Morning Watchlist: Sunday Edition
A quick note from Behind the Markets
It's Sunday morning — the quiet one. The market is closed, the arguments haven't started yet, and the calendar in front of us is one of the fullest of the summer.
And the week's last big question got its answer Friday morning: Kevin Warsh's first Jackson Hole speech. No promises, no pivot — but a warning that the Fed will "have work to do" if it can't get confident inflation is heading back to 2%.
The market heard him. By midday Friday, futures odds of a rate hike next month had jumped from about 35% to 46%, the two-year yield touched a one-month high, and gold slipped about 1% to around $4,604. Stocks shrugged and rose.
Today we do what Sunday is for: we look forward — into a week whose stakes just went up.
Four catalysts this week. Four pairings. Let's get into it.
1) Wednesday Night: The Other AI Report Card
This past Wednesday, Nvidia showed the world a $2 trillion order book. This coming Wednesday, after the close, the other half of the AI chip story reports: Broadcom — the company that builds custom AI chips for the giants who don't want to depend on Nvidia.
The expectations: roughly $29.4 billion in revenue, with AI chip sales guided to about $16 billion — up more than 200% from a year ago. But watch the ceiling, not the floor. Last quarter Broadcom beat its numbers and the stock still fell 12.6%, because management declined to raise its 2027 target of $100 billion-plus in AI revenue. At a $1.7 trillion valuation, beats don't move the stock anymore — raised ceilings do.
We already covered the quiet side of the AI trade earlier this week, so this time we looked somewhere else: inside Broadcom itself. Under the chip business sits a software division that did $7.2 billion last quarter — mostly VMware, which Broadcom bought and has been repricing aggressively ever since. Here's the thing about relentless price increases. Every renewal notice is an advertisement for the competition.
The pairing: Nutanix (NTNX) — Watch
Nutanix sells the leading alternative to VMware — the moving company in a town where the biggest landlord keeps raising the rent. It signs 500 to 1,000 new customers every quarter, nearly all of them VMware migrations. And there's a countdown clock: VMware's vSphere 8 perpetual-license support ends in October 2027, which forces the remaining holdouts to choose.
This past Wednesday night, Nutanix reported a blowout: revenue of $757 million, up 16%, earnings of 60 cents against 49 expected. The stock jumped about 10% to around $72.
So why Watch and not Buy? Because the move already happened. The stock is up more than 40% since late May and trades at roughly 32 times next year's expected earnings, above the average analyst target of about $65. Great business, freshly expensive ticket. Let the pop digest; if Broadcom's Wednesday call confirms VMware pricing stays aggressive, every dip in Nutanix is the landlord doing our marketing for us. What kills it: Broadcom softening VMware pricing to stop the bleeding, or the migration wave cresting.
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2) The Wall Goes Up a Week From Tuesday
While earnings grab the headlines, a deadline is ticking. Canada's retaliatory tariffs — 15% to 50% on roughly 700 American products worth about $27.6 billion, "dollar for dollar" in Prime Minister Carney's words — take effect September 8, the day after Labor Day. Steel, dairy, farm equipment, appliances, pulp and paper. This is the last full trading week before that wall goes up.
We've already flagged this war's casualties (AGCO) and its umbrellas (Eagle Materials). Now the biggest category on the list: steel — taxed by Canada on the way north, and already walled off on the American side by Washington's Section 232 steel tariffs, expanded again in April.
When both neighbors are building the fence, own the lumberyard on your side of it.
The pairing: Commercial Metals (CMC) — Buy
Commercial Metals is America's rebar company. It collects American scrap, melts it in American mini-mills, and sells the reinforcing bar to American job sites — a business that barely notices a border, because rebar is too heavy and too cheap per pound to cross oceans anyway. Tariffs don't threaten this model. They gift-wrap it.
The June quarterly report showed what a price umbrella does: sales up 23%, adjusted earnings per share up 147%. Steel selling prices rose $130 a ton while the scrap feeding the mills rose just $19 — that spread is the whole profit machine. And every data center in that $2 trillion AI backlog stands on a concrete slab laced with rebar.
The stock closed Thursday at $68.76 — a $7.6 billion company, squarely in our wheelhouse — at roughly 9.5 times next year's expected earnings. The S&P 500: about 21. The average analyst target sits at $81.55, and the board just added $600 million to the buyback. The honest risks: rates staying high enough to freeze construction, scrap costs catching up, or a sudden US-Canada handshake that folds the umbrella — the same risk we flagged on Eagle Materials.
3) Thursday Night: The Fallen King of Athleisure
Lululemon was once the most admired name in retail. The stock has been cut roughly in half from its peak near $226 — it sits around $117 now — after five straight years of decelerating sales growth and five straight quarters of shrinking earnings. Management's own guidance for the quarter it reports Thursday night: revenue down 2% to 3%, net income down 42% to 43%.
Here's what makes Thursday interesting. It's the old regime's final report card — on September 8, Heidi O'Neill, the former Nike executive, takes over as CEO. And the stock now trades at about 9 times trailing earnings, roughly 77% below its own historical median. Cheap? Plainly. But cheap is a fact, not a thesis.
The pairing: Lululemon (LULU) — Watch
Think of a storefront with a 50%-off sign in the window. The question is whether the problem is the merchandise or the location — a bad season, or a fading brand. Thursday won't settle that, because new coaches don't win their first game. They clean out the locker room. O'Neill's incentive is to reset guidance low after she arrives, so the bar may drop further before it rises — and Dick's just told us the whole athletic-apparel aisle is fighting a promo war. Our entrance: comparable sales stabilizing Thursday, or better, buying after O'Neill's first kitchen-sink guide — even if it costs a few dollars more. What kills it: another guide-down that reads like the brand, not the cycle.
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4) Friday, 8:30 A.M.: The Number That Runs the Fed
Now the main event. Friday morning brings the August jobs report — and Warsh just raised the stakes. In July, the economy didn't slow its hiring. It shed 23,000 jobs, against expectations of roughly 90,000 added. Meanwhile inflation is running 3.7%. A shrinking labor market and rising prices are pulling the Fed in opposite directions — and at Jackson Hole on Friday, Warsh leaned toward the inflation side of the rope, with futures now putting the odds of a September hike near a coin flip. That makes this jobs report the tiebreaker: the first hard labor data of his chairmanship. Two negative prints in a row, against a Fed leaning hawkish, would change every argument on the table. (The undercard: job openings Tuesday, ADP and the Beige Book Wednesday, jobless claims Thursday.)
Temporary hiring is the first light companies switch off when they get nervous — which is why we looked at the staffing firms and found a stock priced for a party the data hasn't RSVP'd to.
The pairing: Robert Half (RHI) — Sell
Robert Half — the temp-staffing and recruiting firm — has rallied about 31% in the past month on hopes the staffing recession is over. Here's what the hope costs: at about $39.50, the stock trades near 35 times trailing earnings. Last quarter, revenue fell 2% and earnings dropped to 26 cents a share from 41 a year ago. And the dividend? $2.36 a year — a 5.9% yield — against just $1.15 in twelve-month earnings. That's a 205% payout ratio: an allowance paid out of savings, not salary. Cash flow still covers it for now, but paying out twice what you earn only works if the recovery actually shows up.
Sell, for those who hold it, means selling into this strength before Friday's report grades the thesis. What proves us wrong: a genuine payrolls rebound — staffing has vicious operating leverage on the way up, and the firm's permanent-placement line did grow last quarter. If you don't own it, this one isn't your fight this week.
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Gold Is Back in Focus — 4 Stocks to Watch
Gold has climbed back above $4,400 an ounce, and some of Wall Street's biggest banks see significantly higher prices ahead. Goldman Sachs is forecasting $5,400 gold, while J.P. Morgan sees prices approaching $6,000 by late 2026. If gold's rally continues, select gold miners could potentially see their earnings rise alongside the price of bullion.
See 4 Gold Stocks Positioned for Gold's Next Move
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Before You Go
That's the week ahead. Broadcom's ceiling on Wednesday, a tariff wall rising behind the rebar trade, the old regime's last report at Lululemon on Thursday — and then the moment the whole week bends toward: Friday, 8:30 a.m. Eastern, when the August jobs report tells us whether July's 23,000 lost jobs were a stumble or a turn. The first real exam of the Warsh era. The headlines will chase the loud names all week. As always, we'll be standing one step behind them.
Have a wonderful Sunday.
We'll see you tomorrow.
