This Week In Markets ⚡️ 07/08 - 07/12

Good Afternoon, A quick recap of yesterday’s jaw-dropping news: The FBI has confirmed that the shooting at a Pennsylvania rally for former President Trump was indeed an assassination attempt. Trump, who was reportedly shot in the ear, assured everyone he’s “fine.” Meanwhile, the alleged shooter and one rally attendee are dead. Political leaders across the globe have shown their support for Trump and denounced the act of violence. Meanwhile, the Secret Service is under fire for what appears to be a major security lapse.

MARKETS

This Past Week

• This week was a seesaw ride for the markets. The S&P 500 continued its winning streak, up 0.76% to 5,615.35, notching another all-time high. The Nasdaq tiptoed up 0.14% to 18,398.45, while the Dow stole the show, leaping 1.55% to a record 40,000.90.

• Bond yields took a dive with the 10-Year down 25 basis points to 4.19%, as investors weighed Powell's testimony and the latest CPI and PPI numbers.

• Bitcoin had a stellar week, jumping 2.74% to $59,640.30 after Germany's $900M crypto liquidation scare.

•  Big banks kicked off Q2 earnings season, with JPMorgan, Citigroup, and Wells Fargo stepping into the spotlight. Investment banking revenue ticked up as deal-making made a comeback, but high interest rates continued to squeeze their loan and deposit businesses. Wells Fargo, feeling the heat the most from inflation, reported a year-over-year profit drop. Investors weren't thrilled—stock for all three banks took a hit.

STOCK
Winners & Losers

What’s up This Week 📈

• QuantumScape ($QS) jumped 62.4% thanks to a deal to build solid-state batteries for Volkswagen.

• Lucid ($LCID) climbed 36.88% after reporting a 70% rise in deliveries for the second quarter.

• MicroStrategy ($MSTR) advanced 6.06% after the bitcoin-loving company announced a 10-for-1 stock split.

• Advanced Micro Devices ($AMD) popped 3.89% on the news it is acquiring Silo AI, the largest private artificial intelligence lab in Europe, for $665 million.

• Uber ($UBER) gained 1.56% on the news that Tesla will delay the unveiling of its autonomous taxi until October.

• Tesla ($TSLA) rose 0.21%, nearly recovering over robotaxi delays, despite a UBS analyst downgrading the company to “sell.”

What’s down This Week📉

• HubSpot ($HUBS) sank 18.99% after a report that Alphabet is no longer interested in acquiring the company.

• Delta Air Lines ($DAL) dropped 6.90% after missing earnings expectations in the second quarter and forecasting lower revenue ahead. Competitors United Airlines ($UAL) decreased 6.07% and American Airlines ($AAL) slid 3.57% in sympathy.

• UiPath ($PATH) fell 3.95% on the announcement that the software company will cut 10% of its workforce.

• Snowflake ($SNOW) sank 1.76% after AT&T announced a hack affecting virtually every one of its customers, raising cybersecurity concerns.

• ServiceNow ($NOW) dipped 1.31% following a downgrade to “sell” by Guggenheim analysts, who cited growing risks in the second half of the year.

  AT&T ($T) slid 0.11% after revealing a massive data breach involving nearly all of its customers’ information.

STOCK
Oops, They Did It Again: AT&T’s 110M User Breach

Picture this: AT&T just uncovered a data breach so big it’s like opening Pandora’s box for nearly 110 million customers.The telecommunication behemoth discovered the breach in April and has since been on a covert investigation mission.

The culprit? An unknown hacker who accessed phone records through an illegal download targeting a third-party app called Snowflake, which also handles data for other big names like Ticketmaster. At the Department of Justice's request, AT&T kept mum to assess any national security risks.

Here’s the scoop: 

• The hackers now have records of every phone number AT&T customers called or texted between May 1, 2022, and October 31, 2022.

• While the contents and exact times of these communications weren’t part of the heist, the number of interactions and call durations were.

Before you shrug it off as trivial, consider this: With "NSA-level" access to customers’ phone numbers, cybercriminals can easily match numbers to individuals using tools widely available online. The fallout could expose everything from secret business deals to clandestine love affairs.

Big picture: This isn’t AT&T’s first rodeo with data breaches. Back in March, the company revealed that the Social Security numbers and other personal info of 73 million current and former customers had surfaced on the dark web. AT&T assures this latest breach is unrelated, but it’s clear that keeping your data secure is an ongoing battle.

NEWS
Market Movements

• Meta’s Twitter Clone ($META), Threads, has 175 million monthly users since launching a year ago, says CEO Mark Zuckerberg

• UiPath ($PATH) to lay off 10% of workforce in companywide restructuring

• Boeing deliveries drop 27% in June year-on-year

• Athletic Brewing raises $50 million as nonalcoholic wave sweeps beer making

• Samsung Launches AI-Powered Galaxy Flip 6 and Fold 6

• AMD ($AMD) is acquiring Europe’s largest private AI lab to compete with Nvidia

• Tesla ($TSLA) has postponed the launch of its Robotaxi from August 8 to October

• Costco ($COST) is raising its membership fees for the first time since 2017, US and Canada memberships will go up by $5 to $65

• Apple ($AAPL) is struggling with its Vision Pro sales, which have dropped by 75% since last quarter

• The NBA has reportedly finalized a media-rights deal with NBC, Amazon, and ESPN worth $6.9 billion per season through 2036. The previous deal paid $2.7 billion per season

NEWS
The Cost of Costco: From Free Samples to Fee Hikes

Americans might argue about everything under the sun, but when it comes to discount grocery stores and their irresistible free samples, it's unanimous: we love them. Costco announced on Wednesday it's hiking membership costs for the first time in seven years while also vowing to crack down on the sharing of membership cards (so no more using Grandma’s card to stock up on bulk snacks). Starting in September, the Gold Star Membership will jump by $5 to $65 per year, and the Executive Membership will rise by $10 to $130 annually.

This price hike is just another step in Costco's strategy to keep its shelves stocked and its profits rolling. The stock is up 30% year to date and 57% over the past 12 months. Over the last five years, Costco has outperformed the S&P 500 thanks to its loyal customer base, consistent sales growth, and ever-expanding footprint.

Is it time to add Costco stock to your shopping list?

But beware of overindulgence—just ask the sample lady who cut me off after my 47th mini frittata. Some analysts warn Costco may be a bit too pricey right now.

• “It is a juggernaut,” wrote Tradequotex.com analyst Cory Mitchell. “Analysts still project Costco will increase yearly earnings at a higher rate than most S&P 500 companies over the next five years. It’s a solid company, but the stock is near one of its highest P/E levels ever. It’s overpriced.”

• Others believe the stock still has plenty of room to run. “COST continues to gain market share in a challenging macro environment,” wrote UBS analyst Michael Lasser, who has a “buy” rating and a $940 price target. Despite the fee increase, Lasser believes “the vast majority of COST members will still see overwhelming value in a COST membership.”

So, even if your Costco membership is getting pricier this fall, maybe your portfolio will see a nice return.

CALENDAR
On The Horizon

What’s Happening in the Markets This Week

Monday, July 15:

• Federal Reserve Chair Jerome Powell discusses with David M. Rubenstein

• Earnings: BlackRock ($BLK), Goldman Sachs ($GS)

Tuesday, July 16:

• Earnings: Bank of America ($BAC), UnitedHealth Group ($UNH), PNC Financial Services ($PNC), Charles Schwab ($SCHW)

Wednesday, July 17:

• Federal Reserve Beige Book

• Earnings: US Bancorp ($USB), Johnson & Johnson ($JNJ), Kinder Morgan ($KMI), Discover Financial ($DFS)

Thursday, July 18:

• Earnings: M&T Bank ($MTB), KeyCorp ($KEY), United Airlines ($UAL), Netflix ($NFLX), Taiwan Semiconductors ($TSMC), Domino’s Pizza ($DPZ)

• Friday, July 19:

• New York Federal Reserve President John Williams' panel on “A New Era for Monetary Policy”

• Earnings: American Express ($AXP), Comerica ($CMA), Huntington Bancshares ($HBAN), Fifth Third Bancorp ($FITB), Regions Financial ($RF)