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đŸ”»Temu’s Parent PDD Takes a Dive

+ Telegram CEO Pavel Durov Detained in France + This Week

Good afternoon! Elon Musk just threw another curveball at X employees: If you want those long-awaited stock grants, you'll need to do a little homework. In a late-night email, Musk announced that stock options aren’t a given anymore. Instead, employees have to submit a one-page summary detailing why they deserve them.

Yep, you read that right. No more free rides. This move comes as tensions simmer between X’s leadership and staff, who are still waiting on their annual equity refresh that was supposed to drop in April. With delays in promotions and whispers of more layoffs, Musk's latest requirement means employees better sharpen their pencils and prove their value if they want a piece of the pie.

MARKETS

*Stock data as of market close, crypto data as of 5pm CST*

  • The stock market had a bit of a split personality today. The Dow Jones Industrial Average hit a fresh record high, while the S&P 500 and Nasdaq Composite both took a tumble. The culprits? Big Tech stocks, which decided to take a breather after a strong rally that had the market flirting with its all-time highs.

  • Despite a strong showing from most S&P 500 companies, the tech titans—especially chip stocks like Nvidia, Advanced Micro Devices, Arm Holdings, and Micron—dragged the broader indexes down. With Nvidia’s earnings report looming and a fresh inflation update from the government on the horizon, Wall Street is on edge, waiting to see what comes next.

STOCKS
Winners & Losers

What’s up 📈

  • XPeng Motors ($XPEV) surged 7.13% after CEO He Xiaopeng increased his stake in the company, purchasing over two million shares worth more than $13.5 million.

  • Ubiquiti ($UI) climbed 6.12% as BWS Financial raised its price target on the stock by 50%, increasing it from $160 to $240.

  • Cava Group ($CAVA) gained 3.11% after the Mediterranean fast-casual chain reported strong earnings and raised its full-year outlook last week.

  • Tencent Music Entertainment ($TME) rose 4.49%.

  • Atlassian ($TEAM) edged up 3.14%.

What’s down 📉

  • Pinduoduo ($PDD) plummeted 28.51% after disappointing sales growth and management warnings about future challenges.

  • Icahn Enterprises ($IEP) fell 11.49% following the announcement of an Open Market Sale Agreement with Jefferies to sell up to $400 million of its depositary units.

  • Super Micro Computer ($SMCI) declined 8.27%, Arm Holdings ($ARM) fell 4.96%, Broadcom ($AVGO) decreased 4.05%, and Micron Technology ($MU) edged down 3.83%, all in anticipation of Nvidia's upcoming earnings report.

  • Tesla ($TSLA) slid 3.23% afterCanada announced 100% tariffs on Chinese car imports, but Tesla's U.S. plants can serve the Canadian market, minimizing impact.

  • e.l.f. Beauty ($ELF) dropped 8.69%

  • Sweetgreen ($SG) decreased 7.81%

  • Tempus AI ($TEM) slipped 6.84%

  • Alibaba ($BABA) was down 4.27%

  • Hims & Hers Health ($HIMS) dropped 4.06%

EARNINGS
Temu’s Parent Company PDD Takes a Dive

PDD Holdings ($PDD), the proud parent of budget shopping sensation Temu, just took a nasty tumble down the stock market stairs. After posting lackluster quarterly sales and giving a gloomy forecast, shares of the Chinese e-commerce giant plummeted 28.5% on Monday, marking the steepest single-day drop in the company's history. Ouch.

Not-So-Sunny Outlook

What’s behind this dramatic fall from grace? It turns out, PDD’s latest revenue figures didn’t quite hit the mark. The company reported revenue of $13.36 billion for Q2, falling short of Wall Street's forecast of $14.03 billion. That's a miss that investors didn't take lightly. Jun Liu, PDD’s VP of finance, didn’t sugarcoat the situation, warning of “intensified competition and external challenges” that could continue to put pressure on growth and profitability. In other words, it’s going to be a bumpy road ahead.

Even with a massive marketing push and heavy investments in expansion, the slowdown is evident. The company noted that Chinese consumers are shifting their spending from goods to experiences—think less shopping, more eating out and entertainment. This shift, coupled with an ailing Chinese economy, has left PDD scrambling to adjust its strategy. And if that wasn’t enough, rivals like Alibaba ($BABA) and JD. com ($JD) are also feeling the heat, posting weaker-than-expected results in the face of changing consumer behaviors and economic conditions.

All About That Budget Life

Despite the challenges at home, PDD has been casting a wider net, particularly in Europe and beyond, trying to capture the global audience’s attention with Temu's low-cost charm. And it’s not just the usual suspects like Alibaba that PDD has to worry about—everyone from TikTok’s parent company ByteDance to Amazon is vying for the budget-conscious shopper’s dollar.

PDD’s plan? Double down on investment, even if it means sacrificing short-term profits. Chairman and Co-CEO Chen Lei made it clear that they’re willing to accept “short-term sacrifices” to build a stronger foundation for the future. In the meantime, PDD is focusing on cleaning up its platform by supporting high-quality merchants and cracking down on the lower-quality ones.

What’s Next?

With competition heating up and consumer spending on the decline, PDD is gearing up for a fight to maintain its spot in the e-commerce world. While the company has made significant strides in gaining ground against giants like Alibaba and JD. com, it's clear that they’re in for a tough battle both at home and abroad. The days ahead will tell whether PDD’s aggressive growth strategy will pay off or if it’ll face more turbulence in the marketplace.

NEWS
Market Movements

TECH
Telegram CEO Pavel Durov Detained in France

Telegram CEO Pavel Durov just found himself in hot water in France—and not the ice-cold baths he’s famously fond of. The 39-year-old billionaire was detained at an airport outside Paris, suspected of allowing illegal activity to run rampant on Telegram, the messaging app he founded. If you’re picturing Durov scrolling through a flurry of encrypted messages, sipping his French espresso, think again.

French authorities aren’t thrilled with Telegram’s hands-off approach to content moderation, and they’ve made it known. Durov’s arrest, which could be extended by 24 hours, is part of a broader investigation into online criminality. Allegations range from the distribution of child exploitation material to fraud and cyberbullying. Durov’s failure to cooperate with law enforcement on these matters didn’t help his case either.

Russian Roulette

The plot thickens with some political spice—Durov’s arrest has sparked a wave of reactions. The Russian Embassy in Paris quickly demanded explanations from French authorities, while Elon Musk took to X (formerly Twitter) to rally support for Durov with a “#FreePavel” hashtag, suggesting this is an assault on free speech.

President Emmanuel Macron, however, insists there’s no political motivation here. He assured that Durov’s arrest was purely a legal matter, not a diplomatic chess move. Macron’s statement comes as French authorities crack down on platforms like Telegram, which they believe facilitate illegal activities due to lax content oversight.

Telegram’s Wild Ride

Founded in 2013, Telegram quickly became a hit, especially in countries with strict censorship. It’s been a crucial communication tool for both Ukrainian officials and the Russian government during the ongoing war, making it a favorite for those who value privacy—and for some, a tool for illicit activity.

With over 900 million users, Telegram has also been a thorn in the side of governments worldwide, thanks to its encrypted messaging and limited moderation. Durov, who lives in Dubai and holds citizenship in France and the UAE, might be the latest high-profile tech CEO to face the consequences of this tension between free speech and regulation.

What’s Next?

As Durov waits to see if his detention will be extended, the tech world is watching closely. Will he face charges, or is this just a scare tactic? For now, Telegram’s CEO remains in a legal limbo, caught between his app’s free-wheeling ethos and the tightening grip of government oversight.

Calendar
On The Horizon

Tomorrow

Hey, shoppers! It’s time to check your economic vitals because tomorrow, the Conference Board is dropping its latest consumer confidence report. Think of it as a sneak peek into the collective mood of American wallets—are we feeling spendy or saving those pennies?

Here’s the scoop: Consumer spending powers about 70% of the US economy, so all eyes are on this report to see just how sturdy that spending spree is. Analysts are predicting a slight boost in confidence, with August’s index expected to climb to 101.8 from July’s 100.3. For context, any number over 90 usually signals a robust economy.

Another thing to watch? Home-buying intentions. With mortgage rates cooling off a bit, will more people be house hunting? Last month, intentions hit a 12-year low, so any uptick could be a big deal.

Earnings

Here’s the lineup for this week:

Tuesday: Bank of Montreal ($BMO), PVH ($PVH), Nordstrom ($JWN), and Box ($BOX).

Wednesday: Nvidia ($NVDA), Salesforce ($CRM), CrowdStrike ($CRWD), HP($HPQ), Bath & Body Works ($BBWI), J.M. Smucker Company ($SJM), and Chewy ($CHWY).

Thursday: Lululemon ($LULU), Dell ($DELL), Best Buy ($BBY), Dollar General($DG), Burlington Stores ($BURL), Campbell Soup Company ($CPB), Marvell Technology ($MRVL), Brown-Forman ($BF.B), Ulta Beauty ($ULTA), and Birkenstock ($BIRK).

NEWS
The Daily Rundown

RESOURCES
The Federal Reserve Resource

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