Thursday's Final Takeaways: Tech Winners and Losers Emerge as Inflation Eases

**Marley Kayden** (0:00)
Welcome back to Market On Close. I'm Marley Kayden here in Chicago alongside Sam Vadas at the New York Stock Exchange. Here's some final thoughts on the session today. We got wholesale prices. They were flat in July. Coming in below, economists' expectations for a 0.2% increase in another sign that inflation pressures may be cooling. The producer price index rose 4.7% from a year ago. That's down sharply from a 5.5% annual increase back in June, while lower goods prices helped offset a rise in services cost. The report follows a relatively tamed July CPI reading and a weaker jobs report, giving the Federal Reserve more reason that it could potentially hold rates steady at its September meeting rather than consider a hike. Investors now will turn their focus to the July PCE inflation report later this month for another key read on the Fed's path forward.
Workday shares surged as much as 25% before trading was halted, following a Reuters report that private equity firm Silver Lake is in talks to acquire the enterprise software company. The report sent Workday toward its biggest one-day gain in more than a decade, with the stock jumping double digits and leading gains across the S&P 500 The potential deal comes as software stocks have faced pressure from concerns about AI disruption and slowing growth, making a take-private transaction a potentially significant vote of confidence in the sector. Investors will now be watching for any confirmation of these talks or any indication of a potential valuation or deal structure there. Those were just two things that stuck out to me, Sam, but what caught your eye during the session today?

**Sam Vadas** (1:26)
A couple of earnings, two very different reactions to Chinese tech reports today. So shares in Lenovo popped in double digits after solid first quarter results. The ADR performance actually mirroring the gains we saw in Hong Kong where shares actually hit a record last night. The company reported a 43% jump in revenue while adjusted profit grew 176% year over year and expects revenue to grow to 100 billion this fiscal year amid continued strong demand for AI hardware and its infrastructure business continues to see solid growth to revenue in that segment almost doubled and its operating margin hit an all time high of over 9% but it was a rough day for shares in jd.com finishing down over 7% despite posting better than expected results for Q2. Net profit came in at just over $1 billion, up 15% and 40% quarter on quarter. That came in as it posted its first quarterly revenue contraction since its 2014 listing. Revenue came in down almost 3% to $51 billion. It did beat estimates.
It was helped by Chinese major mid-year shopping events but even with those improving margins and profitability, it did obviously see moderating top-line growth which highlights the persistent competitive pressures and soft consumer demand in the economy right now. But heading into tomorrow, Marley, what are you going to be looking out for?

**Marley Kayden** (2:50)
Retail sales. We've been talking about the consumer with several of our guests today. We'll get those numbers tomorrow morning. Headline sales expected to rise a modest 1 to 3 tenths of a percent month over month. The headline coming in at the consensus would be mostly in line with last month. Core retail sales, though, projected to rise two tenths of a percent. That's up from a previous drop in June. Core excludes automobiles, so it provides arguably a clearer view of the underlying consumer spending trends. But how about you, Sam?

**Sam Vadas** (3:15)
You miss out with its consumer survey, so that kind of goes hand in hand with retail sales because if you feel good about the economy, you're probably likely to go out and spend your money. So we'll be watching that, and that'll be a nice sort of cherry on top of the icing, I suppose, for this week, which has been very busy on the macro front, Marley.

**Marley Kayden** (3:31)
Yes, it has. That's going to do it for us today on Market Unclosed. For Sam Vadas, I'm Marley Kayden. Thanks so much for joining us today. We hope you have a great rest of your Thursday.