To The Moon

🧩 Rate cut expectation buoyed U.S. markets, heavyweight earnings reports looming this week.

🔍$BWX Technologies Inc(BWXT)$ / $Primoris(PRIM)$ / $Kratos Defense & Security Solutions(KTOS)$ : Focus on the backbones supporting the revival of U.S. domestic manufacturing.

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|Back in the U.S.A.

On Friday, beyond the dovish remarks from Powell, two major pieces of news caught the attention of market observers.

- First, Intel reached a deal with the U.S. government for a 10% equity stake purchase, pushing $Intel(INTC)$ shares up over 5%.

- Second, in an effort to revitalize the domestic furniture manufacturing industry, Trump announced a national security investigation into imported furniture, causing the shares of several import-dependent furniture retailers to plummet. Meanwhile, $La-Z-Boy(LZB)$ , which primarily manufactures furniture in North America, saw its stock rise around 3% in after-hours trading.

It is evident that Trump has made the revival of U.S. manufacturing a resolute priority—a commitment he has consistently signaled to the market since his presidential campaign. His administration actively promoted domestic manufacturing revival strategies: The U.S. Department of Commerce is currently investigating potential tariffs on various industries, including pharmaceuticals, semiconductors, aircraft, critical minerals, and medium-duty trucks. It has already imposed tariffs on steel, aluminum, copper, and automobiles. Additionally, the nationwide construction of AI data centers has become a critical part of efforts to stimulate the domestic economy and drive job creation amid growing employment challenges.

As the employment landscape becomes increasingly dire, Trump is expected to intensify efforts to revive domestic manufacturing. Key stocks to watch in critical sectors like energy, defense, and utilities include: $BWX Technologies Inc(BWXT)$ / $Primoris(PRIM)$ / $Kratos Defense & Security Solutions(KTOS)$ .

| Market recap

On August 23, all three major indices ended higher: $NASDAQ(.IXIC)$ rose 1.9%, reducing its weekly loss to 0.6%; $S&P 500(.SPX)$ gained 1.5%, posting a modest 0.27% weekly increase.

Federal Reserve Chair Jerome Powell hinted at a potential rate cut in September during his speech at Jackson Hole, which boosted the market. Big techs rallied, with $Tesla Motors(TSLA)$ surging 6.22%, marking its largest single-day gain in two months.

Will Powell maintain a cautious stance moving forward? The U.S. economy faces a complex environment, and the future policy path is likely to be uneven and fraught with uncertainties.

Megacaps - Refocus on the China market

Last Friday, $NVIDIA(NVDA)$ rose 1.72%, and its upcoming earnings report has fueled optimistic forecasts, prompting Wall Street to raise price targets.

• Today, NVIDIA is set to unveil a new artificial intelligence product described as the “new brain” for robots, generating significant market anticipation. Recently, NVIDIA also launched open-source physical AI applications and the Cosmos Reason robot vision inference model to accelerate advancements in robotics intelligence.

• Meanwhile, the company’s upcoming quarterly earnings report has become a focal point for the market, serving as a critical indicator of AI investment sustainability and stock market trends. The market is widely forecasting NVIDIA's Q3 revenue to reach $45.92 billion with earnings per share of $1.01.

• Holding nearly an 8% weight in the S&P 500, NVIDIA’s performance is closely tied to the entire AI supply chain, attracting intense attention from global investors.

$Tesla Motors(TSLA)$ gained over 6%, marking its largest single-day gain in two months.

• Inspired, perhaps, by Apple’s Q2 strategy, Tesla is ramping up efforts to boost sales in the Chinese market.

• Tesla announced the introduction of an in-car voice assistant for the Chinese market, powered by DeepSeek and ByteDance’s AI model. This move is designed to deliver an interaction experience tailored to the preferences of Chinese users. Elon Musk aims to reverse the downward trend in sales and reignite consumer interest with this initiative.

Asia trades - Slow-bull market

China’s A-share market continues to recover, with many brokerage firms reporting a 15-35% increase in new account openings in August compared to the previous month. On a full-year basis, this growth ranges from 20-30%. The improving profitability of the market is gradually attracting more capital inflows.

Goldman Sachs estimates that Chinese households hold RMB 55 trillion in “excess deposits,” with only 22% of household financial assets allocated to funds and stocks. This indicates potential capital inflows exceeding RMB 10 trillion. Despite this, China’s stock valuations remain attractive, and with substantial idle capital yet to enter the market, Chinese assets still possess strong upward momentum.

On Monday, the Hong Kong stock market also delivered impressive performance, $HSTECH(HSTECH)$ surging 3.14%. Multiple Chinese tech giants are set to release earnings this week.

Top movers

Last Friday, $NASDAQ Golden Dragon China Index(HXC)$ ’s 2.73% rally drew attention, with $MINISO Group Holding Limited(MNSO)$ and $NIO Inc.(NIO)$ leading the charge, climbing over 20% and 14%, respectively.

• MNSO: The global flagship store, MINISO LAND, reported explosive sales growth. Quarterly earnings exceeded the upper end of its guidance, and growth prospects remain optimistic.

• NIO: Gross margins improved significantly, and the newly launched third-generation ES8 has been well-received. With a larger size, better features, and lower price, NIO is directly challenging Tesla and other competitors in the same segment.

Key earnings to watch this week include:

1. $PDD Holdings Inc(PDD)$ , which will release results before today’s market open.

2. $Alibaba(BABA)$ , set to report quarterly earnings before Friday’s market open. However, profits are expected to face significant pressure due to high subsidies in the domestic food delivery war.

|Captain America: Reviving Forces

Tracking the U.S. industrial revival, $First Trust RBA American Industrial Renaissance ETF(AIRR)$ surged 2.9% on Friday. Observing a monthly candlestick chart, the ETF has rebounded over 20% from its April lows, with trading volumes increasing month by month, indicating a favorable upward trend. Component stocks included in the ETF must meet two criteria: non-U.S. revenue must not exceed 25%, and consensus earnings expectations for the next 12 months must be positive.

As the employment situation worsens, Trump is expected to escalate efforts to revive domestic manufacturing. As key components of the AIRR ETF, stocks worth monitoring in sectors like energy, defense, and utilities include: $BWX Technologies Inc(BWXT)$ / $Primoris(PRIM)$ / $Kratos Defense & Security Solutions(KTOS)$ .

BWXT - YTD ~46%

$BWX Technologies Inc(BWXT)$ is a leading U.S. supplier of nuclear reactors with strong ties to space and military nuclear energy, making it a priority player in the space nuclear energy sector. Since 2017, BWXT has collaborated with NASA and the Department of Energy on nuclear thermal propulsion design.

BWX is currently leading the development of critical mission-ready microreactors under the "Pele Program." As previously mentioned, the rising demand for electricity driven by AI positions the company as a frontrunner in modular nuclear reactor development.

In addition to developing new technologies to counter China’s rapid advancements, BWX also provides services to existing U.S. commercial nuclear power plants. With Trump’s executive orders simplifying nuclear energy development regulations, BWXT’s importance in the U.S. nuclear energy industry is poised to grow further.

In its latest quarterly report, BWX exceeded market expectations, raising its FY2025 revenue forecast from $3 billion to $3.1 billion. Despite recent pullbacks, BWXT’s RSI suggests the stock is currently oversold.

PRIM - YTD ~50%, ex-date Sep 30

$Primoris(PRIM)$ provides construction, manufacturing, maintenance, and engineering services to public utilities, oil and gas companies, power producers, and municipalities across the U.S. The company has maintained dividend payments for 18 consecutive years, demonstrating its commitment to shareholder value.

Primoris focuses on high-growth areas such as data centers, power transmission, and natural gas power generation, enabling it to capitalize on rising infrastructure demand. This strategic positioning, coupled with stringent cost management, has translated into significant profit growth that outpaces revenue growth.

Primoris reported robust Q2 FY2025 financial results, with revenue reaching $1.9 billion and EPS at $1.68—both significantly beating expectations. The company also raised its FY2025 guidance. On Friday, PRIM shares briefly surpassed $116, hitting a new high and reflecting strong investor confidence.

KTOS - YTD ~153%

$Kratos Defense & Security Solutions(KTOS)$ specializes in developing defense hardware, software, and technology for the U.S. and allied forces. Its business areas include satellite virtualized ground systems, jet-powered drones, advanced vehicles, rocket systems, propulsion systems, C5ISR, and microwave electronics.

Kratos operates through two primary divisions: Kratos Government Solutions and the Unmanned Systems segment, offering services in areas such as microwave electronics, space, and cybersecurity for national defense. The company is working to expand its operations to meet the growing demand from defense partners for technologies that can be delivered quickly and cost-effectively.

On August 7, Kratos reported impressive Q2 FY2025 financial results, achieving $350 million in revenue and EPS of $0.11—both exceeding Wall Street estimates. The company raised its FY2025 revenue guidance to $1.29-$1.31 billion, up from the prior forecast of $1.26-$1.29 billion, reflecting its business growth outlook.

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