Velishchuk
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Grayscale wins court ruling over SEC’s denial of Bitcoin ETF; Coinbase (COIN) jumps. (00:28) Hurricane Idalia may lift construction stocks in shorter term: Citibank. (01:58) Planet Fitness (PLNT) expands pricing pilot to more states. (03:06)
This is an abridged transcript of the podcast.
The U.S. Securities and Exchange Commission must vacate its rejection of Grayscale’s attempt to convert Grayscale Bitcoin Trust into an Bitcoin (BTC-USD) ETF.
Grayscale Bitcoin Trust closed Tuesday’s trading up nearly 17%, while Coinbase Global (NASDAQ:COIN) jumped just shy of 15% on the news. And Bitcoin (BTC-USD) topped $27K for the first time since Aug. 17.
A three-judge appeals panel in Washington on Tuesday vacated a decision by the SEC that blocked the ETF and sent it back to the regulator, according to the court opinion.
The opinion said in part, “In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful. We therefore grant Grayscale’s petition for review and vacate the Commission’s order.”
Grayscale sued the SEC last June after the agency felt that its product failed to meet requirements designed to prevent fraudulent acts and protect investors.
Grayscale’s CEO argued that U.S. regulators were “discriminating” against his cryptocurrency investment firm by continuing to deny approval to ETF’s based on the spot price for Bitcoin.
In a statement following the ruling, Grayscale said, “This is a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure though the added protection for the ETF wrapper.”
The ruling could potentially pave the way for other spot ETFs.
Hurricane Idalia has strengthened into a Category 4 storm. The hurricane is expected to hit the Big Bend area of Florida.
According to analysts at Citibank, its potentially devastating effects may lead to more building contracts for engineering and construction companies, lifting their stocks in the shorter term.
Analyst Andrew Kaplowitz said in a report, “While we are not in the business of forecasting the weather as industrial analysts, should Idalia hit the Gulf Coast as the National Hurricane Center is projecting, there is historical precedence for certain E&C stocks – Quanta Services (NYSE:PWR) especially, as well as potentially Aecom (NYSE:ACM), MasTec (NYSE:MTZ) and Fluor (NYSE:FLR) – to outperform in the short term.”
A major storm’s effect on multi-industrial companies tends to be harder to predict.
According to Citi’s analysis, historical examples include $300 million in storm-related recovery work for Quanta Services (PWR). Fluor (FLR) booked about $1 billion of work to help restore power in Puerto Rico and at least $1 billion more for Federal Emergency Management Agency work after Hurricanes Katrina and Rita.
Planet Fitness (NYSE:PLNT) moved higher in afternoon trading on Tuesday after Baird tipped that the gym club operator is expanding a pricing pilot to multiple states.
Earlier this summer, Planet Fitness (PLNT) began testing a $15 per month no-commitment/White Card everyday pricing plan, while keeping a $10 per month plan with a 12-month commitment in place.
Analyst Jonathan Komp said the firm was encouraged by the expansion of the pilot and thinks PLNT is unlikely to be undercut by competitors.
A strategic pricing action on a large scale is seen as a meaningful lever to raise confidence in Planet Fitness’ 2024-2025 unit development forecast.
During PLNT’s recent earnings call (Planet Fitness, Inc. (PLNT) Q2 2023 Earnings Call Transcript), Chief Financial Officer Tom Fitzgerald said the gym club giant is looking at ways to capture more of the $15 per month pricing during the non-promotional periods, but still have a $10 price during the sale period. Crucially, the exercise chain still feels “really good” about demand despite the macroeconomic backdrop.
Planet Fitness (PLNT) closed Tuesday up 1.47%.
Year-to-date Planet Fitness is down more than 21%, despite showing strong revenue growth.
Other headlines to look out for on Seeking Alpha:
JOLTS shows megacaps are still mega-dependent on the Fed
VinFast Auto plunges on market cap reality check
Amazon’s CEO: Come back to the office or else
On our catalyst watch for the day,
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The two-day Deutsche Bank Technology Conference will include participation from Micron (MU), Logitech International S.A. (LOGI), Informatica (INFA), Advanced Micro Devices (AMD), Zoom Video (ZM), and Western Digital (WDC).
U.S. stocks ended solidly higher on Tuesday.
The Nasdaq (COMP.IND) added 1.74%.
The S&P 500 (SP500) gained 1.45%, while the Dow (DJI) climbed 0.85%.
All 11 S&P sectors ended in positive territory.
Communication Services, Consumer Discretionary and Tech topped the leaderboard.
Treasury yields slipped. The 10-year yield (US10Y) was down 9 basis points to 4.12%, while the 2-year yield (US2Y) was down 17 basis points to 4.88%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down a small fraction, the S&P 500 is down 0.1% and the Nasdaq is down 0.2%. Crude oil is up 0.6% at more than $81 a barrel. Bitcoin is up 5.6% at more than $27,000.
In the world markets, the FTSE 100 is nearly 0.1% and the DAX is down 0.5%.
The biggest stock movers for the day premarket: HP Inc. (NYSE:HPQ) is down more than 8% after the company cut its cash flow and earnings forecast for the rest of the fiscal year, citing a slower recovery in the PC and printing markets.
Ambarella (NASDAQ:AMBA) is down more than 20% after the company published mixed Q2 results and Q3 guidance that fell short of market expectations.
On today’s economic calendar, at 8:15am the ADP jobs report and at 830 am GDP Q2.
