This Week in Emerging Growth: Maybe the “Second Amendment People” Can Take Care of the Economy, While They’re at It…

Well, it was another bizarre week on the campaign trail as both candidates visited the Metro Detroit area (note to major news outlets: Warren is not Detroit) to give economic policy speeches. That wasn’t bizarre, though. Rather, it was Donald Trump seemingly implying that it might be a good idea to assassinate his opponent and then stating that President Obama and Hillary Clinton “founded” ISIS, doubled down on the claim, then insisting that he was being “sarcastic.” It was a strong week for markets, however, as the Dow, S&P 500, and Nasdaq all hit record highs on Thursday, the first time all three did so concurrently since 1999.

Major News Recap:

· It was a rough week for Delta Airlines (DAL) after an outage hit the company’s computer systems and led to the cancelation of nearly 2,000 flights over multiple days, prompting a 3.5% decline in the company’s shares. Boy, too many stories like this and people may start to develop a negative outlook on airlines.

· Earnings season marched on, with Disney (DIS) reporting better-than-expected profits for Q3 that prompted a 2% gain in shares before it surrendered about half of those on Friday. Yelp (YELP) also surprised analysts with a swing to profitability in its second quarter, resulting in the stock gaining nearly 20% on the week.

· The Dow Jones Industrial Average, S&P 500, and Nasdaq all hit record highs on Thursday following a series of better-than-expected earnings reports that included retailers Macy’s (M), Kohl’s (KSS), and Nordstrom (JWN). This represented the first time all three major indices managed to hit record highs on the same day since 1999. Hey, does this mean Pets.com is poised for a comeback?

· In uncompensated labor news, Arianna Huffington announced that she would be stepping down for her role as the Editor-in-Chief of the blogging website that bears her name, the Huffington Post (AOL) so that she can focus on her new company, Thrive Global.

· Labor data showed a drop in American filing for unemployment benefits on Thursday, a sign that the job market continues to remain firm in early August. Knock on wood.

The Week’s Market Action

S&P 500: +0.91 or 0.04% to 2,184.05

Nasdaq: +11.32 or 0.22% to 5,232.90

Top-performing Stocks:

Top Performers

Mega-Cap

Alibaba Group (BABA)

Up $13.66 or 16.15% to $98.25

Large-Cap

Macy’s (M)

Up $5.72 or 16.77% to $39.82

Mid-Cap

Mattress Firm Holding Corp (MFRM)

Up $34.10 or 114.66% to $63.84

Bottom Performers

Mega-Cap

Wells Fargo (WFC)

Down $0.79 or 1.62% to $47.90

Large-Cap

KLA-Tenor Corp (KLAC)

Down $9.13 or 11.79% to $68.28

Mid-Cap

United States Steel Coproration (X)

Down $5.46 or 20.61% to $21.06

Emerging Growth Company News

It was a big week for major acquisitions as the Russell 2000 declined slightly despite gains in the major indices as small-cap earnings didn’t show as much strength as their mid- and large-cap brethren.

Russell 2000 Performance: -1.61 or 0.12% to 1,229.82

Emerging Growth Stock Performance:

Top Performers

Small-Cap

DXP Enterprises (DXPE)

Up $11.48 or 69.45% to $28.01

Micro-Cap

Resolute Energy Corp (REN)

Up $7.77 or 115.11% to $14.43

Bottom Performers

Small-Cap

Impax Laboratories (IPXL)

$9.06 or 29.43% to $21.72

Micro-Cap

SAExploration Holdings (SAEX)

$20.29 or 61.5% to $12.70

Deals Recap:

· Biotech firm Cleave Biosciences raised $37 million on August 8 in a Series B funding round led by New Enterprise Associates and Nextech Invest.

· Open-source video platform Kaltura raised $50 million on August 8 in a Series F funding round led by Goldman Sachs (GS).

· Beauty products company Memebox raised $65.95 million on August 9 in a Series C funding round led by Formation Group.

· Medical device company CVRx raised $93 million on August 9 in a Series G funding round led by Johnson & Johnson Development Corporation.

· Health care company Woundtech raised $40 million on August 9 in a Series A funding round led by Aldrich Capital Partners.

· Virtual reality company NextVR raised $80 million on August 9 in a Series B funding round led by CITIC Group Corporation.

· On-demand health care concierge Accolade raised $71.1 million on August 10 in a Series E funding round led by Andreessen Horowitz.

Emerging Growth News

· Retail goliath Wal-Mart (WMT) snapped up online retail, um, David, Jet.com for some $3.3 billion. Wal-Mart is likely doing this with an eye on Amazon (AMZN) and building an online infrastructure to help them stay better prepared for the future. I wonder if they’re going to get two-day shipping on this purchase…

· A recent study appears to indicate that the weakening in capital flow to startups from the second half of 2015 is an ongoing trend that has continued into the second quarter of 2016. Given that valuations reached an all-time high in mid-2015, this correction is likely no surprise, but it’s worth keeping an eye on to see how far things fall before finding a new bottom.

· Share in Impax Laboratories (IPXL) were plunging Tuesday after the company’s Q2 earnings showed lower-than-expected profits and weaker-than-expected guidance for the rest of the year. The company ultimately shed nearly 30% of its value by week’s end, falling to $21.72 a share.

· This week’s victim of the small-cap Biotech’s high-stakes game of “Cross Your Fingers and Wait for Clinical Results” was Array Biopharma (ARRY), which saw shares plunge more than 20% after the lung cancer drug it’s developing in a partnership with AstraZeneca (AZN), selumetinib, failed a Phase III clinical trial.

· Health benefits platform Castlight Health (CSLT) saw shares leap on Tuesday following a solid Q2 earnings report.

· Job-finding website Monster Worldwide (MWW) agreed to an acquisition price of $429 million, a premium of 23% over Monday’s close, from Randstad Holdings. In the event that Randstad decides to downsize, at least Monster’s employees will have an idea of how to get their job search started.

· Computer maker Hewlett Packard Enterprises (HPE) is snapping up data management company Silicon Graphics International (SGI) for some $275 million.

· Ocean Rid UDW (ORIG) delivered a big earnings beat in its Q2 earnings, released after the closing bell on Thursday. However, that particular piece of information was somewhat overshadowed by the company’s warning that adverse market conditions may force it to file for bankruptcy, which had shares down more than 60%.

· Plastics company A. Schulman (SHLM) shed more than a quarter of its value this week after it lowered its full-year 2016 guidance by more than $0.50 a share.

· Semiconductor company Alpha and Omega Semiconductor (AOSL) saw shares explode by more than a third after a Q4 earnings report showed them beating Wall Street profit forecasts.

Top Reads of the Week

· Los Angeles Disruptors and Entrepreneurs On Display at Equities Emerging Growth & Innovation Forum by Joel Anderson

· Equities.com announced a ground-breaking partnership with fin-tech company Tradier to offer unlimited trading for a monthly flat fee.

· Cannabis Business Leaders’ Advice for Entrepreneurs and Investors by Daniel Banas

· Shark Tank’s Daymond John on the Importance of Crowdfunding for Entrepreneurs by Daniel Banas

· How Behalf is Powering Small Businesses with Easy Instant Access to Credit by Joel Anderson

· As Sam Sees It: Should Investors Rotate Into Growth Sectors? with Sam Stovall

· Can You Really Tame the Momentum Roller Coaster? by Wesley Gray

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