Key Takeaways
- United Nations Secretary-General António Guterres has described the humanitarian situation in Gaza as a "horror show," warning of increasing malnutrition and widespread starvation due to blocked aid efforts.
- The US Richmond Fed Manufacturing Index plummeted to -20 in July, significantly missing estimates of -2 and marking a further contraction from June's -7 (revised from -8).
- Morgan Stanley has named Chewy (CHWY) its top pick in the SMID-Cap E-commerce sector, reiterating an Overweight rating and a price target of $50, citing the company's compelling opportunity in vet clinics.
- Oklo (OKLO) has partnered with Vertiv (VRT) to develop nuclear energy solutions for data centers, aiming to power AI and hyperscale demand with integrated power and cooling from Small Modular Reactors (SMRs).
- Microsoft (MSFT) is attributing recent exploits of SharePoint vulnerabilities to Chinese hackers, leading to widespread breaches.
Global Humanitarian Crisis Deepens
The humanitarian crisis in Gaza continues to deteriorate, with United Nations Secretary-General António Guterres issuing a stark warning about increasing malnutrition and widespread starvation. Guterres characterized the situation as a "horror show" and expressed shock over the continued targeting of UN facilities and the obstruction of UN-led aid efforts. Reports indicate that the population remains gravely undersupplied with basic necessities, and UN officials stress that Israel has an obligation to facilitate humanitarian relief.
Economic Indicators Show Contraction
Economic data released today paints a concerning picture for manufacturing in the US. The Richmond Fed Manufacturing Index for July dropped sharply to -20, a significant decline from the previous month's -7 (revised from -8) and well below the estimated -2. This marks the fifth consecutive month the index has remained in negative territory, with all three of its component indexes also falling, signaling a further deterioration in manufacturing activity in the Fifth District.
Meanwhile, UK Chancellor Rachel Reeves stated that the country remains "very reliant" on the goodwill of strangers when buying government bonds. This comes amidst ongoing fiscal challenges and a need to prove Labour's fiscal credibility, with the bond market's reaction to political statements highlighting investor sensitivity to the UK's debt management.
Corporate Developments: Tech, Energy, and Consumer Goods
In the technology sector, Microsoft (MSFT) has publicly blamed Chinese hackers for exploiting vulnerabilities in its on-premises SharePoint servers, leading to dozens of organizations being compromised worldwide. Microsoft has released security updates and is working with agencies to notify impacted entities, urging immediate patching and security measures.
In a significant move for energy and data infrastructure, Oklo (OKLO) has announced a partnership with Vertiv (VRT) to power data centers using nuclear energy. This collaboration aims to address the surging demand for energy-efficient cooling and power in AI and hyperscale data centers by integrating Oklo's advanced nuclear power plants with Vertiv's thermal management systems, with a pilot launch planned at Oklo's Aurora site.
For consumer goods, Morgan Stanley has identified Chewy (CHWY) as its top pick in the SMID-Cap E-commerce sector, raising its price target to $50. The firm's optimistic outlook is driven by Chewy's robust cost management, potential for margin expansion, and the "compelling" opportunity in the $40 billion vet clinic market.
Separately, Keurig Dr Pepper (KDP) saw its stock extend gains by 1% today. The company is set to release its Q2 earnings, with analysts anticipating an 8.9% year-over-year increase in EPS to $0.49 and a 5.5% rise in revenue to $4.14 billion.
In the tobacco industry, a definitive catalyst for Philip Morris's (PM) IQOS Iluma product in the US might not arrive until 2026, as the US FDA's decision on its applications could extend into the second half of 2025 or later. The company submitted premarket tobacco product applications (PMTAs) and modified risk tobacco product (MRTP) applications for Iluma in October 2023.
Finally, Northrop Grumman (NOC) CEO confirmed that an agreement has been reached with the Air Force regarding the new Sentinel ICBM program baseline. This development follows previous reports of cost overruns and restructuring activities for the critical modernization program.
International Relations and Trade
On the geopolitical front, Sweden's Prime Minister announced that the country will host ongoing trade talks between the USA and China early next week. Discussions are expected to focus primarily on US-China relations, with broader implications for global trade and the economy.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.