4 minutes ago
Debt ceiling impasse threatens the “fundamental building block” of the US financial system, Comerica says
Bill Adams, chief economist at Comerica Bank, says the stronger-than-expected drop in consumer sentiment in May likely reflects Americans’ concerns about the ongoing debate over the debt ceiling.
“This is also reflected in the National Federation of Independent Business’ Small Business Optimism Index, which fell to a 10-year low in April,” Adams wrote in a statement Friday. “It’s no coincidence that small business sentiment was so weak the last time the federal government crossed the fiscal cliff in early 2013.”
The economist pointed to the major downside risks stemming from the impasse in the debt ceiling negotiations, which has caused government bond yields to fluctuate sharply in recent weeks.
“Bonds issued by the Treasury Department are a fundamental building block of the American financial system. No one can predict what will happen if these blocks all break at the same time,” Adams said. “In Washington’s previous fiscal games, sentiment recovered just a few months after the crisis ended. On the other hand, it will not be nice if the government becomes insolvent.”
– Hakyung Kim
19 minutes ago
According to a survey by Morgan Stanley, Walmart+ achieves record membership
According to Morgan Stanley, Walmart’s membership program has reached about 20 million customers, representing about 15.5% of US households. Not only is this a record for the program called Walmart+, it’s also the fifth consecutive increase from the company’s previous survey in early April.
“While it’s a lower estimate than our previous estimate, our estimate still suggests that Walmart+ fees account for about 4-5% of Walmart’s total U.S. EBIT in fiscal 2024 and about 20% of fiscal 2024.” overall US EBIT growth (although a… The caveat is that this doesn’t take into account the higher cost of servicing members), the company said in a statement Thursday.
– Tanaya Macheel
24 minutes ago
Gold is still a good hedge for investors, according to Bank of America
Gold is on track for a weekly decline, even if the S&P 500 and Dow Jones Industrial Average break through by the weekend — but the precious metal still has a place in investors’ portfolios over the long term.
“After a decade [quantitative easing] As gold drives bonds, alternative investments and equities simultaneously, it continues to offer robust diversification benefits and plays an important role in efficient portfolios,” said Savita Subramanian, head of US equity and quantitative strategy at Bank of America.
Gold has outperformed after “incomplete” Fed rate-hike cycles, she noted, adding that geopolitical tensions and sanctions may spur investor interest in the precious metal’s hedging opportunities.
– Darla Mercado
53 minutes ago
Wolfe Research downgrades Disney as direct-to-consumer growth struggles
Wolfe Research downgraded Disney’s shares to “Peer Perform,” citing slowing growth in the company’s direct-to-consumer business and linear TV segment.
“DTC plan for >subs, >prices and Read more about Wolfe Research’s downgrade here. — Samantha Subin Before an hour This week’s inflation data, which showed price categories like used cars rising again, is a reminder that regional banks can’t count on Fed rate cuts to help clean up their balance sheets, said Brian Mulberry, a client portfolio manager at Zacks Investment Management. “We’re not over the hill yet. Regional banks have yet to be prepared for what the new high cost of capital will look like. … Any bank can be brought down by an emotional response and a rush for deposits,” said Mulberry. The portfolio manager said his team still owns some of the larger regional banks like Fifth Third but has pared down some of the smaller names in the group. The SPDR S&P Regional Banking ETF (KRE) lost less than 1% in midday trade. – Jesse Pound Before an hour Wells Fargo downgraded Fox, citing a lack of near-term catalysts for the media stock’s shares. Analyst Steven Cahall said in a note on Friday that there was “much less reason to get excited” in the foreseeable future. Shares lost about 0.3% on Friday. Read more about the call here. — Samantha Subin 2 hours ago Here are some of the names making the biggest moves in midday trading: For more stocks moving in midday trading, see the full story here. – Michelle Fox 2 hours ago According to Daniel Clifton, head of policy research at Strategas, we are entering an age of “austerity”. “This is truly the first of a multi-year austerity phase that we are entering,” Clifton said Friday on Squawk on the Street. “This is the first time in 35 years that the cost of servicing debt is rising. So we’ve been able to cut taxes, increase spending without increasing our debt-service costs, and the free lunch is over.” Clifton made his comments amid ongoing concerns about the debt ceiling negotiations. On Friday, the Congressional Budget Office said tax revenues and contingency measures could help the US avoid a July default if the Treasury Department successfully weathers challenges in June. However, it was also reiterated that the risk of a default next month remains. — Sarah Min 2 hours ago Seventeen stocks in the S&P 500 hit new highs on Friday, many trading at all-time highs. Notable names included food companies. S&P 500 new 52-week highs: Meanwhile, 11 stocks hit their 52-week lows: — Chris Hayes, Sarah Min 3 hours ago Carl Icahn’s holding company Icahn Enterprises rallied 6% on Friday, trimming this week’s losses to 12%. The stock rallied after notable short seller Hindenburg Research went short, citing “inflated” asset valuations and other reasons. Icahn Enterprises released its earnings report on Wednesday, which included a $500 million buyback approval. The company also declared a quarterly dividend of $2 per share. — Yun Li 5 hours before Consumers turned more bearish in May as persistently high inflation and problems in the banking sector weighed on sentiment. The University of Michigan Consumer Survey returned a reading of 57.7 for the month, down from 63.5 in April and below the Dow Jones consensus estimate of 63. One-year inflation expectations eased slightly to 4.5% but rose to 3.2% in the five-year forecast, the highest level since June 2008. -Jeff Cox 5 hours before Shares of First Solar rose more than 20% in early trade Friday after the company announced it would acquire Evolar AB, a developer of thin films for solar panels, for up to $80 million. That would be the stock’s best day since April 9, 2013, when it gained 45.5%. — Fred Imbert 5 hours before 5 hours before According to a Portal report, the World Health Organization is beginning the first review of obesity treatment guidelines in 20 years. Francesco Branca, WHO director of nutrition and food safety, said talks about the new class of weight-loss drugs, which include Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro, are giving the wrong impression. “This is not a panacea,” Branca told the news service, adding that treatment should include lifestyle changes. Drugs known as GLP-1 agonists have helped patients achieve greater weight-loss successes, but the hard-won results may wear off after the drugs are stopped, studies have shown. Wall Street has predicted that demand for these drugs could top $100 billion a year. WHO’s draft recommendation for treating children could be ready by the end of the year, with guidance for adults to follow. Novo shares are up 1.5%, while Eli Lilly shares are up 2.5%. Before that, Lilly shares hit a 52-week high. —Christina Cheddar Berk 5 hours before Copper (JUL) is down -3.7% week to date, facing its worst week since February 24, when copper fell 3.81%. Meanwhile, LME zinc hit a low of $2,517.50 per metric ton. This was the lowest level since November 4, 2020, when zinc traded at just $2,506.5. See grafic… Copper prices in 2023 — Gina Francolla, Hakyung Kim 5 hours before The main moving average edged up slightly in early trading on Friday. The Dow climbed around 60 points, while the S&P 500 and Nasdaq each gained around 0.2%. — Fred Imbert 6 hours ago Baird analyst Peter Benedict said in a note to clients Thursday night that investors should scale back expectations for forthcoming earnings reports from Home Depot and Lowe’s. “Slacking demand indicators and a delayed start to spring have prompted us to lower our 1Q comp and EPS estimates for HD/LOW. While last year was also seasonally weak, our controls point to another lackluster start for seasonal outdoor categories and demand across all three sectors.” “The benchmarks we track have slowed significantly compared to the fourth quarter,” said Benedict. Despite lowering estimates and cutting price targets, Benedict maintained an overweight stance on both stocks. Home Depot will report its first-quarter results before the market close on May 16, while Lowe’s will report a week later on May 23. — Jesse Pound, Michael Bloom 6 hours ago Baird analyst Peter Benedict said in a note to clients Thursday night that investors should scale back expectations for forthcoming earnings reports from Home Depot and Lowe’s. “Slacking demand indicators and a delayed start to spring have prompted us to lower our 1Q comp and EPS estimates for HD/LOW. While last year was also seasonally weak, our controls point to another lackluster start for seasonal outdoor categories and demand across all three sectors.” “The benchmarks we track have slowed significantly compared to the fourth quarter,” said Benedict. Despite lowering estimates and cutting price targets, Benedict maintained an overweight stance on both stocks. Home Depot will report its first-quarter results before the market close on May 16, while Lowe’s will report a week later on May 23. — Jesse Pound, Michael Bloom 6 hours ago Bitcoin is on track to end the week down 10.6% in what Coin Metrics would say would be its worst week since Nov. 11 in the days following the FTX plunge. It last traded down more than 1% at $26,416.31. It previously hit a low of 26,138.19%, its lowest since March 17. The crypto-asset declined throughout the week as investors weighed a number of negative developments, including: Bitcoin is lower or up less than 1% over the past six days. That alone could weigh on sentiment, said Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank. – Tanaya Macheel 6 hours ago According to Jefferies, Molson Coors stock is “finally paying off” as the company’s management revitalization program gains momentum. Jefferies reiterated his buy recommendation for Molson Coors in a statement on Thursday. The company also raised its price target on the shares to $74, up 15.6% from Thursday’s close. “In the near term, the bar is set at a higher level than it’s been in years as TAP capitalizes on Bud Light’s (temporary?) social media fallout,” said analyst Kevin Grundy. Shares rose 1.2% in premarket trading on Friday. The stock is up more than 24% year-to-date.Regional banks are “not out of the woods,” says portfolio manager
Wells Fargo downgrades Fox
Stocks that make the biggest moves at midday
Dan Clifton of Strategas says we are entering an age of “austerity”.
17 S&P 500 stocks hit new highs
Carl Icahn’s holding company rebounds 6%, cutting weekly losses
Consumer sentiment fell more than expected in May
First Solar is heading for its best day since 2013
PacWest stock inches higher
Anti-obesity drugs are not a silver bullet, says the World Health Organization
Copper is on course for its worst week since February
Shares open slightly higher
Upbeat analyst lowers estimates for Home Depot and Lowe’s
Upbeat analyst lowers estimates for Home Depot and Lowe’s
Bitcoin faces its worst week of the year
Molson Coors is a beneficiary of the Anheuser-Busch fallout, Jefferies says