Monday, August 19th, 2024

Market indexes began the day in a good mood. Throughout the course of the trading session, nothing came along to trip it up, either. All four major indexes closed the day at or near session highs.

The Dow gained +236 points, +0.58%, the S&P 500 was +54 points, +0.97%. The Nasdaq won the day as it has continued to lead over the past year and a half, +245 points, +1.39%, while the small-cap Russell 2000 was +25, +1.19%, in today’s session.

July Leading Economic Indicators No Longer Show Upcoming Recession

The Conference Board this morning came out with its monthly print on Leading Economic Indicators (LEI) for July. While we saw a lower-than-expected -0.6% headline from the expected -0.4% (and 3x lower than the unrevised June read of -0.2%), the report also said its six-month annual growth rate no longer points to an imminent recession. This is a notable occurrence; it breaks the LEI’s streak of predicting recessions going back more than a decade.

Perhaps the pandemic-led supply chain difficulties puts recent economic activity into a different category. Or perhaps government investment in infrastructure jobs over the past couple years ahead of a recession helped keep the economy from dipping into one. Perhaps there will yet be a recession that has not yet emerged. Nevertheless, for today’s news cycle, this can only be construed as good news.

To be sure, certain headwinds are still expected in this report. Both the Coincidental Economic Index and Lagging Economic Index both expect challenges ahead as domestic employment attempts to stay afloat while interest rates remain at their highest levels in 17 years. Further, The Conference Board expects +0.6% GDP growth in Q3 and +1.0% in Q4. Of course, these could still be revised lower, but we’ll take a win when we find it.

Palo Alto Networks Beats and Raises in Fiscal Q4

Silicon Valley-based cybersecurity mainstay Palo Alto Networks PANW kept its perfect earnings record intact this afternoon, posting earnings of $1.51 per share which outperformed the Zacks consensus by a solid dime. Revenues of $2.19 billion surpassed the $2.16 billion analysts were collectively looking for. Next-quarter earnings guidance was also raised, to a range of $1.47-1.49 per share, ahead of the $1.44 estimate.

The company also gave full-year fiscal 2025 estimates for both top and bottom lines. Earnings for a year from now are expected to fetch between $6.18-6.31 per share (estimates had been for $6.20 per share), with revenues between $9.10-9.15 billion — an improvement from the $9.11 billion initially projected. Palo Alto Networks also announced a $500 million share buyback. Shares have been fluctuating in late trading; the stock had gained nearly +19% year to date.

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