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Should you buy Nvidia stock now? It may be a once-in-a-generation opportunity
| 2024-10-21 |
It covers the following details: Nvidiahas been one of the most hyped and closely followed stocks in recent memory as the fortunes of the broader market increasingly hinge on the AI chip leader.At one point this year, the stock accounted formore than a third of the S&P 500's gains, and some investors even heldwatch parties for Nvidia's earnings release.Nvidia's astronomical run to a$3 trillion companyhas also been somewhat divisive as many on Wall Street havedoubted that the stock can sustain further gainswhile others see the AI boom fueling more upside.That's left investors asking, "Should I buy Nvidia stock right now, or sell it?"Analysts atBank of Americahave an answer: In a note on Thursday, they reiterated their buy rating on Nvidia stock and raised their price target to $190 from $165, implying it could soar 38% higher from Friday's closing price.At $190 a share, Nvidia's market cap would also explode to $4.7 trillion, from $3.4 trillion today.In fact, BofA is so bullish on Nvidia stock that analysts called it a "generational opportunity," estimating a total addressable market of more than $400 billion for AI accelerators."AI models (demand) continue to evolve, with the cadence of new LLM model launches now increased to 3-5 times/yr per developer (OpenAI,Google, Meta, etc.), and each new major generation requiring 10-20x compute requirement to train," analysts said.Their confidence in Nvidia has been boosted by others in the chip sector like Taiwan Semiconductor and ASML, which both recently signaled strong AI demand. BofA's meetings with executives atBroadcomand Micron as well as comments fromAMDhave yielded similar indications.Meanwhile, Nvidia CEO Jensen Huang also touted huge demand for the company's next-generation AI chip.“Blackwell is in full production. Blackwell is as planned, and the demand for Blackwell is insane,”he told CNBCearlier this month. “Everybody wants to have the most, and everybody wants to be first.”Adding to BofA
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Nvidia stock is in beast mode again!
| 2024-10-21 |
It covers the following details: This is The Takeaway from today's Morning Brief, which you cansign upto receive in your inbox every morning along with:The chart of the dayWhat we're watchingWhat we're readingEconomic data releases and earningsI have never been one to have a cluttered desk at work.To me, everything has a place. Awesome desk organization, awesome outcomes, is how my head works.But I broke this rule slightly by the close of trading on Friday. Going forward, I will have a paper cutout of Nvidia (NVDA) CEO Jensen Huang in his trademark leather jacket thumbtacked to the wallboard (see pic below). And I'll tell you why.For one full day this week I forgot to check Nvidia's stock price my usual 10 times a day — only checking in five times. I let myself (and you all) down because, in the blink of an eye, Nvidia's stock went from a quick sell-off from the Monday record highs back to those same highs come the end of the week.I missed it!The stock is up 13% in October, dusting the 1.4% gain for the S&P 500. AMD's (AMD) stock isdownby 5% this month, similar to Intel (INTC).So Jensen's face on my desk is a reminder to check in with Nvidia's stock price and fundamentals numerous times a day. And to ask everyone I encounter about Nvidia, even people not in the chip space (as I did at one annual CEO dinner this week hosted by ServiceNow's (NOW) CEO Bill McDermott).Nvidia CEO Jensen Huang visits my NYC desk.(Brian Sozzi)Here's what I was reminded of by recommitting to an Nvidia obsession: Something insanely bad from a company-specific perspective will be the only thing taking this market darling down for any prolonged period of time. To be honest with you, I don't see where that insanely bad stuff would sprout from over the next few quarters.Neither do the array of plugged-in characters I chat up each week."I don't think when you get to Nvidia, there is any hype at all. I have known Jensen for
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1 Stock to Buy, 1 Stock to Sell This Week: GE Aerospace, UPS
| 2024-10-21 |
It covers the following details: Jobless claims, Fed speakers, Q3 earnings will be in focus this week.GE Aerospace is a buy with upbeat profit and sales growth expected.UPS is a sell with weak earnings, soft guidance on deck.Looking for more actionable trade ideas to navigate the current market volatility?Unlock access to InvestingPro for less than $8 a month!U.S. stocks closed higher on Friday to cap off their sixth winning week in a row, with the S&P 500 and Dow Jones Industrial Average rallying to new records.For the week, the benchmark S&P 500 rose 0.9%, the blue-chip Dow climbed 1%, and the tech-heavy Nasdaq Composite gained 0.8%.Source: Investing.comThe week ahead is expected to be an eventful one as investors assess the outlook for the economy, inflation, interest rates and corporate earnings.Most important on the economic calendar will be Thursday morning's release of initial jobless claims figures at 8:30AM ET, as well as a pair of flash PMI surveys.That will be accompanied by a heavy slate of Fed speakers, with the likes of district governors Neel Kashkari, Lorie Logan, Mary Daly, and Patrick Harker all set to make public appearances during the week.Weekly Economic EventsSource: Investing.comSome 88% of market participants expect the Federal Open Market Committee to cut its benchmark interest rate by 25 basis points at its November 7 policy meeting, while nearly 12% expect no change, according to Investing.com’s Fed Monitor Tool.Meanwhile, third-quarter earnings season shifts into high gear, with reports expected from several high-profile companies, including Tesla (NASDAQ:TSLA), IBM (NYSE:IBM), and Boeing (NYSE:BA).Some of the other notable reporters include United Parcel Service (NYSE:UPS), Coca-Cola (NYSE:KO), General Motors (NYSE:GM), AT&T (NYSE:T), Verizon (NYSE:VZ), GE Aerospace (NYSE:GE), 3M (NYSE:MMM), Honeywell (NASDAQ:HON), Lockheed Martin (NYSE:LMT),
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Stanley Druckenmiller offers bold view on stocks, election
| 2024-10-21 |
It covers the following details: With the presidential election in less than three weeks, you may be wondering about the impact the result will have on stocks.To some extent, the election outcome doesn’t matter. The S&P 500 has risen in 39 of the past 50 years, generating an average annual return of 11.9%, including dividends.🐂Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter🐻So, if history repeats itself, stocks should do well for whoever wins the presidency. To be sure, the market has done better with Democratic presidents than Republican ones.According to Ned Davis Research, from 1901 to 2024, the Dow Jones Industrial Average climbed an annualized 8.2% under Democratic presidents and 3.2% under Republican administrations.Perhaps that means Democratic presidents have implemented superior economic policy compared to Republicans. But it seems likely to me that much of the difference is random.What Congress means for stocksThe makeup of Congress shows the opposite result. With a Democratic-controlled Congress, the DJIA has gained an annualized 1.1% when adjusted for inflation. However, with a Republican Congress, the increase is 6.5%.Again, I think the results are more random than a reflection of the superior economic policy passed by GOP-led Congresses.Looking at the current market environment, some experts say a Trump victory has already been priced into the strong stock market. They think he would implement business-friendly policies that are good for stocks.Related: Major Wall Street firm lays out extreme possibility for S&P 500 in 2025The betting odds of Trump becoming president have risen to 56%, according to data from several sources cited by JPMorgan Chase.Meanwhile, the odds of a GOP majority in the Senate have risen above 80%, and the odds of a Democratic House have slid from over 60% to around 55%.JPMorgan’s take on the election, stocks“The rising probability of a Republican sweep is seen in the market moves over the past two weeks,” Nikolaos Panigirtzoglou, managing director for global market strategy at JPMorgan, wrote in a commentary.Those moves include stronger stocks, particularly bank stocks, a stronger dollar
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Bank of America Predicts up to ~390% Surge for These 2 ‘Strong Buy’ Stocks
| 2024-10-21 |
It covers the following details: We’re well into Q4, and investors are positioning their portfolios for the coming year. As always, the key is identifying stocks poised to deliver solid returns, and Bank of America has highlighted strong choices for those seeking high-growth opportunities.BofA’s analysts aren’t limiting their focus to just one part of the market; they are looking across sectors at a diverse group of stocks – and they are looking ‘under the hood’ to find shares that are ready to jump.With that in mind, we turned to theTipRanks databaseto review two of Bank of America’s latest stock picks, both of which present strong upside — including one with a potential gain of nearly 390%.In fact, the banking giant isn’t the only one backing these names; both stocks are rated as ‘Strong Buys’ by the broader analyst consensus. Let’s take a closer look and find out what the optimism is all about.Werewolf Therapeutics(HOWL)We’ll begin in the world of biotherapeutics, where Werewolf Therapeutics is developing new immunotherapy drugs specifically designed to reduce the common and severe side effects often associated with cancer treatment. The company has created a proprietary development platform, known as PREDATOR, to engineer conditionally activated molecules that stimulate both the adaptive and innate functions of the immune system. With this approach, Werewolf has successfully advanced two drug candidates into clinical trials.Both products are INDUKINE molecules, a proprietary development, and are designed to selectively activate in tumor tissues while remaining inactive in peripheral tissues, a feature intended to reduce the occurrence of unwanted off-target effects while maximizing the anti-tumor immune response. Werewolf’s goal is to create anti-cancer drugs with higher tolerability levels than existing treatments.Werewolf’s lead drug candidate, WTX-124, is being developed to treat solid tumors and is under investigation as both a monotherapy and in combination with Keytruda. The company is enrolling patients in a Phase 1 open-label, multicenter study – a first-in-human trial of the drug. At the ASCO Annual Meeting in June 2024, the company shared new interim results from the monotherapy dose-escalation arm, along with early
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How investors are betting on the election, from utility stocks to DJT
| 2024-10-21 |
It covers the following details: Investors are ramping up their bets on the U.S. presidential election.Financial advisers caution against making any major investment decisions related to an election—and history shows that the market consequences of a certain candidate’s or party’s victory are unpredictable.Most Read from The Wall Street JournalElectric Motors Are About to Get a Major Upgrade Thanks to Benjamin FranklinHow College Students Beat Boeing in a Battle to Take Down DronesIt’s Time to Bring 401(k)s Into the 21st CenturyBoeing, Union Reach Wage Deal to End StrikeDoes Everything in Your Blue Bin Really Get Recycled? You Would Be Surprised“When Trump was elected, expectations were that technology would underperform and financials and energy would outperform,” said Nancy Tengler, chief executive of Laffer Tengler Investments. “The exact opposite was true.”That isn’t stopping investors from trying to get an edge. Here are some of the ways they are trying to profit from—or hedge against—the outcome.Prediction marketsBetting markets that let people wager on election outcomes aren’t new. Arecent court rulinglegalized them in the U.S.Prediction markets such as Kalshi and Interactive Brokers’ ForecastEx let investors purchase contracts that pay out about $1 if a chosen candidate wins, or nothing if the bet is wrong. Contract prices fluctuate based on demand and the perceived odds of a candidate’s winning.Some prediction markets have shifted sharply in favor of former President Donald Trump since the beginning of October, when they showed the presidential race was nearly deadlocked. On Polymarket, a platform that isn’t open to Americans, a contract that pays out if Trump wins cost around 60 cents on Friday, compared with 40 cents for Vice President Kamala Harris.In theory, betting markets offer a real-time look at election-outcome expectations, with real money on the line. But a recent flurry of wagers among four big accounts on Polymarket are raising questions aboutwho is behind them.Thelatest pollsshow the two candidates are nearly deadlocked in the key swing states that will decide the election.DJT sharesShares of Trump Media & Technology Group, the Trump-backed parent company of Truth Social, have been a volatile playground for traders who are trying to predict the outcome
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Amazon, Tesla and more earnings, AI conferences, and economic data: What to watch in the markets this week
| 2024-10-21 |
It covers the following details: After a week of positive momentum driven by robust economic growth, investors are gearing up for a moderately active week ahead. The upcoming days will feature a mix of key conferences, corporate earnings reports, and a handful of macroeconomic data releases, each holding the potential to influence market sentiment. Let’s take a closer look at what this new week has in store for investors.Amazon, American Airlines, and more earningsInvestors can expect a wave of major earnings announcements this week, with several industry giants set to report their quarterly results.On Tuesday, companies including Verizon (VZ), Spotify (SPOT), and General Motors (GM) will release their earnings reports, setting the tone for the week.Wednesday brings a slew of high-profile earnings, with Tesla (TSLA), Coca-Cola (KO), and IBM (IBM) among the companies scheduled to announce their results. Additionally, telecommunications leaders AT&T (T) (TBC) and T-Mobile (TMUS) will report on Wednesday, along with aerospace giant Boeing (BA).The earnings season continues on Thursday, with Amazon (AMZN), Hyundai (HYMLF), Capital One (COF), and UPS (UPS) set to release their financial updates. Investors will also hear from Dow Inc., Nasdaq Inc., and S&P Global Inc., while American Airlines (AAL) is expected to provide its latest earnings report that same day.Macroeconomic data to watchOn the macroeconomic front, there are no major data releases scheduled for this week. However, a few reports will still provide insight into the current economic landscape.On Wednesday, the existing home sales report will be published, offering a look at the housing market’s performance. The Federal Reserve will also release its Beige Book, a comprehensive summary of economic conditions across the 12 Federal Reserve Districts, which may provide hints about the central bank’s outlook on inflation, employment, and overall growth.Thursday will bring data on initial jobless claims, giving a snapshot of the labor market’s health, along with the release of new home sales figures, which will further highlight trends in the housing sector.The week will wrap up on Friday with the release of the consumer sentiment report for October, shedding light on consumer confidence and spending behavior.Important conferences this weekThis week brings
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Stocks Go from Oversold to Overbought – What a Year!
| 2024-10-21 |
It covers the following details: At MAPsignals we study the Big Money flows.One way we do it is with the Big Money Index (BMI). The BMI is produced by our proprietary data and algorithms. They identify Big Money signals. The BMI is a 25-day moving average of those signals netted, with the ultimate output being a ratio of buys to sells.When the BMI is between 0% and 25%, selling is rampant. These rare periods don’t last long and tend to precede broad market rallies. It’s one of the most powerful risk-on signals you’ll find.At the other extreme, a BMI above 80% means we’ve entered a period of runaway buying. Periods like this can last longer – 22 days on average, but sometimes 80 days or more – and come before pullbacks.Stocks Go from Oversold to Overbought – What a Year!One year ago, extreme oversold conditions ignited a rally for the ages. Today, stocks are in the rare overbought zone.Stocks go from oversold to overbought – what a year!For those keeping score, both the S&P 500 (represented by the exchange-traded fund SPDR S&P 500 ETF Trust (SPY)) and Nasdaq 100 (represented by the Invesco QQQ Trust (QQQ)) are both up 35% since.But now stocks are overbought. Since 2018, the BMI has produced seven oversold readings and 10 overbought readings:The BMI has gone from oversold (point seven above) to overbought for a second time (point 10 above) in a year. Again, the market rose 35% in that time.When The Tide Goes Out, Equity Prices FallBut what happens now?Once the BMI drops – and it will eventually – dips tend to occur:It’s simple: when the tide goes out, equity prices fall.In fact, large- and small-cap stocks (represented by the iShares Core S&P Small-Cap ETF (IJR)) are negative on average up to two months after the BMI leaves overbought territory:The chart above will come in handy
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Tesla and Boeing may rock markets this week
| 2024-10-21 |
It covers the following details: Stocks ended Friday with what seemed like a slow day, even though the Standard & Poor's 500 Index and the Dow Jones Industrial Average both closed at new highs.The S&P 500 was up just 0.4% to nearly 5,865, and the Dow added just 0.09%, all of 36 points, to finish at 43,276. The Nasdaq Composite Index rose 0.6% to 18,490. It wasn't a new high, though Nvidia(NVDA)did hit a new high.Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletterInvestors seem ecstatic. There are projections that the S&P 500 will rise to at least 6,200, a 5.7% gain from 5,865 now. It would mean a 30% gain for the year, the biggest since 1997. There are bullish calls on the Nasdaq and on tech stocks overall.The major averages closed higher for a sixth straight week on Friday. In theory, the markets could make a run at the record for the number of weekly gains.Related: Veteran trader has sharp words for Fed on interest rate cutsThat was nine weeks between the end of October 2023 and the end of trading in 2023, and another nine-week stretch ended in January 2004.A big week for earningsThe pieces in place suggest a seventh week of gains is possible:The third-quarter earnings season is about to hit its heaviest few weeks.The big macro trends are favorable:Job growth looks steady.Oil prices are sliding in spite of all the Middle East tensions.Gasoline prices are moving lower.Rising mortgage rates are keeping home sales in check for now.All 11 S&P 500 sectors are solidly ahead on the year. Real estate is up 11.5%, partly because the Federal Reserve is expected to continue cutting rates. The leaders: Information Technology, up 33%; Utilities, up 29%; Communications Services, up 28.3%; and Financials, up 26.5%.Related: Stanley Druckenmiller makes a stunning
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Tesla, Amazon — even Boeing — will move markets this week
| 2024-10-21 |
It covers the following details: Stocks ended Friday with what seemed like a slow day, even though the Standard & Poor's 500 Index and the Dow Jones Industrial Average both closed at new highs.The S&P 500 was up just 0.4% to nearly 5,865, and the Dow added just 0.09%, all of 36 points, to finish at 43,276. The Nasdaq Composite Index rose 0.6% to 18,490. It wasn't a new high, though Nvidia(NVDA)did hit a new high.Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletterInvestors seem ecstatic. There are projections that the S&P 500 will rise to at least 6,200, a 5.7% gain from 5,865 now. It would mean a 30% gain for the year, the biggest since 1997. There are bullish calls on the Nasdaq and on tech stocks overall.The major averages closed higher for a sixth straight week on Friday. In theory, the markets could make a run at the record for the number of weekly gains.Related: Veteran trader has sharp words for Fed on interest rate cutsThat was nine weeks between the end of October 2023 and the end of trading in 2023, and another nine-week stretch ended in January 2004.A big week for earningsThe pieces in place suggest a seventh week of gains is possible:The third-quarter earnings season is about to hit its heaviest few weeks.The big macro trends are favorable:Job growth looks steady.Oil prices are sliding in spite of all the Middle East tensions.Gasoline prices are moving lower.Rising mortgage rates are keeping home sales in check for now.All 11 S&P 500 sectors are solidly ahead on the year. Real estate is up 11.5%, partly because the Federal Reserve is expected to continue cutting rates. The leaders: Information Technology, up 33%; Utilities, up 29%; Communications Services, up 28.3%; and Financials, up 26.5%.Related: Stanley Druckenmiller makes a stunning
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Here's where investors worried about a stock market bubble should put their money, according to a top economist
| 2024-10-21 |
It covers the following details: The stock market bubble today looks different from those of the past.Drew Angerer / GettyInvestors worried about a market correction should adjust their portfolios, David Rosenberg says.The top economist has warned stocks are in a bubble and at risk of a major decline.He advised investors to pay attention to key sectors and add "insurance" to their portfolios.A number of Wall Street forecasters have been warning of a stock bubble as the market climbs to a series of fresh highs in 2024 — and investors worried about such a scenario should be putting their money in a handful of assets to protect themselves from the eventual bursting.That's according to David Rosenberg, a top economist and the founder of Rosenberg Research, who's been warning of apotential craash in stocksfor months. In the past, he's warned of a39% correction to stocks, among the more extreme predictions on Wall Street, where most investors are feeling optimistic about a soft landing amid a robust economy and easing interest rates."Watching the market these days is like watching a clown blowing up a balloon (or Chuck Prince dancing the ballroom), knowing the inevitable," Rosenberg said in a note to clients on Friday. "When this mega-bubble pops, it will be spectacular."Investors need to exercise caution and avoid following the "herd mentality," Rosenberg said, pointing to the fervor for mega-cap tech stocks. Instead, he said, investors should focus on stocks with strong business models, strong growth, and good prices, and add some "insurance" to their portfolios.Below are his top investment ideas for to prepare for the potential bursting of a market bubble.Healthcare and consumer staplesInvestors should gear their investments towards what people will always need in the future. In particular, Rosenberg recommended that investors pay attention to options in the healtcare and consumer staples sectors."Focus on where people are going to focus on what they need, not what they want," Rosenberg wrote. "Anything related to e- commerce, cloud services, and wiring up your home to become your new office has been in a budding secular growth phase."UtilitiesUtility stocksalso look promising. Other forecasters have predictedhuge upside for utility firms, due to the growing need for power and data centers stem
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The relentless stock market rally could pull off another shocker
| 2024-10-21 |
It covers the following details: The stock market stunned Wall Street last year with a massive gain, and it could top that this year with an even bigger surge.Helped by a U.S. economy that remained strong despite widespread predictions for a recession as well as a dovish shift in tone from the Federal Reserve last fall, the S&P 500 jumped 24% in 2023.Only a handful of Wall Street analysts expected a rally of that magnitude, leading to skepticism that another huge leap was possible in 2024. In fact, JPMorgan predictedthe S&P 500 would drop sharplythis year. Meanwhile,Morgan Stanleyexpected anaverage yearwith returns in the single digits, not a repeat of double-digit gains.Fast forward to today, and the S&P 500 is already up 23% so far in 2024, nearly matching last year's advance. That's despite the Fed beginning its rate-cutting cycle later than hoped and with fewer cuts anticipated for the year.Instead of being fueled by Fed rate cuts, the stock market rally has had other catalysts: the economy has continued to defy expectations with its robustness, corporate earnings have come in strong, and the AI boom still has legs.In recent weeks, Wall Street has been warming up to the idea of another big gain. Earlier this month, Goldman Sachs chief U.S. equity strategist David Kostin saidthe S&P 500 would hit 6,000 by the end of the yearand 6,300 a year from now. That was up from Goldman’s earlier predictions that the S&P 500 would reach 5,600 by year’s end and 6,000 over the next 12 months.If the broad stock market index hits that target, it would represent an increase of 26% for the year.Jay Hatfield, CEO at Infrastructure Capital Advisors, has been saying for months that the S&P 500 would end the year at 6,000. That assumes the U.S. election produces a divided government, which is more likely to lead to stable regulatory policy and lower government spending, he reiterated in a recent note.And on Friday, Sandra Cho, founder and president
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Nvidia to win the race to $4 trillion market cap, experts say
| 2024-10-21 |
It covers the following details: Buy the dip.That was the mindset around chip stocks last week as investors scooped up beaten-down shares, sending Nvidia (NVDA) to a record high. Astrong outlookfor Taiwan Semiconductor (TSM) was enough to revive Wall Street’s enthusiasm for artificial intelligence as growing confidence in the AI boom overshadowed chip supplierASML’s sluggish forecastand reports ofexport capsof advanced AI chips to some Middle Eastern countries.Nvidia closed the week above $138 per share, bringing its market value to $3.39 trillion. The stock was trading a touch higher, up 0.2%, in Monday's premarket trading.It’s now the world's second-largest company behind Apple (AAPL). But that might not be for long. Experts I spoke with this past week say there’s growing confidence the chip giant will be the first Big Tech firm to reach a $4 trillion valuation.“There's no question about it,” Ram Ahluwalia, Lumida Wealth Management CEO, told me on Yahoo Finance’sCatalysts(video above). “The demand for GPU chips is strong, and you're seeing early adopters starting to get some ROI.”Nvidia CEOJensen Huangfueled the stock’s rally earlier this month after describing demand for the new Blackwell chips as “insane.”Even amid the stock’s dramatic outperformance, T. Rowe Price portfolio manager Tony Wangtold meinvestors still “continuously underestimate” Nvidia’s growth potential. He sees “exceptional” demand for AI making it “definitely possible” that the chip giant crosses that $4 trillion threshold first.In the coming weeks, earnings from fellow "Magnificent Seven" companies will give investors better insight into Nvidia’s market dominance. Meta (META), Amazon (AMZN), Alphabet (GOOG,GOOGL), and Microsoft (MSFT), which account for more than 40% of the chipmaker’s revenue, have all pledged to continue investing in AI.Last quarter, spending by Meta, Alphabet, and Microsoft totaled more than $40 billion, while Amazon said spending in the second half of the year will likely surpass the $30 billion spent during
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Cathie Wood unloads $10.5 million in surging fintech stock
| 2024-10-21 |
It covers the following details: Cathie Wood, fund manager of Ark Invest, one of the most closely followed asset managers, often seizes the opportunity to lock in gains if one of her stocks surges.That’s exactly what she did this week.Investors and analysts are split on Cathie Wood, arguably the most famous investor after Warren Buffett, the legendary billionaire behind Berkshire Hathaway.Supporters hail her as a tech visionary, while critics argue she’s a mediocre money manager with subpar performance.Affectionately dubbed "Mama Cathie" by fans, Wood became famous with a staggering 153% return in 2020, gaining popularity through her accessible media appearances.Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & incomeBut her longer-term performance isn't Buffett-esque. Berkshire Hathaway's annualized returns averaged about 20% since inception, approximately double the S&P 500's return over the same time period.However, Wood’s flagship Ark Innovation ETF(ARKK), with $5.6 billion in assets, is down 10% in 2024, and returns have been negative 26% for the past three years and only 3% for five years.That pales in comparison to the S&P 500. The benchmark index posted positive annualized returns of 36% for one year, 11% for three years, and 16% for five years.Cathie Wood actively trades in and out of stocks in Ark Funds ETFs.Getty Images / SOPA ImagesCathie Wood’s investment strategyCathie Wood focuses on disruptive innovation and invests in high-growth tech sectors like artificial intelligence, genomics, and blockchain. Her strategy emphasizes long-term potential and cutting-edge technologies despite short-term volatility.Wood maintains that companies in those categories will be game changers, presumably with game-changing returns. However, high-growth stocks tend to be quite volatile, so the Ark funds’ values often fluctuate widely.Morningstar, one of the most popular companies evaluating mutual fund and exchange-traded fund performance, is critical of Wood and Ark Innovation ETF.
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Late entrepreneur's Spanish island estate hits market for whopping $78M
| 2024-10-21 |
It covers the following details: A sprawling property linked to the late Rainer Schaller recently went up for sale on the Spanish island of Mallorca.His estate put iton the marketin late September, looking to get over $78.3 million (€72 million) for the 25-hectare property, according to its listing with Alby Euesden of The Agency Mallorca.RSG Group, the company founded by Schaller that owns Gold’s Gym, McFit, John Reed Fitness and other brands, confirmed to FOX Business that the estate had belonged to him. He and five other people, including his partner and their two children, were killed after a plane they were traveling on in 2022 crashed near Costa Rica."After the tragic passing of the owner Rainer Schaller and his entire family, his former company the RSG Group and Gold’s Gym have decided to shift their focus on different business strategies, in which Mallorca does not play a big role anymore," the company said. "We truly believe that [the property] is ready to find its new owner to enjoy the estate which truly was a fulfillment of a dream for Rainer Schaller."Retired Wall Street Ceo's Home Hits The Market For $29.5 Million In British Virgin IslandsThe estate "was meticulously curated by Mr. Schaller and a local architect here inMallorca, Spain," listing agent Euesden told FOX Business.Read On The Fox Business AppThere are five structures spread across the massive property "all connected by meticulously designed gardens," according to its listing. Those include a "primary villa,"guest housing, a pool house and sports house.A large infinity pool can be found within the estate, along with an alpaca sanctuary and an elaborate "relaxation spa." The sport court, nestled near the sport house, allows people to playtennis, soccer, basketball and other games, per the listing.Colorado Home Built By 1-800-Flowers Founder Sells For $25.2 MillionThe property’s two "fincas" have "natural materials and influences from Morocco, Bali, and Mykonos" throughout their many rooms, it said.High-end kitchens, a cigar lounge, an extensive indoor gym and a solar power system are among some of theother luxurious
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The housing market is picking up in some of the most expensive regions of the US
| 2024-10-21 |
It covers the following details: The housing market is showing signs of life.Listing activity and homes going under contract ticked up last month nationwide, the latest sign that some of the paralysis brought on by the rapid jump in mortgage rates in recent years is easing.But there’s a limit to how far the housing market can rebound as homeowners with ultra-low mortgage rates stay put instead of listing their homes and accepting today’s rates of 6% or more, a phenomenon known as the rate lock-in effect.“Generally, new listings and sales moved closer to pre-pandemic norms in September,” said Kara Ng, a housing economist at Zillow. “That’s still a long way to go in terms of normalizing supply.”In September, the biggest gains came in pricy locales like Seattle, Los Angeles, and San Jose, Calif.Those regions have higher proportions of buyers who finance their purchases and jumbo mortgages that hand homebuyers bigger monthly cost savings when mortgage rates fall. In some markets, listing prices have even dropped slightly.About950,000 homeswere on the market nationwide in September. That number has been steadily rising this year, though it’s still about 22% below 2019 levels.New listings rose by 25% or more last month compared to a year earlier in the Seattle, Silicon Valley, Denver, and Washington, D.C., areas, according to Realtor.com. Median listing prices in all of those markets top $599,000.In expensive parts of the country, any mortgage rate savings can help spark buyer interest, said Tim Nguyen, a real estate agent in Santa Clara, Calif., where the median home lists for more than $1.4 million. Average interest rates this year dropped more than a percentage point from as high as 7.22% in May to closer to 6% last month.“That always drives the market,” Nguyen said. “If you look at a $1 million home, for every percentage point drop it’s a little over $500 of savings every month. That’s significant when you need money to buy groceries.”Read more:Is this a good time to buy a house?Pending sales, a measure of homes under contract, were up by double digits in Portland, Ore
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88-year-old former pet shop owner is being hailed as Japan’s Warren Buffett, built a $14M fortune with stocks
| 2024-10-21 |
It covers the following details: A former owner of a pet shop and mahjong parlors in Japan has invested his way to eight figures — and earned the nickname Japan’s Warren Buffett.At 88, Shigeru Fujimoto of Kobe is photographed clad in unassuming pullovers while he sits before three computer monitors. But don’t be fooled. This octogenarian, much like the Oracle of Omaha, has invested for decades: since age 19, according toThe Asahi Shimbun, a Japanese newspaper. He became a full-time investor in 1986 and a day-trader in 2015.He is famously frugal, too. Just as Buffett drives a 10-year-old Cadillac XTS, Fujimoto gets by without a cellphone or car. “My goal is Warren Buffett,” Fujimoto told the outlet. With a net worth of $14 million, perBloomberg, he still has a very, very long way to go, given that Buffett’s net worth is an estimated $143.2 billion as of early October. Yet you can’t help but notice similarities. Buffett is 94, just six years Fujimoto’s senior. Both still keep to ambitious work regiments; Fujimoto begins his "workday" at 2 a.m..And when he speaks, Japanese markets listen. After a regulatory filing revealed he had a stake of more than 5% built up in Storage-Oh Co., which manages storage units, its shares spiked 17%.Fujimoto stands out in a country where cash savings made up more than half of household assets in the second quarter of this year, which is attributed to the deflationary environment. That's over 1 quadrillion yen (15 zeroes) or roughly $7 trillion, according to the Bank of Japan.“It’s no use just remaining cautious and thinking to yourself, ‘Oh, that looks fine,’” Fujimoto said to The Asahim Shimbun, talking about the first time he was introduced to online day trading. “Zero times zero only makes zero. Your world is so small. There are so many things that you don’t know. Age doesn’t matter when you are making a
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Housing market report: 10 states where home prices have risen more than 600% since 1984
| 2024-10-21 |
It covers the following details: Want more housing market stories from Lance Lambert’sResiClubin your inbox?Subscribeto the ResiClubnewsletter.Most Read from Fast CompanyHousing market shift: 6 major markets where home prices are actually fallingWhen California raised fast food wages, jobs actually increased. That’s not what the industry wants you to thinkHousing market report: 10 states where home prices have risen more than 600% since 1984Over the past 40 years, U.S. home prices as tracked by the Freddie Mac House Price Index, have soared a staggering 494%.The 10 states with the biggest home price gains between March 1984 and March 2024 were Washington (828%), Oregon (699%), Rhode Island (668%), Massachusetts (664%), California (664%), Hawaii (639%), Utah (610%), Montana (608%), Idaho (607%), Maine (605%).During that 40-year span, overallinflationrose 203%, whilemedian U.S. household incomesrose 233%.Despite the significant disparity between national home price growth and inflation/median incomes, housing affordability is a different story.Traditional housing affordability measurements—taking into account mortgage rates, median incomes, and national home prices—show that in 2024, the situation is only marginally worse than it was for national housing affordability in 1984. This is especially true for buyers who are financing their housing market purchases (although, those who could afford to pay all-cash in 1984 had a considerable advantage over all-cash buyers in 2024).The reason that 1984 and 2024 housing affordability are closer than incomes and prices alone suggest?Mortgage rates. In 1984, the average 30-year fixed mortgage rate was between 13.0% to 15.0%, whereas in 2024, it hovers around 7.0%. Of course, if you consider other factors like property taxes, home insurance, and down payment size, that could make 2
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Chart of the Week: A hot economy is good enough for stocks — and even for rate cuts
| 2024-10-21 |
It covers the following details: This is The Takeaway from today's Morning Brief, which you cansign upto receive in your inbox every morning along with:The chart of the dayWhat we're watchingWhat we're readingEconomic data releases and earningsThe bullish euphoria that came from the possibility of a quick return to neutral rates after theFed's 50 basis point cut in Septemberhas faded. But it's been swapped with a different bullish sentiment, one we all know very well: the strength of a hot economy, which has helped power the market all year — until that cut.While inflation and economic reacceleration concerns have returned after a string of hot data (theSeptember jobs report, theConsumer Price Index, hot retail sales, and calmer weekly jobless claims), the strength has done nothing if not buoy the market. It has done just fine (thank you very much) under the past few years of high interest rates and endless no-landing comments.A hot economy is good for stocks.All this has kept the S&P 500 floating around its all-time high all week, now well over 5,800, as the index passes more and more year-end forecasts — and theirsubsequent upward revisions, like UBS's 5,850 figure that it published Tuesday.The mood feels different than a month ago. But as our Chart of the Week shows, not a whole lot has actually changed in terms of expectations — especially to the downside.The latest Bank of America Global Fund Manager Survey shows the soft landing potential may have slightly decreased. But the hard landing respondents faded just as much, falling into the single digits for the first time since June, with just 8% seeing a recession in the next 12 months.Checking in withthe CME's FedWatch toolalso shows little change. The belief that the Fed will continue to cut interest rates in November is still overwhelming, with the tool showing a 91% chance of a 25 basis point cut on Friday.Reconciling these two things — another potentially reaccelerating economy and a rate cut the market is almost certain of — sounds tough. But it's not when you remember how high rates still are, as we wrote earlier this week in Chart of the Day. As Minneapolis Fed president Neel Kashkar
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There’s an Opportunity Brewing in These 2 Chip Software Stocks, Says Berenberg
| 2024-10-21 |
It covers the following details: The stock market continues to show bullish momentum, with tech companies, much like last year, emerging as key winners. Despite experiencing some volatility in late summer, the NASDAQ index has climbed 24% year-to-date and remains on a generally upward trajectory.While industry giants like Nvidia have dominated headlines, Berenberg analyst Nay Soe Naing is turning attention toward under-the-radar names in the chip software space.To delve deeper, we’ve leveraged theTipRanks dataplatform to gauge Wall Street’s sentiment on two such stocks recommended by Naing. Both come with Buy ratings and promising upside potential. Let’s dive into the details, along with key insights from the Berenberg analysis.Synopsys(SNPS)The first company we’ll look at here, Synopsys, is a specialist in electronic design automation, with a focus on silicon design, the important first step in the manufacturing process for silicon semiconductor chips. The company offers solutions for silicon design and verification, silicon intellectual property, and systems verification and validation, and bases its solutions on artificial intelligence (AI) and software-defined systems. Synopsys boasts that its technology, and the tech and software solutions that it provides, make possible the innovations behind many of today’s big headline generators – autonomous vehicles, machine learnings, and high-speed communications, among others.In recent weeks, Synopsys has made announcements showing that it is both expanding and streamlining its business. On the streamlining side, the company sold off its optical solutions group to Keystone Technologies, a leader in the field of design and emulation test solutions. The terms of this deal were not disclosed. And on the expansion side, Synopsys at the end of September entered into an agreement with TSMC, the world’s second-largest chip maker by market cap and third-largest by revenue, to provide advanced EDA and IP solutions to support TSMC’s most advanced technological process and manufacturing lines.Synopsys may not be a household name, but it is big business. The company has more than 35 years’ experience, and employs over 19,000 people – and brought in over $5.8 billion in revenue for calendar-year 2023.In
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The lucky few Gen Z and millennials who broke into the housing market feel trapped in their starter homes, report says
| 2024-10-21 |
It covers the following details: Many Gen Zers and millennials today are forced to rent (or live with their parents) because of the sheer cost of buying a house—and the lucky few who did get on the housing ladder are now stuck in their starter home sweet home.Baby’s first home has some staying power, not unlike Fisher Prices’ other non-biodegradable heirlooms, according to newresearchby Edelman Financial Engines.High interest rates are keeping Americans tied to their abode: Over a third (36%) of homeowners report feeling stuck in their house and unable to move for said reason. This rises to nearly 50% for homeowners under 50, who are mostly made up of Gen Z and millennials. But even some young Gen Xers in this group are finding themselves in dire straits.Lastyear, the Fed raising interest rates sent mortgages to a 22-year high. While the rates havesince ebbed, many homeowners are feeling still a little burnt by the market. Many (72%) Americans report being concerned about the current rates, rising to 81% for those under 50.The starter home sinks in its teeth for Young AmericansPart of the issue is that because the market is so thorny, many young Americans are forced to pour all their money into theirfirst home. To afford a median-priced starter home, prospective buyers must earn about $80,000 a year,perRedfin.Then their salaryisn’t rising enoughto keep up with their desire to move from an apartment to that three-bedroom house with a garage, like their parents did.“Americans need to earn more than a year ago—and much more than before the pandemic—to afford a starter home because mortgage rates are elevated, and home prices are near record highs,” reads the report.Most Americans are, therefore, priced out. Just over half of households (50.1%) earn $75,000 or less, according to U.S. Census data, points outFortune’sAlena BotrosThe situation is so dire that wannabe presidents have taken note in order to curry favor with Americans. “I’ve been doing housing for a long time. It is the first time that I could remember where both sides are talking about housing,”F
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Stock market today: US stocks close at records and notch 6-week win streak amid solid earnings
| 2024-10-21 |
It covers the following details: Spencer Platt/Getty ImagesThe Dow and the S&P 500 hit all-time highs Thursday as US stocks hit a six-week win streak.Strong third-quarter earnings from Netflix and Intuitive Surgical led to massive 10%+ stock gains.Upcoming earnings reports and economic data releases will be closely watched by investors next week.US stocks jumped to record highs on Friday and theS&P 500,Nasdaq 100, andDow Jones Industrial Averagenotched a six-week win streak as investors digested solid third-quarter earnings results.The Dow and the S&P 500 both closed at all-time highs.Shares ofNetflixandIntuitive Surgicalsoared more than 10% to record highs after theirthird-quarter earnings bested analyst's profit and revenue estimates.With 13% of S&P 500 companies having already reported third-quarter earnings, 82% are beating profit estimates by a median of 6%, while 67% are beating revenue estimates by a median of 2%, according to data from Fundstrat.The blended earnings growth rate for the S&P 500 is 3.4% based on the companies that have already reported, according to data from FactSet. If this growth rate holds through earnings season, it would represent the 5th straight quarter of year-over-year earnings growth.Earnings season will be in full swing next week, with investors awaiting results from more than 80 S&P 500 companies, includingCoca-Cola,Texas Instruments,Tesla, andUPS, among others.Next week, on the economic data front, investors will monitor the release of September's US leading economic indicators index, data on existing home sales, and consumer sentiment.Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:S&P 500:5,864.68, up 0.4%Dow Jones Industrial Average:43,275.91, up0.09% (+36.86 points)Nasdaq composite:18,489.55, up0.
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What to know about the potential $30 million whale moving betting markets toward Trump
| 2024-10-21 |
It covers the following details: Justin Sullivan/Getty ImagesPrediction markets show Trump leading Harris in 2024 election odds.The betting platform Polymarket has seen its trading volume surge, with $1.24 billion in October alone.A $30 million bet on Trump has raised questions about how big bettors can swing the odds.With the presidential election less than three weeks away, polls indicate former President Donald Trump and Vice President Kamala Harrisare in a virtual dead heat.But the election odds look somewhat different in the prediction markets, where people can bet money on the outcome of a race, and the constantly changing odds of a Harris or Trump win on these marketplaces are being closely watched by politicos.Since the start of October, there's been a notable divergence between the betting markets and the polls. Despite numerous polling averages showing a close race between Harris and Trump, with all major battleground states within the margin of error, the betting markets have moved decisively for Trump.Rumblings have grownthat a single person or a consortium of people could be tipping the scale for Trump on the betting platform Polymarket, with a series of big bets totaling $30 million, in a bid to boost the narrative that he's a shoo-in for president.Here's what you need to know.1. What is Polymarket?Polymarket is a crypto-based predictions market that has become one of the most popular venues for placing online bets on upcoming elections.It was founded in 2020 and requires users to place bets via stablecoins. Stablecoins are crypto tokens pegged to a fiat currency like the dollar and rarely deviate from their value.Polymarket allows investors to bet on yes or no questions. For example: Will Donald Trump win the 2024 US presidential election?Polymarket also allows its users to "trade" its bets, or sell out early for profits or to cut their losses.This year, Polymarket has seen $1.75 billion worth of trading volume, according to data from The Block, with betting activity exploding on US election outcomes. In October alone, the betting market has seen $1.24 billion in trading volume.Before 2024, Polymarket's monthly trading volume rarely topped $10 million.2
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Nvidia stock has another 38% upside amid a 'generational opportunity' in AI, Bank of America says
| 2024-10-21 |
It covers the following details: Slaven Vlasic/Getty Images for The New York Times; Chelsea Jia Feng/BIBank of America analysts raised their price target for Nvidia stock to $190 a share this week.They see the AI market growing to $400 billion, giving Nvidia a "generational opportunity."They point to Nvidia's strong lead among competitors, helped by its enterprise partnerships.Nvidia stock has been on a tear all year, but investors can brace for even more gains ahead, Bank of America analysts say.In a Thursday note, the analysts raised their price objective on the stock from $165 to $190. That implies a 38% upside from its price of about $138 a share at midday on Friday.The analysts point to exponential growth in the AI market in the coming years, which they say will give Nvidia a "generational opportunity" as the chip titan continues to strengthen its lead in the market.The analysts see the AI accelerator market growing to $280 billion by 2027, and toward upwards of $400 billion over time — marking huge growth from $45 billion in 2023.As AI models continue to grow rapidly—with developers like OpenAI, Google, and Meta launching new large language models several times per year—the need for computing will only grow, the analysts predict.Each new major LLM generation, especially those developed for larger size and better reasoning capabilities, will require greater training intensity, they add."We continue to see the pace of new model development increase. LLMs in particular are being developed for both larger size and better reasoning capabilities, which both require greater training intensity," the analysts said.They also point to Nvidia's strong partnerships with enterprise customers like Accenture, ServiceNow, Oracle, and others, which show the growing presence of AI at big companies and Nvidia's role as partner of choice."NVDA's engagements span multiple verticals (e.g., Accenture, ServiceNow, Microsoft), and offerings such as AI Foundry, AI Hubs, NIMs are key levers to its AI leadership, not only on the hardware side but also on systems/ecosystems side," the analysts said.The analysts also said Nvidia's financials
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He made Pfizer a household name. Wall Street wants more.
| 2024-10-21 |
It covers the following details: When a novel coronavirus struck in early 2020, Pfizer’s chief executive, Dr. Albert Bourla, saw an opportunity to help save the world. He pushed the drugmaker to deliver a Covid-19 vaccine at lightning speed.The Greek-born CEO’sbold bet paid off. The shot turned Pfizer into a household name, while ringing uptens of billions of dollars in sales. Bourla’s cellphone hummed with calls from leaders around the world. The experience, he said in a commencement speech afterward, showed the virtue of “setting ambitious goals that are seemingly impossible.”Most Read from The Wall Street JournalA Mystery $30 Million Wave of Pro-Trump Bets Has Moved a Popular Prediction MarketYou’re Not Paranoid. The Market Is Out to Get You.The $14 Billion Question Dividing OpenAI and MicrosoftIn Sports, American Socialism Is Beating European CapitalismRegulator Investigates Tesla’s Automated-Driving Feature After Fatal CrashBut now Bourla is under attack because Pfizer’s stock price is way down, in part because it miscalculated demand for its Covid-19 vaccine, and some of the ambitious goals Bourla has set in the years since the pandemic have yet to pan out.An activist investor is leading the charge. Starboard Value, a hedge fund that has waged fights in recent months against Autodesk, Salesforce and Tinder parent Match Group,recently tooka roughly $1 billion stake in Pfizer. The sides held their first meeting on Wednesday, afterStarboard accused the companyof pressuring two former executives who had been working with Starboard to express support for Bourla.It’s a moment of reckoning for Bourla, 62, a veterinarian by training who joined Pfizer in his early 30s from academia and moved all over the globe for the company as he climbed the corporate ladder.Bourla enjoys strong support from Pfizer’s board of directors, according to people familiar with the board’s thinking. Members recognize Bourla’s success spearheading the Covid-19 vaccine, and steps he has taken to right the ship over the last year, including multibillion-dollar cost-cutting programs. The CEO has also reorganized the company,creating a separate cancer-d
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Stocks are nearing a major peak and a more 'disturbed' period of weak returns is ahead for investors, CIO says
| 2024-10-21 |
It covers the following details: bunhill/Getty ImagesThe bull market could be in its final days, according to Calamos Investments' Michael Grant.The CIO said the market has suffered from "invincibility syndrome."Grant said stocks could soon enter a period of weak returns, possibly for "many years."The bull market in stocks looks like it's close to the top, according to an investment chief.Michael Grant, the co-CIO of Calamos Investments, thinks large-cap stocks could be on track for one of the best years over the last century, before the market tips into a period defined by subpar returns.That's because stocks are flashing signs of "invincibility syndrome," with investors falsely believing that nothing can stop further gains, he said in anotethis week."The most significant feature of this investment year is the perception that US equities are virtually invincible. This 'Invincibility Syndrome' historically signals a crescendo when markets are in the process of summiting a major peak," Grant wrote."In our view, the paradox of this rewarding year is its underlying warning of low future returns for 2025 and beyond," he later added.The precarious state of the market can be seen in a slew of data points that measure valuation, sentiment, and positioning, he noted.A handful ofvaluationmeasures suggest stocks are at historically expensive levels, Grant said. For instance, the medianprice-to-earningsratio of the S&P 500 is 28, the most expensive stocks have been relative to earnings since around the dot-com bubble.Meanwhile, the standard Shiller cyclically adjusted price-to-earnings ratio — whichsmooths out outlier P/E data— has climbed past 35, the highest level on record.Sentiment and position indicators are also flashing signs investors are overexcited about the stock market, Grant said.Households appear to be the most bullish on stocks since the dot-com era. The percentage of consumers who expect stock gains over the next year has climbed to its highest levels recorded since 1987, according to the three-month moving average of responses to the Conference Board's monthly survey.The 3-month moving average of year-ahead stock market expectations has climbed to its highest on record, according to Conference Board data.Macrob
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Why the stock market will drop 7% by mid-November, according to a technical analyst
| 2024-10-21 |
It covers the following details: NYSE Traders working during the opening bell.JOHANNES EISELE/AFP via Getty ImagesThe stock market could face a 7% correction by mid-November, says Fundstrat's Mark Newton.Investor complacency and weak seasonals could trigger decline, according to Newton.He views any potential pullback as a "buy the dip" opportunity.The stock market looks poised for a 7% correction by mid-November, according to technical analyst Mark Newton of Fundstrat.Newton told clients in a note on Thursday that he is expecting theS&P 500to see weakness heading into November as investor sentiment hits complacent levels just ahead of the general election on November 5."While intermediate-term bullish these remains very much intact, it's doubtful that US Equities continue to push up into and post-election without any consolidation," Newton said.Newton said the potential correction he expects in the stock market is likely to be a "short-term correction only" and "not the start of a larger decline," playing into Fundstrat's Tom Lee's consistent message that investors should view any decline in the stock market as a "buy the dip" opportunity.Newton is monitoring the 5,900 level on the S&P 500 as potential resistance for the index. The S&P 500 traded at around 5,850 on Friday."The issues with near-term complacency (as judged by low Equity put/call levels), waning breadth, poor seasonal trends and cyclical projections for November as well as SPX's largest sector, Technology, not performing well of late, are all reasons to be alert for possible trend change in the weeks to come," Newton explained.One "key reason" Newton is turning bearish in the short-term is that the current rally in stocks that started in early August is 88 days long, which is exactly how long the April 19 to July 16 rally lasted before a sell-off materialized.From a time perspective, that's "why this rally might 'run out of steam," Newton said.Other areas of technical weakness that Newton is monitoring includes negative divergences in momentum as measured by the RSI and the moving average convergence divergence (MACD) indicators, a lack of bearish investors
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Stock market today: Indexes trade near record highs after a string of solid earnings reports
| 2024-10-21 |
It covers the following details: ANGELA WEISS/GettyUS stocks were mostly higher on Friday amid a string of solid third-quarter earnings reports.Netflix and Intuitive Surgical beat Wall Street estimates, boosting their stock prices to new record highs.82% of S&P 500 companies that have reported earnings so far have surpassed Wall Street's profit estimates.US stocks traded higher on Friday, with all three major averages at or near record highs as investors digested third-quarter earnings results.Netflix'sthird-quarter earnings report was strong.It added 5.1 million subscribers and beat Wall Street's revenue and profit estimates.Netflixstock jumped about 7% in Friday morning trades to near-record highs.Intuitive Surgicalalso reported solid third-quarter earnings that beat Wall Street estimates for revenues and profits. That stock also jumped about 7% in Friday morning trades to a record high.With 13% ofS&P 500companies having already reported third-quarter earnings, 82% are beating profit estimates by a median of 6%, while 67% are beating revenue estimates by a median of 2%, according to data from Fundstrat.Investors are also digesting new data on the housing market, with housing starts in September hitting 1.35 million, down slightly from August's 1.36 million number. Additionally, building permits dropped to 1.45 million in September from 1.48 million in August.Looking ahead to next week, investors will be eyeing the release of September's US leading economic indicators index, data on existing home sales, and consumer sentiment.Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:S&P 500: 5,851.46, up0.17%Dow Jones Industrial Average:43,083.60, down0.36% (-155.45points)Nasdaq composite:18,484.21, up0.64%Here's what else is going on:Bitcoin is on a tear as 'crypto president' Donald Trump's betting-market odds climb.Oil prices
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Emerging-Market Currencies Rebound as Dollar, US Yields Retreat
| 2024-10-21 |
It covers the following details: (Bloomberg) -- A gauge of emerging-market currencies advanced Friday as risk appetite grew across foreign-exchange markets with the greenback and US yields retreating.Most Read from BloombergA Broken Oil Pipeline Plunges South Sudan’s Capital Into ChaosDrug Decriminalization Spawns a Political Debacle for ProgressivesCities Look to AI to Flag Residents’ Trash and Recycling MistakesOne City’s Plan to Re-Link a Neighborhood That Robert Moses DividedChicago Should Consider Furloughs, Higher Booze Tax, Watchdog SaysSouth Africa’s rand and the Philippines peso were the top gainers with the dollar slipping as the People’s Bank of China disclosed more details of its measures to boost capital markets. The Mexican peso weakened, extending its worst weekly plunge since August.The gains chipped away at an otherwise rough week for developing-world currencies. But strategists are warning the relief may be short-lived. A flurry of factors that propelled the greenback still loom, including the prospect of Donald Trump’s return to the White House, data that points to a resilient US economy and lackluster China stimulus measures.“There will likely be a broad aversion towards EM given Trump risks, but some currencies may enjoy offsetting factors that allow them to outperform” said Juan Manuel Herrera Betancourt, a strategist at Scotiabank in London. “Were optimism around Chinese stimulus to improve, we would likely see a boost from metals prices to the Peruvian sol and Chilean peso.”One-month implied volatility for emerging-market currencies rose for a fourth week, the longest streak since August.Citigroup strategists including Luis Costa said emerging currencies could become more vulnerable around the time of the election, particularly as rate cuts in many emerging markets have eroded their real yield cushion against developed-market peers.Latin American currencies, which had been some of investors’ favorite to pick up higher yields, were hit particularly hard this week. Even as prices of iron ore and copper recovered Friday following China’s central bank announcement, currencies from Brazil and Chile sank more than their peers.The Brazilian real traded at the lowest level in over two months versus the dollar as traders brush off government plans to contain fiscal
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Record-breaking rally pushes Wall Street to longest winning streak of the year
| 2024-10-21 |
It covers the following details: The S&P 500 and Dow Jones Industrial Average notched new records on Friday, adding to a six-week winning streak for Wall Street.S&P 500:5,864.67 ⬆️ up 0.40%NasdaqComposite:18,489.55 ⬆️ up 0.063%Dow Jones Industrial Average:43,275.91 ⬆️ up 0.085%STOXX Europe 600:524.99 ⬆️ up 0.21%CSI 300:3,925.23 ⬆️ up 3.62%Nikkei 225:38,981.75 ⬆️ up 0.18%Bitcoin:$68,489.24 ⬆️ up 1.63%US:Netflixearnings and positive economic data fuel market optimismU.S. stocks reached new heights as solid earnings reports and resilient economic data drove optimism for the markets. The S&P 500 ticked up 0.4%, setting another record in its six-week rally, while the Dow Jones climbed 0.37%.Netflix surged11.1% following stronger-than-expected earnings, driving the Nasdaq higher. Investors remain cautiously optimistic as corporate earnings season continues, withMorgan StanleyandUnited Airlinesdelivering upbeat reports earlier in the week.Europe: Equities rise after ECB rate cut signalsEuropean stocks climbed, with the Stoxx 600 index up 0.21%, buoyed by optimism following the European Central Bank’s decision Thursday to cut interest rates, a move that signaled more support for economic growth. Luxury and semiconductor stocks also posted gains.China: Economic growth surprises, driving stocks higherChinese stocks surged, with the CSI 300 jumping 3.62%, following a positive surprise in third-quarter GDP growth at 4.6%, surpassing analysts’ estimates. This lifted sentiment, as investors continue to anticipate further stimulus measures from the Chinese government
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Hedge funds snap up tech stocks at fastest pace in five months
| 2024-10-21 |
It covers the following details: By Carolina MandlNEW YORK (Reuters) - Global hedge funds this week bought U.S. information technology stocks, such as semiconductors and hardware, at the fastest in five months amid the start of the third-quarter earnings season, according to Goldman Sachs on Friday.Outside the U.S., diverging reports from chipmaker Taiwan Semiconductor Manufacturing and chipmaking equipment supplier ASML Holding moved shares in opposite directions while investors await semiconductor companies such as Advanced Micro Devices and Nvidia to unveil their earnings as they seek a trend.Goldman Sachs' prime brokerage unit, which provides services for hedge funds and tracks their positioning, said portfolio managers net bought U.S. information technology stocks for the third straight week. Hedge funds both covered short positions - bets stocks will fall - and snapped up long positions.The bank said the only information tech subsector hedge funds sold was software.Overall, information technology accounts for 16.1% of hedge funds' U.S. exposure, down from roughly 22% it reached earlier this year.On the flip side, hedge funds sold stocks in U.S. consumer sectors, from food products to beverages and restaurants for the fifth straight week, the bank said.(Reporting by Carolina Mandl, in New York; Editing by Marguerita Choy)
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S&P 500 Gains and Losses Today: Netflix Leads Index Higher After Earnings Beat
| 2024-10-21 |
It covers the following details: Mario Tama / Getty ImagesKey TakeawaysThe S&P 500 added 0.4% on Friday, Oct. 18, wrapping up a week of trading that included an initial wave of quarterly earnings releases from major companies.Netflix shares surged after the streaming giant reported better-than-expected third-quarter sales, profits, and subscriber numbers.Shares of grain processors Bunge and Archer-Daniels-Midland lost ground after an analyst said low crop prices and weak farmer sentiment weighed on the agriculture industry.Major U.S. equities indexes moved higher on the final day of a trading week that included a series ofearnings reportsfrom key companies.After major financial firms disclosedmostly upbeat resultsearlier in the week, Netflix (NFLX) took the spotlight with a strong report that could be a positive signal for the tech and communications giants set to report in the coming weeks.On Friday, the S&P 500 added 0.4% to notch an all-time closing high. The Dow reversed morning losses to end the session nearly 0.1% higher, extending its streak of record closes to three. The Nasdaq was up 0.6%.Netflix shares scored the S&P 500's top daily performance, soaring 11.1% to an all-time high following the video-streaming giant's better-than-expectedthird-quarter financial results. Although the pace of subscriber additions slowed from the preceding quarters, 14% growth in total active subscribers was enough to edge out estimates. Analysts have indicated that the company's crackdown on password-sharing has helped boost subscriber numbers, but Netflix plans to discontinue the public release of subscriber data starting in 2025.Shares of Lamb Weston Holdings (LW) surged 10.2% after a securities filing confirmed reports thatactivist investorJana Partners has acquired a stake of around 5% in the food processing company. Jana reportedly intends to encourage the maker of frozen french fries to consider the possibility of a sale as well as push for changes to its operations andcapital allocationstrategy.An upbeat earnings report also helped lift shares of Intuitive Surgical (ISRG
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Wall Street’s Nonstop Rally Mints New Class of Hardcore Bulls
| 2024-10-21 |
It covers the following details: (Bloomberg) -- For Wall Street skeptics arguing the good times can’t last, there is plenty of supporting evidence. Equity valuations are stretched, corporate bond spreads are tightening and gold is at a record.Most Read from BloombergA Broken Oil Pipeline Plunges South Sudan’s Capital Into ChaosDrug Decriminalization Spawns a Political Debacle for ProgressivesCities Look to AI to Flag Residents’ Trash and Recycling MistakesOne City’s Plan to Re-Link a Neighborhood That Robert Moses DividedChicago Should Consider Furloughs, Higher Booze Tax, Watchdog SaysThe result has been a rush to hedges — options and other instruments designed to protect gains already in the books.Alongside all the prudence, though, a vocal subset of managers has emerged whose outlook is decidedly less wary. Despite the headwinds facing investors at this point in the economic cycle, they say there’s reason to believe it’s still early in the bull run for risky assets.One is Nancy Tengler, who helps oversee $1.4 billion for Laffer Tengler Investments in Scottsdale, Arizona. Convinced corporate earnings growth is greater than it seems thanks to a steep falloff in inflation that is also bolstering consumers, she’s pushing clients out of Treasuries and into a broader list of bets on municipal bonds, electrical equipment makers and utilities.“The growth is there and it’s still driven by the consumer,” she said. “Earnings season will be pretty robust. We will see more surprises to the upside than to the downside. We are very bullish.”Stocks rose again this week, with the S&P 500 climbing almost 1% for its sixth straight gain, the longest streak since December. Ten-year Treasury yields were little changed after a four-week advance spurred by the unwinding of bets on outsized interest-rate reductions. In credit, the iShares iBoxx Investment Grade Corporate Bond ETF started the week with its best three-day advance since mid-September, while oil had its first weekly decline this month.The simplest case for optimism remains the economy, where Jerome Powell’s Federal Reserve is undoing two years of restrictive policy
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S&P 500 Bulls Drive Longest Weekly Advance in 2024: Markets Wrap
| 2024-10-21 |
It covers the following details: (Bloomberg) -- Wall Street traders wading through a slew of corporate results and signs the world’s largest economy is holding up drove stocks to their longest weekly advance in 2024.Most Read from BloombergA Broken Oil Pipeline Plunges South Sudan’s Capital Into ChaosDrug Decriminalization Spawns a Political Debacle for ProgressivesCities Look to AI to Flag Residents’ Trash and Recycling MistakesOne City’s Plan to Re-Link a Neighborhood That Robert Moses DividedChicago Should Consider Furloughs, Higher Booze Tax, Watchdog SaysOn the eve of the 37th anniversary of the “Black Monday” market crash, equities hit all-time highs amid gains in most major groups. The S&P 500 was up for a sixth straight week. The gauge’s equal-weighted version — one that gives Target Corp. as much clout as Microsoft Corp. — also rose to a record on hopes the rally will broaden out. Netflix Inc. jumped 11% on solid earnings. Apple Inc. climbed 1.2% as sales of its newest iPhones in China soared. American Express Co. sank 3.2% after trimming its revenue forecast.The bulk of the growth in S&P 500 earnings continues to come from megacaps, with the “Magnificent Seven” expected to show an 18% rise in third-quarter profits, according to Bloomberg Intelligence. While the other firms are seen posting an only 1.8% increase in earnings, their results are projected to accelerate to double-digit gains in the first quarter of 2025.“Earnings season is off to the races, and despite some mixed signals, appears to be in good shape,” said Liz Young Thomas, head of investment strategy at SoFi. “We’re in the early innings though, and coming up on the final days before the election and the next Fed meeting. Never a dull moment.”With the odds tilting toward both Donald Trump winning the US presidential election and Republicans controlling Congress, investors have started ramping up assets which had thrived in the wake of the former president’s 2016 victory, according to Bank of America Corp. strategist Michael Hartnett.Price action in the past week shows
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Netflix stock secures fresh record after earnings, subscriber growth top estimates
| 2024-10-21 |
It covers the following details: Netflix (NFLX) stock finished Friday's trading session 11% higher, pushing shares to a fresh record of above $760, after the streaming giant beat third quarter EPS and revenue estimates and projected sales for the current quarter that came in ahead of Wall Street's expectations.Revenue beat Bloomberg consensus estimates of $9.78 billion to hit $9.83 billion in Q3, Netflix reported after the market close on Thursday, an increase of 15% compared to the same period last year. The growth came as the streamer continued to lean on revenue initiatives like itscrackdown on password sharingandad-supported tier, in addition tolast year's price hikeson certain subscription plans.Netflix guided to fourth quarter revenue of $10.13 billion, a beat compared to consensus estimates of $10.01 billion.For full-year 2025, the company sees revenue hitting between $43 billion and $44 billion, compared to consensus estimates of $43.4 billion. This would represent growth of 11% to 13% from the company's expected 2024 revenue guidance of $38.9 billion.It expects full-year operating margins to hit 27%, an increase from the previous 26%, after the metric hit nearly 30% in the third quarter.Diluted earnings per share (EPS) also beat estimates in the quarter, with the company reporting EPS of $5.40, above consensus expectations of $5.16 and well ahead of the $3.73 EPS figure it reported in the year-ago period. Netflix guided to fourth quarter EPS of $4.23, ahead of consensus calls for $3.90.Subscribers also came in strong with another 5 million-plus subscribers added on the heels of breakout programming like "The Perfect Couple" and "Nobody Wants This."Subscriber additions of 5.07 million beat expectations of 4.5 million andfollows the 8.05 million net additionsthe streamer added in the second quarter. The company had added 8.8 million paying users in Q3 2023."We expect paid net additions to be higher in Q4 than in Q3’24 due to normal seasonality and a
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Netflix Beats Wall Street’s Forecasts in Every Major Metric
| 2024-10-21 |
It covers the following details: (Bloomberg) -- Netflix Inc. shares soared to a record high after the streaming company added more than 5 million customers in the third quarter and eclipsed Wall Street’s expectations on every major financial metric.Most Read from BloombergClimate Change Is Killing Buildings in Slow MotionHow Kyiv Became a Leader in Digital Services Amid Wartime StrainA Broken Oil Pipeline Plunges South Sudan’s Capital Into ChaosDrug Decriminalization Spawns a Political Debacle for ProgressivesDhaka's Revolutionary Makeover Pits Visions of Peace Against VengeanceSales for the period grew 15% to $9.83 billion, the company said in a shareholder letter Thursday, while earnings increased to $5.40 a share. Analysts were predicting Netflix would add 4.52 million subscribers.The shares surged 11% to $763.89 on Friday in New York, the biggest gain in a year. The stock has more than quadrupled since May 2022, when a slowdown in the company’s growth led to a major selloff and spooked investors about the entertainment business.Since then, Netflix has added more than 60 million customers, thanks to a crackdown on password sharing and the introduction of a lower-priced subscription with advertising. The company finished the quarter with 282.7 million subscribers.“We’re feeling really good about the business,” Co-Chief Executive Officer Ted Sarandos said on a call with analysts. “We had a plan to re-accelerate growth and we delivered on that plan.”Most analysts believe the boost from the password crackdown is temporary, and that Netflix will soon need to find another way to grow. The company has yet to see material financial returns from its investment in advertising or video games, and some on Wall Street now worry the stock is overvalued.Subscriber growth “does seem like it’s slowing back down,” according to Dave Heger, an analyst with Edward Jones.Yet Netflix continues to deliver stronger growth than expected, and its leadership has sought to reassure investors by saying the company will benefit from the crackdown on password sharing in the years ahead.The company on Thursday predicted sales next year will increase between 11% to 13% —
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Is Tesla Stock (NASDAQ:TSLA) a Buy Ahead of Its Q3 Earnings?
| 2024-10-21 |
It covers the following details: Tesla (TSLA) has underperformed over the past few weeks following a disappointing production report and negative market reactions to its long-awaited Robotaxi event. As the company prepares to report its Q3 earnings results next week, I maintain a Hold stance on TSLA.I believe that as the market’s attention increasingly shifts to the bottom line, the company’s margins are likely to come under pressure in Q3 due to ongoing headwinds in the auto industry. This could lead to a negative reaction, although some surprises may emerge, such as regulatory credits and strong growth in its energy storage business.Tesla’s Q3 Deliveries MissTesla is scheduled to report its Q3 earnings on October 23. However, part of my neutral stance ahead of the earnings release stems from the fact that Tesla’s earnings day often feels less impactful. The company provides its production and delivery results before its financial reports, giving investors a significant preview of its performance.In early October, the company reported 462,890 deliveries, a 6% increase compared to the same period last year but slightly below analysts’ expectations of 463,310. However, I believe this discrepancy is part of a short- to medium-term trend that investors have come to anticipate.The reasons for not meeting expectations can be attributed to significant macroeconomic pressures, particularly the high interest rate environment, which has affected car sales on financing options—a situation that has only recently started to improve. The auto industry as a whole has faced challenges, with weak sales reports from traditional automakers such as Ford (F), General Motors (GM), and Stellantis (STLA).However, there is more to consider. Tesla’s broader strategic shift towards autonomous ride-hailing and humanoid robots may also be impacting production. Such a significant change in strategy is likely to result in periods of contraction in its traditional electric vehicle deliveries and production numbers.All Eyes on the RobotaxiWhile I view Tesla’s current situation as cautious, one major area where the company seems to hold significant long-term potential is in its AI initiatives, particularly its shift toward autonomous ride-hailing and humanoid robots. Thelong-awaited Robotaxi event, which had been rescheduled several times, finally took place on
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Starbucks new CEO taps fellow Chipotle alum for top marketing role
| 2024-10-21 |
It covers the following details: By Waylon Cunningham(Reuters) - Starbucks on Friday announced it hired food marketing veteran Tressie Lieberman to take its top marketing job, the latest in a spate of executive reshuffling by new CEO Brian Niccol.Lieberman and Niccol overlapped at Chipotle, where Niccol served as CEO until August, when he was poached by Starbucks. Lieberman was Chipotle's vice president of digital marketing and off-premise sales from 2018 to 2023."It’s time to tell our story again and reintroduce Starbucks to the world. Tressie is the perfect person to help us do that," Niccol said in a statement.Lieberman's new role as executive vice president and global chief brand officer begins on Nov. 4. Starbucks said she will be in charge of marketing, product development, creative and data analytics and insights.Niccol in a public letter last month said marketing was a central plank of his vision for Starbucks, which has suffered from slumping sales in recent quarters.In addition to Chipotle, Lieberman previously held senior marketing roles at Yahoo, Snap Kitchen and Yum! Brands, the parent company of Taco Bell and other restaurant chains.Starbucks' leadership team has undergone changes since Niccol took over.In September, the chain announced that North America CEO Michael Conway was retiring, and that the company would not fill his position. Instead, North America retail operations head Sarah Trilling will report directly to Niccol.Starbucks also announced on Tuesday that teams in charge of concepts, store designs and store development would be consolidated under Trilling. That is intended to "create clear accountability for the look and feel of our stores from concepts through design to development," it said.Starbucks also announced it was consolidating its communications and corporate affairs teams.(This story has been corrected to change the day to Friday in paragraph 1 and to say that it is consolidating its communications and corporate affairs teams, not its marketing teams, in paragraph 10)(Reporting by Waylon Cunningham; Editing by Bill Berkrot)
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What's Going On With Nokia Stock On Friday?
| 2024-10-21 |
It covers the following details: What's Going On With Nokia Stock On Friday?Nokia Corp(NYSE:NOK) stock rebounded Friday from Thursday’s selloff, as its quarterly report failed to impress the Street.The Finnish telecom company clocked afiscal third-quarternet sales decline of 8% to $4.76 billion), missing the consensus estimate of $5.34 billion. The topline decline marked weakness in the Indian market.Also Read:Ericsson Q3 Earnings: Gains From AT&T Boost, CEO Signals North American RecoveryNokia’s market share in North America dropped after losing contracts withVerizon Communications Inc(NYSE:VZ) andAT&T Inc(NYSE:T).CEO Pekka Lundmark told Reuters that telecom remains a limited growth market for Nokia despite some recovery. Lundmark highlighted that Nokia is now focusing on the data center and defense sectors for growth.He also pointed to a demand rebound in India, supported by the Vodafone Idea deal and a possible contract with Bharti Airtel.Meanwhile, Nokia has slashed around 2,000 employees across Greater China and 350 jobs across Europe to cut costs, Bloombergcitesfamiliar sources.The cost cuts are part of Nokia’s plans to slash up to 14,000 jobs to save 800 million euros ($868 million)-1.2 billion euros by 2026, Reuters reports.Reuters cites Nokia’s annual report as stating that as of December 2023, it had 10,400 employees in Greater China and 37,400 in Europe.The U.S. sanctions on Chinese smartphone giantHuawei Technologies Cocost Nokia its China market, which generated 27% of its sales in 2019, as per Reuters. Greater China generated 6% of Nokia’s sales in the current quarter.Chinese operators retaliated against the U.S. embargo by snubbing European equipment. Nokia already sold part of a joint venture with Huawei in China in 2024
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Stock movers: Netflix, Lamb Weston, CVS Health
| 2024-10-21 |
It covers the following details: The stock market is trading higher midday. The S&P 500 gained 0.40%, and the tech-heavy Nasdaq Composite climbed 0.70%. The Dow Jones Industrial Average added 0.06%, while the Russell 2000 Index is flat.All Magnificent 7 stocks are up.S&P 500 big stock movers todayFive S&P 500 stocks making big midday moves are:Netflix(NFLX)+10.8%Lamb Weston(LW)+10.7%Intuitive Surgical(ISRG)+10.1%Dexcom(DXCM)+3.9%Vistra(VST)+3.8%The worst-performing five S&P 500 stocks with the largest midday drop are:Bunge Global(BG)-5.8%CVS Health(CVS)5.5%Archer-Daniels-Midland(ADM)-4.5%SLB(SLB)-3.9%Vertex Pharmaceuticals(VRTX)-3.0%Stocks also worth noting include:Nvidia(NVDA)+1%Tesla(TSLA)+0.2%Apple(AAPL)+1.5%ASML(ASML)+3%Amazon(AMZN)+1.5%Netflix saw a 35% quarter-over-quarter jump in its ad memberships.ShutterstockLamb Weston shares pop after potential saleLamb Weston surged 11% following a Wall Street Journal report that activist investor Jana Partners has acquired a stake in the company, aiming to encourage a potential sale.Jana believes Lamb Weston shares are undervalued, citing "self-inflicted missteps" that hurt shareholder performance, according to a filing.Related: Key McDonald’s supplier shuts production plant, no bankruptcy yetThe firm suggested a review of strategic alternatives, board and management changes, and raised concerns about issues like share buybacks, management pay, capital spending, and raw potato procurement, Bloomberg reported.Lamb Weston is the largest producer of french fries in North America. The stock is down 26% year-to-date.Netflix
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AI cloud firm Nebius predicts sharp growth as Nasdaq return nears
| 2024-10-21 |
It covers the following details: By Alexander Marrow(Reuters) -AI infrastructure firm Nebius Group expects to make annual recurring revenue of $500 million to $1 billion in 2025, the company said on Friday before trading of its shares resumes on Nasdaq on Monday after a lengthy suspension.Trading was suspended soon after Russia's February 2022 invasion of Ukraine, when the stock was traded under the ticker of Russian internet giant Yandex through its Amsterdam-based parent company. In July, Nebius emerged following a $5.4 billion deal to split Yandex's Russian and international assets.Yandex, Russia's equivalent of Google, was valued at more than $30 billion before the war, but Nebius is now a fledgling European tech company focused on AI infrastructure, data labelling and self-driving technology.A key unknown is what price the company's shares will trade at after such a long trading hiatus and company transformation, especially as some investors have already written off the investment.The 98-page document published on Friday, accompanied by a video presentation, is by far the most detailed insight the company has given since emerging from the split."We are at the very beginning of the AI revolution," Nebius Chairman John Boynton said in a video presentation. "Nobody can be sure which business models or underlying technologies will prevail, but we can be sure of one thing: the demand for AI infrastructure will be massive and sustained."This is the market space where Nebius will play."CEO Arkady Volozh was bullish on the company's prospects, pointing to his track record at building Yandex.He said the industry was still in its "early days," anticipating strong growth over the coming years and that compute, or computational power, is going to be key.Nebius expects to have deployed more than 20,000 graphics processing units at its Finnish data centre by year-end.Nebius' estimated that its addressable market - GPU-as-a-service and AI cloud - will grow to more than $260 billion in 2023 from $33 billion in 2023.(Reporting by Alexander Marrow; Editing by Mark Porter)
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Why Analysts Are Bullish on MARA Holdings (NASDAQ:MARA) Stock
| 2024-10-21 |
It covers the following details: MARA Holdings (MARA) operates as a Bitcoin (BTC-USD) miner and as such it is a popular option to gain exposure to cryptocurrency without buying digital assets. For the company’s business model to work, MARA requires the price of Bitcoin to be substantially higher than its cost of approximately $56,000 to expand its profit margins.As such, the rise in the world’s largest cryptocurrency’s value is directly beneficial to the company’s financial performance. When the market price of Bitcoin increases beyond the miners’ production costs, they can sell their Bitcoin holdings at a higher margin, thereby increasing their profitability. Lower interest rates are likely to help risk assets such as Bitcoin. As such, MARA and other Bitcoin miners are likely to see their share prices rise in coming months. For this reason, I am bullish on MARA stock.Capitalizing on OpportunitiesMARA’s portfolio boasts over 250,000 Bitcoin mining machines that are owned and leased, which is one of the reasons I’m bullish on the stock. The firm’s diversification extends beyond Bitcoin mining. It also mines Kaspa, develops cooling technology for data centers, and has an energy harvesting business dedicated to utilizing excess power.MARA recently announced that it has secured a $200 million line of credit, which is collateralized by a portion of its Bitcoin holdings. The company said that it “may use the funds to capitalize on strategic opportunities and for other general corporate purposes.”As the chart below indicates,MARA stock is down 25% this year. The company’s share price has been hurt by a halving event that took place this past April, which is when the available supply of Bitcoin, and the rewards for mining it, are reduced by 50%.More Favorable Business EnvironmentAnother reason to be bullish on MARA is that a rise in Bitcoin’s price could lead to improved earnings. As the company’s break-even point is set around a Bitcoin price of $56,000, any increase above this level could potentially result in a catch-up rally for MARA stock given its underperformance so far this year.According to analysts at Bernstein, the price of Bitcoin is expected to reach a cycle high of $20
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Activist Investor Stake Makes French Fry Stock Sizzle
| 2024-10-21 |
It covers the following details: Photo by Lauren DeCicca / Getty ImagesLamb Weston supplies French fries to McDonald's and other companies.Things are heating up in the French fry business.Shares of Lamb Weston (LW), a leading fries supplier to McDonald’s (MCD) and other fast-food giants, jumped Friday on news that an activist investor has taken a stake in the struggling company and is looking to shake things up.The stock recently went up almost 10%. Regulatory filings today indicated that Jana Partners had acquired about a 5% stake in Lamb Weston. AWall Street Journalreport confirmed that another investor reporting a smaller stake in Lamb Weston, Continental Grain, was working with Jana, seeking a sale or other changes at the company.Shares of Lamb Weston are down nearly 30% in 2024. Earlier this month, the company announceda restructuring planthat included a plant closing and layoffs. The company has bemoaned slow restaurant traffic and a move toward promotional fast-food value meals which resulted in diners gettingsmaller orders of fries.Lamb Weston's market value is around $10 billion, according to Visible Alpha data.Read the original article onInvestopedia.
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Utilities outperform the broader markets amid enthusiasm over AI electricity demand
| 2024-10-21 |
It covers the following details: Utilities have been on fire this year as enthusiasm over booming AI electricity demand pushes the sector higher.Case in point: The S&P 500 Utilities ETF (XLU) is up a whopping 29% so far this year — the best-performing sector to date, compared to the broader index's 23% rise.Much of the gains stem from enthusiasm over power producers that stand to benefit from the electrification boom — which includes Big Tech's massive appetite for AI data centers and electric vehicles.By 2050, electricity is projected to become the largest source of energy worldwide, according to a recentMcKinsey study.Utilities have been the best performers this year.Also, five of the top 10 returning companies in the S&P 500 this year have been energy companies, noted Matt Sallee, president ofTortoise Capital. “Utilities and midstream infrastructure are going to be secondary beneficiaries of the AI theme,” he said in a recent note.There’s no better example of that investor fever than the S&P 500's top performer this year, power producer Vistra Corp(VST).Shares of the Irving, Texas-based company are up 243% year to date, outperforming even AI heavyweight Nvidia (NVDA), up 186% during the same period.On Thursday, JPMorgan analysts initiated coverage of Vistra along withtwo other Wall Street favorites, Talen Energy (TLN) and Constellation Energy (CEG) — all with an Overweight rating,The analysts said the independent power producers (IPPs) stand to benefit from "a paradigm shift in power demand" amid structural tailwinds like manufacturing on-shoring, electrification trends, and data-center development."We do not see competitive market supply growth matching this demand, enabling IPPs to capture outsized margins for an extended period of time," wrote JPMorgan's Jeremy Tonet and his team.As Yahoo Finance’s Julie Hymanpointed out, recent headlines like Microsoft (MSFT)teaming upwith Constellation Energy to restart a nuclear reactor at Three Mile Island, and Amazon (AMZN) buying up a data center campus from Talen Energy have put Big Tech and its
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Altman-Backed Nuclear Stock Doubles in Value on AI Power Demand
| 2024-10-21 |
It covers the following details: (Bloomberg) -- A developer of advanced nuclear systems backed by Sam Altman has more than doubled in value this week as investors rushed to pile into companies associated with the power industry.Most Read from BloombergA Broken Oil Pipeline Plunges South Sudan’s Capital Into ChaosDrug Decriminalization Spawns a Political Debacle for ProgressivesCities Look to AI to Flag Residents’ Trash and Recycling MistakesInside the ‘Utopias’ of Mexico CityOne City’s Plan to Re-Link a Neighborhood That Robert Moses DividedShares of Oklo Inc., which went public in May after merging with a blank-check company sponsored by the OpenAI chief executive and serial dealmaker Michael Klein, have spiked 115% to a record $19.72 this week. The gains come as Amazon.com Inc., billionaire financier Ken Griffin, and Alphabet Inc.’s Google unveiled investments in next-generation nuclear energy firms.Oklo shares have been volatile since going public, sinking as low as $5.35 on Sept. 9 before more than tripling over the past month and a half. On Friday, the stock spiked to an intraday peak of $20.64 from a $9.15 close just a week ago — vaulting its market capitalization to top $2.4 billion.Santa Clara, California-based Oklo is benefiting from the surge in artificial intelligence and other computing that’s driving a boom in power-hungry data centers and helping to boost demand for electricity for the first time in decades.NuScale Power Corp., a peer of the still-private and Amazon-backed X-Energy, has jumped more than 35% this week, while Centrus Energy Corp. is up more than 60%.However, Oklo is still years away from having a functional operating reactor, something it had said would likely be in service before the end of the decade.Despite that, its stock is bringing a paper windfall to Altman and Klein, as well as executives Jacob DeWitte and Caroline Cochran. Altman owns about 3.2 million shares, worth $60 million as of Friday’s trading, while Klein’s nearly 14 million share stake from the SPAC deal is worth more than $
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