Traders Market Weekly: No Fear as Risk Complacency Rises

Viewing 15 posts - 1 through 15 (of 43 total)
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  • #74391
    Truman
    Participant

    Applied Materials (AMAT 208.55, -1.18, -0.6%): downgraded to Hold from Buy at Jefferies
    Texas Instruments (TXN 186.23, -0.82, -0.4%) downgraded to Hold from Buy at Jefferies
    NVIDIA (NVDA 906.30, +7.52, +0.8%): Jefferies reiterated its Buy rating and raised price target from $780 to $1,200

    #74392
    Truman
    Participant

    Equity indices in the Asia-Pacific region began the week on a mixed note.

    Japan’s Nikkei: -0.1%,
    Hong Kong’s Hang Seng: +0.8%,
    China’s Shanghai Composite: -0.2%,
    India’s Sensex: +0.2%,
    South Korea’s Kospi: UNCH,
    Australia’s ASX All Ordinaries: UNCH.

    Japan
    April M2 Money Stock 2.2% yr/yr (expected 2.5%; last 2.5%)
    The Bank of Japan reduced its purchases of 5- to 10-yr JGBs for the first time since December.

    China
    April CPI 0.1% m/m (last -1.0%); 0.3% yr/yr (expected 0.1%; last 0.1%).
    April PPI -2.5% yr/yr (expected -2.3%; last -2.8%).
    April New Loans CNY730 bln (expected CNY1.20 trln; last CNY3.09 trln)
    April total social financing -CNY200 bln (last CNY4.87 trln)
    China plans to sell CNY1 trln worth of 20-, 30-, and 50-yr bonds this week.
    Developer Country Garden reportedly made its late onshore coupon payment within the grace period.

    Australia
    April NAB Business Confidence 1 (last 1) and NAB Business Survey 7 (last 9)
    Australia’s government is reducing its domestic growth forecast for the year to 2.0% from 2.25%. The government expects that inflation will return to the 2-3% range by the end of 2024.

    New Zealand
    April FPI 0.6% m/m (last -0.5%)

    #74393
    Truman
    Participant

    Major European indices trade just below their flat lines.

    STOXX Europe 600: -0.1%,
    Germany’s DAX: -0.1%,
    U.K.’s FTSE 100: -0.2%,
    France’s CAC 40: -0.2%,
    Italy’s FTSE MIB: +0.2%,
    Spain’s IBEX 35: -0.1%.

    Swiss
    Q2 SECO Consumer Climate -24 (expected -40; last -38)

    France announced that foreign investors pledged to invest EUR15 bln in the country, up from EUR13 bln announced for 2023.

    British Prime Minister Sunak is expected to say that the U.K. stands at a “crossroads” as he prepares to call an election.
    Spain’s Socialist party won majority in a regional election in Catalonia.

    #74394
    Truman
    Participant

    Intel (INTC 30.20, +0.35, +1.2%): in discussions with Apollo (APO) to fund $11 bln plant in Ireland, according to WSJ
    Apple (AAPL 185.43, +2.38, +1.3%): closing in on deal to use ChatGPT technology on iPhone
    Amazon (AMZN 187.91, +0.43, +0.2%): US investigating two crashes involving AMZN Zoox autonomous SUVs, according to Bloomberg
    Microsoft (MSFT 417.65, +2.91, +0.7%): will invest EUR 4 bln in cloud and artificial intelligence services in France, according to Bloomberg

    #74395
    Truman
    Participant

    Market lunch
    Dow 39423.25 -89.59 (-0.23%)
    Nasdaq 16356.34 +15.47 (0.09%)
    SP 500 5214.61 -8.07 (-0.15%)
    10-yr Note +23/32 4.482
    NYSE Adv 1521 Dec 1209 Vol 322 mln
    Nasdaq Adv 2494 Dec 1642 Vol 2.6 bln

    Industry Watch
    Strong: Information Technology, Materials, Utilities, Real Estate
    Weak: Communication Services, Consumer Discretionary, Health Care, Energy, Industrials

    Moving the Market
    — Losses in some mega cap stocks
    — Early buyer enthusiasm fading somewhat
    — Drop in market rates
    — Wait-and-see in front of PPI on Tuesday, CPI on Wednesday

    The market had been trading higher initially, driven by carryover momentum from recent gains. Early buyer enthusiasm faded somewhat with no specific catalyst. Market breadth is still positive, but margins have narrowed compared to earlier in the session.

    Shortly after the open, advancers lead decliners by a 5-to-2 margin at both the NYSE and at the Nasdaq. Now, advancers have a 5-to-3 lead over decliners at the NYSE and a 2-to-1 lead at the Nasdaq.

    Four of the 11 S&P 500 sectors trade higher led by information technology (+0.7%), which has benefitting from turnaround action Microsoft (MSFT 415.18, +0.45, +0.1%). Shares of Apple (AAPL 186.95, +3.68, +2.0%) have been trading higher through the session, sitting near intraday highs now.

    There has also been some speculative interest driving some meme stocks sharply higher following the first X post by “Roaring Kitty” in three years. GameStop (GME 29.41, +11.95, +68.2%) is surging in response.

    Commodity futures, aside from gold ($2,340.10/ozt, -34.90, -1.5%), are trading higher.

    WTI crude oil futures are up 0.7% to $78.78/bbl; natural gas futures are up 3.3% to $2.33/mmbtu; and copper futures are trading 1.8% higher to $4.74/lbs.

    The price action in energy-related commodities hasn’t boosted the S&P 500 energy sector, which sports a 0.4% decline.

    #74396
    Truman
    Participant

    Softbank Earnings:

    SoftBank Group said its net asset value surged thanks to its U.K. chip-design unit, Arm, and that it has committed to five investments in artificial intelligence on the scale of $1 billion each.

    SoftBank’s quarterly briefing Monday showed its transition to an AI focus, the latest makeover for a company that previously was centered on telecommunications and at one point had much of its value tied up in Chinese internet company Alibaba.

    Now it has shed its Alibaba stake and Arm accounts for nearly half of the group’s assets. Although it has lost money in each of the past three years, SoftBank said its net total assets reached $183.6 billion as of March 31, up $48 billion from three months earlier, after investors piled into Arm’s stock.

    The stock was listed in the U.S. last September but SoftBank retains a 90% stake in the unit, whose designs are widely used in smartphone chips and increasingly in AI applications.

    SoftBank is betting on growth in AI after a difficult period. The Japanese technology investment company said it booked a net loss of nearly 228 billion yen, equivalent to nearly $1.5 billion, in the fiscal year ended March 31, compared with analysts’ forecasts of a slight profit. That followed losses of ¥970 billion and ¥1.7 trillion in the two previous fiscal years.

    “It was a year in which we were able to go on the offensive, while still playing defense,” said SoftBank’s chief financial officer, Yoshimitsu Goto.

    The company had held back from making new investments as its flagship Vision Fund investment vehicles suffered huge losses amid the pandemic and high interest rates. More recently it has resumed an active search for opportunities.

    SoftBank and its related funds invested $3.9 billion in the year ended March 31 and it said it has committed to invest in five additional companies, with each investment around $1 billion. The new deals include GreenBox, a joint venture that offers AI-powered automated warehouse services.

    Last week, Arm posted a sharp increase in net profit for the three months ended March as revenue jumped partly because of higher demand for chips related to AI and data centers.

    SoftBank’s Vision Fund business edged into the black in the most recent fiscal year after losing tens of billions of dollars the previous year. Tech stocks surged for much of the year on enthusiasm over AI and the prospects of potential Federal Reserve rate cuts later this year.
    Goto, the CFO, said SoftBank wanted Arm and the other companies in which it is investing to create a new ecosystem for AI. He said SoftBank’s chief executive, Masayoshi Son, was continuing to take a break from quarterly earnings meetings so he could focus on AI but would likely appear at the company’s annual shareholder meeting in June.

    In a speech last October, Son said artificial general intelligence would become overwhelmingly more powerful than all of human intelligence over the next decade. “Take advantage of it or be left behind,” he said.

    Write to Megumi Fujikawa at megumi.fujikawa@wsj.com and Kosaku Narioka at kosaku.narioka@wsj.com

    #74397

    Dow 39,431.51 -81.33 -0.21%
    S&P 500 5,221.42 -1.26 -0.02%
    Nasdaq 16,388.24 47.37 0.29%
    VIX 13.60 1.05 8.37%
    Gold 2,341.90 -33.10 -1.39%
    Oil 79.23 0.97 1.24%

    #74400

    Dow 39,558.11 126.60 0.32%
    S&P 500 5,246.68 25.26 0.48%
    Nasdaq 16,511.18 122.94 0.75%
    VIX 13.35 -0.25 -1.84%
    Gold 2,361.90 18.90 0.81%
    Oil 78.12 -1.00 -1.26%

    #74404
    TradersCom
    Keymaster

    Producer Price index for final demand increased 0.5% month-over-month in April (consensus 0.3%) following a downwardly revised 0.1% decline (from 0.2%) in March. The index for final demand, excluding food and energy, also increased 0.5% month-over-month (consensus 0.2%) following a downwardly revised 0.1% decline (from 0.2%) in March. On a year-over-year basis, the index for final demand was up 2.2%, marking the largest increase since April 2023, while the index for final demand, excluding food and energy, was up 2.4%, unchanged from March.

    #74405
    TradersCom
    Keymaster

    The key takeaway from the PPI report is that nearly three quarters of the increase in final demand prices was due to a 0.6% increase in the index for final demand services, something that will detract from the Fed’s confidence that inflation is on a sustainable path to its 2% target.

    #74406
    TradersCom
    Keymaster

    The NFIB Small Business Optimism Index hit 89.7 in April (Briefing.com consensus 88.9), up from 88.5 in March.

    #74407
    TradersCom
    Keymaster

    Fed Chairman Powell repeated that he does not expect a rate hike to be the next policy move, saying that the April PPI reading was “quite mixed.”
    The Biden administration confirmed new tariffs on imports of Chinese electric vehicles and other products.
    French President Macron spoke in favor of more bank mergers in the EU.
    Bank of England Chief Economist Pill said that good progress is being made in the fight against inflation, but more work remains ahead.
    Japan’s troubled Aozora Bank received a JPY50 bln injection from Daiwa Securities.
    The International Monetary Fund concluded its annual consultation with Japan, noting that the country’s economy is growing, but at an uneven pace.
    There was growing speculation that the People’s Bank of China could announce a reserve requirement ratio cut this week.
    Japan’s April PPI was up 0.3% m/m (last 0.2%), rising 0.9% yr/yr, as expected (last 0.9%). March Machine Tool Orders were down 11.6% yr/yr (last -8.5%).
    South Korea’s April Import Price Index was up 2.9% yr/yr (last -0.5%) and Export Price Index was up 6.2% yr/yr (last 2.3%).
    India’s April WPI Inflation was up 1.26% yr/yr (expected 1.0%; last 0.5%).
    Eurozone’s May ZEW Economic Sentiment rose to 47.0 from 43.9 (expected 46.1).
    Germany’s April CPI was up 0.6% m/m, as expected (last 0.6%), rising 2.4% yr/yr, as expected (last 2.3%). May ZEW Economic Sentiment rose to 47.1 from 42.9 (expected 44.9) and ZEW Current Conditions improved to -72.3 from -79.2 (expected -75.0).
    U.K.’s March Average Earnings Index + Bonus was up 5.7% yr/yr (expected 5.3%; last 5.7%). March three-month employment decreased by 177,000 (expected -215,000; last -156,000). March Unemployment Rate rose to 4.3% from 4.2%, as expected. Q4 Labor Productivity was down 0.3% qtr/qtr (expected -1.0%; last 0.5%).
    Spain’s April CPI was up 0.7% m/m, as expected (last 0.8%), rising 3.3% yr/yr, as expected (last 3.2%).
    Swiss April PPI was up 0.6% m/m (expected 0.2%; last 0.1%) but down 1.8% yr/yr (last -2.1%).

    #74408
    MoneyNeverSleeps
    Participant

    Arcutis Biotherapeutics (ARQT) beats by $0.37, beats on revs… ARQT up 16.9%
    Blink Charging (BLNK) secures contract as one of the official EV charging providers for the state of New York… BLNK up 4.3%
    Boot Barn Holdings (BOOT) beats by $0.07, reports revs in-line, comps fell 5.9%; guides Q1 EPS below consensus, revs above consensus; guides FY25 EPS below consensus, revs below consensus… BOOT down 6.7%
    dLocal Limited (DLO) misses by $0.06, misses on revs; new share repurchase program up to $200 mln… DLO down 18.9%
    Infinera (INFN) issues preliminary Q1 results, misses on EPS; company also provides Q1 guidance, misses on EPS, revs… INFN down 12.8%

    #74409
    MoneyNeverSleeps
    Participant

    Fair Value for Wednesday, May 15:

    S&P 500: 5,270
    Nasdaq 100: 18,413
    DJIA: 39,666

    #74410

    Dow 39,908.00 349.89 0.88%
    S&P 500 5,308.15 61.47 1.17%
    Nasdaq 16,742.39 231.21 1.40%
    VIX 12.45 -0.97 -7.23%
    Gold 2,393.60 33.70 1.43%
    Oil 78.86 0.84 1.08%

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