There were a lot of fits and false starts yesterday, as the market fought back summer doldrums while waiting for a slew of consequential events. It began after the close, where most companies posted numbers that beat consensus. They all saw their share price pop:

• Neurocrine Biosciences (BNBIX)
• Trex Co (TREX)
• RingCentral (RNG)
• Medpace Holdings (MEDP)
• Chegg (CHGG)
• Varonis Systems (VRNS)
• Texas Road (TXRH)
• Restoration Hardware (RH)

To Infinity and Beyond?

The most compelling report came from Beyond Meat (BYND), which has become a cult stock since its debut as a publicly traded company. Considering the move from the Initial Public Offering (IPO), it seemed unreasonable to expect the stock to move any higher on financial results, but the initial reaction was slightly higher:

• Revenue: $67.3 million +287%
• Retail: $34.1 million +192%
• Restaurant: $33.1 million +483%

Then, the stock tumbled on news of a secondary offering that will mostly line the pockets of insiders:

• 3.0 million shares from shareholders
• 250,000 shares from the company

The underwriters, including the leads (Goldman Sachs, JPMorgan Chase, and Credit Suisse), will also exercise options on 487,500 shares at the offering price. I’m not sure where to peg the company, which has the playing field largely to itself, and it is creating name recognition that will fetch a premium above fundamentals for some time.

The stock is facing its toughest session since going public, but there is no doubt this stock will make another run higher at some point.

Fed Up, Yet?

The Federal Open Market Committee (FOMC) gathering begins today; tomorrow there will be an announcement on rates as everyone expects a rate cut.

According to the Chicago Mercantile Exchange (CME) forecasting, the cut should amount to 25 basis points (bps). However, the Street is currently anticipating 75 to 80 basis points cut from the current rate level of 225-250.

President Trump wants at least 50 bps, which is what NY Fed President Williams seemed to suggest would be the wise move until he was forced to clean up his comments. Accurately telegraphing moves is a part of the Fed’s mystic and is even a tool to move rates even without any action, so there will be a cut.

Portfolio

We issued profit alerts on two positions in the model portfolio yesterday.