Good morning. Happy Friday.
The Asian/Pacific markets leaned to the upside. China, Hong Kong and Singapore did well; Australia and the Philippines were weak. Europe, Africa and the Middle East lean to the downside. Turkey is up, but Denmark, Greece, Norway, Hungary and Austria are down. Futures in the States point towards a moderate gap up open for the cash market.
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The dollar is down. Oil is unchanged; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Time to tweak
It’s already been a big week for the world’s biggest central banks, but the Bank of Japan had to get in on the action after a further round of rate hikes in the U.S. and Europe. The BOJ has remained an outlier on the world stage in the face of historic inflation, maintaining an easy monetary policy stance with its so-called Yield Curve Control. In fact, it’s the only prominent central bank to still keep rates in negative territory, but signs of creeping price pressures, impacts on its balance sheet, and side effects of prolonged easing – like the weakening of the yen – mean the institution cannot continue down this path indefinitely.
Path toward normalization: The BOJ already widened its bands last December, allowing Japan’s 10-year bond yields to rise to around 0.5%, or double the previous upper limit. Building on the steps, the central bank today kept the target for 10-year JGB yields at around 0%, but said its 0.5% ceiling on yield movements was now a “reference” and “not a rigid limit.” It will also offer to purchase Japanese government bonds in fixed-rate operations, effectively setting a new hard cap for the 10-year yield at 1%.
“Yield curve control is a dangerous policy which needs to be retired as soon as possible,” said Kit Juckes, chief FX strategist at Societe Generale. “By anchoring JGB yields at a time when other major central banks have been raising rates, it has been a major factor in the yen reaching its lowest level, in real terms, since the 1970s. So, the BOJ wants to very carefully dismantle YCC, and the yen will rally as slowly as they do so. For the moment, that means there is little upside to USD/JPY, but the fall from here is also likely to be very slow, until the global trend in bond yields turns decisively lower.”
Market movement: The timing of the tweak makes sense as things stabilize following the regional banking crisis in the U.S., while the end of an aggressive hiking cycle can also be seen on the horizon. Markets still had a hard time deciding on direction overnight, with the Nikkei 225 Index (NKY:IND) slumping to a session low of as much as 2.6%, before finishing the day down 0.5%. The yen (USD:JPY) was also volatile on the news, fluctuating between ¥138.6 and ¥140.4 against the dollar, while the benchmark 10-year JGB bond yield jumped to 0.575% – the highest level since September 2014 – before easing back.
Doing just fine
The U.S. economy is showing further resilience as GDP grew at a 2.4% annualized rate in Q2, almost a full percentage point stronger than the 1.5% expected. The growth was driven by robust consumer and business spending, while durable goods orders separately showed the fourth straight month of growth. A soft landing may be turning into the base case for strategists, but for those looking to hedge stock longs, BofA explains why it’s never been cheaper to buy protection. Meanwhile, BofA’s quant team detailed how every one of its stock screens has performed so far in 2023. See the list of five best and worst strategies. (214 comments)
More capital
U.S. regulators have jointly proposed to increase capital requirements for banks with more than $100B of assets, in the so-called “Basel III endgame.” The changes will likely result in a 16% increase in common equity tier 1 capital requirements for the affected companies, with the increase principally affecting the largest and most complex banks. Global systemically important institutions including Bank of America (BAC) and JPMorgan (JPM) would still be subject to the strictest standards, while the new proposal aims to strengthen regulation of large regional lenders such as KeyCorp (KEY), Huntington Bancshares (HBAN), and Regions Financial (RF). (77 comments)
Cold reception
While the IPO market has staged a comeback after a downturn that lasted more than a year, Surf Air Mobility’s (SRFM) weak trading debut showed that investors are picky about the companies they are willing to back. After setting a reference price at $20, shares of Surf Air started trading yesterday at $5, before ending the session 37% lower at $3.15 per share. Investors were likely wary of buying into the first direct listing of 2023 as Surf Air previously flagged substantial doubt about its ability to continue as a going concern, while Investing Group Leader Donovan Jones also cautioned against investing in the electric aviation and regional air travel company.
Today’s Economic Calendar
8:30 Personal Income and Outlays
8:30 Employment Cost Index
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
3:00 PM Farm Prices
What else is happening…
Ford (F) rallies after hiking guidance, setting lofty EV targets.
Airline turbulence: Southwest’s (LUV) cost outlook rattles traders.
AB InBev (BUD) fires U.S. corporate staff as Bud Light sales slump.
McDonald’s (MCD) easily tops comparable sales estimates in all regions.
… will also launch new store format based on the CosMc character.
Inside Intel (INTC): Revenue decline halts in key consumer, AI segments.
Enphase Energy (ENPH) takes a tumble on weak sales guidance.
Vale (VALE) to sell 13% of base metals unit in two deals totaling $3.4B.
Roku (ROKU) soars with Q2 revenue, losses beating expectations.
Earnings watch: Exxon Mobil (XOM), Chevron (CVX) to report today.
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Good morning. Happy Thursday.
The Asian/Pacific markets leaned to the upside. Japan, Hong Kong, South Korea, Australia, Singapore and Thailand did well, while India and Indonesia were weak. Europe, Africa and the Middle East are doing great. Finland and Portugal are down, but France, Turkey, Germany, Switzerland, Spain, the Netherlands, Italy and the Czech Republic are posting solid gains. Futures in the States point towards a relatively big gap up open for the cash market.
————— Online Course: Jason Leavitt’s Masterclass in Trading —————
The dollar is down slightly. Oil is up 1%; copper is up slightly. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Cancel the recession
The Federal Reserve pushed interest rates to a 22-year high on Wednesday, with another 25 bps move that’ll bring its key rate to 5.25%-5.50%. It’s not enough for the central bank to declare victory on historic inflation just yet, but it sure looks like markets are charting their next steps, with the CPI now down to 3% (from a high of over 9% seen last summer). Not much changed in the new FOMC statement, and while Fed Chair Jay Powell did continue to voice caution in the accompanying press conference, he did shift his tone especially with regards to the outlook for the U.S. economy.
Turning the corner: “The staff [economists from the central bank] now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession… My base case is that we will be able to achieve inflation moving back to our target without the kind of really significant downturn that results in high levels of job losses that we’ve seen in some past, many past instances… The Federal Funds Rate is at a restrictive level now, so if we see inflation coming down, credibly, sustainably, then we don’t need to be at a restrictive level anymore… You’d stop raising [rates] long before you got to 2% inflation and you’d start cutting before you got to 2% inflation, too.”
Following the news, the Dow Jones Industrial Average (DJI) notched its 13th consecutive advance, marking its biggest winning streak since the 1980s, and if it closes higher today, it would be its longest positive run since 1897. The latest U.S. GDP number for the second quarter will also be published this morning at 8:30 AM ET. Expectations are for growth to have slowed to a 1.5% annualized rate vs. growth of 2.0% in Q1, though that’s a far cry from many economic forecasts that initially predicted a deep recession to already have taken hold by the middle of 2023.
SA commentary: “The Fed appears to be on track for a soft landing,” wrote analyst Komal Sarwar in a new article covering the Invesco NASDAQ 100 ETF (QQQM). “The current bull market is supported by strong economic fundamentals, corporate outlook, and investor sentiment, with sectors such as technology, consumer cyclical, and communications showing particularly strong results.” The S&P 500 (SP500) has “gained about 4% since earnings season began almost two weeks ago, with 75% of companies outperforming expectations, according to FactSet data.” (8 comments)
Meta rebound
Meta Platforms (META) jumped 8% AH on Wednesday after posting Q2 earnings that easily beat expectations. The report echoed an online advertising recovery signaled by rival Alphabet (GOOG, GOOGL) and Meta guided for Q3 revenue above estimates. As with other tech companies, Meta’s earnings call focused largely on AI, and while CEO Mark Zuckerberg previously said 2023 would be a “year of efficiency,” overall expenses in Q2 grew 10%. Investing Group Leader Livy Investment Research said the results continue to show the company’s progress in turning a corner, though Growth at a Good Price believes Meta may not rapidly catch up with its steep valuation. (52 comments)
Russian roulette
With Urals crude (URDB:COM) trading at or above $60 for more than two weeks, the U.S. government will likely reach out to Western allies to remind them to adhere to the price cap on Russian oil exports by ship. Enforcement will likely take place quietly out of fear that harsh public measures could upend energy markets. Compounding worries in the West, Moscow is increasingly relying on smaller trading firms to export crude to Asia, and while this does not violate sanctions, it could hinder tracking Russian oil transactions. Elsewhere, NATO will boost surveillance in the Black Sea region, including with maritime patrol aircraft, amid escalating tensions after Russia pulled out of a key grain deal. (1 comment)
Freight in focus
Yellow Corporation (YELL) dropped 26% to $0.76/share before the bell as the beleaguered trucker could file for bankruptcy protection this week. It follows a cash crunch that forced Yellow to miss union payments and a hemorrhaging of customers as a union dispute forced it to limit pick-ups. The exodus could drive up pricing in the trucking sector, which is already facing low freight rates and weak demand. Yellow’s customers include large retailers such as Home Depot (HD) and Walmart (WMT) and others that have paused cargo shipments out of fear that goods could be lost if the company goes bankrupt. (1 comment)
Today’s Economic Calendar
8:30 Durable Goods
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 GDP Q2
8:30 Initial Jobless Claims
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $35B, 7-Year Note Auction
4:30 PM Fed Balance Sheet
What else is happening…
Amazon (AMZN) could face antitrust lawsuit from FTC next week.
Justice Dept, EPA investigate telecom firms over lead cables.
Boeing (BA) hits 52-week high after reporting narrower loss.
XPeng (XPEV) soars as Volkswagen (OTCPK:VLKAF) buys in.
Coca-Cola (KO) rallies amid strong Q2 show, guidance hike.
Union Pacific (UNP) jumps 10% after naming new CEO.
Chipotle (CMG) slides on rare comparable sales miss.
Insider watch: Salesforce (CRM) top executives sell stock.
Mastercard (MA) to end marijuana purchases on debit cards.
Amazon (AMZN): ‘Thousands’ of AWS clients trying out new AI tools.
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Good morning. Happy Wednesday. Happy Fed Day.
The Asian/Pacific markets leaned to the upside. India, Australia, Malaysia, Indonesia and Singapore led, while Hong Kong and South Korea posted losses. Europe, Africa and the Middle East are mostly down big. Portugal and Israel are doing well, but the UK, Denmark, Poland, France, Germany, Finland, Switzerland, Norway, Hungary, the Netherlands, Austria and Sweden are down. Futures in the States point towards a slight positive open for the cash market.
————— Online Course: Jason Leavitt’s Masterclass in Trading —————
The dollar is down. Oil and copper are down; Gold is up; silver is flat. Bonds are up.
Stories/News from Seeking Alpha…
Sooner or later
The Federal Reserve’s policy-setting arm is widely expected to boost its key rate by 25 basis points today as the central bank slows its pace of tightening. What comes next is up for debate, but Fed Chair Jerome Powell offered some insight into his thinking at last month’s FOMC press conference, and could do so again this afternoon at 2:30 PM ET.
Flashback to June: “It’s sort of standard thinking that monetary policy affects economic activity with ‘long and variable lags.’ Of course, these days, financial conditions begin to tighten well in advance of actual rate hikes. So if you look back when we were lifting off, we started talking about lifting off – by the time we had lifted off, the two-year [interest rate], which is a pretty good estimate of where [monetary] policy is going, had gone from 20 basis points to 200 basis points. So in that sense, tightening happens much sooner than it used to in a world where news was in newspapers and not, you know, on the wire. So that’s different.”
“But it’s still the case that what you see is interest-sensitive spending is affected very, very quickly – so housing, and durable goods, and things like that. But broader demand, and spending, and asset values, and things like that – they just take longer. And you can pretty much find research to support whatever answer you would like on that. So there’s not any certainty or agreement in the profession on how long it takes… it’s one of the main reasons why it makes sense to go at a slightly more moderate pace.”
Any changes to this view today will be closely watched by the markets, which will be hanging on to each one of Powell’s words. Trading in fed funds futures anticipates that the Fed will stop raising rates after this meeting, with a 55.6% probability that the federal funds rate range will hold at 5.25%-5.50% for the rest of the year, according to the CME FedWatch Tool. There’s also a 31.9% chance that the FOMC will increase again by 25 bps, and some are betting the rate will rise to 5.75%-6.00%, giving that outcome a 4.8% probability. By contrast, the median dot on the FOMC’s dot plot expects the rate to rise to 5.6% by year-end.
SA commentary: “The data points to extraordinary resilience in the U.S. consumer and economy, suggesting a soft landing is increasingly likely, and this is likely the last hike in a brutal Fed hiking cycle,” writes SA analyst Christopher Robb. “One reason that the Fed is likely to continue hiking is the desire to avoid the “stop and go” policy mistakes from the 1970s and early 1980s,” counters Logan Kane. “This is a valid concern. Then, inflation came in several waves, and after each wave, the Fed would ease up, only for inflation to come roaring back.” (5 comments)
AI costs
Despite quarterly results that topped expectations, Microsoft (MSFT) fell 3.7% AH on Tuesday as it forecast aggressive AI spending that will weigh on its bottom line in the near term. Capital expenditures are expected to increase sequentially each quarter as Microsoft ramps up investments in its cloud infrastructure amid strong AI demand. “Growth from our AI services will be gradual as Azure AI scales and our copilots reach general availability dates,” CFO Amy Hood declared, adding that the impact will be weighted towards H2 FY24. SA Investing Group Leaders also discussed the results, with Michael Wiggins De Oliveira saying much of the news was already priced in, while Bohdan Kucheriavyi warned against accumulating a long position at current levels. (92 comments)
Accelerating growth
Thanks in part to strong advertising from Google Search, Alphabet (GOOG, GOOGL) gained around 7% AH following a Q2 earnings report that beat top and bottom line expectations. The tech giant also expanded the role of Ruth Porat as the company seeks a CFO successor, and she reiterated that the focus is still on growing expenses slower than revenue in 2024. Those tuning in to the earnings call heard Alphabet’s No. 1 innovation priority, and referenced “our continued leadership in AI,” while Investing Group Leader Jonathan Weber was quick to laud Alphabet’s successful margin turnaround following the results. (56 comments)
Stronger together
The latest bank consolidation will see regional lender Banc of California (BANC) acquire PacWest (PACW) in an all-stock deal. The merger comes after PacWest, which took the spotlight during the regional bank crisis, disposed of certain assets to shore up its balance sheet. News of the merger, which will result in a combined company with ~$36.1B in assets, helped push PACW up 32% before the bell today, while BANC rose 11%. Separately, PacWest posted weak Q2 results hurt by losses on loan sales, while Banc of California’s earnings were largely in line with expectations. (127 comments)
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 New Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $24B, 2-Year FRN Auction
2:00 PM FOMC Announcement
2:30 PM Chairman Press Conference
What else is happening…
UPS (UPS) signs tentative deal with Teamsters to avoid costly strike.
Snap (SNAP) slides 17% on gloomy forecast amid platform rehaul.
Ad business, AI to be catalysts for Meta’s (META) Q2 earnings.
Wells Fargo (WFC) raises dividend, authorizes $30B buyback.
RTX (RTX) plunges after disclosing Pratt & Whitney engine defect.
Dish (DISH) to sell mobile service on Amazon (AMZN) by end of week.
Historic tightening: UBS looks back at three ways the Fed ‘messed up.’
Teladoc (TDOC) climbs 6% as improved margins drive Q2 earnings beat.
Magellan (MMP) CEO is confident that sale to Oneok (OKE) will prevail.
Visa, 3M, GE and GM earnings discussed on Wall Street Lunch podcast.
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Good morning. Happy Tuesday.
The Asian/Pacific markets did very well. China, Hong Kong, South Korea, Taiwan, Malaysia and Singapore did great; New Zealand closed down. Europe, Africa and the Middle East currently lean to the upside. Russia, Greece, South Africa, Finland, the Netherlands, Sweden and Saudi Arabi are up; Denmark, Turkey and Israel are down. Futures in the States point towards a slight positive open for the cash market.
————— Online Course: Jason Leavitt’s Masterclass in Trading —————
The dollar is up. Oil is down; copper is up, Gold is down; silver is up. Bonds are down.
Stories/News from Seeking Alpha…
Earnings intelligence
Market participants are shifting their focus to Big Tech as earnings season goes into overdrive with some of the biggest names in the industry set to publish Q2 results. On tap for today are earnings from Google (GOOG, GOOGL) and Microsoft (MSFT), which will report after the bell, as well as quarterly numbers from Meta Platforms (META) on Wednesday. The stocks are also part of the “Magnificent Seven,” which has led the big stock rally this year, as well as the Nasdaq 100 (NDX), which just underwent a “special rebalance” due to overconcentration.
What to watch: Artificial intelligence is likely to be the buzzword during post-earnings conference calls, which could further boost sentiment about future revenues. Microsoft, which spearheaded the AI frenzy with its multi-billion-dollar backing of ChatGPT-maker OpenAI, will especially be on watch, though eyes will also be on Google’s AI developments. Signs of cooling inflation and the end of a Fed hiking cycle have also benefited the biggest names in tech and helped propel the market rebound in 2023.
Other parts of the tech titans’ businesses will also go under the microscope. Investors will be paying attention to whether growth will bounce back at Microsoft’s Azure cloud computing unit, as well as PC demand and its Windows and Office businesses. Over at Alphabet, Search and YouTube will be on the radar, which will provide a snapshot of online ad spending. Meanwhile, better monetization will be the focus at Meta, with stats and user numbers surrounding social platforms Facebook, Instagram, WhatsApp and the newly released Threads.
SA commentary: “Well-known large-cap names (NFLX, TSLA) sold off hard last week, and I think the same will occur with some of the names here,” wrote Investing Group Leader David Lerner, outlining a list of stocks of interest this week. “I am not sure this theme will remain throughout earnings season… but if one or two names do sell off, they could be mighty good opportunities. There are still a lot of money managers that haven’t participated in this rally and many of them are hoping for a chance. There are also trillions in money markets and as interest rates settle down, they should go lower… this will pull in more funds to stocks.” (13 comments)
Climate action
The Biden administration may expand its crackdown on household appliances and items with a proposed rule aimed at making residential water heaters more efficient. New standards would require many electric water heaters to achieve efficiency gains by using heat pumps, while gas-fired water heaters would be required to make improvements through condensing technology. It follows a series of related measures from the Department of Energy, including the rolling out of new efficiency standards for central AC units, proposed limits on washing machines and dishwashers, and the banning of incandescent lightbulbs in favor of LEDs. Climate action was also discussed in yesterday’s WSB survey. If you haven’t taken the poll, you can still do so here, or add your investing views on the subject in the comments section. (105 comments)
Tupperware party
There might be a new meme stock in the making. Tupperware (TUP) shares soared 75% yesterday to $1.58 – notching their best session on record – following sky-high volume and heightened interest in the survivability of the consumer products company. Some are even asking if the latest movement could mirror the rally of used-car retailer Carvana (CVNA), which is up 900% YTD and was also once thought to be on the brink of bankruptcy. Shorts could be put to the test if things continue, with short interest on TUP over 23% of the total float. In April, Tupperware’s board actively engaged with management to improve the company’s capital structure and near-term liquidity, and also engaged financial advisors and partners to assist in securing supplemental financing, among other measures. (13 comments)
Grain attacks
U.S. wheat futures on the Chicago Board of Trade are on watch again after surging by their daily maximum on Monday. Russia attacked Ukrainian ports and grain infrastructure on the Danube River, expanding its air campaign that began last week after it pulled out of the Black Sea Grain Initiative. Three warehouses were reportedly destroyed in the port of Reni by Russian drones, which continue to pound Ukrainian food export ports almost daily. Corn and soybeans followed wheat futures higher, with outlooks for hot weather in the U.S. crop belt adding support, while the EU’s monitoring service further reduced its crop yield forecasts for this year’s harvest. (1 comment)
Today’s Economic Calendar
FOMC meeting begins
9:00 S&P CoreLogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg. Index
1:00 PM Results of $43B, 5-Year Note Auction
1:00 PM Money Supply
What else is happening…
IPO Roundup: Surf Air Mobility (SRFM), Opti-Harvest (OPHV) and more.
UBS (UBS) to pay $387M to settle Credit Suisse’s Archegos missteps.
Apple (AAPL) said to keep shipments of next iPhone in line with prior model.
Negotiations continue as FedEx (FDX) pilots reject labor agreement.
Brief filed asking Supreme Court to OK Mountain Valley Pipeline.
Gasoline futures return to October highs after Exxon (XOM) refinery outage.
Disinflation could become a headwind – Morgan Stanley.
J.P. Morgan bear Marko Kolanovic spies an AI bubble.
Spotify (SPOT) sinks after announcing increase in U.S. premium prices.
Report: Adobe (ADBE) won’t offer EU remedies over Figma deal.
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. Japan, South Korea, New Zealand and Malaysia did well; China, Hong Kong and India were weak. Europe, Africa and the Middle East are currently mixed. Poland, Turkey, the UAE and Russia are up; Denmark, France, Spain and Israel are down. Futures in the States point towards a positive open for the cash market.
————— Online Course: Jason Leavitt’s Masterclass in Trading —————
The dollar is up. Oil is up; copper is down, Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Fueling the future
Delegates from most of the world’s largest economies met in Goa, India, over the weekend to discuss the energy transition as extreme heat takes hold in many areas across the globe. The G20 Energy Transitions Working Group Meeting was intended to set tone and strategy, and while there were some points of agreement, the summit ended without any consensus on phasing out fossil fuels. Investors in energy and renewables are especially taking note ahead of a gathering of G20 leaders in September and the COP28 forum in December.
Snapshot: Greenhouse gases like carbon dioxide, methane and nitrous oxide continue to reach new record highs, while increasing temperatures, a loss of biodiversity and extreme weather events are said to be growing in intensity. It doesn’t help that much fossil fuel manufacturing usage is being outsourced to developing nations, where deregulation of environmental protections has been used to advance their economies. This can even be seen among countries that are powering the green revolution, like nickel smelting for EV batteries, with further criticism being leveled at the sustainable commitments of some of the world’s most profitable companies.
Many nations are also attempting to shore up their domestic fuel stockpiles as Russia’s war in Ukraine and geopolitical tensions elsewhere threaten to weaponize energy supplies. The U.S. Senate last week voted to block China from purchasing oil from the Strategic Petroleum Reserve, while U.S. Energy Secretary Jennifer Granholm reiterated calls for additional supplies as “it gets dangerous when the prices are so high.” At the same time, the American government has plowed billions of dollars in subsidies and tax breaks into businesses involved in electric vehicle technology and the energy transition, but other countries may not be able to finance such initiatives or those priorities, and that makes finding a consensus quite complicated.
Outcome statement: “Given that fossil fuels currently continue to play a significant role in the global energy mix, eradication of energy poverty, and in meeting the growing energy demand, the importance of making efforts towards phase down of unabated fossil fuels, in line with different national circumstances was emphasized by some members.” The gathering also failed to set a specific global goal for renewable energy development, and there was also disagreement about the effectiveness of carbon capture technologies. To note, G20 countries account for more than three-quarters of global emissions and world’s gross domestic product. Take the WSB survey.
Meet ‘X’
When Elon Musk bought Twitter, he aimed to monetize the platform through three separate strategies: advertising, subscriptions, and becoming an “everything app.” The initial months following his acquisition focused on the first two plans of action, but the latter is now kicking into high gear. In a series of tweets and retweets, Elon Musk said he would ditch the Twitter bird by rebranding to “X,” with the future of the app focusing on audio/video, messaging, and payments/banking, as well as creating a global marketplace for ideas, goods and services that are powered by AI. As Meta Platforms (NASDAQ:META) and others look to take away market share from the Musk-owned entity, will Mark Zuckerberg follow up on “Twitter-killer Threads” with a new pivot into the Everythingverse? (16 comments)
Valuations are justified
Stock valuations tend to have a tough time in a rising rate environment, but Goldman Sachs says there are three good reasons why that is not the case currently. The S&P 500 (SP500) (NYSEARCA:SPY) (IVV) (NYSEARCA:VOO) P/E has risen to 20x from 18x since the start of April, while the 10-year Treasury yield (US10Y) (NYSEARCA:TBT) (NASDAQ:TLT) has risen more than 30 basis points. “Our rates strategists expect that progress on a soft landing and our economists view for no Fed cuts until 2Q 2024 will lift the nominal 10-year UST yield to 3.9% at year-end before dipping to 3.75% in 2024,” strategist David Kostin wrote in a note. “The key upside risks to our baseline valuation forecast are that the multiples of laggards ‘catch up’ or that bond yields fall.” (4 comments)
Talk about a blowout
“Barbenheimer” weekend was great for the box office, with two blockbuster films that resulted in the strongest weekend of 2023 for theaters in North America. It also led to the fourth-biggest weekend ever in the U.S., according to Comscore, as well as the only weekend in the top 10 of all-time that didn’t include a movie from Jurassic Park, Marvel or Star Wars franchises. Warner Bros. Pictures’ (NASDAQ:WBD) Barbie grossed $155M in the U.S. and Canada, while Universal Pictures’ (NASDAQ:CMCSA) Oppenheimer brought in $80.5M domestically between Friday and Sunday. It’s also a big cause of celebration for Hollywood, which is experiencing a double strike by both actors and writers, as well as theater stocks like AMC (NYSE:AMC), Cinemark (NYSE:CNK), Cineplex (OTCPK:CPXGF) and IMAX (IMAX). (10 comments)
Today’s Economic Calendar
8:30 Chicago Fed National Activity Index
9:45 PMI Composite Flash
1:00 PM Results of $42B, 2-Year Note Auction
What else is happening…
Biggest stock movers today: AMC (AMC), POSCO (PKX) and more.
Chevron (CVX) waives mandatory retirement age for CEO Mike Wirth.
Who’s next? Western companies on alert after asset seizures by Russia.
Inside Amex (AXP), Capital One (COF), Discover (DFS): Credit quality metrics.
GM (GM), Ford (F) revving up for solid results: Earnings preview.
Which crypto do asset managers see as the most compelling growth outlook?
Restaurant earnings are coming – watch these stocks.
Microsoft’s (MSFT) generative AI push could cause a revenue ‘tidal wave.’
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