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If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 16,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The major indexes are all higher to start the week as markets recover from the recent correction.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Annual inflation rate slows to 2.9% in July, lowest since 2021

Inflation rose as expected in July, driven mainly by higher housing costs, according to a Labor Department report.

The consumer price index (CPI) increased by 0.2% for the month, resulting in a 12-month inflation rate of 2.9%, slightly below the 3% economists had anticipated.

Excluding food and energy, the core CPI also rose by 0.2% monthly and 3.2% annually, in line with expectations. These figures mark the lowest annual rates since early 2021.

Shelter costs, which increased by 0.4%, accounted for 90% of the overall inflation rise. Food prices rose by 0.2%, while energy prices remained flat.

The Federal Reserve may consider an interest rate cut in September, with market predictions indicating a possible reduction of up to half a percentage point during the September 17-18 meeting and further cuts by the end of 2024.

Starbucks replaces CEO Laxman Narasimhan with Chipotle CEO Brian Niccol

Starbucks announced that CEO Laxman Narasimhan is being replaced by Chipotle CEO Brian Niccol, leading to a 24.5% surge in Starbucks' stock, its best day ever.

Narasimhan, who took over as CEO in March 2023, is stepping down immediately, with CFO Rachel Ruggeri serving as interim CEO until Niccol officially takes over on September 9.

Starbucks has faced weak sales in its key markets, the U.S. and China, and reported a 3% decline in same-store sales in its latest quarter.

Activist investor Elliott Management, which recently acquired a stake in Starbucks, supported the leadership change. Former CEO Howard Schultz, who had selected Narasimhan, also endorsed Niccol as the new CEO.

Meanwhile, Chipotle's stock dropped over 10% on the news of Niccol's departure.

Breaking up Google an option being considered by DOJ

The U.S. Department of Justice (DOJ) is exploring options to address Google's illegal monopoly in the online search market, as ruled by a judge last week.

The ruling found that Google spent billions to establish itself as the world's default search engine, violating antitrust laws.

As potential remedies, the DOJ is considering breaking up Google, possibly divesting its Android operating system, forcing it to share data with competitors, and preventing it from gaining an unfair advantage in AI products.

Other options include the possible sale of AdWords and divestment of the Chrome browser.

This case marks a significant move by federal authorities against Big Tech, following similar actions against companies like Meta, Amazon, and Apple.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• Home Depot expects sales to weaken as consumers grow more cautious

• Google launches first AI-powered Android update and new Pixel 9 phones

• Mars to boost snack portfolio with nearly $30 billion deal for Pringles-maker Kellanova

• Victoria's Secret bringing in Hillary Super from Savage X Fenty as its new CEO

• Mortgage refinancing surges 35% in one week, as interest rates hit lowest level in over a year

• Southwest Air Backs CEO as Activist Elliott Seeks Board Overhaul

• Adani Group shares shed billions after Hindenburg allegations against regulator

The Second Half

There are several major companies still to report earnings this week, while retail sales and jobless claims will be in focus on the economic news front.

Earnings Reports

There are still some major earnings this week. At the Investor’s Edge we will be watching Cisco, Walmart, Alibaba, and John Deere.

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

Here is the calendar of events scheduled for the remainder of the week:

Retail sales will be the main focus as we close the week, though there will also be initial jobless claims, consumer sentiment and several key housing reports.

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.