One last thing before I bid you all adieu and get ready to lock in for the Oracle (ORCL) and Adobe (ADBE) earnings calls.

Here’s a snapshot of what the market expects for tomorrow’s August CPI report:

The headline CPI figure is expected to come in at 3.4% on a year-over-year basis, matching the July figure. The core reading for August is expected to inch lower to 2.4% from 2.5% in July. 

While many tend to focus on the core figure, with food and gas accounting for 20%-25% of the average paycheck, it’s hard to think consumers aren’t feeling the pinch of current gas prices or the continued rise in food prices found in the FAO Food Price Index. 

Later in the day, the University of Michigan will publish its preliminary September reading for Consumer Inflation Expectations and the market sees it clocking in at 3.9%, down a tick from 4.0% in August.  

Position: None 

Over at the Pro Portfolio we’ve been long the shares of the First Trust Nasdaq Cybersecurity ETF (CIBR) since May 2022 when the shares were trading just under $41. Over time, we’ve build up the position size given our thinking that cyberattacks are the dark side of our increasingly connected, digital world and the more connected devices there are, the greater number of attack points for bad actors. 

From the “early days” of AI, our thinking was that AI in the hands of bad actors would accelerate the vector and velocity of cyberattacks, resulting in even greater efforts to protect a company’s or a government’s crown jewels. Headlines and articles in recent weeks clearly support that line of thinking, but today, appearing at the Goldman Sachs Communacopia & Technology conference, Nvidia (NVDA) CEO Jensen Huang had this to say about cybersecurity:

“A derivative of coding is, of course, bug finding. And a derivative of that which is a very large market is called cybersecurity. And the reason why there’s so much conversation today about cybersecurity is because the industry is getting ready to launch some products. And, what better way to create demand than to create a problem, And so. 

“Who doesn’t want their market to be hysterical about their product and line up around the corner. For it. And so, there are responsible ways of doing it and there’s less attractive ways of doing it. But, there’s, a lot of demand creation about cybersecurity today because new products are about to be launched. And if you can code well, so you must be able to debug well. And, red teaming is finding a bug, blue teaming is patching a bug. And so it’s not a complicated concept.

“But the fact of the matter is cybersecurity will likely be the next major use case of AI. And it’s going to run continuously.” 

In our view, that’s another driver for AI and data center capacity, and it’s likely to be a closer one than autonomous driving, which is expected to be a massive creator and consumer of data. 

Bottom line, we continue to think cybersecurity should be a part of every investor’s portfolio and we prefer the diverse exposure offered by CIBR shares or other cybersecurity ETFs. 

Position: TheStreet Pro Portfolio is long CIBR and NVDA 

After today’s market close, Adobe (ADBE) and Oracle (ORCL) report their quarterly results.

For Adobe, which is expected to deliver EPS of $6.09 on $6.7 billion in revenue, it will be the first earnings since it announced Anil Chakravarthy will succeed Santanu Narayen as CEO December 1. Now to see if outgoing CEO Narayen delivers guidance that matches Wall Street’s expectation for the final quarter under his tenure. For Adobe’s November quarter, Wall Street sees EPS of $6.33 on $6.85 billion in revenue. 

Turning to Oracle, the market consensus is for the company to post EPS of $1.74 on $19.13 billion in revenue for its August quarter. For the current one, those figures are $1.89 and $21.17 billion. In addition to those figures, we’ll be following Oracle’s remaining performance obligations (RPOs), which stood at $638 billion exiting its May 2026 quarter. During that May quarter, management booked $67 billion in AI infrastructure contracts. We’ll also be looking to see if Oracle increases its capital spending plan for its fiscal 2027 beyond the $70 billion shared back in June. 

In reviewing both earnings releases and corresponding earnings calls, we will also be mindful about what is said pertaining to the pace of AI adoption and usage. 

Position: None

While I was supposed to be refueling for the balance of the trade day and post market close earnings calls, after reviewing some things over at the Pro Portfolio we cut back our position size in United Rentals (URI) and locked in an enviable gain that rebuilt cash levels. We also downgraded our rating on URI, and laid out what we’ll be watching over the coming days to determine what’s next for our remaining shares. 

Read the full alert here. 

Position: TheStreet Pro Portfolio is long URI shares. 

Another item that seemingly points to a more hawkish Fed outcome next week:

Stanley Druckenmiller, a close ally of Federal Reserve chair Kevin Warsh, told a private Wall Street audience that US borrowing costs remained a “little low” and central bankers who thought monetary policy was restrictive were “ridiculous.” 

The macro hedge fund manager, a longtime mentor of Treasury secretary Scott Bessent and Warsh, said in a closed-door meeting on Thursday that rate cuts “are no longer needed.”

“Committee members on the Fed who keep saying fed funds rates are restrictive are just ridiculous,” he told a packed crowd of hundreds of Wall Street investors on Thursday morning at a conference hosted by Piper Sandler in New York, according to a transcript seen by the FT and multiple people familiar with the matter.

The full article from the FT can be found here.

Position: None

It’s time for a little lunchtime reading while I refuel for the balance of the trading day, and don’t worry, I’m off the bean (as in coffee bean) until early tomorrow AM. 

Robotics Startup Skild AI Hits $100 Million in Revenue Run Rate As Customer List Grows

AI chip startup Positron’s valuation skyrockets in latest funding round

The ECB is Tightening, But Don’t Bet the Bank on a Warsh Fed Rate Hike

My First Impressions of the New Folding iPhone Duo

A Sprint to Decipher U.S.-Canada Tariffs: ‘Are Sprinkles on the List?’

How Donald Trump boxed his party in

Position: None

From Shake Shack (SHAK) and me to you, Happy National Milkshake Day to all those who celebrate!

Normally, I’d be over it like white on rice, but I have to remain in fighting shape for my daughters’ wedding later this month. 

Enjoy!

Position: None

From today’s FT:

Law firm Latham & Watkins has bought its own Nvidia GPU servers and started customising AI models, an expensive and technically demanding set-up that shows how much the technology is changing Big Law’s business model.  

Latham, the US’s second-largest law firm with $8.3bn in revenue last year, has in recent years purchased several servers, each of which holds multiple GPUs, the powerful computer chips that run AI models. 

It is the first public example of a big law firm buying its own AI hardware and fine-tuning models. It makes Latham responsible for cyber security and operating the servers but gives it the ability to keep clients’ sensitive data entirely within its own systems…

The move stands in contrast to other law firms’ approaches. Latham’s larger rival Kirkland & Ellis is working with Palantir to develop AI tools, while A&O Shearman has worked with legal tech start-up Harvey, and Freshfields this year announced a deal to work with Anthropic.  

Latham is still using AI products and services from large tech companies alongside building its own technology. It declined to say how much it has invested or is planning to invest in the new approach, which it has been working on for the past few years.

Position: None

How long might the U.S.-Iran war go on for?

Last night Pres. Trump suggested we will see a sharp drop in oil and gas prices following the mid-term elections, and while many (including me) raised our eyebrows at that, other reports this morning, including this one form Bloomberg, suggest the conflict will be a protracted one:

Iran and the US are digging in for a protracted war, with little sign of a near-term ceasefire or return to normal Middle East energy flows even if hostilities remain at a low intensity.

Tehran’s leaders are resolved to keep fighting despite mounting economic costs as they see the conflict as an existential threat, Bloomberg reported, citing a senior Iranian official. The country has been able to rebuild its missile capabilities and will escalate strikes on US and Gulf assets if Washington intensifies its own attacks, the official said.

Top White House advisers including Vice President JD Vance and Secretary of State Marco Rubio have told President Donald Trump that the war could drag on through the remainder of his term, which runs until January 2029, the Wall Street Journal reported, citing US officials.

Position: None

Visa’s September 2026 Economic Outlook.

The nutshell take is Visa (V) now sees 2026 GDP for the U.S. coming in at 2.2%, with the same figure for next year. While that isn’t too far off the forecasts for this year from the New York Fed’s Nowcast Model and the St. Louis Fed’s Read GDP Nowcast one, it suggests the Atlanta’s Fed’s GDPNow model figure of 4.7% GDP for the current quarter is more than a bit aggressive. We’re not quite half way through all the economic data for Q3 2026, but the further oil, diesel and gas prices head, the more downside risk to the Atlanta Fed’s forecast we see. 

Now here’s what Visa had to say and we’ll follow that with our update macro data table, the one we publish each week in the Pro Portfolio’s Weekly Roundup:

The economic data over the last month continues to reflect an economy weathering higher inflation pressures. The August employment report showed the U.S. labor market was still on a strong footing, with employers adding 162,000 jobs for the month and wage growth holding firm. Even with solid wage gains, real (inflation-adjusted) income growth is contracting, but continued stock market gains have helped to prop up spending for some consumers, at least for now. As a result, we foresee consumer spending continuing but at a more modest pace this quarter at 2.1 percent on a year-over-year (YoY) basis. Continued robust AI investment should also help support business investment growth this quarter. 

Headwinds are emerging, however, that could limit growth over the next few quarters. Inflation is likely to reaccelerate through the end of this year as the Middle East conflict pushes diesel and fertilizer prices higher, while the effects of El Niño weigh on global crop supplies and food prices more broadly. The addition of tariffs on key U.S. trading partners could also push prices higher. 

As a result of these dynamics, it is looking more like a bumpy path forward for interest rates over the coming months. For starters, long-term interest rates have risen in recent weeks due to several factors, including investors seeking higher yielding alternatives, expectations that inflation will remain elevated for longer, and ongoing debt issuance due to higher budget deficits. The upward movement in long-term rates has delayed the need for the Federal Reserve to step in and contain inflation, but there are signs from recent speeches and meeting minutes that their patience may be wearing thin. We now think a rate hike before year-end is the base case (see more details in the full report). 

With these changes to our outlook this month, we have downwardly revised our outlook for GDP growth for this year to 2.2 percent YoY while leaving our forecast for 2027 unchanged at 2.2 percent. GDP growth will likely begin to moderate in Q4 with more modest inflation-adjusted consumer spending. Inflation and interest rates should ease enough to support 2.1 percent GDP growth in 2028.

Positions: None.

With oil prices moving higher, let’s take a look at gas prices per our friends over at AAA.

Positions: None.

Getting back to the CME FedWatch Tool now that the market has had some time to digest the August PPI data:

Remember, we’ll want to revisit these expectations after tomorrow’s August CPI report. 

Position: None

The August producer price index report is out and headline PPI came in a tad hotter than expected at 5.4% year over year vs. the 5.3% consensus and 4.7% in July. Core inflation came its expected, up 4.6% year over year from 4.2% in July. 

In response, the 10-year Treasury yield is moving higher, approaching 4.9% and the rate hike expectations tracked by the CME FedWatch Tool are likely to move higher. We’ll get a snap of those expectations as the market has a chance to digest more of this morning’s PPI data. 

Position: None

The Financial Times is reporting that Starbucks (SBUX) is investing (betting?) $1 billion in transforming some 9,000 cafes into what is being referred to as “community lounges.” 

This sounds like something we might have heard from former CEO Howard Schultz and his “third place concept,” but that was before the rise of mobile ordering. 

How that $1 billion squares with current CEO Brian Niccol’s target of taking $2 billion out of the business in cost savings over the next two years is just one of the questions folks are likely to have. Another is with the rise of Dutch Bros (BROS) and others that offer quick service, is the Starbucks notion of “community lounges” outdated? 

Here’s the link to the FT article.

Position: None

Here’s an early look at what Wall Street firms are saying after having some time to digest Apple’s (AAPL) Surprise and Shine event, which, in our view, largely delivered on what was speculated. 

Citi keeps a Buy rating on Apple with a $365 price target after the company launched a new foldable iPhone. The Duo is Apple’s biggest new hardware category since the watch and Airpods, the analyst tells investors in a research note. Citi adds that Apple repriced the iPhone 16 and 17 by at least $100 to offset higher memory component prices. It views the iPhone 18 specifics and foldable phone selling price as in-line with expectations.

BofA analyst Wamsi Mohan lowered the firm’s price target on Apple to $370 from $380 and keeps a Buy rating on the shares, stating that the first major product launch under new CEO John Ternus helped “showcase his focus on Apple’s core values and continuing to create products that delight customers.” Pricing on the new iPhones came in lower than the firm had expected, which can drive higher units but put some pressure on gross margins given higher memory and component costs, adds the analyst, who adjusted estimates accordingly.

Rosenblatt keeps a Neutral rating on Apple with a $303 price target following the company’s product launch event. Apple’s “light touch” on pricing could weigh on its gross margins due to rising memory costs., the analyst tells investors in a research note. The firm says Apple revealed the foldable Duo, new iPhone Pro and Pro Maxes with better battery life and improved cameras, and new entries in Apple Watches, AirPods, and Siri AI.

JPMorgan says Apple’s fall product launch was largely inline with expectations. Apple’s pricing is inline with JPMorgan’s base case of a $100 like-for-like increase, taking the iPhone 18 Pro and 18 Pro Max to $1,199 and $1,299, the analyst tells investors in a research note. However, the numbers are below the larger increases some investors had anticipated on account of memory cost inflation, contends JPMorgan. The firm believes Apple “walks the fine balance” of absorbing memory costs while keeping the opportunity for a positive volume cycle. It keeps an Overweight rating on the shares.

Position: TheStreet Pro Portfolio is long AAPL shares. 

Upgrades:

Block (XYZ) upgraded to Buy from Hold at StoneX, tgt $105

Casey’s General Stores (CASY) upgraded to Outperform from Market Perform at Raymond James, tgt $750

DT Midstream (DTM) upgraded to Overweight from Equal Weight at Morgan Stanley, tgt $170

Herc Holdings (HRI) upgraded to Overweight from Neutral at JPMorgan, tgt $175

Kymera Therapeutics (KYMR) upgraded to Outperform from Peer Perform at Wolfe Research, tgt $180

Meta Platforms (META) upgraded to Overweight from Neutral at JPMorgan, tgt $820

Novartis (NVS) upgraded to Hold from Reduce at HSBC 

Orchestra BioMed (OBIO) upgraded to Buy from Neutral at BTIG, tgt $10

PACCAR (PCAR) upgraded to Outperform from Sector Perform at RBC Capital, tgt $150

Simmons First National (SFNC) upgraded to Outperform from Market Perform at Keefe, Bruyette & Woods, tgt $26

Synopsys (SNPS) upgraded to Overweight from Equal Weight at Wells Fargo, tgt $475

Yum! Brands (YUM) upgraded to Overweight from Equal Weight at Wells Fargo, tgt $175

Downgrades:

AngloGold Ashanti (AU) downgraded to Market Perform from Outperform at BMO Capital, tgt $115

BioCryst Pharmaceuticals (BCRX) downgraded to Sector Perform from Outperform at RBC Capital, tgt $11

Bowhead Specialty (BOW) downgraded to Market Perform from Outperform at Citizens 

Chewy (CHWY) downgraded to In Line from Outperform at Evercore ISI, tgt $25

Cooper Companies (COO) downgraded to Neutral from Buy at BofA, tgt $65

Cooper Companies (COO) downgraded to Neutral from Outperform at Robert W. Baird, tgt $61

Cooper Companies (COO) downgraded to Neutral from Overweight at Piper Sandler, tgt $59

Uber (UBER) downgraded to Neutral from Buy at Arete, tgt $74

United Rentals (URI) downgraded to Neutral from Overweight at JPMorgan, tgt $1,170

Others:

908 Devices (MASS) initiated with a Buy at Canaccord, tgt $13.50

Adagene (ADAG) initiated with a Buy at Chardan, tgt $9

Adlai Nortye (ANL) initiated with a Buy at Jefferies, tg

Aehr Test Systems (AEHR) initiated with an Outperform at Oppenheimer, tgt $120

Amer Sports (AS) initiated with a Buy at BTIG, tgt $42

Amer Sports (AS) resumed with an Equal Weight at Morgan Stanley, tgt $31

AMD (AMD) initiated with an Overweight at Piper Sandler, tgt $600

Antero Resources (AR) resumed with a Hold at Stifel, tgt $42

APA Corp. (APA) initiated with a Buy at Stifel, tgt $62

Arm Holdings (ARM) initiated with an Overweight at Piper Sandler, tgt $320

Broadcom (AVGO) initiated with an Overweight at Piper Sandler, tgt $460

California Resources (CRC) resumed with a Buy at Stifel, tgt $68

CareTrust REIT (CTRE) initiated with an Outperform at Huntington, tgt $44

Chiron Real Estate (XRN) initiated with a Market Perform at Huntington, tgt $37

Chord Energy (CHRD) resumed with a Buy at Stifel, tgt $182

Clean Harbors (CLH) initiated with an Outperform at William Blair 

Coinbase (COIN) initiated with an Equal Weight at Morgan Stanley, tgt $250

Diamondback Energy (FANG) resumed with a Buy at Stifel, tgt $259

Devon Energy (DVN) resumed with a Buy at Stifel, tgt $61

Driven Brands (DRVN) resumed with an Underperform at BofA, tgt $12

Energy Transfer (ET) resumed with a Buy at Stifel, tgt $25

EOG Resources (EOG) resumed with a Hold at Stifel, tgt $158

Enterprise Products (EPD) resumed with a Hold at Stifel, tgt $40

FatPipe (FATN) initiated with a Buy at Roth Capital, tgt $8

FedEx Freight (FDXF) initiated with a Market Perform at Bernstein, tgt $133

Fervo Energy (FRVO) initiated with an Outperform at Northland, tgt $27

Gulfport Energy (GPOR) initiated with a Hold at Stifel, tgt $193

Intel (INTC) initiated with a Neutral at Piper Sandler, tgt $110

Janus Living (JAN) initiated with an Outperform at Huntington, tgt $36

Kinder Morgan (KMI) resumed with a Hold at Stifel, tgt $35

Knight-Swift (KNX) initiated with an Outperform at Bernstein, tgt $91

LTC Properties (LTC) initiated with an Outperform at Huntington, tgt $47

Mach Natural Resources (MNR) resumed with a Buy at Stifel, tgt $15

Marvell Technology (MRVL) initiated with an Overweight at Piper Sandler, tgt $270

MPLX (MPLX) resumed with a Hold at Stifel, tgt $65

National Health Investors (NHI) initiated with an Outperform at Huntington, tgt $79

Nebius Group (NBIS) initiated with a Buy at Truist, tgt $355

Nike (NKE) resumed with an Underweight at Morgan Stanley, tgt $31

NVIDIA (NVDA) initiated with an Overweight at Piper Sandler, tgt $300

Old Dominion (ODFL) initiated with a Market Perform at Bernstein, tgt $200

ONEOK (OKE) resumed with a Hold at Stifel, tgt $105

On Holding (ONON) resumed with an Overweight at Morgan Stanley, tgt $39

Ovintiv (OVV) initiated with a Buy at Stifel, tgt $92

Permian Resources (PR) resumed with a Buy at Stifel, tgt $30

Qualcomm (QCOM) initiated with a Neutral at Piper Sandler, tgt $190

Range Resources (RRC) resumed with a Hold at Stifel, tgt $46

RELX (RELX) initiated with a Buy at TD Cowen 

Revolution Medicines (RVMD) initiated with an Overweight at Morgan Stanley, tgt $255

Sabra Healthcare REIT (SBRA) initiated with an Outperform at Huntington, tgt $23

Saia (SAIA) initiated with an Outperform at Bernstein, tgt $439

SK Hynix (SKHY) initiated with an Overweight at JPMorgan, tgt $245

StepStone Group (STEP) initiated with an Outperform at RBC Capital, tgt $65

Strawberry Fields REIT (STRW) initiated with a Market Perform at Huntington, tgt $15

Targa Resources (TRGP) resumed with a Buy at Stifel, tgt $340

TXO Partners (TXO) resumed with a Buy at Stifel, tgt $17

Under Armour (UAA) resumed with an Equal Weight at Morgan Stanley, tgt $4

Western Midstream Partners (WES) resumed with a Buy at Stifel, tgt $55

WhiteHawk Minerals (WHK) resumed with a Buy at Stifel, tgt $32

Williams Companies (WMB) resumed with a Buy at Stifel, tgt $85

XPO (XPO) initiated with an Outperform at Bernstein, tgt $244

Positions: TheStreet Pro Portfolio is long AVGO, META, MRVL, NVDA, PCAR, and URI.

JPMorgan upgraded Meta Platforms (META) to overweight from neutral, citing upside potential following the social media giant’s launch of its AI assistant. The firm also boosted its META price target to $820 from $640.

“Meta is in the early stages of releasing frontier models and AI-driven products beyond advertising, notably Muse AI agent and Meta Model API access,” analyst Douglas Anmuth said, according to reports. PT was set to $820, implying a 25% increase from last close.

“Frontier models are at the core of Meta’s (META) product and monetization pipeline over a multi-year period, and its path toward superintelligence.”

“Muse is built around security and privacy—an advantage for Meta—which we believe could be a key hurdle for other agents to gain trust and navigate more challenging tasks involving passwords, credit cards, and other personal information.”

Position: TheStreet Pro Portfolio is long META

JetBlue Airways (JBLU) raised Q3 RASM growth guidance to 17-20% yr/yr from 12.5-16.5%, citing “strong travel demand, constructive pricing and targeted commercial actions; early Q4 booking trends remain encouraging.”

Position: None

Taiwan Semiconductor Manufacturing (TSM) reported August consolidated revenue of NT$514.81 billion, up 53.3%, year over year, from NT$335.77 billion.

August revenue increased 10.1% sequentially from NT$467.58 billion in July.

Here’s the thing, that 53.3% August revenue growth is a reacceleration from the 44.7% year-over-year figure posted in July. 

That follows the record August revenue reported a few days ago by Foxconn of ~$29.14 billion, up 52% year over year. 

Our read-through on those data points are positive for the Portfolio’s chip holdings and support the view that chip capacity is poised to remain tight for some time, a strong positive for our position in Applied Materials (AMAT). 

Position: TheStreet Pro Portfolio is long AMAT shares. 

In my opening comments, we shared what the market is expecting from today’s August PPI report. 

Fifteen minutes before we get that 8:30 AM ET report, the European Central Bank will make its latest policy decision. The consensus is it will deliver a 25 basis point rate hike, but what is said during the subsequent press conference about inflation and where monetary policy could go from here will be of greater interest. 

Position: None

Here we go my friends! Once again I have the privilege of playing in Doug Kass’s sandbox for the day, and boy oh boy we will have a lot to chew through together. 

Normally about now, I’m reviewing and compiling what will potentially go into the day’s “8 Key Things Shaping the Stock Market” but I’m going to hold that until after we get this morning’s August PPI report. 

The consensus for that report has headline PPI rising 5.3% year over year, up from 4.7% in July. Core PPI is also expected to step up to 4.6% from July’s 4.2%.

But… 

When we look at where oil, diesel, gas and other prices have moved to since the end of August and signs the Iran war is heating back up, we can see the argument about looking past the August PPI and tomorrow’s CPI data to focus on what the September data looks like. 

And while we tend to steer away from getting political, preferring to focus on policy and outcomes, we also have the fact that President Trump commented that “Right after the election, oil prices are going to be tumbling downward.”

Thinking that comment through, it means that, best case, oil and related prices are likely to be elevated not only in September and October. And there are reasons to think even that best-case scenario is questionable. 

It would be swell to have gas prices come tumbling down, but we’ve also heard the war with Iran was won and over more than a few times, and yet here we are. 

When it comes to TheStreet Pro Portfolio, we’ll continue to follow the data and let it inform us, rather than making the herd-like mistake of superimposing what we want it to say, course correcting as needed. 

That’s the Portfolio, but this is the Daily Diary, and we’ll have a lot more coming your way today.

Go get that first, second or if you’re like me, third cup of your preferred go juice (coffee here!), and I’ll have more for you in a jiffy. 

Position: None