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Big News for Alibaba Stock Investors
| 2024-04-17 |
It covers the following details: In this video, I will cover the recent updates regardingAlibaba(NYSE: BABA)and how they could impact shareholders.*Stock prices used were from the trading day of April 15, 2024. The video was published on April 16, 2024.Should you invest $1,000 in Alibaba Group right now?Before you buy stock in Alibaba Group, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Alibaba Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Consider whenNvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $526,933!*Stock Advisorprovides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice hasmore than quadrupledthe return of S&P 500 since 2002*.See the 10 stocks »*Stock Advisor returns as of April 15, 2024Neil Rozenbaumhas no position in any of the stocks mentioned. The Motley Fool recommends Alibaba Group. The Motley Fool has adisclosure policy.Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe throughhis link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.Big News for Alibaba Stock Investorswas originally published by The Motley Fool
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1 Red-Hot Cryptocurrency to Buy Now. It Could Soar 525% to 5,800%, According to Certain Wall Street Analysts.
| 2024-04-17 |
It covers the following details: Bitcoin(CRYPTO: BTC)gained 116% over the past year amid a resurgence in risk assets driven by an increasingly optimistic economic outlook. Other factors contributing to those returns include the recent approval of spot Bitcoin ETFs and the upcoming halving of Bitcoin mining rewards, estimated to occur on April 16, 2024.Several Wall Street analysts think those factors will drive the cryptocurrency even higher in the future, but Anthony Scaramucci, Tom Lee, and Cathie Wood are among the most bullish. Their forecasts imply upside ranging from 525% to 5,800% from the current price of $64,000.The two catalysts that could drive Bitcoin higherRecently approvedspot Bitcoin ETFsoffer direct exposure to Bitcoin without the friction of cryptocurrency exchanges. That could be a game changer. By letting investors consolidate accounts (i.e., no separate accounts for cryptocurrency) and eliminating high transaction fees, spot Bitcoin ETFs could greatly increase demand.Meanwhile, Bitcoin mining rewards will be reduced by 50% in April 2024. Halving events are coded into the blockchain protocol to ensure Bitcoin supply never exceeds 21 million, and they occur about once every four years. The upshot is that, by cutting issuance in half, the event will leave miners with 50% less Bitcoin to sell over the next four years, thereby diminishing selling pressure.Anthony Scaramucci: $400,000 per Bitcoin (525% upside)Anthony Scaramucci is the founder and managing partner at SkyBridge Capital, an alternative asset manager that specializes in hedge funds, digital assets, private equity, and real estate. Scaramucci was an early investor in theiShares Bitcoin ETFbyBlackRock, and he made a few interesting comments during an interview with YouTube host Scott Melker earlier this year.When questioned about his prediction that Bitcoin could exceed $170,000 by 2025, Scaramucci called it a data-dependent estimate based on Bitcoin consistently quadrupling during the 18-month period following halving events. Reuters quoted a similar comment from Scaramucci ahead of the World
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2 Incredibly Cheap Dividend King Stocks to Buy Now
| 2024-04-17 |
It covers the following details: There's an old Wall Street maxim that says the best time to buy is when there's blood in the streets. That might be a bit extreme for most investors, but the point is that you can often find the best deals on stocks that other investors are afraid of.Right nowStanley Black & Decker(NYSE: SWK)andBlack Hills(NYSE: BKH)are out of favor, which is why you might want to take a closer look at these two historically cheap Dividend Kings.1. Stanley Black & Decker is way downA "fallen angel" is an investing term for a once-beloved stock that has faced some hardship that sent its shares hurtling back to Earth. With a stock price that's down over 55% since hitting a high in 2021, Stanley Black & Decker looks very much like it has lost its wings. There's a good reason for that: Adjusted earnings hit a record high of $10.48 per share in 2021 before promptly falling to $4.62 in 2022 and then to $1.45 in 2023.Image source: Getty Images.Several problems led to this outcome, including debt-funded acquisitions that left the iconic tool maker with a bloated and inefficient business. Management has been hard at work selling assets, streamlining operations, cutting costs, and paying down debt to get back on its feet. But theDividend Kingalso remained committed to its dividend, making modest increases to the annual payment despite the earnings decline. That commitment coupled with the deep stock-price decline has left the company with a historically attractive 3.5%dividend yield.The best part of the story is that the industrial company's efforts to turn things around appear to be taking hold. For example, Stanley Black & Decker's margins improved over the past year. Executives are currently projecting adjusted earnings for 2024 to turn upward again, coming in between $3.50 and $4.50 per share.Given the rough two years that Stanley Black & Decker lived through, the company has a lot to prove. But if it can get earnings going in the right direction again, Wall Street will likely reward the stock with a higher valuation. Now is the time for a deep
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Got $1,000? These 3 Artificial Intelligence (AI) Stocks Are Still a Bargain
| 2024-04-17 |
It covers the following details: Investors have moved heavily into artificial intelligence (AI) stocks over the last 18 months. The release of a vastly improved version of OpenAI's ChatGPT in November 2022 forced the shareholding public to rethink the power of AI, and some stocks experienced massive increases.However, the market did not treat allAI stocksequally, and some struggled because of the perception that they had or were going to fall behind. Some of these market perceptions were probably overly negative, creating an opportunity in three AI stocks, even for those with only a $1,000 investment budget. Let's take a look at why these three AI stocks are now a bargain.1. AlphabetGoogle's parent company,Alphabet(NASDAQ: GOOGL)(NASDAQ: GOOG), has long been synonymous with AI. Since it first began using machine learning to correct spelling in 2001, it has been a leader in the AI field. It also became an "AI-first" company in 2016, meaning that it integrated AI into all products from that point forward.Still, the release of an improved version of ChatGPT changed perceptions. Google Search competitorMicrosoft's Bing began integrating ChatGPT into its search tool in 2023, leading investors to question whether Alphabet could maintain its lead in search. Additionally, the release of its competing product, Google Gemini, received mixed reviews.Nonetheless, the company recently combined its AI research arms with Google DeepMind to consolidate its efforts. Moreover, it holds around $111 billion inliquidity. Hence, if it cannot innovate in the field, it can probably buy out a company that can. These resources should help the company stay competitive in the AI field.Furthermore, despite its "struggles," its stock is up by almost 50% over the last year to just under $160 per share as of the time of this writing. Also, at a price-to-earnings (P/E) ratio of 27, it sells at a lower valuation than all of the "Fab 4" stocks (see chart below). With its valuation and tremendous optionality, the negative perceptions are likely a buying opportunity, not a harbinger of long-term decline for the company.GOO
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3 Unstoppable AI Stocks Not Named Nvidia That You Can Buy and Hold for Years
| 2024-04-17 |
It covers the following details: Nvidiais undoubtedly the name many investors think about these days when they think of artificial intelligence (AI). And that's not wrong, as the chipmaker has been playing a big role in helping companies develop AI models and improve their overall capabilities. But there are some strong AI stocks to buy besides Nvidia that investors should consider as well.Palantir Technologies(NYSE: PLTR),Amazon(NASDAQ: AMZN), andAlphabet(NASDAQ: GOOG)(NASDAQ: GOOGL)are three stocks that all look unstoppable right now and can be excellent long-term options for AI investors. Let's find out a bit more about these three buy-and-hold AI stocks.1. Palantir TechnologiesPalantir is a name that has been growing in popularity with both government organizations and private businesses. The company's focus on data analytics and delivering actionable insights has always had AI connections. But more recently, Palantir made the connection more clear when it launched its Artificial Intelligence Platform, or AIP. Based on customers' reactions, it's clear they are eager to put it to use.In 2023, the company reported revenue totaling $2.2 billion, which grew 17% year over year. For the current year, Palantir anticipates its top line will total around $2.6 billion to $2.7 billion, rising at a slightly higher rate of around 20%. It also expects to remain in the black, as it has in recent quarters, as a lack of profitability is no longer a big risk with the tech stock.Palantir expects its growth rate to ramp up, however, thanks in large part to the more than 500 "boot camps" it has held with customers to help them identify possible opportunities for AI to help their businesses. Securing those types of contracts can take time, but with a few large wins, the company's revenue potentially could come in much higher in the long run.Investors expect more growth from the business thanks to AI, but Palantir is getting more positive attention because it is not only improving its growth rate but is profitable while doing so. All in all, this can be one of the best AI stocks to own as Palantir's mix of government and commercial revenue gives it some excellent long-term stability.2. AmazonAmazon
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AST SpaceMobile Stock: Buy, Sell, or Hold?
| 2024-04-17 |
It covers the following details: AST SpaceMobile(NASDAQ: ASTS)reached an important milestone in 2023. In 2022, it put a functioning cellular broadband satellite into space, with testing in 2023 proving that the satellite could actually do what management said it would.In effect, AST SpaceMobile has shown it is capable of competing with Elon Musk's much bigger and more established Starlink. Is that enough to make this company a buy, or are investors better off avoiding it until it's further along in its development?AST SpaceMobile has a different modelMusk's privately held Starlink service owns a network of satellites that provide global broadband cellular and internet service. This company, which is a division ofSpaceX, is a stand-alone offering to which customers must subscribe.It also involves setting up what amounts to a satellite dish to connect to Starlink's satellite array. AST SpaceMobile wants to compete with Starlink, but it is taking a vastly different path.Image source: Getty Images.First off, AST SpaceMobile's service works with normal cell phones; there's no need to buy and set up any other hardware. Second, and perhaps more important, the company is trying to partner with cellular providers, which would make its service an add-on offering to their services.This is notable because it allows the company to tap into an existing customer base while allowing the mobile carriers to compete with Starlink without having to build their own individual services. And it gives AST SpaceMobile access to corporate cash to help fund the development of its satellite array.This is where things get tricky. AST SpaceMobile has only one test satellite in space right now. It is working on five more, but it isn't a functioning space-based cellular broadband service in any real sense even though the company has proved it can provide such a service.In other words, a lot more spending must take place before AST SpaceMobile can actually compete with Starlink. So what should investors do?Sell AST SpaceMobile?When you step back and look at AST SpaceMobile, it still doesn't have a functioning service, which means it is still just a big idea. Getting from this point to being able to support real customers, not just testing, will require launching more satellites.The next five
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3 Stocks That Can Help You to Get Richer in 2024
| 2024-04-17 |
It covers the following details: Looking to get richer in 2024 (not to mention in 2025, 2026, 2027, and beyond)? Of course you are! Investing wisely in the stock market is a solid way to accomplish that goal.The stock market does experience occasionalcorrections and even crashes, but in the long run, it tends to go up, up, up. One proven way to successfully invest in stocks is to buy one or more low-fee exchange-traded funds (ETFs) that track a broad market index, such as theS&P 500. Doing so will get you roughly the same return as the index (minus the low fees).The other proven way to get richer is to research and buy individual stocks. Do it well and you might even generate market-beating returns with some or much of your invested moolah. But which individual stocks can help you get richer in 2024? Here are three to consider:1. NvidiaIf you've been paying any attention to stocks in recent years, you've likely noticedNvidia's(NASDAQ: NVDA)amazing run. Over the past 10 years, its stock has averaged annual gains of around 69%. Over the past five years, it's more like 80% average annual gains. Compare that to the broader market average of 10.5%. Jeepers.As the company itself notes, it invented the graphics processing unit (GPU) in 1999 and is now a key player in developing artificial intelligence (AI) chips: "Our work in AI is transforming industries valued at more than $100 trillion, from gaming to healthcare to transportation, and profoundly impacting society."It would be reasonable to assume thatit's too late to investin Nvidia and to think that the stock is likely overvalued, but that's not necessarily the case. The company's forward-looking price-to-earnings (P/E) ratio sits at around 37, which is below its five-year average of 39. And its recent price/earnings-to-growth (PEG) ratio of 1.5 is below its five-year average of 2.4. Yes, its valuation is still quite high and its growth
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Got $5,000? Here Are 3 Undervalued Stocks to Buy and Hold Forever
| 2024-04-17 |
It covers the following details: The overall market shows clear indications that it's priced at relatively rich levels right now. But smart investors willing to do a little digging will find that there are always at least a few undervalued stocks worth consideration.The real difficulty though is finding undervalued names you want to buy and hold forever. These companies must be in true "forever" businesses. And, these companies must also be capable of adapting as needed. It's a taller order, to be sure.Still, such stocks exist. Here's a rundown of three of the best undervalued "forever" stocks to think about buying sooner rather than later.1. Delta Air LinesIt's been a lackluster past few years forDelta Air Lines(NYSE: DAL)shareholders. Although the stock's no longer falling since the initial COVID-19 pandemic-prompted tumble, DAL shares are still trading below their pre-pandemic peak. The market's seemingly waiting for the other shoe to drop, so to speak, which would again crimp demand for air travel services.The thing is, we're now nearly four years removed from the worldwide shutdown of ...well,everything. The International Air Travel Association says last year's total passenger miles are essentially back to 2019's pre-pandemic levels, en route to new record levels this year, with new records also expected for the next several years. The industry's biggest challenge now is actually alackof planes, with many airlines reluctant to fly new passenger jets manufactured by beleagueredBoeing.Connect the dots. There is no other shoe that's going to drop. Most of the challenges Delta and its peers face now are nothing new, and nothing the business hasn't overcome in the past. The rest can be figured out, up to and including buying more new commercial aircraft from Boeing's rivalAirbus.Indeed, the long-term future looks very bright.Putting thedesign problemswith its 737 and 787 jets aside, aircraft company Boeing regularly updates its long-term outlook for air travel demand. In its most recent look at the matter, the company suggests the world will need 42,600 new commercial jets over the course of the next 20 years. To put this number in perspective
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An Analyst Who Predicted the 2008 Recession Just Issued a Warning. 1 Great Stock to Buy Now If He's Right
| 2024-04-17 |
It covers the following details: Earlier this month in an interview with CNBC, financial analyst Gary Shilling warned that there could be a "delayed" recession. He noted that he is seeing some traditional and reliable forerunners to a recession, including the current inverted yield curve and small businesses cutting back on spending and employment. He added that on average, a recession starts within two years after the Federal Reserve starts to raise rates. The Fed started raising rates in March 2022, so it has been just over two years.Shilling was one of the analysts back in 2007-08 warning investors about the housing bubble that was developing. It led to the Great Recession of 2008-09 which had a long-term adverse effect on the economy. In other words, he has some street cred when it comes to macroeconomic predictions.A recession is typically bad for the stock market, and investors are always looking for ways to cope when such downturns hit.Walmart(NYSE: WMT)has proven to be a strong performer during these periods. Here's why it's a stock to consider in light of Shilling's comments.Walmart is a low-cost leaderWalmart tends to perform well in a recession for several reasons. One is that it sells a lot of everyday necessities that people will buy regardless of the broader economy. The company has become the largest grocer in the U.S. by far, twice as big asKroger, its largest grocery competitor (as measured by revenue). This gives the company tremendous scale and buying power, which allows it to get the best prices. It then turns around and passes these low prices on to its customers.The company is a low-cost leader, and in times of economic stress, it isn't afraid to push prices even lower. This allows it to gain share from both traditional grocers and general merchandise retailers likeTarget.Walmart also benefits from the trade-down effect. During more difficult economic times, even higher-income people will often look for lower-priced alternatives. Walmart tends to attract more high-income customers during tougher economic times, given its everyday lower prices.The company has already been making inroads into the higher-income demographic in the past few years, as more consumers try to cope with the elevated inflationary environment.
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Here Are My 2 Top Artificial Intelligence (AI) Stocks to Buy Right Now
| 2024-04-17 |
It covers the following details: The artificial intelligence (AI) stock boom is showing some signs of cooling off, but that doesn't mean that the opportunity in AI stocks is over by any means.Big businesses and start-ups are still ramping up spending to capitalize on what many tech CEOs and experts see as the biggest technological revolution since the internet. OpenAI CEO Sam Altman has also said that demand for generative AI is still growing so rapidly that new energy solutions will be needed to support it.So, there still seems to be plenty of upside potential inAI stocks. If you're looking to capitalize on the opportunity, these two stocks look like great ways to do it.Image source: Getty Images.1. Taiwan Semiconductor ManufacturingMost of the AI winners at the moment seem to be hardware stocks likeNvidiawhich are seeing demand soar for its GPUs and other components that make up the backbone of AI infrastructure. Competition in GPUs and other such hardware components like servers is expected to intensify asIntelandAdvanced Micro Devicesare launching their own competing AI GPUs.One company that's benefitting from this increased AI-related competition isTaiwan Semiconductor Manufacturing(NYSE: TSM). Even better, it's less likely to encounter the kind of competitive incursion the hardware stocks referenced above are facing.TSMC (as it is also known) is the world's biggest contract semiconductor manufacturer, and it dominates the market with an estimated 55% share of third-party chip manufacturing and a 90% share of advanced chip manufacturing. It's the company that has primarily made the era of fabless chip design possible as tech companies and chip designers likeApple, Nvidia, AMD, andBroadcomall turn to TSMC to manufacture their product designs. Even Intel, which has its own foundry business, had TSMC produce its new Gaudi 3 AI chip, as Intel can't match TSMC in advanced chip production. TSMC can now make 3nm (nanometer) chips and is aiming to release 2nm chips in 2025.That market share and vital position in the chip supply chain give TSMC significant market power. In its fourth-quarter earnings report, the company reported an operating margin of 41.6%, showing that it converts a high percentage of its revenue
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Investors Are Chasing the Biggest Names in Artificial Intelligence. But These 2 Lesser-Known Companies Are AI Stocks to Buy Now.
| 2024-04-17 |
It covers the following details: When my 94-year-old grandfather asks me aboutartificial intelligence(AI), as he did just last week, I believe it's safe to say that AI is the most hyped trend in business and investing today. But this much attention can raise expectations sky-high. And sky-high expectations tend to lead to overvalued stocks.Unfortunately for investors, many companies are overstating their AI capabilities -- it's so bad that the Securities and Exchange Commission (SEC) is starting to investigate false claims. The fakers obviously won't make good AI investments. But legitimately good AI companies may not make good investments today either due to their elevated valuations.And that's why I want to highlight two lesser-known companies today inAppLovin(NASDAQ: APP)andXometry(NASDAQ: XMTR). Both are legitimate AI stocks. But they are under the radar and potentially undervalued, making them much better buys right now.1. AppLovinAppLovin owns around 200 mobile games, and these generated revenue surpassing $1.4 billion in 2023. But management doesn't intend for this to be the long-term business model -- indeed, the company is open to selling these apps outright if it can find a buyer. Rather, it developed these apps to help gather data for training the AI models for its software business.Companies want users to find, download, and use their apps and they turn to AppLovin for help. The company's AppDiscovery software product is powered by AI and the newest version launched in 2023. Based on revenue growth, I'd say it's been an overnight success story. In 2023, AppLovin's software revenue was up 76% year over year to $1.8 billion.What's exciting is that AppLovin is experiencing this level of growth during a slump in the mobile app economy. According to Statista, worldwide spending on mobile apps was $171 billion in 2023. For perspective, it was $170 billion back in 2021. Therefore, the space isn't growing, but AppLovin is.What's also exciting is that AppLovin is still feeding the AI models. Management hopes that
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Could Super Micro Stock Help You Become a Millionaire?
| 2024-04-17 |
It covers the following details: Super Micro Computer(NASDAQ: SMCI)is arguably one of the more surprising successes of the current boom in artificial intelligence (AI) stocks. The manufacturer of servers existed in relative obscurity for decades despite expanding its operations to more than 100 countries.However, a partnership withNvidiahas stoked demand for its servers as customers seek the hardware for running AI applications. Consequently, the stock has risen more than 2,000% in the last three years.With those gains, investors who have held the stock for three years or more have a likely path to millionaire status even if they started with relatively small investments. What is less clear is whether small investors can expect to become millionaires by starting now.The state of Super MicroSuper Micro has existed since 1993. The company committed to its role as a rack-scale, total IT solutions provider, building energy-efficient and environmentally friendly servers for its customers.Since its founding, the company has become an innovator in the server industry. It also expanded steadily, establishing operations in Asia and Europe in the 1990s. That expansion enabled the launch of its initial public offering (IPO) in 2007. Nonetheless, between its 2007 IPO and the end of 2021, the stock had appreciated less than 400%.However, its servers became increasingly popular in this decade, and the sudden interest in generative AI sent its stock into the stratosphere.SMCI ChartThe bull market in these investments may not end anytime soon. Allied Market Research projects a compound annual growth rate (CAGR) of 38% for the AI chip industry through 2028. Thus, even if growth slows after 2028, it is likely that Super Micro will be at the center of a much larger industry years from now.Super Micro's financials and metricsOne can see that trend in the increase in Super Micro stock. A $10,000 investment three years ago would be worth just under $240,000 today. This means it has doubled in value more than four times over that time. At that value, shares would only have to double just over two more times to reach $1 million. Hence, those holding long-term positions in Super Micro can become millionaires even if they started small.Still
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Want Exposure to the Hottest AI Stocks? Buy This ETF Hand Over Fist.
| 2024-04-17 |
It covers the following details: There's no doubt that artificial intelligence (AI) has been the hottest topic in technology (and arguably any sector) over the past year and a half. AI isn't a new development, as many companies have used it for years. From online shopping recommendations to voice assistants to autonomous driving technology, AI has been around for a while.However, AI was recently brought into the mainstream with the immense popularity of OpenAI's ChatGPT and othergenerative AIapps. Thanks to this popularity, many tech companies are going all in on AI, and investors are rushing to invest in them, hoping to capitalize on the momentum.AI is a relatively broad field, and companies operate in different parts of the ecosystem. For investors looking to get exposure to top companies across the AI spectrum, theFidelity Nasdaq Composite Index ETF(NASDAQ: ONEQ)can do the trick.A lot of ground covered with a single investmentTheNasdaq Compositeis one of the three major U.S. stock market indexes and tracks all the companies trading on the Nasdaq stock exchange. Many tech companies are listed on this exchange, so the Fidelity Nasdaq Composite Index ETF is tech-dominant, with the sector accounting for close to half of the fund (49.45%). The other four sectors rounding out the top five are communication services (14.70%), consumer cyclical (13.75%), healthcare (7.02%), and industrials (4.08%).Although tech companies lead the charge, it's nice to have some diversification (although a small amount) to help hedge against sector-specific volatility and downturns.Some of the top AI companies globally leading the wayThe tech portion of the Fidelity Nasdaq Composite Index ETF includes some of the world's hottest and most important AI-related companies. Below is just a snapshot of some of the ETF's top holdings (all in the top 10) and how they're leveraging AI:Microsoft(NASDAQ: MSFT): A strategic partnership with OpenAI has given it exclusive rights to use the company's large language models (LLMs) to integrate into its products.Apple(NASDAQ: AAPL): In addition to current AI-powered
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Wall Street says a Wall Street revival is finally here
| 2024-04-17 |
It covers the following details: Wall Street is surging again. This time, bank executives say it’s for real.Bank of America (BAC), Goldman Sachs (GS), Citigroup (C), Morgan Stanley (MS), and JPMorgan Chase (JPM) all reported first quarter jumps in investment banking.They did so because initial public offerings, bond issuances, and in some cases, M&A dealmaking beat analyst expectations.Collectively, those revenues at the five big banks were up 26.6% from a year ago, to $8.08 billion. The biggest jump of 34% belonged to Bank of America, followed by 32% increases at Goldman and Citigroup.CEOs are not hiding their enthusiasm for the turnaround following two years of depressed dealmaking."The pipeline is clearly growing," Morgan Stanley bossTed Pick told analysts Tuesday, repeatedly using the word "bullish" to describe his outlook.Wall Street is in the "early innings of a multiyear M&A cycle."Goldman CEO David Solomon said Mondaythat "it's clear that we're in the early stages of reopening the capital markets," adding that "I've said before that historically depressed levels of activity wouldn't last forever."The investment banking rebound for these banks couldn’t have come at a better time, serving as a boost whilehigher interest rates begin to eat awayat more traditional consumer banking margins.Morgan Stanley CEO Ted Pick. REUTERS/Jeenah Moon(REUTERS / Reuters)'Green shoots'Wall Street has been waiting two years for this moment, enduring repeated false starts.Last year was supposed to be the year things turned around as executives touted a string of IPOs and merger announcements. Instead, 2023 was the worst year for dealmaking in a decade, as clients turned cautious about everything from the direction of interest rates to relations with China to the larger US economy.Investment banking revenue at the five big banks with sizable Wall Street operations fell by an average of 9% last year. The portion of these fees tied to advice given on mergers or acquisitions declined even more, by 21% on average.Some executives even had towalk back their talk of "green shoots"after the hoped-for surge in deals failed to materialize."
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Shifting Market Spurs Dai-ichi to Adjust $219 Billion Portfolio
| 2024-04-17 |
It covers the following details: (Bloomberg) -- Japan’s largest listed life insurer has a dilemma — its traditional investment strategies aren’t working. Most Read from BloombergDubai Grinds to Standstill as Cloud Seeding Worsens FloodingChina Tells Iran Cooperation Will Last After Attack on IsraelWhat If Fed Rate Hikes Are Actually Sparking US Economic Boom?Tesla Asks Investors to Approve Musk’s $56 Billion Pay AgainPowell Signals Rate-Cut Delay After Run of Inflation SurprisesYields on Japanese government debt are too low. Fo
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Analysis-Painful high rates wake-up call threatens global markets
| 2024-04-17 |
It covers the following details: By Naomi RovnickLONDON (Reuters) - Fear that interest rates in major economies will stay relatively high is creeping back and threatens a painful wake-up call for financial markets, big investors warn.With traders laser-focused on expected summer rate cuts, global stocks remain near record highs and demand for debt issued by the riskiest companies is firm.But asset managers and economists now expect only minimal monetary easing, especially from a U.S. Federal Reserve facing unexpectedly persistent inflation.Big investors are not rushing to change long term holdings, but in a sign of things to come stock market volatility is around a six-month peak as traders debate how high the U.S. rate hurdle against which financial assets are valued will stay.Global stocks will suffer "a valuation drag from higher for longer rates," said Ann Katrin-Petersen, senior investment strategist at the BlackRock Investment Institute, the research arm of the world's largest asset manager.Amundi, Europe's largest asset manager, said in a note on Monday that U.S. stocks will lag globally for the next decade. It expects the equity and debt of companies in developing nations such as high-growth India and mineral-rich Chile and Indonesia to outperform."Everyone is so focused on when rate cuts are coming," BNY Mellon chief economist Shamik Dhar said. "The much bigger question is what is the average level we can then expect rates to cycle around."Traders, who since 2009 have become used to low rates flattering asset prices, are set for "an adjustment in expectations, psychology and beliefs", Dhar added.NEW REGIMEThe International Monetary Fund said on Tuesday that the Fed funds rate could fall more slowly than markets now anticipate.BlackRock's Petersen forecasts U.S. rates of close to 4% for the next five years and about 2% for the euro zone. "We have entered a new macro market regime and one of the cornerstones of that regime is structurally higher rates," she said.World stocks are up about 4% this year, hitting record highs in March. And an index of global junk bonds issued by indebted firms is around its highest since 2021, bolstered by hopes the Fed will lower rates from a 2
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Foreign Investors Set to End Emerging Asia Stock-Buying Streak
| 2024-04-17 |
It covers the following details: (Bloomberg) -- Global funds are retreating from emerging markets in Asia, with a five-month buying spree of stocks ending on scaled-down expectations for US rate cuts.Most Read from BloombergDubai Grinds to Standstill as Cloud Seeding Worsens FloodingChina Tells Iran Cooperation Will Last After Attack on IsraelWhat If Fed Rate Hikes Are Actually Sparking US Economic Boom?Tesla Asks Investors to Approve Musk’s $56 Billion Pay AgainPowell Signals Rate-Cut Delay After Run of Inflation SurprisesOver
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Markets could tank if the Fed doesn't cut rates soon, and failure to do so could lead to a hard landing in 2025, chief economist says
| 2024-04-17 |
It covers the following details: Federal Reserve Chairman Jerome PowellKevin Dietsch/Getty ImagesA no rate cut scenario risks fueling a hard landing in 2025, Apollo chief economist Torsten Slok told Bloomberg TV.He expects stocks to slowly lose momentum, which could fuel massive losses in a higher rate environment.Slok has cited runaway inflation and the hot economy as reasons why the Fed won't cut.Equity strength can't last if the Federal Reserve keeps interest rates unchanged, Torsten Slok toldBloomberg TV on Tuesday.If rates aren't slashed this year, the stock market's ongoing "sugar high" will melt away, as the negative consequences of hawkish policy continue to bear out."It is already biting hard on highly levered consumer balance sheets, highly levered corporate balance sheets and also hard on banks and regional banks," the Apollo chief economist said:"As that sugar high starts to fade, if the stock market doesn't continue to go up, you will eventually get that effect to begin to dominate. And that's probably what we get in 2025, when you ultimately will then get the risk of a hotter landing."In this environment, Slok cautioned that the market would be reminiscent of 2022, as stocks fell against rising rates.The stock market ended that year in a deep bear market, and the benchmark S&P index shed 18%.Despite his warnings of the risks posed by high rates, Slok doesn't see strong chances of a Fed rate cut and has been among the first to suggest that monetary policy will remain unchanged this year.Underlying reasonsinclude the US economy's surprising strength, and rising inflation figures across a slew of sectors, a point he doubled down on in the interview.His comments come as investors have turned doubtful about the potential for a rate cut in June, once held up as the most likely month for interest rate easing. While markets are now pricing in these odds for September, some have gone as far as to suggestpossible rate hikes, if the Fed wants to clamp down on inflation. Slok doesn't agree with that outlook, however."I think they rather, from a transmission mechanism perspective, keep rates high for a little bit longer, maybe one or two quarters, and then achieve their goal of getting the economy to slow down."Read the
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Stock market today: US indexes mixed amid hawkish Fedspeak and spiking bond yields
| 2024-04-17 |
It covers the following details: US Federal Reserve Board Chairman Jerome Powell.Anna Moneymaker/Getty ImagesStocks inched higher on Tuesday, despite hawkish comments from Fed Chairman Jerome Powell.Powell noted little progress in combatting inflation, suggesting higher-for-longer interest policy.Treasury bond yields hit another record high for 2024.US stocks were mixed on Tuesday, with equities wavering after the latest comments from Federal Reserve Chairman Jerome Powell cast doubt on the potential for interest rate cuts this year.Speaking during a panel, the central bank chief said that more confidence was needed in the trajectory of US inflation, which has remained stubbornly high in recent readings."More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal," he said.His comments sent long-dated Treasury yields spiking to another 2024 record, indicating that investors are growing convinced about a higher-for-longer monetary regime.Fed fund futures are nowpricing inthe first rate cut for September, instead of the long-touted June timeline."Fed Chair Powell moved more decidedly in a hawkish direction as he essentially underscored that the downward trajectory of inflation has essentially stalled," Quincy Krosby, Chief Global Strategist for LPL Financial, said. "Moreover, he made it clear - rather than his more ambiguous stance regarding a rate easing timetable - that the 'higher for longer' narrative remains intact."Stocks were propped up throughout the day by strong corporate earnings, with a majority of S&P 500 companies having so far beaten estimates. Rallying on Tuesday were Morgan Stanley and UnitedHealth, which grew nearly 3% and 6%.Here's where US indexes stood at the 4:00 p.m. closing bell on Tuesday:S&P 500: 5,051.33, down 0.21%Dow Jones Industrial Average: 37,798.77, up 0.17% (+63.66 points)Nasdaq Composite: 15,865.25, 0.12%Here's
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The stock market just flashed bullish a signal suggesting 19% upside by August 2025, BofA says
| 2024-04-17 |
It covers the following details: REUTERS/Brendan McDermidThe S&P 500 just flashed a bullish signal that suggests a 19% gain by August 2025, according to Bank of America.The bank highlighted the stock market's 12 consecutive months of positive year-over-year gains.The signal suggests that equities still have a bullish backdrop despite weakness in April.Abullish signal just flashedin the stock market, and it suggests that theS&P 500could surge another 19% to 6,000 by August 2025, according toBank of America.In a note on Tuesday, Bank of America technical analyst Stephen Suttmeier highlighted that the S&P 500 posted 12 consecutive months of positive year-over-year gains.In other words, from March 2023 to March 2024, the S&P 500 had a positive year-over-year return each month. That bullish signal is the exact opposite to what happened in the prior year, when the S&P 500 delivered 12 consecutive months with negative year-over-year gains, from April 2022 through March 2023."April 2023 broke this bearish streak with a positive YoY return. We viewed this as a bullish backdrop signal for US equities, and the SPX has rallied over 20% since then," Suttmeier said.The positive signal that just flashed is a reminder to investors that despite the stock market's weakness in April, with the S&P 500 down about 4%, the long-term trend in stocks is still up. And that suggests there could be further gains ahead."Don't lose sight of the secular bull market," Suttmeier said.According to Suttmeier, the monthly streak of positive returns can extend from the current 12 month-reading to 20 months, based on historical averages, which coincides with a 17% gain for stocks. Meanwhile, the median streak of positive returns can extend to 17 months with a gain of 14%, based on historical data.That suggests the S&P 500 could trade to 6,000 by August 20
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US dollar weakens as market consolidates gains, but uptrend intact
| 2024-04-17 |
It covers the following details: By Herbert Lash and Gertrude Chavez-DreyfussNEW YORK (Reuters) -The dollar on Wednesday fell for the first time in six days, as investors consolidated gains after Federal Reserve officials repeated the interest rate-cutting cycle is on hold pending new economic data, while the monetary easing outlook for other major central banks remained unchanged.The greenback also dropped from 5-1/2-month highs hit on Tuesday. The dollar index was last down 0.4% at 105.89. So far this year, the index has gained about 4.7%."I see today's move as more of a slight correction than anything. To put things into context, the dollar spot index is still just off its highest point since mid-November," said Helen Given, FX trader at Monex USA in Washington."(Fed Chair Jerome) Powell's panel yesterday was the big market-mover for the week, and now traders appear to be hedging on the other side of the market, so we're seeing this pullback today. We're reaching a point where markets have priced in the downshift on cuts from the Fed, so flows are a bit more normalized."Top U.S. central bank officials, including Powell on Tuesday, have provided little indication into when rates may be cut, saying instead that monetary policy needs to be restrictive for longer.Recent data showed the U.S. economy remains stronger than expected, leading investors to reduce their bets on future rate cuts. This was again evident in the Fed's latest so-called "Beige Book" released on Wednesday. The report indicated U.S. economic activity expanded slightly from late February through early April and companies signaled they expect inflation pressures to hold steady.Meanwhile, risks of a broadening Middle East conflict have added to the dollar's safe-haven appeal in the short term.After last week's hotter-than-expected reading of U.S. consumer prices, the market has reduced the number of quarter-point rate cuts expected by the Fed this year to less than two. The first is now seen in September, later than a prior June, according to LSEG's rate app.A more hawkish view from the Fed has led Treasury yields to move higher and strengthened the dollar's outlook."
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Here's how users on Truth Social are feeling about Trump Media's steep stock decline
| 2024-04-17 |
It covers the following details: Donald Trump (left) and a phone displaying his social media app, Truth Social.Brandon Bell/Christoph Dernbach/Getty ImagesThe crash of Trump Media stock has rattled some Truth Social users.Some on the social media site have claimed the company's stock has been artificially devalued.Shares of Trump Media are down about 30% in the last week.Truth Social users are feeling glum about Trump Media's stock crash.Users on the social media platform — referred to on the site as "Truthsayers" — have been buzzing about thestock's steep declinesince it went public at the end of March. Shares of Trump Mediahave tanked more than 50%since March 27, with the stock dropping another 18% this week after the company moved to allow insider shareholders to potentially sell stock before the six-month lockup period is up. Shares declined further on Tuesday after the company announced that it would launch a streaming platform.Reactions to the plunge on the social media site ranged, with some users expressing shock and dismay, to acknowledgment that the shares might not regain lost value. A few said the sell-off was evidence of a conspiracy to discredit the former president and tank his net worth."What is happening to DJT stock," one user said in areplyto a post from Donald Trump's official account, claiming they had invested their life savings into the company. "Please do something about the crash."More conspiratorial Truthsayers have accused short-sellers of foul play, claiming that the share price has been artificially lowered somehow."Remain Calm," one userwroteon April 15, the day Trump Media shares plummeted 18%. "This drop was literally just someone selling 140k shares in 10 minutes premarket. This is extreme manipulation at best. There isn't a massive sell-off. It's one or a handful of people trying to cause panic.""They'll do anything to discredit President Trump," another userreplied. "God has different plans and will save the nations in HIS Perfect timing."Other users blamed the Securities and Exchange Commission, as regulators did not pause trading of the stock during its decline. The SEC may suspend trading for up to 10 days if it believes doing so
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The stock market could still face a 10% correction even as the Fed nails a perfect 'no landing' economic recovery, market vet says
| 2024-04-17 |
It covers the following details: Are we in a bear or bull market? Here's how they compareundefined undefined/ Getty ImagesThe stock market could face a 10% correction even as economic strength supports a "no landing" scenario, according to Ed Yardeni.Yardeni observed strong retail sales in March and an updated first-quarter GDP growth estimate of 2.8%."The US economy is still flying high. That's because consumers didn't get the recession memo," Yardeni said.Continued strength in the US economy supports a "no landing" scenario, but that doesn't mean the stock market will dodge a 10% correction, according to market veteran Ed Yardeni.Yardeni said in a note on Monday that even after a strong retail sales report, theS&P 500is at risk of testing its 200-day moving average at around 4,700 over the next few months."That would be a classic 10% correction," Yardeni said.Yardeni observed that rising bond yields, with the 10-year Treasury yield hitting its highest level of the year on Tuesday at 4.69%, are starting to weigh on stock prices.That can be seen in the percentage of S&P 500 stocks that are trading above their 50-day moving average, which fell from the overbought level of about 80% last month to about 30% today."We are increasingly convinced that the S&P 500 made a short-term top on March 29 at 5254.35. It is down 3.7% since then to 5061.82 today, dropping below its 50-day moving average," Yardeni said. "The market was overbought and may now be moving towards being oversold."But a healthy correction in the stock market should not discount the continued strength of the US economy.Following the strong March retail sales data, which was more than double economist expectations, Yardeni observed that the Federal Reserve's first-quarter GDP growth estimate was upgraded to 2.8% from a prior estimate of 2.4%. The Fed has since boosted its GDP growth estimate to 2.9%."The US economy is still flying high. That's because consumers didn't get
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Analysts reassess Amazon stock price targets ahead of earnings
| 2024-04-17 |
It covers the following details: On July 16, 2002, Jeff Bezos, founder and then-CEO of Amazon(AMZN), said that the company was "putting out the welcome mat for developers."The internet behemoth was unveiling Amazon Web Services, which the company described as "a platform for creating innovative web solutions and services designed specifically for developers and website owners."“Developers can now incorporate Amazon.com content and features directly onto their own websites,” Bezos said in astatement. “We can't wait to see how they're going to surprise us.”More than 20 years later, it's probably fair to say that the company is happily surprised by the growth of AWS.During Amazon's fourth-quarter-earnings call on Feb. 1, Andy Jassy, Amazon's current CEO,told analyststhat AWS revenue grew 13% year-over-year in the quarter compared with 12% year-over year in the third quarter, "and we're now approaching an annualized revenue run rate of $100 billion."We watched the incremental revenue added each quarter," Jassy said. "And in Q4 AWS added more than $1.1 billion of incremental quarter-over-quarter revenue, which on [a foreign-exchange-neutral] basis is more than any other cloud provider as far as we can tell."Andy Jassy, chief executive officer of Amazon.Bloomberg/Getty ImagesAmazon CEO Jassy: '2023 a very significant year'He added that "2023 also was a very significant year of delivery and customer trial for generative [artificial intelligence] or Gen AI in AWS."JP Morgan analyst Doug Anmuth discussed AWS in a report about the internet sector.Anmuth said he remained positive overall on the sector heading into the first-quarter-earnings reports.The analyst says investor sentiment is generally constructive, with pockets of higher valuations and elevated expectations.Related: Amazon tries to win back key customer group it lost during CovidAmazon remains the firm's best idea for 2024, he said, "even as it is most owned across our coverage.""We believe Amazon is well positioned as the market leader in e-commerce and public cloud," the firm said.Anmuth said he expected Amazon Web Services to exc
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Morningstar unveils top-tier semiconductor stocks to own
| 2024-04-17 |
It covers the following details: Semiconductor stocks have soared over the past year amid investor mania for artificial intelligence.Graphics processing units (GPUs) are the chips that fuel AI. The PHLX Semiconductor Sector index has jumped 54% over the last 12 months.Nvidia(NVDA), the 800-pound gorilla that dominates the GPU market for AI, has led that rally. Its shares have tripled over the period, giving it the third highest market capitalization in the country, after No. 1 Microsoft and Apple.“We are seeing a historic rise in demand for AI, accelerators, led by Nvidia,” Morningstar analysts Brian Colello and Jivyaa Vaidyawrote in a report.“In recent quarters, Nvidia has reported staggering revenue growth, raised the bar for the next quarter even higher, and then smashed through such rosy forecasts.”Nvidia and its CEO Jensen Huang have led the way for chips used in artificial intelligence.SAM YEH/Getty ImagesMorningstar's overview of semiconductor industryDemand for AI-related GPUs should remain strong, they said. “We still see the world’s leading cloud computing providers, and even nation states, racing to buy enough GPUs to run generative AI for themselves and their customers.”That’s true whether economic growth stays strong or weakens, the analysts said.Related: Analyst updates Nvidia stock price target after stocks tumbleHowever, “the non-AI landscape is a different story,” they maintain. “PC [Personal computer] and smartphone chip demand is recovering from cyclical bottoms in 2022-23.”As for industrial chips, “demand seems to be mired in the bottom of a downturn [this year], although firms are seeing some green shoots that suggest a recovery in the second half of 2024,” Colello and Vaidya said.Turning to automotive chips, demand for them is “the biggest question mark heading into first-quarter earnings,” the analysts said.“At best, auto chip growth will grind to a halt, if not fall modestly after three-plus years of great growth. At worst, sluggish demand for electric vehicles may drive the auto space into a deeper cyclical downturn for most of 2
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The bull market in stocks won't be derailed by Fed jitters or Middle East tensions, 4 Wall Street pros say
| 2024-04-17 |
It covers the following details: monsitj/Getty ImagesThe bull market in stocks is alive even as investors fret over numerous headwinds.Stocks dropped last week over Fed rate cut concerns and rising tensions in the Middle East.But there are signs stock's long-term bull market is intact, Wall Street experts say.Investors have grown jittery over the trajectory of stocks in recent weeks, but the bull market hasn't been derailed, Wall Street veterans say.US stocks have skidded lower over the past week as investors digested escalating Middle Eastern conflict and monetary policy concerns. Major indexes dropped last week afterinflation came in hotter-than-expected in March, causing investors to dial back their expectations for rate cuts in 2024. Stocks took another hit afterIran attacked Israelover the weekend, with investors flocking to safe havens like US Treasurys.But the latest concerns may be minor blips in the face of a booming US economy and the potential uplift from artificial intelligence, meaning thebull market in stocksis still far from over, some veteran investors say.Here's why four Wall Street pros say investors shouldn't sweat over the latest pullback in stocks:Tom Lee, Fundstrat Head of ResearchInvestors shouldbuy the dip in stocks, as the March inflation report wasn't as bad as it seems, according to Fundstrat's Tom Lee.In a recent video update, Lee noted that more components of the consumer price index saw year-over-year price increases of less than 3%. That's a promising sign that inflation is on track to fall to the Federal Reserve's 2% price target, even if prices overall for the economy came in hotter-than-expected last month.Headline inflation was mainly driven by a surge in auto insurance, he added. That suggests a June rate cut is still possible, he said, though markets have mostly taken that possibility off the table, according to the CME FedWatch tool."Believe it or not, this was actually a very good CPI report," Lee said. "It just tells you that this is a timing issue, it's not structural. In other words, nothing else is causing hotter CPI."James Demmert, Main Street Research CIOStocks are still in the midst of a longer-term bull market, and the recent correction represents the latest buy
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Advanced Micro Devices Stock Has 25% Upside, According to 1 Wall Street Analyst
| 2024-04-17 |
It covers the following details: The growing adoption of artificial intelligence (AI) has created a boon for a number of companies in thesemiconductorspace, andAdvanced Micro Devices(NASDAQ: AMD)has been among the beneficiaries of that trend. The company's processors have seen strong demand driven by these secular tailwinds.Despite spectacular gains of 78% over the past year, one Wall Street analyst believes AMD has further to run.Profiting from the AI boomEvercore ISI analyst Mark Lipacis initiated coverage on AMD stock with an outperform (buy) rating while assigning a $200 price target on the stock. That represents potential upside for investors of 25% compared to the stock's closing price on Monday. The analyst suggested AMD will be the beneficiary of "the tectonic shift in computing to parallel processing era," as it takes a growing market share of the central processing units (CPUs) used in data centers.The analyst goes on to say that AMD has established itself as a suitable alternative toNvidia's AI-centric graphics processing units (GPUs), with AMD recently unveiling its Mi300 series of AI accelerators, platforms, and data center accelerated processing units (APUs).The analyst may be on to something. The rapid demand shift forgenerative AIhas created a shortage of high-end processors needed to run AI -- and AMD is well positioned to exploit that scarcity. Furthermore, whileIntelhas long been one of the leaders in the data center CPU market, AMD has been gaining share at the expense of its longtime rival. To add insult to injury, AMD also increased its share of desktop CPUs for the first time in more than two years.To be clear, the results of AMD's moves are only beginning to show in its financial results, as revenue grew 10% year over year in the fourth quarter. However, if the company can capitalize on the surge in demand for AI-centric processors, the future could be bright indeed.The stock isn't exactly cheap at 8 times forward sales, but if AMD continues to gain market share, that might end up being a bargain.Should you invest $1,000 in Advanced Micro Devices right now?Before you buy stock in Advanced Micro Devices, consider this:TheMotley Fool Stock Advisoranalyst team
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Why Northern Trust Stock Tumbled by 5% on Tuesday
| 2024-04-17 |
It covers the following details: Before market open Tuesday,Northern Trust(NASDAQ: NTRS)released its first-quarter earnings report, which set the tone for its stock that day. Unfortunately, this meant quite a tough trading session for the company and its investors, as market players largely sold out of the shares. They fell by 5% in value, notably worse than the 0.2% dip experienced by the bellwetherS&P 500index.A major double whiffNorthern Trust saw declines in both revenue and, particularly, net income in its first quarter. The former declined by 6% year over year to hit $1.65 billion, while the latter saw a far steeper (36%) drop to slightly under $215 million ($0.96 per share) according to generally accepted accounting principles (GAAP).Both headline figures were significantly under the average analyst estimates. The consensus prognosticator forecast for revenue was $1.78 billion, and for per-share earnings, it was $1.45.During the quarter, the Chicago-basedfinancial servicescompany saw a 6% uptick in non-interest expenses. Other line items affecting its performance included a more than $184 million pre-tax loss on debt securities due to what it characterized as a "repositioning" of its portfolio. On a brighter note, it did see 13% in total assets under management (AUM), a key metric for many companies of its type.Management says frothy equity markets will provide supportManagement waxed positive about Northern Trust's trailing performance and immediate future, although its pronouncements didn't seem to land with investors, given the sell-off. CEO Michael O'Grady pointed out that the company managed to grow its deposits and spoke of the robust equity markets that should help support the "improving momentum across our business."Should you invest $1,000 in Northern Trust right now?Before you buy stock in Northern Trust, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Northern Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Stock Advisorprovides investors with an easy-to-follow blueprint for success,
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Why HSBC Stock Got Rocked Today
| 2024-04-17 |
It covers the following details: There's apparently trouble on the Eastern front for global banking conglomerateHSBC(NYSE: HSBC), and investors are clearly concerned. On news of layoffs in two major Asian markets, they traded out of the company's stock, to the point where the bank's U.S.-listed shares lost more than 2% of their value.Pink slips coming?HSBC is in the process of laying off a clutch of workers in its investment-banking operations in two of the continent's financial hubs, Hong Kong and Singapore, according to reporting from Reuters. Citing three unidentified "people with knowledge of the matter," the news agency said the affected workers are mainly associates and vice presidents at the sprawling internationalbank.If the report is accurate, HSBC wouldn't be the first to reduce its investment banking workforce in Asia, nor is it likely to be the last. The mainland China and Hong Kong stock markets have both been struggling, largely due to structural issues in the Chinese economy. When markets are in the doldrums, investment banks tend to cut headcounts.HSBC didn't directly address the reporting in the Reuters story. An unnamed spokesperson from the bank told the news agency that, "The size of our workforce will fluctuate in any given year."Not a secure job these daysWhile the news isn't all that encouraging, it doesn't come as a great surprise -- likely a reason why HSBC shares weren't punished harder on Tuesday. China and the markets around it have been struggling for some time, and it was inevitable that investment banks would take a hit from this. We can expect more employee-roll reductions if the gloom about Asian markets persists.Should you invest $1,000 in HSBC Holdings right now?Before you buy stock in HSBC Holdings, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and HSBC Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Consider whenNvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $526
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Morning Bid: Powell dashes easing hopes, markets dented again
| 2024-04-17 |
It covers the following details: By Jamie McGeever(Reuters) - A look at the day ahead in Asian markets.Investors in Asia hoping for some relief from surging U.S. bond yields and a rampant dollar would have been deflated by remarks on Tuesday from Federal Reserve Chair Jerome Powell, and will likely go into Wednesday's trading with their guard up."The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence," Powell said in Washington, a signal to the world that inflation is not coming down towards the central bank's 2% target as quickly as expected and so interest rates will have to stay higher for longer.'Higher for longer' would also seem to apply to the U.S. dollar, Treasury bond yields and financial conditions indexes - a sub-optimal mix for Asian assets, which are already feeling the heat.Chinese stocks on Tuesday fell 1%, Japanese and aggregate Asia ex-Japan equity benchmarks tumbled 2%, and currencies across the continent are sliding in a move exacerbated by the yen's spiral down towards 155.00 per dollar.As yet there has been no action from Tokyo on the yen, to the probable irritation of policymakers across Asia. The dollar's strength will surely crop up in discussions between finance ministers and central bankers attending the IMF and World Bank Spring meetings.The IMF on Tuesday revised its U.S. growth outlook sharply higher, and said China's stronger-than-expected first-quarter growth may prompt an upward revision to the outlook.In theory, these are positive developments for markets in Asia. And Wall Street's resistance on Tuesday in the face of yet another spike up in Treasury yields could still inject some optimism into Asian trading on Wednesday.But that could be tempered by Middle East tensions and patchy Q1 U.S. earnings.The MSCI Asia ex-Japan index is at a two-month low, having declined 4% in the last four days. Time for a pause, or is selling momentum gathering a powerful head of steam?The same question could definitely be asked about the Japanese yen, which is printing fresh 34-year lows on a near-daily basis.The latest Japanese trade data and Reuters 'tankan'
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Why Johnson & Johnson Stock Got Tossed by the Market Today
| 2024-04-17 |
It covers the following details: The latest earnings season has begun, and the latest quarterly results from some of our economy's largest companies are starting to come in.Tuesday morning, it was healthcare mainstayJohnson & Johnson's(NYSE: JNJ)turn in the spotlight, and investors weren't all that satisfied with the performance. In the wake of the company's first-quarter earnings report, the stock traded down by over 2%. That was a steeper fall than the 0.2% decline of theS&P 500index on the day.A mixed first quarter for the companyIn its first quarter, Johnson & Johnson earned $21.38 billion in sales, which was more than 2% higher on a year-over-year basis. Non-GAAP(adjusted) net income also edged higher, rising by nearly 4% to $6.58 billion, or $2.71 per share.That meant a mixed quarter for the healthcare giant, as it narrowly missed the $21.40 billion consensus-analyst estimate for sales but edged past the $2.64 average projection for per-share adjusted net income.In Johnson & Johnson's investor presentation on its performance, the company quoted CEO Joaquin Duato as saying that it "reflects our sharpened focus and the progress in our portfolio and pipeline."Guidance narrowedJohnson & Johnson narrowed its full-year guidance slightly; the lowered top end of the range likely also contributed to the stock's sell-off. The company is now forecasting total sales of $88 billion to $88.4 billion; previously, it was guiding for $87.8 billion to $88.6 billion. The adjusted-earnings estimate also got a tweak. The new range is $10.57 to $10.72 per share; before, the range was $10.55 to $10.75.Should you invest $1,000 in Johnson & Johnson right now?Before you buy stock in Johnson & Johnson, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Johnson & Johnson wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Stock market today: US stocks rise on strong earnings as traders try to come back from streak of losses
| 2024-04-17 |
It covers the following details: Traders work on the floor of the New York Stock Exchange during afternoon trading on November 03, 2023.Michael M. Santiago / GettyUS stocks rose Tuesday morning as corporate earnings continue to beat estimates.Shares of firms such as Morgan Stanley and Bank of America climbed on first-quarter results.Treasury yields also climbed as investors readjust to Federal Reserve expectations.US stock indexes were higher Tuesday morning, as investors tried to reverse a string of losses following strong corporate earnings.Shares in firms such as UnitedHealth,Morgan Stanley, andBank of Americajumped in pre-market trading, rising on better-than-expected first-quarter performance.Around 80% of companies have so far beat earnings estimates, according to FactSet."While many corporations expected a weak first quarter earnings relative to the balance of the year, we feel those earlier guides were overly conservative and earnings will beat expectations handily as the first quarter earnings season progresses," Bryan Reilly, portfolio manager at CIBC Private Wealth US, said.Such reports are helping bring back confidence to investors, who have turned nervous in recent days, whether due to geopolitics or the prospect of a delayed interest rate pivot. Treasury yields continued to rise on Tuesday, indicating that these concerns have not entirely ebbed away. The 10-year Treasury yield rose five basis points to 4.686%.A slew of Federal Reserve officials will speak this week, starting on Tuesday with comments from Vice Chair Philip Jefferson. The Fed will issue its Beige Book on Wednesday.Here's where US indexes stood at the 9:30 a.m. opening bell on Tuesday:S&P 500: 5,057.94, down 0.08%Dow Jones Industrial Average: 37,906.80, up 0.45% (+169.54 points)Nasdaq Composite: 15,848.73, down 0.22%Here's what else is happening today:Jamie Dimon pocketed$183 million from JPMorgan stock sales.Stocks will crash 30%, but that's before an even bigger post-election tumble, market guru warns.As China still struggles to bring back its economy, the
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Money market account vs. money market fund: What's the difference?
| 2024-04-17 |
It covers the following details: Understanding the differences between a money market account vs. money market fund is crucial. Learn more about how these two financial products work and which one is best for your savings.
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US Yields Spike as Hawkish Powell Puts 5% in Play: Markets Wrap
| 2024-04-17 |
It covers the following details: (Bloomberg) -- The world’s biggest bond market was hammered anew, with the two-year yield briefly hitting 5% after Jerome Powell signaled policymakers are in no rush to cut interest rates.Most Read from BloombergDubai Grinds to Standstill as Cloud Seeding Worsens FloodingWhat If Fed Rate Hikes Are Actually Sparking US Economic Boom?China Tells Iran Cooperation Will Last After Attack on IsraelPowell Signals Rate-Cut Delay After Run of Inflation SurprisesUS Yields Spike as Hawkish Powell Puts 5% i
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The EV market is in trouble: The latest sign is Tesla's layoffs
| 2024-04-17 |
It covers the following details: The Tesla Cybertruck is the first new electric vehicle the company has released in several years.(Frederic J. Brown / AFP / Getty Images)Tesla is in trouble: Its product line is aging.Sales are stalling.Top executives are fleeing. Thestock price is down. The first wave of new Cybertrucks isriddled with quality problems. The low-cost Model 2 recently promised by Chief Executive Elon Muskappears to be dead.Some of Tesla’s most environmentally conscious buyers are signaling their disgust with thebehavior of Muskby turning to other brands, even as price cut follows price cut. Those bargain basement deals are squeezing profit margins, though the company remains profitable and still sells more EVs than other automakers.The company’s four auto factories have more car-making capacity than the company has customers.The situation is so serious that on Monday, Musk announced that“more than 10%” of its global workforce would be laid off. How much more Musk did not say. Tesla did not respond to a request for comment for this article, but Musk said in an internal email explaining the layoffs that the company had to seek cost reductions and higher productivity.If Tesla were the only electric car maker under pressure, that alone would send shivers through California policymakers, from Gov. Gavin Newsom on down, who in their quest to address climate change and air pollution have set strict mandates that will ban sales of new cars that run only on fossil fuels by 2035.But the drive to electric vehicles has, at best,hit a rough patch, with little visibility into road conditions ahead. EV sales are still rising but at a far slower pace than the highs reached in 2022 and early 2023.Read more:Fisker had big dreams to compete with Tesla. What went wrong with this Manhattan Beach company?Ford, General Motors and other major automakers are pulling back on their EV ambitions, putting more of their money behindhybrid vehicles, cutting back on production, and delaying introduction of some EV models. EV startups includingRivian,LucidandPolestarare laying off workers, as they encounter production problems or fall short of sales targets or both. Thefinancial difficulties at Fisker, the
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Shippers must seek out experienced cross-border providers during Mexican market boom
| 2024-04-17 |
It covers the following details: (Photo: Jim Allen/FreightWaves)Companies are more intrigued than ever by Mexican manufacturing prospects. Mexico unseated China as the top exporter to the U.S. for the first time in 2023 after a multi-year climb. During a similar time period, the Laredo, Texas and Tucson, Arizona markets haveskyrocketed in popularity.Mexico is expected to continue to win business – and grab headlines – as the well-documented and ongoing nearshoring trend continues. In fact, foreign domestic investment in Mexico hit a record high over the past two years.Getting Started in MexicoIt will take several years to see the full impact of manufacturing investments in Mexico, according to Lance Dixon, Werner’s Senior Vice President of Mexico, Canada and Temperature-Controlled divisions. That is because building facilities from the ground up is inevitably a complex and time-consuming process.That said, manufacturers with facilities already in Mexico have flexed up their operations with relative speed. In some cases, this can be as simple as adding an additional shift to an existing operation. Dixon has seen many of his customers take this route.Finding the Right Logistics Partner for Cross-BorderWith trade between the U.S. and Mexico heating up, more and more shippers are evaluating their options when it comes to cross-border logistics partners.While many logistics companies offer some level of cross-border services, the complexity of moving freight efficiently between Mexico and the U.S. demands an experienced and innovative partner.“Cross-border is very complex,” Dixon said. “It is unique compared to domestic freight in the U.S., and it brings a whole new set of challenges.”Those challenges can include managing paperwork, understanding applicable taxes and duties and navigating differing regulations between the companies. When logistics partners are not adept or experienced at solving those issues, it can lead to frustration and costly delays.The Power of Experience with Cross-BorderWerner has reputable expertise when it comes to cross-border, which allows it to make quick decisions without compromising quality. The company also uses its experience to navigate customer issues with finesse, due in large part to the its established relations with other players in the space, including Mexican careers.Dixon urged shippers to seek out this level of experience – along with the capacity to flex up
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Netflix Q1 Earnings Preview: Subscriber Growth, Potential Price Increase, Ad-Tier Plan And More On What Wall Street Expects
| 2024-04-17 |
It covers the following details: Netflix Q1 Earnings Preview: Subscriber Growth, Potential Price Increase, Ad-Tier Plan And More On What Wall Street ExpectsStreaming giantNetflix Inc(NASDAQ:NFLX) is set to report first-quarter financial results on Thursday, April 18, 2024,after market close.Here's a look at earnings estimates, what analysts are saying and key items to watch.Earnings Estimates: Analysts estimate Netflix will report first-quarter revenue of $9.275 billion, according todata from Benzinga Pro.The streaming company reported revenue of $8.162 billion in last year's first quarter. The company has beaten Street estimates in two of the last four quarters, including the most recently reported fourth quarter.Netflix saidduring its fourth-quarter earnings reportthat it expects first-quarter revenue to be $9.24 billion, which would be up 13.2% year-over-year.Analysts expect the company to report first-quarter earnings per share of $4.52, up from $2.88 reported in the prior year's first quarter. The company has beaten earnings per share estimates from analysts in three of the last four quarters.Netflix guidance calls for first-quarter earnings per share of $4.49.The streaming company reported 13.12 million net subscriber adds in the fourth quarter, taking its total to 260.28 million. Netflix guidance said net subscriber adds would be down sequentially, but should come in higher than the 1.8 million net adds reported in the first quarter of 2023.What Analysts Are Saying:The ad-supported plan and paid sharing crackdowns from Netflix could lead to more upside, according to Macquarie analystTim Nollen.The analyst, who has an Outperform rating on the stock, said Netflix could have more upside when comparing his original estimates on ad-tier and paid sharing to where the company is now."Netflix's password-sharing crackdown on the heels of its ad tier launch helped drive nearly 30m sub adds in FY23," Nollen said.The analyst, who raised the price target on Netflix from $595 to $685, said Netflix originally
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Junior analysts, beware: Your coveted and cushy entry-level Wall Street jobs may soon be eliminated by AI
| 2024-04-17 |
It covers the following details: Artificial intelligence has undoubtedly contributed to society in its early years of adoption, but it has also threatened a variety of job functions. Thus far, frontline jobs likefast foodandtruckinghave been consumed by AI, but there’s ruminating fear that this nascent technologycould eliminateeven the most high-paying and highly skilled jobs.Take entry-level Wall Street banking jobs, for example. Incoming junior analysts could be in danger of losing their jobs to AI, according to a recentNew York Timesreport. Indeed, big firms are reportedly considering pulling back hiring as much as two-thirds as Wall Street relies more on AI, several people familiar with the matter told theNew York Times.This includes people working at the most renowned firms, includingGoldman SachsandMorgan Stanley. These companies did not respond to requests for comment fromFortune.The junior analyst position at big banks is highly coveted, mostly for its pay and for the career path it bestows upon new employees. These workers are typically tasked with researching financial trends, valuations, and economic data to evaluate risk in any new investments. But in practice, the role involves a lot of tedious and repetitive tasks like updating charts in pitch decks and company valuation comparison tables.Entry-level Wall Street jobs will only get more competitiveLongtime industry workers have already seen AI technologies implemented at their places of work to answer financial, risk, and litigation questions,Michael Ashley Schulman, partner and chief investment officer with financial services firmRunning Point Capital Advisors, tellsFortune. Schulman previously served as a vice president atDeutsche Bank, which was named in theNew York Timesreport about AI replacing entry-level Wall Street jobs.“The easy idea is you just replace juniors with an A.I. tool,” Christoph Rabenseifner, Deutsche Bank’s chief strategy officer for technology, data, and innovation, told theNew York Times,although he added that humans will still need to be involved in the decision-making process.Schulman predicts AI won’t necessarily take all entry-level Wall Street jobs away, but the technology will fundamentally redefine the role.“In its current state, AI won't eliminate entry-level Wall Street jobs, but it will reduce the number of heads required to accomplish the same task," Schulman says. “The entry-level job may transition from being a data gatherer to
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Nvidia Stock Has 35% Upside, According to 1 Wall Street Analyst
| 2024-04-17 |
It covers the following details: There's no getting around it: Artificial intelligence (AI) has taken the tech world by storm, andNvidia(NASDAQ: NVDA)has been leading the charge. In recent weeks, however, the stock has stalled, with some investors fearing the worst.One Wall Street analyst believes the stock is merely gathering stream for its next leg higher.A long profitable road aheadEvercore ISI analyst Kirk Materne initiated coverage on Nvidia stock with an outperform (buy) rating while assigning a $1,160 price target on the stock. That represents a potential upside for investors of 35%, compared to Monday's closing price. The analyst stresses Nvidia isn'tjusta chip company but also supplies hardware and software stacks that rivals simply can't match.The analyst has a point. Nvidia has gone far beyond merely providing the chips that run AI. The company has developed processors, software, accelerators, links, and entire plug-and-play systems that take businesses from zero to 60 with the turn of a key.Materne points out that every 15 to 20 years, a new "computing era" emerges, which is "typically dominated by a single vertically integrated ecosystem company, whose returns are measured in100- to 1000-baggerrange." In this scenario, Nvidia is that company.While 2023 was a breakout year for generative AI, and early adopters jumped on the bandwagon, it's still very early in the game, and most businesses have yet to adopt this groundbreaking technology. A recent survey of 300 business leaders found that just 9% were significantly using AI, with many more expected to deploy it in the coming years.Recent research suggests that it could take a decade or more for the adoption ofgenerative AIto peak. Nvidia has positioned itself as the technological leader, suggesting there's much more to come.Even after a full fiscal year of more than 100% growth, Nvidia's management suggests there's more to come. While 36x forward earnings might seem pricey, it's attractive when viewed through the lens of the company's ongoing opportunity.Should you invest $1,000 in Nvidia right now?Before you
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Trump Media stock sinks after company announces plans to launch live TV streaming platform
| 2024-04-17 |
It covers the following details: Trump Media & Technology Group (DJT) stock fell 14% on Tuesday after the company announced it's launching a new live TV streaming platform.According to apress release, Trump Media — the parent company of Donald Trump's social media platform Truth Social — will launch the live streaming service on phones, tablets, and TV through the Truth Social app."The streaming content is expected to focus on live TV including news networks, religious channels, family-friendly content including films and documentaries; and other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services," according to the release.Trump Media went public on the Nasdaq aftermergingwith special purpose acquisition company Digital World Acquisition Corp. in a deal approved by shareholders late last month. Shares are down more than 60%sincethe end of March.On Monday,the stock tumbledon news the company hadfiledto issue more than 21 million shares.Trump maintains a roughly60% stakein Truth Social. As of Tuesday's closing price of $22.84 a share, Trump Media boasts a market cap of roughly $3.1 billion, giving the former president a stake worth around $1.85 billion. Right after the company's public debut, Trump's stake was worth just over $4.5 billion.The former president founded Truth Social after he was kicked off major social media apps like Facebook and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms.According to anupdated regulatory filingreleased earlier this month, Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.The filing also confirmed stakeholders are still subject to a six-month lockup period before selling or transferring shares. The only exception to the lockup period would be if the company's board votes to make a special dispensation. Although possible,experts told Yahoo Finance last monththe attempt would likely result in multiple lawsuits on behalf of public shareholders.Trump faces a$454 million fraud penaltyand grapples with acampaign fundraising shortfallahead of
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Live Nation stock tumbles on report of antitrust probe
| 2024-04-17 |
It covers the following details: Live Nation (LYV) stock dropped more than 7% on Tuesday afterthe Wall Street Journal reportedthe Department of Justice (DOJ) is preparing to file an antitrust lawsuit against the company as soon as next month.According to the report, the DOJ will allege that Live Nation, the parent company of Ticketmaster, has "leveraged its dominance" in the marketplace to harm competitors.The federal government approved the Live Nation-Ticketmaster mergerin 2010. Since then, the company has been at the center of antitrust concerns, with critics taking aim at its sky-high ticket fees and accusing the entertainment giant of monopolistic practices and anti-competitive behavior.In 2020, the departmentupdatedthe company's consent decree, an agreement which barred Live Nation from strong-arming venues into using Ticketmaster for its tours, and extended it until 2025 after finding evidence the company repeatedly and over the course of several years engaged in conduct that violated its earlier agreement.Meanwhile, Capitol Hillramped up its fightagainst Live Nation during a Senate Judiciary Committee hearing at the start of last year following a 2022 fiasco withTaylor Swift concert tickets.At the time, multiple senators called for a breakup of the company, although some Wall Street analystshave argued a breakup wouldn't necessarilysolve the problems surrounding the unregulated secondary ticket market.Analysts have also said Live Nation would be a"shell of itself"without Ticketmaster as that entity makes up the bulk of the profits.In itslatest earnings report, the company saw its fiscal year 2023 revenue surge 36% year over year to $22.7 billion, while its earnings per share more than doubled to $1.37. Concert attendance climbed 20% as over 145 million fans attended over 50,000 events.In the face of Tuesday's stock declines, shares are down about 1% since the start of the year. Live Nation did not immediately respond to Yahoo Finance's request for comment on the report.Live Nation has been at the center of antirust concerns since its 2010 merger with Ticketmaster. REUTERS/Brendan McDermid/
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Tesla’s Value Dips Below $500 Billion in Blow to Stock Bulls
| 2024-04-17 |
It covers the following details: (Bloomberg) -- Tesla Inc. shares extended their decline for 2024, pushing the electric-vehicle maker’s market valuation briefly below $500 billion, as a round of job cuts this week underscored how much the company’s growth has slowed. Most Read from BloombergDubai Grinds to Standstill as Cloud Seeding Worsens FloodingWhat If Fed Rate Hikes Are Actually Sparking US Economic Boom?China Tells Iran Cooperation Will Last After Attack on IsraelPowell Signals Rate-Cut Delay After Run of Inflation Surpr
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Tesla stock slides as Musk pushes deeper into robotaxis
| 2024-04-17 |
It covers the following details: Tesla (TSLA) shares fell 2.7% on Tuesday to their lowest closing level in nearly a year. Shares are now down 8.3% to open the week after the company announced a"more than 10%" staff reductionearly Monday.The continued stock slide for the EV maker follows new revelations of deeper cuts to certain divisions in the company that point to a riskier bet by CEO Elon Musk on robotaxis and autonomous software.While Musk said in a memo that the “duplication of roles and job functions in certain areas” due to rapid growth necessitated the layoffs, later reports from Tesla sources suggested the cuts were well over 10% and hit certain divisions harder.Reuters reported “heavy layoffs”in Tesla’s service center division, China sales team staff, and of at least 140 engineers in the US.EV blogElectrekreported that Tesla used the latest round of layoffs to dispatch several projects that Musk was no longer in favor of, including the lower-cost next-gen EV.Musk shut down a project known internally as “NV9,” which aimed to build a $25,000 next-gen EV — which some have dubbed the “Model 2” — at Giga Austin. “Instead, Musk asked for all resources to go into the Robotaxi program and, specifically, a new data center to be built in an ongoing expansion at the factory,” Electrek said.Concurrently, Tesla is building another data center, powered by its Dojo supercomputers, in New York to ramp up its AI efforts for developing its self-driving software, which would be the software backbone of the Tesla robotaxis.The departure of longtime Tesla exec Drew Baglino also indicates a pivot. As senior vice president of powertrain and energy engineering, Baglino led huge projects at Tesla, including the "4680" battery cell production and cathode facility at Giga Austin, Electrek said. Baglino likely had a hand in the development of the Model 2 as well.“Baglino is an absolute gut punch loss in our view as he was instrumental in the powertrain and energy initiatives at Tesla and was viewed by many as key to the Model 2 initiative over the next few years,” Wedbush analyst Dan Ives said
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Fed Chair Jerome Powell has an ‘unfriendly’ message for markets: You might not be getting any rate cuts this year
| 2024-04-17 |
It covers the following details: Investors anticipating market-juicing interest rate cuts from the Federal Reserve have started off 2024 with one piece of bad news after another. Three hot inflationreports, escalatingconflictin the Middle East, risingoil prices, robustretail sales numbers—the list of evidence that the U.S. economy is running hot, and inflation will continue to be an issue, has grown long and varied. On Tuesday, Fed Chair Jerome Powell only reinforced that point when he confirmed what many forecasters have been expecting: Interest rate cuts aren’t coming anytime soon.“Right now, given the strength of the labor market and progress on inflation so far, it’s appropriate to allow restrictive policy further time to work,” Powell said at a policy forum on Canada-U.S. economic relations in Washington, D.C., adding that if inflation does persist the Fed will “maintain the current level of [interest rates] for as long as needed.”The comments come after the latest consumer price indexreportshowed year-over-year inflation rose for the third consecutive month in March, to 3.5%. That’s well below its June 2022 9.1% peak, but still off the most recent June 2023 low of just 3%, and far from the Fed’s 2% target.Powell noted that recent data has shown a clear “lack of progress” in taming inflation, which means it will take longer than expected for Fed officials to be confident they can cut interest rates without reheating the economy. Quincy Krosby, chief global strategist for LPL Financial, toldFortunevia email that Powell’s comments “underscored that the downward trajectory of inflation has essentially stalled.”“Moreover, he made it clear—rather than his more ambiguous stance regarding a rate easing timetable—that the ‘higher for longer’ narrative remains intact,” she said. “This was unfriendly for equity markets, but markets got the message.”Still, Powell’s new tone wasn’t exactly surprising, given the messaging from his fellow Fed officials in recent weeks following multiple hot inflation reports to start the year. Afterprojectingthree interest rate cuts just last month, Fed officials seem to be suddenly turning hawkish.In late March, Atlanta Fed President Raphael Bostic
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Stock market today: Dow snaps 6-day losing streak, Powell warns on inflation
| 2024-04-17 |
It covers the following details: The Dow snapped a six-day losing streak on Tuesday as investors digested a "higher-for-longer" interest rate mantra from the Federal Reserve.The Dow Jones Industrial Average (^DJI) finished the day up 0.2%, or more than 50 points, following comments from Federal Reserve chair Jerome Powell, who said it will likely take"longer than expected"for the central bank to be confident in its inflation fight.The S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) closed down 0.2% and 0.1%, respectively, after seesawing throughout the trading day.The moves come as bond yields remain at multi-month highs, coupled withrising tensionsin the Middle East following Iran's weekend attacks on Israel.Yields jumped on the heels of Powell's comments with the 2-year note briefly touching above 5% — its highest level since November. The benchmark 10-year Treasury yield (^TNX), which touched 2024 highs on Monday, climbed about 3 basis points to trade around 4.66% on Tuesday.Meanwhile, earnings reports flooded in before the bell. UnitedHealth (UNH) shares added about 5% after the healthcare groupbeat quarterly profit estimates, even as it said it expects to take a $1.6 billion hit from a February cyberattack.Investors were also digesting more big bank results: Bank of America (BAC) reported that first quarter profit dropped 18% year over year as a key revenue source weakened, while Morgan Stanley (MS) stock rose as it topped expectations. Elsewhere, BNY Mellon (BK) posted aprofit beatwhile Johnson & Johnson (JNJ) reported arevenue miss.LIVE COVERAGE IS OVER16 updatesTue, April 16, 2024 at 1:39 PM PDTAlexandra CanalUnited Airlines jumps after reporting narrower loss, strong guidanceShares of United Airlines (UAL) jumped more than 5% in after-hours trading on Tuesday after the airliner postedfirst-quarter resultsthat beat Wall Street expectations.UAL posted an adjusted loss of $0.15 a share compared to the
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Uranium Stocks Poised for Breakout As Nuclear Resurgence Gains Momentum
| 2024-04-17 |
It covers the following details: The world is finally realizing, after trying to rid itself of nuclear power following the 2011 Fukushima nuclear disaster, that the power of the atom will be the heart of clean, reliable electricity generation - not unreliable solar and wind.The latest sign that a nuclear renaissance is beginning to gain steam is news fromBloombergon Monday morning that Tokyo Electric Power Co. will be loading fuel rods into one of the reactors at the Kashiwazaki Kariwa nuclear plant in Niigata prefecture.The Kashiwazaki Kariwa is significant because it's the world's largest nuclear power plant, with a net capacity of 7,965 megawatts of electricity. Loading the No. 7 reactor with fuel rods is a sign that the power plant could be restarted soon.Japan's Nuclear Regulation Authority on Monday approved the plans to insert fuel rods at the No. 7 reactor at the site in Niigata prefecture. The plant will still need to complete additional inspections and win consent from the local governor — which is not guaranteed — before Tepco can restart generation.Approval for fuel loading is a step forward for Tepco's facility, which has been halted since the Fukushima nuclear disaster brought all of Japan's reactors offline. Kashiwazaki Kariwa has faced additional complications to a restart after security breaches in 2021.-BloombergThe planned restart of Japan's atomic fleet comes as power grids worldwide (maybe not China and or India) are undertaking massive decarbonization efforts to lower emissions.In the US, the federal government recently announced that it would provide a $1.5 billion loan to restart a nuclear power plant in southwestern Michigan for thefirst time. NJ-based Holtec International acquired the 800-megawatt Palisades plant in 2022 with plans to dismantle it. Still, with support from the state of Michigan and the Biden administration, the focus has shifted to restarting the nuclear power plant next year.And Patti Poppe, the chief executive officer of Pacific Gas & Electric in California,said just weeks ago, "Nuclear should be part of the future," adding the state's only nuclear power plant - Diablo Canyon - should
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Jamie Dimon made $183 million from selling JPMorgan stock
| 2024-04-17 |
It covers the following details: Jamie Dimon has raked in $183 million from his planned sale of 1 million JPMorgan shares.JPMorgan's CEO sold stock worth $33 million on Monday, after selling a $150 million tranche in February.Dimon's first disposals in 19 years were for diversification and tax planning, JPMorgan said.Jamie Dimonhas wrapped up his planned sale of 1 millionJPMorganshares, pocketing $183 million in total proceeds.The boss of America's biggest bank disposed of about 178,000 shares for about $33 million on Monday,regulatory filings show. He already cashed in 822,000 shares for $150 million on February 22.JPMorganflaggedits CEO's intended disposals to the market in late October, saying they were for "financial diversification and tax-planning purposes."In other words, too much of the Dimon fortune was riding on JPMorgan so the family wanted to spread its bets, and it also wished to extract some cash to cover future tax bills.The news surprised many as Dimon had never sold a share of JPMorgan since taking charge of the Wall Street titan in 2006. He's known for subscribing to Warren Buffett's view that bosses should have their own money on the line so they win or lose alongside their shareholders.Dimon, Amazon'sJeff Bezos, and Meta'sMark Zuckerberghave all pared their stakes in their respective companies in recent months,sparking concernsthat they're cashing out at the top and expect a sell-off soon.But none of the three have sold a significant percentage of their holdings. Dimon still directly owns about 8.7 million shares after his disposals.Still, the billionaire banker hasrepeatedly warnedinvestors they're overlooking threats to financial markets and the US economy such as stubborn inflation, recession, and foreign conflicts.In hisyearly letter to shareholdersthis month, Dimon flagged the wars in Ukraine and the Middle East, rising US-China tensions, sharp increases in food and energy prices, and the impact of steeper borrowing costs on thebanking systemand indebt
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Here's What's Happening in Markets: April 16
| 2024-04-17 |
It covers the following details: Emerging MarketsMarkets were wobbling Tuesday as investors continued to digest corporate earnings, hoping to snap a losing streak in the Dow.SPY, theSPDR S&P 500 ETF Trust, was flat as the S&P 500 moved in and out of the red. The Dow remains the leader on the day, boosted by beats on both the top and bottom lines byUnitedHealth Group Inc.DIA, theSPDR Dow Jones Industrial Average ETF Trustwas up roughly a third of a percentage point. The Nasdaq also teetered Tuesday, remaining flat on the day. QQQ, the tech-heavyInvesco QQQ Trustmirrored the index, struggling to stay in the green.Bank of AmericaCorp. reported earlier today that profit dropped more than 18% from the same quarter last year. The dip highlighted the challenges banks are finding in the higher interest rate environment. While higher rates typically boost profit margins for financial firms, they also erode margins on consumer accounts.XLF, theFinancial Select Sector SPDR Funddropped more than a quarter of a percentage point as investors digested the impact of rates on the financial sector. Despite the recent dip in financials, the sector has been resilient so far this year, jumping close to 7% since the start of the year.XLF 3-Month Total ReturnSource: etf.comAccording to etf.com data, XLF is one of the most active ETFs Tuesday, with a total trading volume around 29 million at 1 p.m.Corporate earnings will continue to be a market driver for the next few weeks as investors look for clarity about the strength of the U.S. economy amid anxieties about the Federal Reserve and the future path of rate cuts. According to FactSet, roughly 6% of the S&P 500 has reported earnings so far, with 83% delivering a beat on earnings and more than half reporting upside surprises on revenue.For investors hoping for an interest rate boost in their portfolios, they will have to look abroad. European Central Bank head Christine LaGarde told CNBC that the bank would "moderate its restrictive monetary policy" if inflation continued to move as expected.VGK, theVanguard FTSE Europe ETFwhich
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BMO chief says US economy improving, calls California 'a strategically important market'
| 2024-04-17 |
It covers the following details: TORONTO (Reuters) - The U.S. economy was showing signs of stronger than expected growth, with California being a strategically important market, said the head of Bank of Montreal, which has rapidly expanded in its southern neighbour.CEO Darryl White, addressing shareholders at the bank's annual meeting, said the bank was well positioned to cater to clients between American and Canadian economies in a shifting global landscape.BMO, Canada's third largest bank by market capitalization, makes about a third of its income from the United States after its $16.3 billion Bank of the West acquisition last year, the biggest ever deal in Canadian banking history.He said that trade and investment between Canada and the U.S. is key to economic competitiveness noting that it is one of the largest bilateral trade relationships in the world."The relationship is significant. Put into context, just counting the Great Lakes region… (it) would be the world’s third largest economy, nearly equal to that of Japan and Germany combined, and the region employs about a third of the U.S.-Canadian combined workforce," he said."Then add in California, an economy almost twice the size of Canada's, and you can see the global impact this North-South partnership has."Canadian banks are increasingly looking to expand south of the border or in other parts of the world as opportunities at home are limited in a saturated market.White cautioned about a higher-for-longer interest rate environment as borrowing costs remain high and demand weakens. But when rates begin to ease, the market could see a "new normal, an environment with fundamentally different characteristics than that of the past two decades," he said.(Reporting by Nivedita Balu in Toronto; Editing by Aurora Ellis)
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Tesla Stock (NASDAQ:TSLA): Earnings Not as Good as the Reaction Suggests
| 2024-04-25 |
It covers the following details: Tesla (NASDAQ:TSLA)surged after posting its Q1-2024 results. The stock rallied by 12% after its earnings were released and added an additional 5% the day after. Despite the notable two-day rally, shares are still down by more than 30% year-to-date. I am bearish on the stock and believe that its year-to-date trend is a better indicator of what’s to come than the stock’s recent post-earnings rally.The Earnings Report Was Not GreatTesla reported a 9% year-over-year revenue decline. That alone should spook many investors since the stock trades at a 43x P/E ratio. Even a 30% year-to-date drop does not change the fact that shares are overvalued.It’s even worse when investors notice that the company’s GAAP net income attributable to common shareholders dropped by 55% year-over-year. Tesla cannot sustain its lofty valuation if it continues to lose market share in key areas like China. Other Chinese EV manufacturers are making it more difficult for Tesla to expand.Competition is common among automakers, but it’s a thorn for Tesla more than any other. Other automobile stocks have much lower valuations, which gives them higher margins of safety.Tesla needed to be perfect, and it was far from that in its latest earnings report. The move to offer more affordable vehicles may hurt profit margins, and the recent job cuts can make it more difficult for Tesla to achieve production goals.Is Tesla a Tech Company?When discussing the company’s earnings, Elon Musk focused on Tesla being a tech company rather than a car company. The company’s Q1-2024 slide deck mentions that the company increased its AI training compute by more than 130% in Q1 and reduced its FSD subscription to $99/mo.Tesla has been selling subscriptions and software upgrades in its cars, but it still relies on cars to generate business. Total Automobile revenues came to $17.4 billion in Q1 2024 compared tototal reven
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Asian Tech Stocks Gain, Yen Drops on BOJ Rate Hold: Markets Wrap
| 2024-04-25 |
It covers the following details: (Bloomberg) -- Asian technology shares rose following stellar earnings reports from Microsoft Corp. and Alphabet Inc. overnight. The yen weakened to a fresh 34-year low after the Bank of Japan kept its key interest rate unchanged.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Bi
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Vietnam delays launch of new stock trading system
| 2024-04-25 |
It covers the following details: HANOI (Reuters) - Vietnam will delay the launch of the much-expected new stock trading system initially slated for next week, its State Securities Commission (SSC) said.The debut, which had been planned for May 2, has been pushed back due to regulatory roadblocks and the unreadiness to connect to the new system to provide trading services to investors from securities firms, the State Securities Commission (SSC) said in a document dated April 25.Vietnam's main Ho Chi Minh City exchange also failed to report the launch plan to the finance ministry and get needed approvals for information security, according to the document, without elaborating on a new timeframe for the launch.The new trading system provided by the Korea Exchange (KRX) would speed up settlement of transactions, as part of reforms aimed at upgrading the country's stock market.KRX will handle the settlement of transactions within a day, speeding up operations and facilitating trading, especially short selling, which was hampered by the current slower system.If successful, the upgrade would boost the chances of the Southeast Asian nation being reclassified as an emerging market.Both the MSCI and FTSE indices currently classify Vietnam as a frontier market, preventing many funds, family offices and others from investing in companies listed there.(Reporting by Phuong Nguyen; Editing by Kim Coghill)
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Stock market today: Dow falls 375 points as traders brace for new inflation data after weak GDP
| 2024-04-25 |
It covers the following details: Traders work the floor of the New York Stock Exchange on July 25, 2023, in New York City. Wall Street stocks were mixed early July 25 following a round of generally positive earnings as markets looked ahead to a Federal Reserve interest rate decision.Photo by Angela Weis/AFP via Getty ImagesUS stocks tumbled after the first-quarter GDP report on Thursday.Economic growth slowed to 1.6% in the first three months of the year, badly missing expectations.Commentators pointed out that the data was still mostly strong but inflation is problematic.Stocks fell on Thursday, with the Dow Jones Industrial Average losing 375 points as the market took in weaker-than-expected economic data.Growth slowed but inflation stayed high last quarter, a discouraging sign for traders as they look for signs the Federal Reserve will soon cut interest rates. Slowing growth and high inflation is a tough scenario for the economy and hasled to "stagflation"in previous eras, like the 1970s.Yet, several banks noted that the data is still upbeat under the surface. Barclays and Bank of America both noted that demand looks to be solid still, evidenced by sales to domestic purchases, which came in at 2.8% for the quarter.However, inflation was a nasty surprise, and the situation could be complicated even more by Friday's personal consumption expenditures report, which is the Fed's preferred measure of inflation. Bank of America analysts said that they forecast upward revisions in January and February PCE, rather than a big surprise jump in the March figure."The economy will likely decelerate further in the following quarters as consumers are likely near the end of their spending splurge. Savings rates are falling as sticky inflation puts greater pressure on the consumer," LPL Financial chief economist Jeffrey Roach said. "We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed's 2% target still looks a long ways off."The 10-year Treasury bond jumped five basis points to 4.704%.Meta tumbled Thursday, helping to drag the wider tech sector down. The social media firm delivered disappointing guidance after reporting earnings that beat estimates. Markets are awaiting results after the closing bell for Microsoft and Google parent Alphabet.Here'
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Rooting for Trump to fail has made his stock shorters millions
| 2024-04-25 |
It covers the following details: NEW YORK (AP) — Rooting forDonald Trumpto fail has rarely been this profitable.Just ask a hardy band of mostly amateur Wall Street investors who have collectively made tens of millions of dollars over the past month by betting that the stock price of his social media business —Truth Social— will keep dropping despite massive buying by Trump loyalists and wild swings that often mirror the candidate’s latest polls, court trials and outbursts on Truth Social itself.Several of these investors interviewed by The Associated Press say their bearish gambles using “put” options and other trading tools are driven less by their personal feelings about the former president (most don’t like him) than their faith in the woeful underlying financials of a company that made less money last year than the average Wendy’s hamburger franchise.“This company makes no money. ... It makes no sense," said Boise, Idaho, ad executive Elle Stange, who estimates she’s made $1,300 betting against Trump Media & Technology stock. “He's not as great a businessman as he thinks. A lot of his businesses go belly up, quickly.”Says Seattle IT security specialist Jeff Cheung, “This is guaranteed to go to zero.”As of Friday's close, a month since Trump Media’sinitial public offeringsent its stock to $66.22, it has dropped to $41.54. An AP analysis of data from research firms FactSet and S3 Partners shows that investors using puts and “short selling” have paper profits so far of at least $200 million, not including the costs of puts, which vary from trade to trade.Still, amateur traders, mostly risking no more than a few thousand dollars each, say the stock is too volatile to declare victory yet. So they are cashing in a bit now, letting other bets ride and stealing a glance at the latest stock movements in the office cubicle, at the kitchen table or even on the toilet.There have been plenty of scary moments, including last week when DJT, the ex-president’s initials and stock ticker, jumped nearly 40% in two days.“I don’t know which direction the stock is going,” says Schenectady, N.Y., day trader Richard Persaud while checking his iPhone amid the surge. “It’s
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Billionaire 'bond king' Bill Gross tells investors to avoid tech and stick to value stocks
| 2024-04-25 |
It covers the following details: Bill GrossJanusBillionaire "bond king" Bill Gross told investors to avoid tech stocks and stick to value stocks.Microsoft is the only buy if investors must dabble in the tech sector, he said.Gross also questioned the rationale for owning bonds. Yields spiked Thursday after the GDP report.Bill Gross says investors should avoid tech stocks.In a post on X, the "bond king" said, "Stick to value stocks, avoid tech for now."His message comes as a weaker-than-expected GDP report also showed that consumer prices remained high in the first quarter. Bond yields jumped on the data, and the tech sector dropped, with the Nasdaq Composite down more than 1% Thursday afternoon.Gross said that if investors have to dabble in tech, go withMicrosoft:"MSFT best in tech if you must."Expectations for the tech titan's earnings after the bell on Thursday are high as Wall Street eyes momentum in itsAzure, Copilot, and office 365 units.Gross also questioned owning bonds, with the 10-year above 4.7% on Thursday after the GDP report.The billionaire investor said he owns stock in Western Midstream Partners and energy infrastructure firm MPLX.Bill Gross has been cool on the AI craze that's gripped Wall Street. He previously told investors that the AI frenzy is showing signs of "excessive exuberance."The stock market has had its worst month of the year in April. Another hot inflation print in March has prompted a reappraisal of the Federal Reserve's path of monetary policy, with Wall Street dialing down expectations for rate cuts.Tech earnings haven't been enough to kickstart a new rally. Tesla reported dismal results but the stock rose on plans for a cheaper vehicle model in the works.Meta, however, disappointed investorswith weak guidance in its earnings report on Wednesday. The stock sold off sharply, down by over 10% late Thursday, helping to drag the tech sector lower.Read the original article onBusiness Insider
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Asia stocks rise, yen plumbs 34-year low as BOJ stands pat on rates
| 2024-04-25 |
It covers the following details: By Chris Prentice and Naomi RovnickNEW YORK/LONDON (Reuters) -Global stocks were higher on Friday as Big Tech gains lifted Wall Street shares, while Japan's yen sank to a 34-year low after the Bank of Japan (BOJ) kept monetary policy loose.MSCI's gauge of stocks across the globe rose 6.80 points, or 0.90%, to 762.39 on tech sector optimism following robust results from Alphabet and Microsoft.U.S. data also boosted sentiment, with the consumption expenditures (PCE) price index up 0.3% in March, in line with estimates by economists polled by Reuters. In the 12 months through March, PCE inflation advanced 2.7% against expectations of 2.6%.The S&P 500 and the Nasdaq registered their biggest weekly percentage gains since early November 2023.The Dow Jones Industrial Average rose 153.86 points, or 0.40%, to 38,239.66, the S&P 500 gained 51.54 points, or 1.02%, to 5,099.96 and the Nasdaq Composite gained 316.14 points, or 2.03%, to 15,927.90.Europe's benchmark stock index had its biggest daily gain in more than three months, closing up 1.2%, on gains in banking and industrial stocks. The technology sector got a boost from upbeat results from U.S. megacaps.The dollar hit 158.275 yen, the highest since June 1990.World equities were poised to finish the month lower, as hopes of rapid Fed rate cuts receded following a series of U.S. inflation readings.The Bank of Japan kept interest rates around zero at its policy meeting, despite forecasting inflation of around 2% for three years.Markets are braced for Tokyo authorities to prop up the currency, in what would be an unconventional and politically tough decision. BOJ Governor Kazuo Ueda said on Friday that exchange-rate volatility could significantly impact the economy.U
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Why Hasbro Stock Popped This Week
| 2024-04-25 |
It covers the following details: Shares ofHasbro(NASDAQ: HAS), the toy and game maker known for products like Transformers, Magic: The Gathering, and Monopoly, were on the move this week as the stock beat quarterly estimates in spite of a decline in revenue.According to data fromS&P Global Market Intelligence, the stock was up 17.6% for the week as of Thursday's close.Image source: Getty Images.Is this the start of a turnaround?Revenue in the quarter fell 24%, primarily due to the sale of the Entertainment One video entertainment business. Excluding its effect, revenue was down 9% due to a 21% decline in its consumer products business. The challenges in the toy business reflect broader industry challenges and Hasbro's own decision to exit certain business lines and reduce closeout sales.The company finished the quarter with revenue of $757.3 million, though that still beat estimates at $738.6 million.While the decline in revenue might have been disappointing, investors focused their attention on the company's cost cuts, which led to improvements in the bottom line.Adjusted operating profit doubled to $148.6 million. Its adjusted operating margin improved from 4.9% to 19.6% as it slashed inventory by 53%, improved supply chain productivity, and reduced operating costs.On the bottom line, adjusted earnings per share jumped from $0.01 to $0.61, which topped the analyst consensus at $0.27.CEO Chris Cocks noted the strong performance of the company's licensing portfolio as it attempts to unlock the value of its intellectual property, a tried-and-true strategy in the children's entertainment industry.Can Hasbro keep climbing?Looking ahead, the company continues to expect revenue to decline. It forecasts a 7% to 12% decline in consumer products, a 3% to 5% decline in the Wizards of the Coast segment, and revenue in the Pro-forma entertainment segment down $15 million.On the bottom line, it forecast earnings before interest, taxes, depreciation, and amortization (EBITDA) of $925 million to $1 billion, meaning the stock trades at less than 10 times EBITDA. Its 4.3
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Cathie Wood makes almost $100 million on battered tech stock
| 2024-04-25 |
It covers the following details: Tesla(TSLA)shares stumbled badly until this week amid falling deliveries, price cuts, and concern that Chief Executive Elon Musk was distracted from his work at the electric vehicle titan.Tesla stock dropped 43% from the beginning of the year through April 22. But, since then, its shares have rebounded 16%.And what has propelled them higher? Slivers of good news amid a weak first-quarter earnings report.As forthe bad news, Tesla's net income slid nearly 55% from a year earlier to $1.13 billion, and revenue fell 8.7% to $21.3 billion.On the plus side, Musk promised to introduce a less expensive electric vehicle as early as late 2024, offsetting worries about its lackluster earnings and diminishing growth prospects for its existing lineup.It's been a rollercoaster ride over the years for Elon Musk and Tesla, which he heads.Chesnot/Getty ImagesTesla CEO Elon Musk’s views"I think we'll have higher sales this year than last year," Musk told investors, even as the company reiterated its forecast for "notably lower" vehicle deliveries for the current year."We've updated our future vehicle lineup to accelerate the launch of new models ahead [from the] previously mentioned start of production in the second half of 2025. So, we expect it to be more like the early 2025, if not late this year," Musk said.Wall Streetanalysts offered mixed reactionsto the earnings report. Alliance Bernstein analyst Toni Sacconaghi argues that the "widespread deployment of [Tesla's Full Self-Driving] is five to 10 years away.”Related: Analysts scramble to reset Tesla price targets as stock soars after earningsHe said it's by no means a "slam dunk" that the company can grow sales this year, given the weak EV-demand environment.It may also be a tough ask given that Musk has been cutting prices on Model 3 and Model Y, hoping to spark demand.Bank of America analyst John Murphy said Musk addressed "key concerns" on the conference call. And he managed to "revitalize the
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Billionaire investor Ron Baron says Tesla stock has bottomed out and will 'go up huge' on the promise of more affordable vehicles
| 2024-04-25 |
It covers the following details: Ron Baron once told Elon Musk to stop tweeting.Associated Press via Business WireBillionaire investor Ron Baron told CNBC that Tesla is "going to go up huge."The stock has reached bottom after investors were unsure if the firm was scrapping plans for a low-cost model.Baron sees all cars being EVs in 10 to 15 years, and cited Tesla's cost efficiency compared to rivals.Tesla's stock has reached a positive inflection point and will leave recent lows in the dust now that the company is giving investors what they want, according to billionaire investor Ron Baron."Oh, it's going to go up huge," he toldCNBCon Wednesday. "Now is the bottom."So far this year, Tesla shares have crashed more than 34%, driven downwards by a first-quarter delivery slag, reports of a pivot towards robotaxis, and a string ofleadership controversies.But to the Baron Capital founder, eroding sentiment had less to do with how the electric vehicle maker performed, but whether CEO Elon Musk was still committed to coming through on promised projects."When I think about the reasons the stock is down, it's because people were concerned that he was going to abandon the idea of having a low-cost car and go all into robotaxis," Baron said.Doubts first crept in after a Reuters article announced thatTesla was scrapping such plans, a report Musk then went on to deny.But now, the company's recentearnings callmade clear that it would accelerate production of a more affordable model, and would also unveil its robotaxi later this year. Baron expects the firm to make 5 million of the new low-cost vehicle.He also cited that Tesla could make a profit by eventually selling its full-self driving technology to other carmakers.While Tesla's earnings also showed a 9% slump in first-quarter revenue, its stock has jumped close to 18% since then.Before Tuesday's results were published, some analysts have cited long-term burdens that will continue weighing on the company,including an EV recessionand rising competition, whether domestically or in offshore markets.But Baron doubled down that Tesla continues to have a lead, pointing out the firm's cost efficiency.
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Analysts revisit Humana stock price targets amid Medicare Advantage hit
| 2024-04-25 |
It covers the following details: When then-President George W. Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, he said the act would help achieve "a more modern Medicare system that includes prescription drug coverage and choices for seniors."Under the act, private health plans approved by Medicare became known as Medicare Advantage Plans.Related: U.S. growth slowdown, with inflation spike, raises early stagflation risksRoughly 33.4 million people were enrolled in a Medicare Advantage plan at the start of 2024, according to the medical publicationStat, which analyzed federal data.Just over half of Americans on Medicare are enrolled in one of the plans large insurance companies offer.Earlier this month, shares of Humana(HUM), UnitedHealth(UNH)and CVS Health(CVS)tumbledwhen the U.S. Centers for Medicare & Medicaid Services said Medicare Advantage payments would rise only by an average of 3.7% next year.Analysts were looking for an increase of around 4.7%, based on the CMS's January proposal of 3.7%, following increases of around 1.22% each year between 2019 and 2024, according to preliminary CMS figures.The payments reimbursing insurers for treatment of U.S. patients over age 65 will be effectively lower than current levels when adjusted for costs and inflation.Analysts adjusted their stock price targets for Humana.HumanaCEO: Company facing 'challenging time'On Wednesday, Humana reported first-quarter earnings of $7.23 per share. compared with $9.38 a year earlier, surpassing the FactSet consensus of $6.12.Revenue totaled $29.61 billion, up from $26.74 billion, beating Wall Street's call for $28.52 billion.Related: Analysts reset Facebook-parent Meta stock price targets amid post-earnings plungeHowever, Humana withdrew its already downscaled 2025 profit forecast, citing disappointing government Medicare reimbursement rates.At last check, Humana's shares were down $2.24% to $3
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Norwest Venture Partners raises $3B for 17th vehicle, maintaining fund size despite market downturn
| 2024-04-25 |
It covers the following details: Norwest Venture Partners, a 65-year-old firm backed solely by Wells Fargo, has raised its 17th fund at $3 billion.That's a noteworthy number, given that NVP last raised the same amount in December 2021. That was the peak of the venture boom, and at that time, the firm said it increased its capital pool by 50% (NVP's 2019 fund closed at $2 billion) because it needed to stay competitive in the dealmaking environment where round sizes and valuations have climbed to unprecedented levels.But things have obviously changed since then. Investors are backing fewer companies, and valuations have dropped and mayfall further.Jeff Crowe, a senior managing partner, admitted that the investment rate in venture and certain sectors is slower than it was several years ago, but he said that dealmaking in certain strategies, sectors and geographies, such as growth equity, healthcare and India, is as robust as it was before the downturn."We've kept a very steady pace and have delivered a number of nice exits," Crowe told TechCrunch. "We felt it makes sense to keep going at the same pace."Since closing its previous fund, the firm has helped 36 companies realize liquidity. Not all exits were great outcomes for the firm (NVP's portfolio companyVanMoof filed for bankruptcy protection), but returns from certain exits greatly outweighed the losses, according to Crowe. He pointed to the firm's sale ofSpiff to Salesforce,the buyout ofAvetta by EQTfor a reported $3 billion and the IPO of Indian-based Five Star Business Finance.Crowe declined to comment on returns, but said: "This is fund 17. We've been doing this for a long time, and in the venture world, you get to stay in business if you deliver really good returns."NVP attributes much of its success to operating out of one large global multi-strategy fund. The firm invests in North America, India and Israel. It has an early-stage and growth equity business, and has recently added a biotech team to round out its existing healthcare practice.The diversified approach allows the firm to adjust its strategy when the market changes. For instance, NVP planned to invest in crypto companies when it raised its last fund
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Pimco Says BOJ May Raise Rates Higher Than Markets Expect
| 2024-04-25 |
It covers the following details: (Bloomberg) -- The Bank of Japan may raise interest rates three more times even after last month’s historic hike, according to Pacific Investment Management Co. Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest CityBig Tech Surges in Late Hours on Blowout Earnings: M
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Skechers Stock Jumps On Strong Q1 Earnings: The Details
| 2024-04-25 |
It covers the following details: Skechers Stock Jumps On Strong Q1 Earnings: The DetailsSkechers U.S.A. Inc(NYSE:SKX) shares are rising in Thursday’s after-hours session after the company reported better-than-expectedfinancial results for the first quarter.What Happened:Skechers first-quarter revenue increased 12.5% year-over-year to $2.251 billion, which beat theconsensus estimateof $2.204 billion, according toBenzinga Pro. The lifestyle footwear company reported quarterly earnings of $1.33 per share, which beat analyst estimates of $1.10 per share.Wholesale sales were up 9.8% in the quarter, while direct-to-consumer sales jumped 17.3%. Gross margins came in at 52.5%.“We began the new year by setting a new sales record, delivering results above expectations, and further expanding the Skechers brand globally,” saidRobert Greenberg, Skechers’ CEO.“With our focus on evolving and innovating our extensive product offering, best-in-class partnerships with our distribution network, and exceptional global demand, we are confident that Skechers will have another record-breaking year.”Outlook:Skechers sees second-quarter revenue in the range of $2.175 billion to $2.225 billion versus estimates of $2.202 billion. The company anticipates second-quarter earnings of 85 to 90 cents per share versus estimates of $1.09 per share.View more earnings on SKXSkechers raised its full-year 2024 revenue guidance from $8.6 billion to $8.8 billion to $8.725 billion to $8,875 billion versus estimates of $8.781 billion. The company also raised its full-year EPS outlook from $3.65 to $3.85 to $3.95 to $4.10 versus estimates of $3.90.“We remain committed to our growth strategy, further expanding our global reach and helping shoppers around the world enjoy the comfort and value of our Skechers products, and we have continued confidence in our goal of
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Analysts reboot stock price target for GE Aerospace after earnings
| 2024-04-25 |
It covers the following details: On May 29, 1453, Constantinople, the capital of the Byzantine Empire, fell to the Ottoman Empire after a 53-day siege, an event that historians say marked the end of the Middle Ages.Now you may be asking: That's very interesting, but what the hell does it have to do with me?Related: Analysts reset Facebook-parent Meta stock price targets amid post-earnings plungeWell, just keep your shirt on and we'll get it to that in a minute.Our story moves to the modern world, where on Tuesday, April 23, General Electric postedbetter-than-expectedfirst-quarter earnings and lifted its full-year-profit forecasts, as what was the iconic industrial group launched its new future as an aerospace company.Earlier this month, GE completed its historic split into three separate and independently operated companies: GE Healthcare, GE Vernova and GE Aerospace.In its final report as a combined company, General Electric posted adjusted earnings of 82 cents a share, more than double the year-earlier tally and well ahead of the Wall Street consensus estimate of 66 cents a share.GE Aerospace, which inherits the(GE)ticker on the NYSE, saw revenue rise 15% to $8.1 billion, with operating profit up 24% to $1.5 billion.On April 23, Larry Culp, who was chief executive of the group and now helms GE Aerospace, welcomed analysts to “our first earnings call as GE Aerospace, now a pure-play global leader in propulsion, services and systems.”GE Aerospace CEO Larry Culp.Ilya S. Savenok/Getty ImagesCEO notes 'incredible responsibility'“We're wholly focused on our aerospace and defense customers, serving the 900,000 passengers in the air right now with our technology under wing,” Culpsaid.“It's an incredible responsibility for our teams globally and why we take safety and quality so seriously," he said.Related: Analysts reset Facebook-parent Meta stock price targets amid post-earnings plungeCulp said that the company's commercial propulsion fleet is the industry'
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Stock market today: US indexes drop as 1st-quarter GDP growth comes in weaker than expected
| 2024-04-25 |
It covers the following details: The US economy grew at an annualized rate of 1.6% in the first quarter of 2024.Photo by Michael Nagle/Xinhua via Getty Images)US stocks fell sharply Thursday as data showed the US economy grew much slower than expected to start 2024.The report also showed consumer prices rising in the quarter, complicating the Fed's rate-cut decision.Bond yields jumped, with the US 10-year Treasury hitting the highest in five months.US stocks opened lower on Thursday as the Bureau of Economic Analysis reported thatUS economic growth was weaker than expectedin the first three months of this year.US GDP grew by 1.6% on an annualized basis in the first quarter, well below expectations of 2.4% and far short of the 3.4% increase in the final quarter of 2023.While slower economic growth could bolster the case for the Federal Reserve to ease monetary policy, the GDP report on Thursday also showed consumer prices rising in the quarter, complicating the central bank's mission of fighting inflation without sparking an economic slowdown.The market will be focused on personal consumption expenditures data, the Fed's preferred inflation measure, which is due out on Friday.Bond yields jumped as traders reacted to the economic data. The 10-year Treasury rose to its highest level in five months, spiking five basis points to 4.706%."The softer first read of Q1 GDP could shift - again- the Fed's timetable for initiating the rate easing cycle, with July coming back into play," Quincy Krosby, chief global strategist at LPL Financial, said after the GDP report."If the PCE report due tomorrow similarly suggests the downward path of inflation has begun to once again gain momentum, it could serve as a catalyst for the market."Meta shares dragged the wider tech sector down Thursday, with shares of the Facebook parent plunging 15% after it reported earnings results that beat estimates but delivered disappointing guidance.Here's where US indexes stood shortly after at the 9:30 a.m. opening bell on Thursday:S&P 500:5,006.32, down 1.3%Dow Jones Industrial Average:37,929.
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BOJ Tightening Bets Help Revive a Rally in Value and Bank Stocks
| 2024-04-25 |
It covers the following details: (Bloomberg) -- The possibility of a more hawkish tilt by the Bank of Japan at this week’s policy meeting means it may be too early to call time on the rallies in banks and other value stocks.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest CityBig Tech Surges in Lat
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1 Wall Street Analyst Thinks Meta Platforms Stock Is Going to $565. Is It a Buy?
| 2024-04-25 |
It covers the following details: Meta Platforms(NASDAQ: META)delivered first-quarter financial results above expectations, but the stock tumbled after management said it was going to ramp up spending to support growth initiatives. This clouds the near-term outlook for the company's profits, which is why the stock is falling.Bernstein lowered itsprice targetfrom $590 to $565 but maintained an outperform (buy) rating on the shares. Here's why the dip could be a great buying opportunity.Why buy Meta stockMeta reported solid numbers across the board. Revenue grew 27% year over year, and higher margins boosted earnings per share by 114%. However, the company's investments inartificial intelligence (AI)initiatives will come at a cost that could put the brakes on earnings growth in the near term.Meta said it expects full-year operating expenses to be $2 billion higher than its previous forecast. It also plans to spend more on infrastructure to support AI development, which could range from $35 billion to $40 billion.Wall Street typically likes to see higher visibility to growth in the near term, but Meta is investing for a long-term payoff. These investments are ultimately designed to benefit user engagement and business activity across its social media platforms.Meta is still the same business it was yesterday. It has a history of accelerating capital expenditures when it sees an opportunity to grow the value of the business. The stock should recover and move toward the analyst's price target as market participants return their attention to the company's long-term growth prospects.Should you invest $1,000 in Meta Platforms right now?Before you buy stock in Meta Platforms, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Consider whenNvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $488,186!*Stock Advisorprovides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and
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A rate cut in June is still on tap because the job market is weakening, Citi economist says
| 2024-04-25 |
It covers the following details: Federal Reserve Governor Jerome Powell delivers remarks during a conference at the Brookings Institution in Washington.Reuters/Carlos BarriaIt's still likely the Fed will issue its first rate cut this June, Citi economist Veronica Clark said.That's because central bankers will need to support a weakening labor market, Clark told Yahoo Finance.The job market has shown signs of weakening in some sectors, like manufacturing.The Federal Reserve is still likely to cut rates in June in order to prop up the labor market amid aslowdown in hiring, according to Citi economist Veronica Clark.Speaking withYahoo Financethis week, Clark pointed to signs of weakness in the US labor market, despite robust job growth seen so far this year. The US added303,000 payrollslast month, according to the Bureau of Labor Statistics — the third straight month of stronger-than-anticipated hiring.But that growth could start to slow later in 2024, Clark predicted.Manufacturing employmentactivity continued to contract in March, a sign that hiring is already starting to weaken in some sectors. The unemployment rate, meanwhile, has inched higher in recent months, with the totaljobless rate notching a 2-year-highof 3.9% in February."We have a base case for June still," Clark said of rate cuts, though she noted a July Fed rate cut was also possible. "If anything, we think inflation is pretty sticky, but we think the Fed is looking at some of this labor market data … and really getting worried that we might be entering a weaker labor market."Fed officials raised interest rates 525 basis-points over the last two years. That's helped tame inflation but hasraised the risk of a recession, the first signs of which could crop up in the labor market, economists have warned.While Clark anticipates looser Fed policy, investors have pushed back on their outlook for Fed rate cuts this year after a hotter-than-expected inflation report in March. Markets are now pricing in just one or two cuts by December, according to theCME FedWatch tool, down from as many as seven rate cuts projected at the start of 2024.Central bankers, for their part, havesuggested interest rates should remain higher for longer.
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National average money market account rates for April 2024
| 2024-04-25 |
It covers the following details: A money market account is a type of savings deposit account that tends to offer check-writing privileges and a debit card for ATM access to your savings. Typically, savings accounts usually don’t let you write checks from the account, making money market accounts a unique option to store and tap your money when you need it.The Federal Reserveindirectly impacts money market account rates at competitive banks. Generally, you’ll find that Federal Deposit Insurance Corp. (FDIC) bank rate increases follow the Fed’s movements. But a Fed rate increase isn’t a guarantee that a bank will raise rates.That’s why you have tocompare ratesto find the right account for your financial needs.And beyond yields, you’ll want to make sure a money market account has the features that you’re looking for.Check-writing privileges, ATM access, mobile check deposit and a highly-rated app are the features people tend to look for.Except for the potential for check writing, a money market account anda high yield savings accountare nearly similar. So it’s also worth considering opening a high interest savings account in your search for a money market account.You might be rewarded for depositing more money in a money market accountSome money market accounts give you a higher annual percentage yield (APY) for carrying a larger balance. These accounts, calledjumbo money market accounts, are worth looking into if you’re looking to deposit a large sum into a liquid account. Always make sure you’re following the Federal Deposit Insurance Corp. (FDIC) rules and guidelines to make sure that your money is protected in the event ofa bank failure.Latest average money market account APYs for the past 3 monthsDateMoney market account national average APY10/14/20240.43%10/7/20240.42%9/30/20240.43%9/26/20240.43%9/16/20240.45%9/9/20240.44%9/2/20240.47%8/26/20240.46%8/19/20240.46%8/12/20240
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Why the S&P 500 is poised to gain 3% over the next 20 days, says JPMorgan's trading desk
| 2024-04-25 |
It covers the following details: Caspar Benson/Getty ImagesA tactical buy signal just flashed in the stock market, according to JPMorgan's trading desk.The bullish signal suggests that the S&P 500 could surge 3% within the next 20 days."This is very similar to what we saw in late Aug when the S&P bounced just over 3%," JPMorgan said.A tactical buy signal just flashed in the stock market, according to a Tuesday note fromJPMorgan'strading desk.The buy signal suggests that theS&P 500could jump 3% within the next 20 days, which would put the index within spitting distance of its all-time high.JPMorgan's Tactical Positioning Monitor measures positioning data within the stock market, and it flashes buy signals when either short-term positioning falls significantly and swiftly, or when positioning is rising while the stock market is still below its recent peak.JPMorgan's tactical buy signals have a proven track record, with the strategy generating an 8.9% annual return with a 69% per trade win ratio from 2015 to 2021. What's more, the buy signals' tendency to generate a 3% return over the following 20 days is triple the 1% gain that has occurred during all other time periods, according to the bank.The most recent buy signal was flashed after positioning data showed a sharp decline amid this month's 5% sell-off in the broader stock market."Our US Tactical Positioning Monitor just hit our threshold for an attractive set-up for the S&P 500, based on the fact that it dipped to -1.5z over the past 4 weeks," JPMorgan said. "The last time we hit this level was in late Oct '23, although the current set-up seems more akin to where things stood near the late Aug '23 lows, when an attractive set-up was also triggered."But a bullish buy signal isn't enough to push the stock market higher on its own, JPMorgan's trading desk admitted.Instead, for this most recent buy signal to be successful, corporate first-quarter earnings will have to deliver and geopolitical tensions will have to cool down."To state
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Big Tech Surges in Late Hours on Blowout Earnings: Markets Wrap
| 2024-04-25 |
It covers the following details: (Bloomberg) -- The world’s largest technology companies soared in late trading as stellar results from Microsoft Corp. and Google’s parent Alphabet Inc. fueled confidence in Wall Street’s most-influential group.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest CityBi
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Why QuantumScape Stock Lost 7% Today
| 2024-04-25 |
It covers the following details: Shares ofQuantumScape(NYSE: QS)closed lower today as the development-stage quantum-battery stock reported first-quarter results this morning. Investors seemed to want to see faster progress in the company's battery-cell development.As a result, QuantumScape stock closed the session down 6.9%.Image source: Getty Images.QuantumScape still needs timeQuantumScape still has no revenue, and its operating expenses increased modestly in the quarter from $110 million a year ago to $131.9 million.Capital expenditures were just $14.1 million, down from $28 million in the quarter a year ago, and its per-share loss of $0.24 was worse than expectations at $0.21.QuantumScape said it had achieved the first of its four goals for 2024, which it previously announced, shipping its six-layer, Alpha-2 prototype battery cells to its automotive customers, and called it a key deliverable for its prospective launch customer.The company still aims to begin low-volume QSE-5 prototype production, ramp its Raptor process, and prepare for Cobra production in 2025.With no major news to share, investors seemed to shrug off the quarterly report.What's next for QuantumScapeQuantumScape reported earnings this morning, but its earnings call was scheduled for after-market hours at 5 p.m. ET, meaning that the stock could move tomorrow if management shares anything material on the call.The electric vehicle (EV) battery stockhas gradually drifted lower as investor expectations have cooled down following a promising initial public offering (IPO), and revenue expectations are still modest, with analysts calling for $6.5 million in revenue next year.The company has $1 billion in cash, cash equivalents, and marketable securities, which should give it a decent runway for product development. Based on its free-cash-flow loss or cash burn of $71 million in the quarter, the company can afford to fund the business for roughly 3.5 years.Investors are hoping it will have a viable business by then as it ramps up battery-cell production in the coming years.Should you invest $1,000 in QuantumScape right now?Before you buy stock in
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Tradeweb Markets (TW) Q1 2024 Earnings Call Transcript
| 2024-04-25 |
It covers the following details: Image source: The Motley Fool.Tradeweb Markets(NASDAQ: TW)Q1 2024 Earnings CallApr 25, 2024,9:30 a.m. ETContents:Prepared RemarksQuestions and AnswersCall ParticipantsPrepared Remarks:OperatorGood morning, and welcome to Tradeweb's first quarter 2024 earnings conference call. As a reminder, today's call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury, FP&A, and Investor Relations Ashley Serrao. Please go ahead.Ashley Serrao--Head of Treasury, FP&A, and Investor RelationsThank you, and good morning. Joining me today for the call are our CEO, Billy Hult, who will review the highlights for the quarter and provide a brief business update; our president, Tom Pluta, who will dive a little deeper into some growth initiatives; and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information, and complying with our disclosure obligations under Regulation FD. I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Statements related to, among other things, our guidance are forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, presentation, and periodic reports filed with the SEC. In addition, on today's call, we will reference certain non-GAAP measures, as well as certain market and industry data.Should you invest $1,000 in Tradeweb Markets right now?Before you buy stock in Tradeweb Markets, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Tradeweb Markets wasn’t one of them. The 10 stocks that made the cut could produce monster returns
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Why Hertz Stock Plunged Today
| 2024-04-25 |
It covers the following details: Shares ofHertz Global Holdings(NASDAQ: HTZ)were tumbling today after the car rental giant posted disappointing results in its first-quarter earnings, as the company continued to experience challenges with itsEV fleet.As a result, the stock was down 19.8% as of 3:28 p.m. ET.Image source: Getty Images.Hertz is still short-circuitingHertz's revenue in the quarter rose 2% year over year to $2.1 billion, which topped estimates at $2.04 billion. Total transaction days rose 9% due to strength in the leisure and rideshare channels, while retail price per day fell 7% to $56.68.The big issue facing Hertz came on the cost side, as the company said it now planned to sell 30,000 EVs, up from the 10,000 it had announced earlier, as it decreases its exposure to the electric vehicle market. Hertz took a $195 million vehicle depreciation charge on the EVs held for sale, and direct operating expenses rose 3% due to inflationary pressure and damage-related expenses.On the bottom line, the company reported an adjusted net loss of $392 million, or a loss of $1.28 per share, which compared to an adjusted profit per share of $0.39 in the quarter a year ago, and estimates of a loss of $0.44 per share.CEO Gil West didn't hide from the challenges, saying of the fleet and direct operating costs, "We're tackling both issues -- getting to the right supply of vehicles at an acceptable capital cost, while at the same time driving productivity up and operating costs down."What's next for Hertz?Hertz didn't offer guidance in the press release, but the company should eventually overcome the EV-related headwinds, and the modest top-line growth is a positive sign.I wouldn't call this a buying opportunity yet, but Hertz should be able to bounce back over the longer term.Should you invest $1,000 in Hertz Global right now?Before you buy stock in Hertz Global, consider this:TheMotley Fool Stock Advisoranalyst team just identified
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Real Estate Stocks Sink on Rate Outlook, Disappointing Earnings
| 2024-04-25 |
It covers the following details: (Bloomberg) -- Real estate brokerage stocks tumbled Thursday on waning expectations for Federal Reserve interest-rate cuts, and as a disappointing earnings release raised concern about the sector’s outlook.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest CityBig Tec
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Why Broadcom, Taiwan Semiconductor Manufacturing, and Arista Networks Rallied Even on a Down Day for the Nasdaq
| 2024-04-25 |
It covers the following details: Shares of semiconductor and data center infrastructure stocksBroadcom(NASDAQ: AVGO),Taiwan Semiconductor Manufacturing(NYSE: TSM), andArista Networks(NYSE: ANET)were all rallying today, up 3.2%, 3.2%, and 4.4%, respectively, as of 3:39 p.m. EDT.While these gains may not have been extremely eye-opening, they were in the context of theNasdaq Composite indexbeing down around 0.65% at that time. These three are large components of that index, so to see them defying their peers is notable.The divergence is likely due to one large tech giant significantly raising its full-year outlook for capital spending, most of which will go to artificial intelligence (AI) data centers. Fears of a large AI spending war among the very biggest tech giants caused those stocks to plunge today, but the increased spending should be a boon for these infrastructure players.Meta's spending benefits these threeLast night,Meta Platformssurprised investors with its first-quarter earnings report. While Q1 revenue and earnings beat estimates, the companyalso raised its 2024 guidance for capital expendituresto $35 billion to $40 billion, up from its prior forecast of $30 billion to $37 billion.That big increase in spending caused Meta's stock to plunge this morning, but it's actually great news for the recipients of all that spending. In particular, Meta is known to be a huge customer of Arista Networks' data center ethernet switches. In fact, Meta was Arista's largest customer in 2023, accounting for 21% of its revenue.Datacenter plays are reaping the early benefits of the AI wars. Image source: Getty Images.So, Meta's big spending should be good news for Arista. And Arista's switches use Broadcom networking chips, so the increased revenue for Arista should also filter down to Broadcom. Not only that, but Meta is also a direct customer of Broadcom's custom ASIC business, as Meta uses Broadcom IP in its own house-designed AI accelerators.On the conference call with analysts last night, Meta CEO Mark Zuckerberg noted that the company was attempting
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Intel reports better than expected Q1 earnings but falls short on revenue outlook. Stock slides more than 5%.
| 2024-04-25 |
It covers the following details: Intel (INTC) announced its first quarter earnings results after the bell on Thursday, beating analysts' expectations on the top and bottom lines. But the company's Q2 outlook fell short of Wall Street's estimates, sending the stock sliding.Intel said it anticipates Q2 revenue of between $12.5 billion and $13.5 billion. Analysts were anticipating $13.63 billion for the coming quarter.Intel is looking to grow its AI market share by challenging rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudi 3 AI accelerator while hoping it can woo consumer and enterprise customers with its AI PC lineup.The company reported earnings adjusted per share (EPS) of $0.18 on revenue of $12.72 billion. Wall Street was expecting an EPS of $0.13 and revenue of $12.71 billion, according to consensus data compiled by Bloomberg. Intel reported a loss per share of $0.04 on revenue of $11.7 billion in the same quarter last year.“We are making steady progress against our priorities and delivered a solid quarter,” Intel CEO Pat Gelsinger said in a statement. “Strong innovation across our client, edge and data center portfolios drove double-digit revenue growth in Intel Products.Intel CEO Pat Gelsinger presents chips with a new production technology. (Photo by Andrej Sokolow/picture alliance via Getty Images)(picture alliance via Getty Images)Intel is in the midst of transforming itself from a designer and manufacturer of its own chips to a manufacturer of chips for third-party clients. So far, the company said it has six customers, including Microsoft (MSFT), which is developing its own custom chips.The first quarter marks the first time Intel is reporting earnings under its new corporate structure. The company now reports revenue from its Client Computing Group, Data Center and AI, and Network and Edge divisions under its Intel Products segment. Altera, Mobileye, and Other now report under the All Other Segment, while Intel’s Foundry business reports under Intel Foundry. In announcing the restructuring, however, Intel also revealed that its foundry business lost $7 billion in the last year.For the quarter, Intel saw Intel Products revenue of $11.9 billion, up 17% year over year
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Microsoft results top Wall Street targets, driven by AI investment
| 2024-04-25 |
It covers the following details: By Yuvraj Malik, Anna Tong and Stephen Nellis(Reuters) -Microsoft beat Wall Street estimates for third-quarter revenue and profit on Thursday, driven by gains from adoption of artificial intelligence across its cloud services, and the company's shares jumped more than 4% in extended trade.Executives forecast ranges for current quarter cloud revenue that were mostly above Wall Street targets.The rise in Microsoft shares after the bell lifted the company's stock market value by $128 billion as profit and revenue growth overshadowed its higher-than-expected capital expenditures. In contrast, Facebook and Instagram parent Meta's market capitalization fell by $200 billion on Wednesday after it warned of rising AI expenses and issued a lower-than-anticipated revenue forecast."Microsoft’s AI-powered earnings demonstrate that doubling down on innovation is paying off," said Jeremy Goldman, senior director of briefings at Emarketer, pointing to the company's early moves in generative AI, such as its large investment in ChatGPT maker OpenAI.Microsoft revenue rose 17% to $61.9 billion in the quarter ended March, exceeding the consensus estimate of $60.80 billion, according to LSEG data. Earnings per share of $2.94 topped Wall Street's target of $2.82.At the same time, Microsoft's AI-driven capital expenditures in the third quarter were nearly $1 billion more than analysts' estimates. Capital expenditures grew from $11.5 billion in the previous quarter to $14 billion, passing estimates of $13.14 billion, according to Visible Alpha."We're continuing to see customer demand grow quite a bit," Brett Iversen, Microsoft's vice president of investor relations told Reuters. "And so we're making sure to scale our available capacity in line with that."The stock has soared on Microsoft shipping generative AI (genAI) tools based on its strategic partnership with OpenAI and also helped it capture the world's most valuable company crown from Apple this year. Microsoft has special access to OpenAI's coveted AI technologies, which it has been working to infuse across its product portfolio, such as in Azure, Bing and also Microsoft 365, which includes Word, Excel, and Powerpoint.Revenue
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Stock market today: Stocks slide after GDP report prompts inflation, growth concerns
| 2024-04-25 |
It covers the following details: Stocks fell on Thursday aftera sharply lower-than-expected reading on US GDPfor the first quarter ratcheted up questions about the health of the US economy.The Nasdaq Composite (^IXIC) fell about 0.6%. The S&P 500 (^GSPC) lost around 0.5%, while the Dow Jones Industrial Average (^DJI) slipped about 1%, or nearly 400 points. The indexes did recover from steeper losses earlier in the session.US GDP growth came in at a 1.6% annualized pacein the first quarter, a government report said, falling well short of expectations of 2.5%. Meanwhile, an underlying measure of inflation grew by 3.7% in the first quarter, the report showed, above estimates and significantly higher than a 2% gain in the prior quarter. The readings came amid ongoing debate about the path of the Federal Reserve's interest rate campaign.Treasury yields rose after the print, with the benchmark 10-year yield (^TNX) surging to its highest levels of the year before hovering around 4.7%.Meanwhile, Meta (META)shares sank more than 10%as the market balked at rising costs at the Facebook and Instagram owner, which plans to spend up to $10 billion onAI infrastructure investments. Results from other Big Tech companies after the bell on Thursday appeared to calm any concern that Meta's disappointment will be a theme throughout the sector.Shares of Alphabet (GOOG,GOOGL) soared more than 10% in extended trade as the company's results topped Wall Street's expectations. The search giant also announced its first-ever quarterly cash dividend and expanded its stock repurchase program by an additional $70 billion. Meanwhile, Microsoft (MSFT) shares rose as much as 5% after the company topped Wall Street's estimates for both revenue and earnings per share.LIVE COVERAGE IS OVER18 updatesThu, April 25, 2024 at 1:40 PM PDTJosh SchaferMore earnings movers after the bell on ThursdayIntel (INTC) shares sank more than 8% following the market close as the company reported second quarter revenue guidance that disappointed investors. The company expects revenue
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An Often Overlooked Jobs Indicator Points to Deep Cracks in Canada’s Labor Market
| 2024-04-25 |
It covers the following details: (Bloomberg) -- Canada’s job market is less robust than the country’s most closely watched employment indicator suggests.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest CityBig Tech Surges in Late Hours on Blowout Earnings: Markets WrapData from the payroll employme
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Why ServiceNow Stock Was Sliding Today
| 2024-04-25 |
It covers the following details: Shares ofServiceNow(NYSE: NOW)were moving lower today after the software-as-a-service company beat estimates in its first-quarter earnings report but offered revenue guidance for the full year that was slightly below analyst expectations. Additionally, there may be concerns about its valuation getting stretched after the stock had run up in the last several months, so it was easy for a slight miss to prompt a sell-off. As a result, the stock was down 5.1% as of 12:55 p.m. ET.ServiceNow posts a solid first quarterRevenue in the quarter rose 24% to $2.6 billion, which essentially matched estimates at $2.59 billion. Subscription revenue rose 25% to $2.5 billion, and current remaining performance obligations, a reflection of the work that's booked for the next year, were up 21% to $8.45 billion, showing demand remains solid.Image source: Getty Images.ServiceNow also booked eight transactions of more than $5 million in annual contract value, doubling from the quarter a year ago. This shows it was attracting more large contracts and large customers.Operating marginwas up solidly in the quarter as ServiceNow gained leverage in every line item on its income statement. It reported an adjusted operating margin of 30%, up from 26% in the quarter a year ago. Meanwhile, adjusted earnings per share jumped from $2.37 to $3.41, which beat estimates of $3.14.CEO Bill McDermott said the company was off to a fast start in 2024, adding, "As leaders seek significant productivity improvements, ServiceNow has first-mover advantages with years of investment in AI technology and talent."Why ServiceNow stock fellThe company's guidance for the second quarter was decent, calling for subscription revenue growth of 21.5%-22% to $2.525-$2.53 billion, which represented a sequential deceleration from the first quarter and was better than the consensus at $2.45 billion. However, for the full year, the company called for $10.56 billion-$10.57 billion in subscription revenue, up 21.5%-22%, but below the consensus of $10.59 billionIn
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Why Keurig Dr Pepper Stock Popped Today
| 2024-04-25 |
It covers the following details: Shares of coffee and carbonated beverage giantKeurig Dr Pepper(NASDAQ: KDP)popped on Thursday after the company reported soaring profits in its latest quarterly financial report. As of 2:40 p.m. ET, Keurig Dr Pepper stock was up 4% but it had been up almost 7% earlier in the day.Profits are up more than salesKeurig Dr Pepper mostly sells coffeemakers, coffee brewing supplies, and packaged beverages. In the first quarter of 2024, the company's net sales were only up by a modest 3% to $3.5 billion. However, it enjoyed substantial improvements to profits, which is what investors are cheering today.Keurig Dr Pepper'sgross marginexpanded to nearly 56% compared with 52% in the prior-year period. Productivity improvements were partially credited for the increase. And onan adjusted basis, the company's Q1 operating income jumped 17.5% to $825 million.For the year, Keurig Dr Pepper continues to anticipate modest top-line growth. But it hopes its adjusted profits will grow close to 10%. And this profit growth has the stock up today.How is management using profits?Keurig Dr Pepper's management credited itself with buying back more stock than ever during Q1 -- it used $1.1 billion during Q1 alone, which was a record. Management said it was being opportunistic with the stock's valuation. But that's only half the story.The other half is that JAB Holding Company owns a lot of Keurig Dr Pepper stock. And in March, it announced it was divesting 100 million shares. Management, therefore, was buying up these shares to prevent downward pressure on the stock.Granted, Keurig Dr Pepper did get a good deal on these shares at under $30 per share. But JAB has more to sell. Fortunately this doesn't dilute shareholders. But this stock may have more sellers than buyers for a little while as JAB sells.The good news is that Keurig Dr Pepper's profits are ahead of schedule and management is using some to increase its marketing. That might further bolster some sales growth
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Pam sets Dutch auction to buy back shares; battered stock price soars
| 2024-04-25 |
It covers the following details: Pam is buying back about 2.5% of its stock via a Dutch auction. (Photo: Jim Allen/FreightWaves)Pam Transportation, the auto industry-focused truckload carrier whose stock has been battered in the past year and beyond, is buying back some of its shares through a process known as a Dutch auction.Companies buy back their stock frequently but generally do so in a lower-key manner, entering the market as an occasional or frequent buyer operating through the normal processes of the equity markets. Companies often declare their intention to buy back stock over a certain period, but the specifics of those purchases are far less transparent and open-ended than in a Dutch auction.By contrast, Pam(NASDAQ: PTSI)announced the Dutch auction in a press release and in a Securities and Exchange Commission filing Wednesday.If one of the goals of the Dutch auction was to boost the company’s stock price, it was working Thursday. At approximately 1:30 p.m., Pam stock was up $2.97, a gain of 20.43%, to $17.51.Pam’s stock set its 52-week high on June 7, 2023, when it reached $28.77. Its 52-week low was $13.51 on Monday, a decline of 53% since the 52-week high.The stock decline has been more dramatic since its high-water mark of near $40 in November 2022. The percentage decline from the peak to the recent 52-week low is roughly two-thirds.Pam has not paid a dividend since a special one-time payout in 2012.Pam executives are prohibited from discussing the offer while it is in what is known as “quiet time” before an action governed by SEC rules.However, the goals of the auction were set forth in a company filing with the SEC.“Our Board of Directors has determined that the Offer is a prudent use of our financial resources and presents an appropriate balance between meeting the needs of our business and delivering value to our stockholders,” the document said. “Our Board of Directors determined that a cash tender offer is an appropriate mechanism to return capital to stockholders that seek liquidity under current market conditions while, at the same
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Why Carrier Global Stock Is Heading Higher Today
| 2024-04-25 |
It covers the following details: Climate control specialistCarrier Global(NYSE: CARR)reported hotter-than-expected earnings in the quarter. Carrier shares were up 8% as of 2:30 p.m. ET after the company showed clear progress in its campaign to improve profitability.Earnings up in a tough sales environmentCarrier earned $0.62 per share in the quarter, beating Wall Street's consensus estimate by $0.11, despite revenue that at $6.18 billion was about $100 million short of expectations. Strong cost controls led the way, helping Carrier to boost adjusted operating margins by 280 basis points compared to a year prior."We continue to perform while transforming," CEO David Gitlin said in a statement. "We are focused on capitalizing on the long-term secular sustainability trends, outperforming the market, and achieving and accelerating revenue and cost synergies."Carrier also completed its deal for Viessmann Climate Solutions and outlined a plan to pay down its debt to a point where the company hopes to resume share repurchases before year's end.Is Carrier a buy after its earnings report?A wide range ofindustrialcompanies are reporting sluggish demand this quarter, with customers carefully watching the broader economy and thinking twice about large-scale capital investment. Carrier orders in the quarter were down year over year, and the company cut its full-year revenue guidance by $500 million to $26 billion.The good news is the company's efficiency efforts appear to be taking hold, and Carrier is firming up its guidance for a 15.5% operating margin in 2024. Carrier is a work in progress and very much reliant on the health of its end markets, but the company appears to be making the right moves to build for the future.Should you invest $1,000 in Carrier Global right now?Before you buy stock in Carrier Global, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocksfor investors to buy now… and Carrier Global wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Consider whenNvidiamade this list on April 15, 2005... if you invested $
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Why Micron Technology Stock Bucked the Market Downtrend on Thursday
| 2024-04-25 |
It covers the following details: Shares ofMicron Technology(NASDAQ: MU)gained ground on Thursday, climbing as much as 1.1%. While this might not seem like much to celebrate, the gains came against the backdrop of a broader market downturn as theNasdaq Compositelost0.8% and theS&P 500shed 0.6% (as of this writing). As of 1:41 p.m. ET, the stock was still up 0.5%.The catalyst that sent the memory and storage chipmaker higher was word that the company would receive as much as $13 billion in loans and subsidies from the CHIPS Act.An influx of cashThe White House announced on Thursday that Micron would receive grants and loans under the CHIPS and Science Act, a program designed to revitalize thesemiconductorindustry in the U.S. Micron, a leading supplier of memory (DRAM) and storage (NAND) chips, will receive up to $6.1 billion in federal grants to subsidize the construction of two fabrication facilities -- one in Clay, New York, and the other in Boise, Idaho, where Micron is headquartered. In addition to the direct funding, the preliminary agreement also provides $7.5 billion in loans to support these projects.In return for these funds, Micron has agreed to invest up to $125 billion between the two states over the next two decades to "build a leading-edge memory manufacturing ecosystem."In addition to the funds from the CHIPS Act, Micron will benefit from the investment tax credit, which provides a credit of 25% for "qualified capital investments." The state of New York is also offering $5.5 billion in incentives over the life of the project.Micron becomes the fourth chipmaker to receive funds under the program, which has also disbursed $8.5 billion in funds toIntel, $6.6 billion toTaiwan Semiconductor Manufacturing, and $6.4 billion toSamsung.This represents a strategic opportunity for Micron, yet the stock is selling for less than 4x next year's sales. While that's a slight premium, compared to the multiple of 3x for the S&P 500, the broader opportunity makesMicron a buy.
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Why Whirlpool Stock Went Into a Downward Spiral Today
| 2024-04-25 |
It covers the following details: Shares of global consumer appliance companyWhirlpool(NYSE: WHR)sank to 52-week lows on Thursday after the company reported financial results for the first quarter of 2024. As of 1:30 p.m. ET, Whirlpool stock was down almost 12%.Investors don't like Whirlpool's strugglesWhirlpool is facing multiple headwinds. First, the company has a lot of debt. Second, inflation has increased its cost of manufacturing. And third, home-appliance purchases have slowed due to a slow housing market, meaning that management has to lower prices to stimulate sales. This is a bad combination.Whirlpool's Q1 net sales were down everywhere except for Latin America, resulting in a 3% year-over-year drop to $4.5 billion. The company also had ongoingearnings per share(EPS) of $1.78, which were down 33%, reflecting the higher costs coupled with lower-than-ideal selling prices.To reduce costs, Whirlpool is laying off 1,000 workers, according toThe Wall Street Journal. This will reportedly save it $400 million eventually. But investors don't necessarily like layoffs because it's a reminder that the business is struggling. This was also likely on investors' minds today as they gave up on Whirlpool stock.Hope on the horizon?I pointed out ongoing EPS above instead of plain ol' EPS because it is significant in this case. After Q1 ended, Whirlpool completed the sale of its business in Europe. There were one-time expenses with this deal that are impacting numbers this year. But the move is expected to boostfree cash flowlong term.Whirlpool hopes that it can generate around $1.2 billion in free cash flow in 2026 and beyond as a result of the moves it's making today. Considering its market cap is only at $5 billion today, the stock could be quite the bargain if it executes over the next couple of years.However, investors need to maintain a level head when evaluating the opportunity with Whirlpool stock. Management said that inflation in Q1 was "sticky" and that efforts to address its costs were "slower than anticipated." Both statements suggest that things aren't quite going to plan right
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Merck Stock Gains On Its Blockbuster Cancer Drug Keytruda, Raises Annual Outlook
| 2024-04-25 |
It covers the following details: Merck Stock Gains On Its Blockbuster Cancer Drug Keytruda, Raises Annual OutlookOn Thursday, U.S. drug makerMerck & Co Inc(NYSE:MRK) reported first-quarter sales of $15.8 billion, up 9% year-over-year, beating theconsensus estimate of $15.2 billion.Excluding the impact of foreign exchange, sales increased 24%.Merck reported adjusted EPS of $2.07, up 48%Y/Y, beating theconsensus of $1.88.Merck’s pharmaceutical unit booked $14.01 billion in revenue during the first quarter, up 10% Y/Y.Related:Merck’s $11B Bet Pays As FDA Approves Sotatercept For Rare Lung Disease.Merck’s blockbuster cancer immunotherapy Keytruda largely drove the growth. Keytruda generated $6.95 billion in revenue during the quarter, up 20% from the year-earlier period.Merck has become dependent on Keytruda for more than 40% of company sales and faces a revenue hit when Keytruda’s main U.S. patent expires in 2028.Merck also reported a 14% jump in sales of Gardasil to $2.25 billion, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S.Merck’s Januvia drew $670 million in sales, down 24%, primarily due to lower drug pricing, falling demand in the U.S., and generic competition in several international markets.Januvia is one of 10 drugs targeted in ongoingMedicare drug price negotiations.Guidance:Merck raised and narrowed its full-year 2024 revenue and adjusted earnings forecasts.The company now expects 2024 sales of $63.1 billion-$64.3 billion, up from previous guidance of $62.7 to $64.2 billion compared to the consensus of $63.82 billion.The company expects 2024 adjusted EPS of $8.53-$8.6
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Why Impinj Stock Is Soaring Today
| 2024-04-25 |
It covers the following details: Shares ofImpinj(NASDAQ: PI)skyrocketed on Thursday. On the heels of an impressive earnings report, the stock traded 27.9% higher at 1:25 p.m. ET, reaching a fresh all-time high.Impinj's Q1 by the numbersYour average Wall Street analyst expected Impinj to reportadjusted earningsnear $0.11 per diluted share in the first quarter, based on top-line revenue around $73.6 million. Instead, the maker of radio frequency ID (RFID) asset-tracking tags and related systems delivered $0.21 of earnings per share on $76.8 million in sales.Impinj's management set second-quarter guidance targets far ahead of the Street's current consensus projections. The analyst view points to next-quarter earnings of roughly $0.19 per share and sales in the neighborhood of $79 million. The midpoint of the company's official target ranges stop at $0.75 per share and $97 million, respectively.CEO Chris Diorio highlighted strong RFID tag sales in the apparel and general merchandise portions of the retail sector."We see continued strength looking into the second quarter," Diorio said on the earnings call. "Looking further out, we see growing opportunities to drive recurring licensing and services revenue, monetizing our [intellectual property] platform and cloud services."Measuring the retail market's recovery with RFID tagsDiorio expects the first-quarter strength to translate into a broad surge in RFID demand. In other words, this earnings surprise could be the start of a sustained growth spurt, rather than a unique single-quarter boost.In turn, robust Impinj results should point to healthier business trends inthe retail sector as a whole. Two large customers are accelerating their RFID-tracking installations. Of course, nobody knows exactly what the global economy will look like by the holidays or in 2025, but large retailers are willing to bet big money on an upturn in the foreseeable future.Should you invest $1,000 in Impinj right now?Before you buy stock in Impinj, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the
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S&P; Global (SPGI) Q1 2024 Earnings Call Transcript
| 2024-04-25 |
It covers the following details: Image source: The Motley Fool.S&P Global(NYSE: SPGI)Q1 2024 Earnings CallApr 25, 2024,8:30 a.m. ETContents:Prepared RemarksQuestions and AnswersCall ParticipantsPrepared Remarks:OperatorGood morning, and welcome to S& P Global's first quarter 2024 earnings conference call. I'd like to inform you that this call is being recorded for broadcast. All participants are in a listen-only mode. We will open the conference to questions and answers after the presentation and instruction will follow at that time.To access the webcast and slides, go to investor.spglobal.com. [Operator instructions] I would now like to introduce Mr. Mark Grant, senior vice president of investor relations for S&P Global. Sir, you may begin.Mark Grant--Senior Vice President, Investor RelationsGood morning and thank you for joining today's S&P Global first quarter 2024 earnings call. Presenting on today's call are Doug Peterson, president and chief executive officer; and Chris Craig, interim chief financial officer. For the Q&A portion of today's call, we will also be joined by Adam Kansler, president of S&P Global Market Intelligence; and Martina Cheung, president of S&P Global Ratings. We issued a press release with our results earlier today.In addition, we have posted a supplemental slide deck with additional information on our results and guidance. If you need a copy of the release and financial schedules, or the supplemental deck, they can be downloaded at investor.spglobal.com. The matters discussed in today's conference call, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections estimates and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements.Should you invest $1,000 in S&P Global right now?Before you buy stock in S&P Global, consider this:TheMotley Fool Stock Advisoranalyst team just identified what they believe are the10 best stocks
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Why Microsoft, Amazon, Alphabet, and Other "Magnificent Seven" Stocks Crashed on Thursday
| 2024-04-25 |
It covers the following details: The biggest driver of headlines across the technology sector over the past year or so has been the proliferation ofartificial intelligence(AI). Many of the world's biggest companies see a vast opportunity resulting from AI and are investing accordingly to stake their claim in the AI revolution. What some investors weren't prepared for, however, is the level of spending necessary to reap the windfall that AI is expected to unleash over the next few years.With that as a backdrop,Microsoft(NASDAQ: MSFT)slumped 3.4%,Amazon(NASDAQ: AMZN)was off 2.5%, andAlphabet(NASDAQ: GOOGL)(NASDAQ: GOOGL)fell 2.2%, as of 1:05 p.m. ET on Thursday.To be clear, there was very little company-specific news driving these so-called "Magnificent Seven" stocks lower today (more on that in a bit). This supports the conclusion that investors are reacting to the quarterly results reported byMeta Platforms(NASDAQ: META)and what it means for other big players in the AI space.Image source: Getty Images.You have to spend money to make moneyMeta Platforms released its first-quarter report after the market closed on Wednesday, and while the results were better than expected, there was one revelation that caught investors off guard.The company reported revenue of $36.4 billion, up 27% year over year. Expenses advanced at a more modest pace, growing just 6%. This benefited operating margins, which surged to 38%, up from 25% in the year-ago quarter. This also helped expand Meta's profits, as earnings per share (EPS) of $4.71 soared 114%.The results easily surpassed expectations, as analysts' consensus estimates forecast revenue of $36.14 billion and EPS of $4.32. However, it was an update to the company's full-year spending plans that sent the stock reeling.Like its Magnificent Seven counterparts, Meta has been at the forefront of generative AI, eager to earn its part of the trillions of dollars the technology is expected to generate over the coming decade or so. However, "there ain
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Why Honeywell Stock Is Under Pressure Today
| 2024-04-25 |
It covers the following details: Honeywell International(NASDAQ: HON)delivered a solid quarter, but the company's guidance suggests investors might have to wait for growth. Shares of the industrial conglomerate traded down as much as 3% post-earnings, and were down slightly as of 1 p.m. ET on Thursday.Strength in part of the businessHoneywell, a manufacturer ofindustrial,aerospace, and automation products, earned $2.25 per share in the first quarter on revenue of $9.11 billion. That's ahead of Wall Street's expectations for $2.17 per share in earnings on sales of $9.03 billion.Operating margin improved by 130 basis points year over year to 20.4% thanks to strength in commercial aviation, defense, and space. Honeywell's backlog of future business grew by 6% to $32 billion.But sales in more economically sensitive areas including industrial automation were down, a reflection of customers being unwilling to commit to new spending at a time when the health of the economy seems uncertain.CEO Vimal Kapur said Honeywell is experiencing "pockets of recovery" in these so-called short-cycle businesses and is expecting "broader participation as the year unfolds and channels normalize."The question is how soon that recovery will come. Honeywell expects to earn between $2.25 and $2.35 per share in the current quarter, implying some potential downside to Wall Street's $2.35 consensus estimate.Is Honeywell a buy following its earnings report?Honeywell has underperformed the market for several years now as we wait for both the long- and short-cycle parts of the business to take off. That day is coming, but it appears it could be more of a story in the second half of 2024 than something we will see this quarter.In the meantime, the company continues to deploy its cash for bolt-on acquisitions as well as dividends and share repurchases, offering shareholders a 2.25% yield at current prices while they wait for a recovery. Long-term investors who buy in today are likely to be rewarded over time.Should you invest $1,000 in Honeywell International right now?Before you buy stock in Honey
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Meta’s Zuckerberg can't calm Wall Street’s nerves on AI spending, stock falls 10%
| 2024-04-25 |
It covers the following details: Meta stock (META) fell more than 10% on Thursday after CEO Mark Zuckerberg revealed that the social media company is pouring more cash into its AI efforts, spooking investors.The CEO, however, tried to assuage investor concerns about the company’s spending during Wednesday’s earnings call, noting that Meta has made similar moves when transitioning to other new technologies in the past.“We've historically seen a lot of volatility in our stock during this phase of our product playbook, where we're investing in scaling a new product but aren't yet monetizing it. We saw this with Reels, Stories, as Newsfeed transitioned to mobile, and more,” Zuckerberg said.But he also admitted that it will likely take years before Meta turns a profit on its AI investments. In January, Zuckerbergannounced via an Instagram postthat Meta will purchase some 350,000 Nvidia H100 AI chips by the end of the year. While Nvidia doesn’t release the exact price of its data center chips, estimates indicate they cost anywhere between $20,000 and $40,000 apiece. That would put Meta’s estimated costs well into the billions of dollars.Meta CEO Mark Zuckerberg delivers a speech, as the letters AI for artificial intelligence appear on screen, at the Meta Connect event at the company's headquarters in Menlo Park, Calif., Sept. 27, 2023. REUTERS/Carlos Barria/File Photo(REUTERS / Reuters)Meta CFO Susan Li backed up Zuckerberg’s statements in her earnings note commentary, raising the company's full-year total expenses estimate from a range of between $94 billion and $99 billion to between $96 billion and $99 billion due to higher infrastructure and legal costs. Li said that the company’s investments will also increase in the years ahead."While we are not providing guidance for years beyond 2024, we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts," Li said.While Wall Street’s early reaction to Zuckerberg’s comments may have turned off some investors, experts say the investments will likely pay off in the long run more than, say,
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IBM's Stock Got a Big, Blue Bruise Today
| 2024-04-25 |
It covers the following details: Shares ofIBM(NYSE: IBM)took a hard hit on Thursday, following the release of first-quarter results and the announcement of a $6.4 billion acquisition in thecloud computingspace. The results were solid enough, but IBM investors wanted a stronger artificial intelligence (AI) push. As a result, IBM shares traded 9.6% lower at noon ET.IBM's busy dayLet's start with the earnings report. First-quarter sales rose 1.5% year over year, landing at $14.5 billion. That's a rounding error away from the consensus analyst projection of $14.6 billion. On the bottom line, adjusted earnings increased by 24% to $1.68 per diluted share. Here, your average analyst would have settled for $1.60 per share. All in all, that's a solid print.Management doubled down on the full-year financial forecast it provided three months ago. As a reminder, that means single-digit revenue growth with free cash flow of roughly $12 billion in 2024 as a whole.Meanwhile, IBM is buyingHashiCorpfor $35 per share, an all-cash deal with an enterprise value of $6.4 billion. HashiCorp specializes in monitoring and automation of cloud computing operations across multiple cloud platforms. Expected to close before the end of the year, the deal has been approved by both companies' boards of directors but still needs the usual range of regulatory and shareholder approvals.IBM expects HashiCorp's services to unlock synergies with its hybrid cloud computing platforms, built around the $34 billion Red Hat buyout in 2019.Buy the news?Big Blue's market cap lost more than $14 billion of value on Thursday, or more than double HashiCorp's price tag. HashiCorp's stock only gained roughly 5% today, butthe stock jumped more than 20% two days agoas the rumor mill started speculating about an IBM deal.In the end, Wall Street saw the potential HashiCorp acquisition coming and the announcement wasn't much of a surprise. And as you saw earlier, the earnings report was robust. Yet, IBM's stock price plunged today.The price drop makes sense for two reasons
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Mortgage rates are a ‘wild card’ in the housing market—and they’re edging closer to 8%
| 2024-04-25 |
It covers the following details: For a while, it seemed as thoughmortgage ratestraveled to the back of everyone’s mind. They’d fallen below 7%, and something about a mortgage rate that begins with a six appealed to people, even though it was still more than double pandemic-era rates.But for the first time all year, last week, mortgage ratessurpassed7%. And today, Freddie Mac’sweekly readingshowed that the 30-year fixed rate mortgage just hit 7.17%. (Daily mortgage rates are trending higher: 7.52%, as of thelatest reading.) But as you can see, they’ve reemerged at the forefront of the housing conversation on the back of sticky inflation and interest-rate cuts that are further away—and as we know, mortgage rates are somewhat of a game changer in the housing world.“Mortgage rates continue to be a wild card, and although they topped 7% for the first time in 2024 last week, they are in territory that was charted last fall when rates approached 8%,” Realtor.com’s chief economist, Danielle Hale, wrote in aweekly housing market report.Whether or not that means mortgage rates will top 8% again, we’re close to that more than two-decade high seen in October last year. The effect of that could be felt soon, if not already. “So far, sellers continue to put homes on the market more frequently than last year, but mortgage rates could cause a pullback in this figure as nearly three-quarters of potential sellers are also trying to buy a home,” Hale wrote.By Realtor.com’s weekly measure, new listings are up from a year earlier, and so is active inventory. But according to Redfin’smonthly update, new listings slowed in March, dropping 6% on a monthly basis, which happens to be the largest decline in about two years. They are higher than last year, but rose at a much slower pace compared to Febuary’s 14% annual gain. Active listings rose 1% in March from the previous month, the smallest increase since the end of summer.“New listings may have slowed because mortgage rates are staying higher longer than expected, which is exacerbating the lock-in effect,” Redfin
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Private Credit Market Sees One of the Cheapest Loans as Competition Intensifies
| 2024-04-25 |
It covers the following details: (Bloomberg) -- EQT AB is tapping a group of direct lenders for around $1 billion of debt to help finance its acquisition of Avetta LLC at one of the cheapest rates seen in the private credit market, according to people with knowledge of the matter.Most Read from BloombergUS Economy Slows and Inflation Jumps, Damping Soft-Landing HopesJavier Milei Fuels Wild Rally That Makes Peso No. 1 in WorldPlunging Home Prices, Fleeing Companies: Austin’s Glow Is FadingMalaysia in Talks With Tycoons on Casino
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Southwest Airlines reports news that sends its stock plunging
| 2024-04-25 |
It covers the following details: Nothing will spook investorsquite likea large posted loss, lowered growth forecasts andforced cutsto expansion plans and jobs.At an Aril 25 earnings call, Southwest Airlines(LUV)announced awider-than-expected lossof $231 million, or 39 cents a share, in the first three months of 2024 and a lowered growth capacity of 4% instead of the 6% it announced last year. Year-over-year, the airline’s loss sits at $159 million.Related: Spirit lost a staggering amount of money during the summer periodNone of this was good for company stock which fumbled nearly 10% at the time the news was announced and was down 7.67% at $27 as of Thursday afternoon.Southwest Airlines has not had a profitable quarter in 2024.Image source: Kevin Dietsch/Getty ImagesThis is how much money Southwest Airlines lost last quarter“While it is disappointing to incur a first-quarter loss, we exited the quarter with healthy profits and margins in the month of March,” chief executive Bob Jordan said in a statement on the earnings.More Travel:A new travel term is taking over the internet (and reaching airlines and hotels)The 10 best airline stocks to buy nowAirlines see a new kind of traveler at the front of the planeTo get back onto the path of profitability and “reaching financial goals,” Southwest announced that it would be laying off more than 2,000 employees ranging from pilots to airport ground staff and ceasing operations at four airports across the country entirely — New York’s Syracuse, Washington’s Bellingham, Houston’s George Bush International Airport and Cozumel Airport in Mexico.The airline also blamed some of its problems with further growth on the fact that production issues with Boeing 737 Max 8(BA)planes mean that it can expect to only get 20 planes instead of the 46 it had initially hoped for in the near future — this, in turn, will prevent Southwest from running many of the routes it had as part of its growth plans.‘Achieving our financial needs is an immediate imperative’“Achieving our financial goals is an immediate imperative," Jordan said further. "
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Here is What is Happening in Markets: April 25
| 2024-04-25 |
It covers the following details: ETF Investing ToolsMarkets are in the red to kick off the trading day on Thursday after the Commerce Department reported that the economy had slowed.Gross domestic product (GDP) grew 1.6% in the first quarter, the Bureau of Economic AnalysisreportedThursday, less than the 2.2% economists hadforecast. The growth rate was a sharp slowdown from the last quarter of 2023, when the U.S. economy grew by 3.4%.As markets slipped, broad index ETFs also fell. SPY, theSPDR S&P 500 ETF Trustfell 1.2% after the open while DIA, theSPDR Dow Jones Industrial Average ETF Trustlost 1.6%. According to etf.com data, SPY was one of the most active ETFs on Thursday with a trading volume of nearly 15 million as markets dipped.Bond yields jumped Thursday as investors digested the data about a weakening economy. Yields have an inverse relationship to prices and as bond prices fell, TLT, theiShares 20+ Year Treasury Bond ETFalso slipped, falling nearly 1% in midmorning trading. Fixed income traders have been on a rollercoaster ride in 2024 as investors questioned whether the Fed would cut interest rates—and when.BND, theVanguard Total Bond Market ETFand AGG, theiShares Core U.S. Aggregate Bond ETFwere also under pressure on Thursday. Both funds invest in the wider bond market.Slowing economic growth would typically be good news for investors betting on rate cuts. If the economy starts the weaken, the belief is that the Fed will cut rates to help stimulate economic growth. But personal consumption expenditures (PCE) rose 3.4% in the first quarter, compared to a 1.8% jump in the last quarter of 2023.The acceleration in PCE—the Fed's preferred inflation gauge—highlights persistent and stubborn levels of inflation. With inflation here to stay, today's report torpedoed investor hopes that rate cuts were coming any time soon.According to the CME Fed Watch Tool, investors aren't expecting rate cuts until September.The tech-heavy Nasdaq was also in the red after
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Wall Street plunges after US inflation shock
| 2024-04-25 |
It covers the following details: US stocks have fallen heavily on Wall Street amid worries about the timing of interest rate cuts - AP Photo/Mary AltafferUS stock markets plunged amid fears of stagflation in the American economy, which grew at its slowest pace in nearly two years just as inflation jumped.Shares on Wall Street plummeted as official figures showed US GDP grew less than expected in the first three months of the year.The growth of 1.6pc was behind forecasts for 2.5pc and came as separate data indicated that inflation picked up at a faster pace than predicted.The core PCE prices index, which is closely watched by the Federal Reserve, rose to 3.7pc during the first quarter, ahead of analyst expectations of 3.4pc.As a result, traders pushed back their expectations for the first interest rate cut by the US Federal Reserve, which is now priced in to happen by December rather than November.Ian Lyngen at BMO Capital Markets warned that “stagflation chatter will surely pick up in the wake of these figures”.US stock markets had already been expected to begin the day lower after Metarevealed plans to increase spending on artificial intelligence(AI) technology, spooking investors seeking returns.The Dow Jones Industrial Average plunged by 1.3pc after the opening bell to 37,977.20 while the S&P 500 fell 1.4pc to 5,000.05.The tech-heavy Nasdaq Composite was the worst effected, falling by 2.2pc to 15,360.15, as more than $190bn (£152bn) was wiped off the value of Meta.The FTSE 100 has been unaffected by the tech sell-off due to its heavy focus towards the financial sector and commodities, and remains 0.1pc higher despite the US economic data.06:28 PM BSTSigning offThat’s all from us today! See you again first thing tomorrow.06:26 PM BSTWPP hit by slump in tech ad spendingWPP has posted a decline in revenue over the first quarter as the advertising giant was hit by lower spending by tech companies and the loss of major client Pfizer.The London-listed company posted revenues of £2
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Microsoft-backed Rubrik's stock jumps 21% in NYSE debut
| 2024-04-25 |
It covers the following details: (Reuters) -Rubrik's shares climbed nearly 21% in their debut on the New York Stock Exchange on Thursday, giving the Microsoft-backed cybersecurity firm a valuation of $6.77 billion.The startup joins a list of companies that have seen strong debuts recently as initial public offerings (IPOs) bounce back on hopes of a soft landing for the economy, where inflation falls without a recession or big job losses.The rapid adoption of cloud applications for data storage and transfer has left businesses vulnerable to malicious attacks via the internet and boosted the appeal of cybersecurity firms.Palo Alto, California-based Rubrik provides data security solutions to more than 6,100 customers including appliance maker Whirlpool, snacks and beverages giant PepsiCo and investment bank Goldman Sachs.Initially named ScaleData, Rubrik competes with data management and protection vendors including Cohesity, Commvault, Veeam, IBM and Dell EMC.The company's stock opened at $38.6, higher than the $32 IPO price, and were last trading at $37. Rubrik raised $752 million in the IPO.The strong debut comes against the backdrop of weakness in the broader equities market. The Russell 2000 Index, which measures the performance of small-cap U.S. equities, has dropped nearly 7% so far this month.Rubrik was founded in late 2013, but only began offering products and services in the fiscal year ended Jan. 31, 2016. It is led by co-founder and CEO Bipul Sinha, who is also a venture partner at Silicon Valley's technology investment firm Lightspeed Venture Partners.Microsoft made an equity investment in Rubrik in 2021 in a financing round that valued the startup at $4 billion. Venture capital firms Greylock Partners and Lightspeed have also backed the company.The IPO was underwritten by a syndicate of more than a dozen banks including Goldman Sachs, Barclays, Citigroup and Wells Fargo Securities.
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Why O'Reilly Automotive Stock Sank Today
| 2024-04-25 |
It covers the following details: Shares of auto parts retailerO'Reilly Automotive(NASDAQ: ORLY)sank on Thursday after the company reported financial results for the first quarter of 2024. As of noon ET, O'Reilly stock was down 4% but it had been down as much as 8% earlier in the day.A good quarter for O'Reilly despite the negative reaction from investorsI readily admit that the negative reaction to O'Reilly's financial results from investors is a head-scratcher. Many headlines say that O'Reilly stock is down because of disappointment regarding its profit outlook. However, the company raised its outlook for profits today. Therefore, that explanation doesn't seem to hold water.To be clear, the numbers looked good for O'Reilly. The company's sales increased 7% year over year to nearly $4 billion, bolstered by strongsame-store salesgrowth of over 3%. Moreover, itsnet incomewas up 6% to $547 million.Granted, one might nitpick O'Reilly because its sales increased more than its profits in Q1, meaning its profit margin went down. But the company still had a Q1 profit margin of almost 14%, which is nothing to sneeze at.What should investors do now?O'Reilly is one of the very best auto parts retailers and the business is fine. However, investors might want to consider its valuation today before buying shares. The company expects about $2 billion in free cash flow this year, meaning it trades at about 31 times this year's free cash flow. As the chart below shows, that's high compared to its 10-year average.ORLY Price to Free Cash Flow ChartO'Reilly routinely buys back its stock with profits to boost shareholder value. Its share count is down about 24% over the last five years. In coming quarters, management will keep repurchasing shares as it's done in the past. But when the stock trades at a higher valuation, like it does right now, those repurchases aren't quite as effective.For shareholders, there's no reason to worry about O'Reilly's business -- it's doing well. But some investors might want to wait on the sidelines before starting a position, waiting for a better val
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