The major indexes experienced a relatively muted day, with certain areas of big tech buoying the broader market. Meanwhile, a bounce in bonds helped to boost small-cap stocks, which are still trying to find direction. And Roaring Kitty returned to ignite another meme stock rally. Let’s see what you missed. 👀

Today's issue covers two big brands with demand problems, the latest dog to have its day, and a rare Internal Revenue Service (IRS) apology. 📰

Here's today's heat map:

7 of 11 sectors closed green. Consumer discretionary (+1.20%) led, & consumer staples (-0.43%) lagged. 💚

Internationally, the Bank of Mexico left its key interest rate unchanged at 11%, noting market volatility amid its upcoming elections and stubborn inflation. Meanwhile, the Bank of Japan remains focused on the Yen ahead of its July Policy meeting, as the currency falls to a 38-year low against the U.S. Dollar. 💱

U.S. first-quarter GDP’s final reading came in at 1.40%, up 10 bps from the last estimate. Notably, consumer spending rose at its slowest rate in a year and a half, with a larger trade deficit and slower growth in inventories weighing on the reading. Experts are looking for a second-quarter rate of 2%. 🔺

Manufacturing activity remains mixed, with May durable goods orders inching up just 0.10% and April’s number being revised down by 40 bps. The Kansas City Fed’s manufacturing index also fell moderately in June despite future expectations rising slightly. 🏭

May wholesale inventories rose 0.60% MoM, while retail inventories were flat excluding automobiles. And the U.S. housing outlook remains tepid, with pending home sales falling by 2.10% to an all-time low in May, while transitions dropped 6.60% YoY. 😬

The Supreme Court threw a wrench in Purdue Pharma’s opioid settlement, saying that the bankruptcy judge did not have the authority to lets its members evadae facing future lawsuits. Meanwhile, a jury ruled the NFL violated antitrust laws with its Sunday Ticket Offering, awarding a $14 billion judgment. 🧑‍⚖️

Hims & Hers Health fell 7% after Hunterbook Media published a report discussing alleges issues about the company’s sale of weight loss drugs. International Paper also dipped 7% on news that Suzano is no longer pursuing its acquisition of the company. 📉

Consolidation in the oil and gas space continues, with SM Energy Company attempting to purchase purchase XCL Resources in a $3 billion deal. 🛢️

Luxury furniture retailer RH jumped 9% after CEO Gary Friedman purchased $10 million in shares. He owns more than a quarter of all outstanding stock. 🤑

And Faraday Future Intelligent Electric popped 31% after a meeting with UAE investment firm Master Investment Group sparked speculation of a new equity investment could be coming. 💰

Other active symbols: $GME (+3.68%), $DJT (-6.42%), $BB (+10.86%), $PLTR (+4.65%), $CMG (-5.24%), and $AITX (+7.50%). 🔥

Here are the closing prices: 

Two tried and true brands are having trouble getting consumers to buy their stuff, and it’s becoming a major issue for investors… 🙃

Apparel giant Nike cut its full-year guidance and said it expects revenues to fall 10% YoY in the current quarter. Fiscal 2025 revenues will be down mid-single digits vs. previous expectations of slight growth. ✂️

It harped on macroeconomic headwinds like weak China sales and “uneven” consumer trends around the world. As a result, its no surprise revenues of $12.61 billion missed expectations by about 2%. Meanwhile, adjusted earnings of $1.01 per share topped the $0.83 expected, as the company remains in cost-cutting mode.

Nike has been trying to drive sales through its own website, as direct-to-consumer channels offer better pricing power and margins. However, it’s now walking back that initiative, saying it went too far in moving away from its wholesale partners. ⏪

As a result, it’s seen increased competition across most of its product lines and markets, with customers opting for newer designs over Nike’s “classics.”

The mix of external headwinds and operational missteps is eerily similar to Lululemon’s, whose management offered little in terms of solutions. And Nike’s earnings call sounded the same, with management harping on all the issues and not making investors feel like there’s a clear plan to address them.

Executives ultimately said “a comeback at this scale takes time,” but time is not a luxury investors are giving the stock…which has underperformed significantly over the last few years. ⌛

Maybe the Stocktwits community is seeing this as the “kitchen sink” quarter, where Nike gets all the bad news out and sets itself up to beat low expectations going forward. Sentiment is currently in “extremely bullish” territory as prices fall 12% after the bell. 🤷

One stock the Stocktwits community is not giving the benefit of the doubt is ex-Dow 30 name Walgreens Boots Alliance. 👎

The retail pharmacy giant’s adjusted earnings per share of $0.63 missed the $0.68 expected, while revenues of $36.40 billion beat by 1%. However, the company cut its full-year adjusted profit outlook due to a “challenging” environment for pharmacies and U.S. consumers.

Walgreens CEO Tim Wentworth said management assumed the consumer would get somewhat strong in the second-half of the fiscal year, but that was not the case. He noted that consumers continue to have “sticker shock” in stores, especially in the discretionary goods category. 🤯

With an unclear plan for boosting sales, the company is returning to cost-cutting to boost earnings. It plans to cut a significant number of underperforming stores, saying that “seventy-five percent of our stores drive 100% of our profitability.”

Overall, the bigger-picture challenges for the company continue to offset any positives, like strong performance in its health-care division. However, unlike Nike, the stock is not getting any grace from investors. Shares fell to 23-year lows on the news and remain in free fall. 📉

Where Roaring Kitty goes, the crowd follows…even if they have no idea where he’s going. The meme stock leader returned to Twitter after a 10-day hiatus, posting a picture of a dog without explanation. 👇

That immediately sent GameStop CEO Ryan Cohen’s former company Chewy soaring on…with shares being halted amid a 30% rally. It also sent shares of other dog-related assets like Petco ($WOOF) running too. 🐕

While this was a new development for many in the market, Stocktwits users have been talking about Chewy’s “meme stock” potential for more than a month. Below is an excerpt shared in The Daily Rip on May 29th posing the question “Can Chewy Achieve Meme Stock Status?”

Without an explanation from Roaring Kitty, we’ll unfortunately have to wait and see what this means for the stock longer-term. For now, Chewy and the others gave back all of their gains during afternoon trading. 🙃

As for Roaring Kitty, he continues to operate in mysterious ways, bringing traders with him wherever he goes (much like the gif above).

But for Chewy and every other stock impacted by his activity, fundamentals will determine their long-term value. And without clear plans for fixing the underlying businesses of these stocks, these pops and drops are going to continue…so trade responsibly. 🦺

Stocktwits co-founder Howard Lindzon chops it up with pals JC Parets and Phil Pearlman every Thursday on "Trends With Friends."

This week, they’ve brought back technology expert and investor Michael Parekh to discuss the role of data in the AI revolution, how big tech like Apple and Tesla are implementing AI, and opportunities in the healthcare and small-cap space.

Watch it on YouTube, Spotify, or Apple, and subscribe to catch each episode when it goes live!

The IRS issued a rare apology to billionaire investor Ken Griffin for the leak of his tax records to the press. The apology extends to other taxpayers whose information was breached, acknowledging the mishap caused by former IRS contractor Charles Littlejohn. 📝

Littlejohn, who leaked tax returns for Griffin and other wealthy Americans to ProPublica, was sentenced to five years in prison for unauthorized disclosure. Griffin, the founder of Citadel, dropped his lawsuit against the IRS and the U.S. Treasury Department after the agency admitted its failure to protect his confidential data.

"The IRS sincerely apologizes to Mr. Kenneth Griffin and the thousands of other Americans whose personal information was leaked," the agency said. The IRS is now focusing on strengthening its data security measures to prevent future breaches. 🔨

Griffin expressed his gratitude for the resolution, stating, "I am grateful to my team for securing an outcome that will better protect American taxpayers and that will ultimately benefit all Americans."

The IRS assures that this case's resolution will result in a stronger and more trustworthy process for safeguarding taxpayer information. Meanwhile, Littlejohn, who also leaked Donald Trump's tax records, remains in prison, appealing the length of his sentence. 🕵️‍♂️

🤖 A major news nonprofit joins others in suing ChatGPT maker over copyright infringement. The Center for Investigative Reporting is the latest to sue OpenAI and Microsoft for using its content without permission and without offering compensation, violating copyright laws. While OpenAI continues to allegedly steal content from some publishers, it’s striking deals left and right with others…the most recent being Time Magazine. Given how quickly things are moving, it’s looking like a situation where the new market entrant skirts laws initially to become too big to stop…and will just end up paying fines after it gains market control. AP News has more.

🚗 Uber wants to pay you $1,000 to ditch your car for 5 weeks. The ridesharing giant is paying 175 people in select cities in the U.S. and Canada to use alternative modes of transportation. It’s goal? To highlight the high costs of personal car ownership and view how people’s behavior changes when they go “car light” which is not strictly “car free.” Australian tests showed people need access to at least four other transportation modes to ditch their car, but they’re interested to see the results in the U.S. market. More from The Verge.

🛒 Amazon’s new discount store looks to stave off Temu and Shein. The competition from low-cost sellers out of China, the U.S. consumer and tech giant presented plans for a new budget storefront that features low-cost apparel, home goods, and other items. It’s unclear how Amazon will debut the storefront, but it said it will start accepting product this fall as it looks to recapture some of the market share its lost to foreign sellers. CNBC has more.

🕵️ Trends With No Friends — find stocks with high relative strength and a low social following

🌮 Taco Bell enters the value meal wars with its biggest deal ever

🪫 EVs fare poorly in J.D. Power quality survey; Ram and Porsche top the rankings

🥫 How Walmart-owned Sam’s Club is trying to take on Costco’s private label Kirkland

😰 The biggest US banks are more vulnerable than they were last year, Fed’s stress test shows

💊 Drug prices have risen almost 40% over the past decade, according to a new tracker

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