open-source models.