Wall Street Lunch: ‘Economy Is Slowing, But Still Clearly Growing’

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Lumber futures on the edge of bear territory (0:20) Snowflake, HP gaining post-earnings (1:25) U.S. GDP growth revised higher (2:30) Pattern Group Nasdaq IPO (3:45) Teva’s GLP-1 weight loss drug (4:40)

The following is an abridged transcript:

Our top story so far

Does a bear … lurk in the woods?

Lumber futures (LB1:COM) are on the edge of bear territory. The initial tariff-driven upswing has fizzled out and cracks in the housing market are beginning to show.

Lumber has retreated from an early August high of about $695 per thousand board feet to about $560. That’s a decline of nearly 19.5%, just shy of the 20% drop that signals a technical bear market.

Lumber futures saw a surge driven by tariffs and optimism over lower interest rates, which pushed prices to their highest levels in more than three years. But enthusiasm soon faded, as recent housing data disappointed and builders scaled back due to higher input costs, weaker demand and looming affordability challenges.

BofA says housing affordability remains stretched even with potential rate cuts, requiring better wage growth or increased supply for meaningful improvement.

Mill closures, reduced North American production capacity and tariff concerns have resulted in increased volatility in the lumber market of late.

Among active stocks:

Snowflake (SNOW) is surging post-earnings, with accelerating sales and momentum from its artificial intelligence strategy prompting analysts to increase price targets and reiterate strong ratings.

Goldman Sachs analysts said: “We highlight that Snowflake has an opportunity to be a Gen-AI platform, enabling customers to develop agentic applications using Cortex AISQL.”

HP (HPQ) is among the top S&P 500 gainers after its quarterly results and guidance topped expectations despite tariff concerns.

Evercore analysts said: “Although print market fundamentals remain somewhat soft, continued PC strength provides an offset which should enable HPQ’s top line to remain positive over the next few quarters,”

And Best Buy (BBY) topped Q2 estimates and set favorable guidance, but predicted a slight tightening of margins.

Best Buy sees fiscal 2026 revenue of $41.1 billion to $41.9 billion (midpoint $41.5 billion) vs. $41.4 billion consensus and EPS of $6.15 to $6.30 (midpoint $6.225) vs. $6.14 consensus.

On the economic front:

U.S. GDP growth was revised higher, to an annual rated of 3.3% from 3% at the initial estimate.

The revision primarily reflects upward revisions to investment and consumer spending, which were partly offset by a downward revision to government spending and an upward revision to imports.

Q2 PCE prices were revised to a 2% increase, down from the initial estimate of 2.1% and 3.7% in Q1. Core PCE prices, though, stayed at 2.5% vs. the prior estimate.

Heather Long, chief economist at Navy Federal, says: “Bottom line: Economy is slowing, but still clearly growing.”

And the July Pending Home Sales Index edged down 0.4% for the month to 71.7, missing the consensus of a 0.2% rise. Sales in July increased 0.7% from a year ago, compared with a 2.8% annual decline in June.

NAR Chief Economist Lawrence Yun says: “Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant.”

And in other news of note:

E-commerce firm Pattern Group (PTRN) has filed for an IPO on the Nasdaq.

Pattern Group was originally founded as iServe in 2013. By 2018, the company rebranded from iServe to Pattern and expanded internationally with the acquisition of the consultancy Practicology.

The Utah-based company uses advanced AI and machine learning to manage logistics, pricing, advertising, and customer service for its partners. Its specialty is managing branded sales on digital marketplaces like Amazon (AMZN), Walmart (WMT), Target (TGT) and TikTok Shop.

Pattern Group (PTRN) disclosed that it generated revenue of $1.80 billion for the year that ended on Dec. 31, 2024, which represents a compound annual growth rate of 35% over the last two years. Notably, Pattern Group derived 94% of its revenue from consumer product sales on Amazon. In addition, Amazon accounted for over 75% of the total U.S. marketplace retail sales in 2024.

And Teva Pharmaceuticals (TEVA) said that the FDA approved its generic version of Novo Nordisk’s (NVO) Saxenda, a GLP-1 weight loss drug.

“With this approval, and by launching a generic for Saxenda, we will provide patients in the U.S. the first ever generic GLP-1 product specifically indicated for weight loss,” the company said.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.