The Daily Chase: Uber shares surge; TFI reports results

Look up in the sky tonight and you may be lucky enough to find a full Sturgeon Moon staring back at you. The first August full moon is auspicious for many reasons. For Indigenous communities and farmers it is a time for harvest. For fishers a time of plentiful fish (hence the name). For my husband, it’s that thing in the sky his wife keeps asking him to come over and look at.  In any case, this is an investing newsletter so why am I talking about moons? I’m glad you asked. There have been studies (editor: Amber, what are you doing?) that have looked at the relationship (no, don’t do this) between the stock market (you are a respectable journalist) and lunar cycles (I’m done here). Ahem. According to one study by University of Michigan researchers, stock market returns are lower on days around the full moon than on days around a new moon. You may call this lunacy but keep in mind that’s a 16th century word for insanity of an intermittent kind attributed to changes in the moon.

Here are five things you need to know today:

New month, who this?: Markets are off to a tentative start to kick off the first trading day of the month. July was a rousing success for the bulls. The S&P 500 finished things off at a 16-month high, the NASDAQ is on the longest monthly win streak since August 2020. Oil was the comeback kid with a nearly 16 per cent gain in July. CNN Fear & Greed Index is notching into “Extreme Greed” territory. S&P 500 targets are being moved up at sell-side shops. All fuelled by the expectations we will nail this soft landing. And yet, the Senior Loan Officer Survey yesterday showed credit conditions tightened to levels that have almost always been associated with recessions. Is this time different? Data today might tell us. We will get U.S. job opening data and a read of U.S. manufacturing activity at 10 a.m EDT. We also have 47 S&P 500 companies reporting today. There are seven companies reporting on the TSX, but almost all after-hours. Is it me or are more companies reporting after hours these days?

Uber surge: Shares of Uber are getting a lift after reporting a surprise profit in the quarter and record ridership. It also spat out record free cash flow of more than US$1 billion. But the CFO is leaving and that could pump the brakes on enthusiasm this morning. Shares of Uber have rallied 100 per cent into the print so that fact it is up at all speaks to investor delight in profitability and signs the company is growing up.

Dow checkup: Dow components Caterpillar and Merck both reported results this morning and are trading up. Caterpillar is doing surprisingly well considering we are in a global manufacturing recession. Sales growth of 22 per cent beat expectations and profit was also higher than expected. Merck meanwhile also beat and raised its sales forecast for the year on the back of strength in its cancer fighting drug Keytruda and its HPV vaccine Gardasil.

Hitting a rough patch: Shares of travel stocks Norwegian Cruise and JetBlue are under pressure following quarterly results. Norwegian, one of the best performing S&P 500 companies so far this year, seems to be falling victim to its own success. While its loss was much smaller than expected and its revenue soared 86 per cent, its forecast for the current quarter didn’t live up. JetBlue, on the other hand, is actually cutting its profit forecast making it the second airline to warn of wilting U.S. travel demand.

Eyes on the road: I’ll be watching shares of trucker TFI International. It reported weaker than expected top and bottom line results. However, with the conference call just kicking off, the focus will be around any potential benefits from the Yellow bankruptcy. Our Paige Ellis is reporting on this for us.

Notable Guests