Tech Rally Shows Signs of Losing Steam — WSJ

Investing.com-- Thoma Bravo is close to a deal to buy call center software maker Verint Systems Inc (NASDAQ:VRNT), Bloomberg reported on Friday, in a deal that could value the latter at $2 billion including debt.

An agreement could be announced as soon as Monday, Bloomberg reported, citing people familiar with the matter. Bloomberg had in July reported that Thoma and Verint were in talks over a potential deal.

Verint builds software to support customer experience and call center businesses, and has over 10,000 clients in over 175 countries. 

Verint shares are trading down 23.5% at a market capitalization of $1.23 billion. The company has faced increased share pressure this year amid growing concerns that artificial intelligence will greatly disrupt the business process outsourcing industry. 

Investing.com-- SpaceX postponed the planned 10th test flight of its Starship rocket on Sunday after detecting a problem with ground systems, the company said.

“Standing down from today’s tenth flight of Starship to allow time to troubleshoot an issue with ground systems,” SpaceX said on social media platform X.

The two-stage rocket, comprising a 232-foot Super Heavy booster and a 171-foot Starship upper stage, had been fueled and was standing by at the company’s Starbase facility in Texas, earlier announcements showed.

The launch was called off roughly 30 minutes before its scheduled 7:35 PM ET liftoff.

The delay follows a series of setbacks for the program this year, including an in-flight malfunction on its ninth mission and a ground test explosion in June.

Tesla (NASDAQ:TSLA) CEO Elon Musk’s SpaceX has not announced a new launch date.

Investing.com-- Coca-Cola Co (NYSE:KO) is considering options for its British coffee chain Costa, including a potential sale, a host of reports showed on Saturday and Sunday. 

Reuters reported the firm is working with investment bank Lazard (NYSE:LAZ) to review potential options. A weekend report from Sky New said Coca-Cola held initial talks with some potential bidders for Costa, including private equity firms. 

Indicative offers are expected by early autumn, but a sale is not definite, the reports said. 

The soft drink giant had acquired Costa Coffee in 2018 for over $5 billion, as it sought to strengthen its position in the global coffee market and compete with established majors such as Starbucks (NASDAQ:SBUX). 

Costa operates in about 50 countries, but is grappling with pressure on its sales from sticky inflation and picky consumers.

Coca-Cola CEO James Quincey had hinted at changes to Costa during the company’s earnings call in July, stating that the investment in the coffee chain was “not where we wanted it to be.”

Investing.com-- U.S. stock index futures steadied on Sunday evening after Wall Street rallied sharply on dovish comments from Federal Reserve Chair Jerome Powell, which heralded interest rate cuts in the near-term. 

Focus this week is squarely on earnings from artificial intelligence major NVIDIA Corporation (NASDAQ:NVDA), for more cues on the fast-growing industry. 

Futures rose after Wall Street rallied on Friday, reversing a bulk of recent losses as investors ratcheted up bets that the Fed will cut interest rates in September. 

But technology shares still remained fragile after a sharp selldown through most of last week, with caution ahead of Nvidia expected to keep the sector subdued. 

S&P 500 Futures were flat at 6,483.25 points, while Nasdaq 100 Futures were steady at 23,572.0 points by 19:17 ET (23:17 GMT). Dow Jones Futures hovered around 45,711.0 points. 

Powell signals potential rate cut, Wall St rallies 

Powell, speaking at the Jackson Hole Symposium on Friday, said the central bank could possibly cut rates in September amid increasing risks to the labor market.

But the Fed Chair warned that the decision was not set in stone, especially as risks from inflation remained. Fed policymakers have repeatedly cited uncertainty over the inflationary impact of President Donald Trump’s trade tariffs. 

Still, Powell’s comments were relatively dovish when compared to recent signaling from the Fed, and saw markets ramp up bets on a September rate cut. Wall Street indexes also rose sharply following his comments, reversing most of last week’s losses.

The S&P 500 rose 1.5% to 6,466.91 points on Friday. The NASDAQ Composite rose 1.9% to 21,496, while the Dow Jones Industrial Average rose 1.9% to a record-high 45,631.74 points. 

Fed fund futures prices showed markets pricing in a 82.9% chance the Fed will cut rates by 25 basis points in September, up from the prior day’s possibility of 73.1%, CME Fedwatch showed. 

Nvidia awaited for more cues on AI 

Focus this week is squarely on second-quarter earnings from AI major NVIDIA Corporation (NASDAQ:NVDA), which are due on Wednesday. 

The company is widely regarded as a bellwether for AI demand, and is expected to mostly log another strong quarter.

But focus will be on the company’s China sales, which are likely to have fallen further amid brief U.S. export curbs and increased Chinese scrutiny towards AI chips. Nvidia was seen halting production of its China-specific H20 chip last week.

Nvidia’s earnings also come following an extended rout in tech shares, as investors questioned just how profitable the AI industry will remain in the coming quarters. 

Outside Nvidia, Dell Technologies Inc (NYSE:DELL), Dick’s Sporting Goods Inc (NYSE:DKS), Best Buy Co Inc (NYSE:BBY), Dollar General Corporation (NYSE:DG), and Abercrombie & Fitch Company (NYSE:ANF) are also set to report earnings this week.

Second-quarter gross domestic product data is also on tap this week, coming after preliminary data released in late-July showed strong growth.

Investing.com-- Keurig Dr Pepper Inc (NASDAQ:KDP) is close to striking a roughly $18 billion deal for European coffee group JDE Peet’s, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

The combined company plans to later split its beverage and coffee units, unwinding the 2018 merger of Keurig and Dr Pepper, the report said.

JDE Peet’s, based in Amsterdam, is valued at about $15 billion, while Keurig Dr Pepper’s market value is about $50 billion, the report added.

Investing.com-- China’s smartphone shipments fell for a second straight month in June as high inventories and weak sales weighed on demand, Jefferies analysts said in a note.

Shipments dropped 14% year-on-year, following a 21% fall in May, dragged by a roughly 31% decline in iPhone volumes and an 11% drop in local brands, analysts said.

"This is in line with our expectation, as production ramp, especially by local brands, in Dec 2024 and 1Q25 owing to optimistic outlook ahead of the gov subsidy program has been met by poor sales," analysts wrote.

While Apple (NASDAQ:AAPL) managed to regain market share through targeted discounts aligned with government subsidies, Jefferies estimated that overall smartphone sell-through slipped about 1% in June.

Huawei remained the only major local brand to post growth, rising 18% in June and 24% in the second quarter, helped by aggressive discounting, according to Jefferies.

In contrast, non-Huawei Android makers saw continued weakness, with volumes falling 4% in June and 8% in the quarter, the report said.

Jefferies noted that inventories have eased, with industry-wide finished goods inventory days down by about 15 in the past six months. iPhone’s inventory levels fell faster than Android’s due to production cuts and discounts. Still, industry recovery looks unlikely until the fourth quarter.

“Therefore, local Android brands (ex Huawei) are expected to continue facing pressure into 3Q25,” Jefferies analysts wrote.

Jefferies maintained its preference for Apple’s supply chain, highlighting Cowell (HK:1415), Crystal Optech (SZ:002273), Lante Optics (SS:688127), Luxshare Precision (SZ:002475) and Lingyi iTech (SZ:002600) as top picks likely to benefit from new features and form factors.