2023 Nov 7, US Market
Wall Street’s winning streak continued Tuesday, with shares of technology firms and companies that depend on discretionary consumer spending lifting major stock indexes.
Treasurys also continued to rally. The yield on 10-year notes fell to 4.57%, down from 4.662% Monday and 5% last month. Yields fall as prices rise.
Falling yields tend to benefit riskier assets such as technology stocks. Tech shares are rebounding from a summer swoon when Treasury yields climbed to their highest levels in years.
Now that yields have fallen back, the tech stocks that have led the 2023 rally, including chip-maker Nvidia and Facebook owner Meta Platforms, are climbing anew. Those companies as well as the rest of the so-called Magnificent Seven stocks each rose on Tuesday.
Slumping oil prices dragged down energy stocks, the worst-performing sector in the S&P 500 on Tuesday. Benchmark U.S. oil futures shed $3.45 a barrel on Tuesday to end at $77.37, the lowest price since late July.
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said over the weekend that it will extend output cuts of one million barrels a day until the end of the year in an effort to boost prices. The country’s national oil company, Saudi Arabian Oil Co.—known as Aramco—on Tuesday reported a decline in quarterly profit because of lower prices and volumes.
Fed's Logan: Inflation readings look like they're trending toward 3%, not 2%.
Fed's Bowman: I continue to expect further rate hikes are needed.
US 3-Year Note Auction
High Yield 4.701% vs WI 4.702%
Bid-to-Cover ratio 2.67
US sells $48 bln
Awards 4.28% of bids at high
Primary dealers take 16.26%
Direct 19.13%
Indirect 64.6%
Edward Jones upgraded HP Inc. (HPQ) to Buy from Hold. The firm thinks the shares are attractively valued and that the personal computer market will return to growth in 2024 as PCs purchased during the pandemic are replaced.
DA Davidson upgraded Monday.com (MNDY) to Buy from Neutral with a $170 price target ahead of the company reporting its Q3 results on Monday, November 13. The firm believes the company can outperform guidance by "a healthy margin" based on its analysis of third-party data, talking to managements, and recent reads from relatively similar software reports.
Goldman Sachs double upgraded DigitalOcean (DOCN) to Buy from Sell with an unchanged price target of $33. The firm believes cyclical risks are priced in with the shares down 7% year-to-date while the company's structural improvements are underappreciated.
Wedbush upgraded Ventas (VTR) to Outperform from Neutral with a price target of $51, up from $44. The company showed a "decisive response to its Holiday by Atria hiccup" during Q2, recovering nicely during Q3 with that portfolio either transitioned or getting an influx of capital, the firm tells investors in a research note.
Argus upgraded Hess Corp. (HES) to Buy from Hold with a $171 price target. Following the announcement of its merger with Chevron (CVX), the value of the stock has fallen sharply as Hess faced pressure from weaker crude oil prices and recession concerns, the firm tells investors in a research note.
Deutsche Bank downgraded Peloton (PTON) to Hold from Buy with a price target of $4, down from $13. The downgrade follows a transfer of analyst coverage. While the firm remains bullish on Peloton having a large total addressable market ahead of it that can support accelerative growth, it says the confidence in underwriting the success of its growth drivers in the medium term is challenging.
BofA downgraded Sonos (SONO) to Neutral from Buy with a price target of $12, down from $20. The firm's channel checks confirm weakness in consumer electronics.
Stifel downgraded Ventyx Biosciences (VTYX) to Hold from Buy with a price target of $6, down from $56, following the "disappointing data" from the VTX958 Phase 2 psoriasis study and discontinuation of the psoriasis and psoriatic arthritis programs. LifeSci Capital also downgraded Ventyx Biosciences to Market Perform from Outperform with a $5 price target.
William Blair downgraded Olo (OLO) to Market Perform from Outperform without a price target. The company reported slightly better than expected Q3 results but underlying trends were disappointing, the firm tells investors in a research note.
Rosenblatt downgraded Adtran (ADTN) to Neutral from Buy with a price target of $7, down from $11. The firm cites the company's high exposure to telecom and Europe for the downgrade.
RBC Capital initiated coverage of Home Depot (HD) with a Sector Perform rating and $303 price target. There are a lot of reasons to like the story over the long term, but various macro factors, including high rates, persistent inflation, and shift from goods to services, skew Home Depot's near-term earnings risk to the downside, the firm tells investors in a research note.
RBC Capital initiated coverage of Lowe's (LOW) with a Sector Perform rating and $194 price target. While Lowe's under-penetration in pro is a meaningful share gain and margin opportunity over the long-term, it is likely to result in underperformance versus peers near-term as the consumer backdrop worsens, the firm tells investors in a research note.
Bernstein initiated coverage of Birkenstock (BIRK) with a Market Perform rating and $37.15 price target. Birkenstock distribution "can only be kept on a tight leash as long as the brand experiences strong momentum and desirability," the firm tells investors in a research note.
Citi initiated coverage of BridgeBio (BBIO) with a Buy rating and $42 price target. The firm believes the shares are compelling given the significant near-term commercial opportunity of acoramidis post the recent Phase 3 success for the treatment of ATTR-CM.
UBS initiated coverage of Accenture (ACN) with a Neutral rating and $333 price target. Macro uncertainty is balanced by secular shifts in customer preferences towards verticalized offerings in software, the firm tells investors in a research note.
Uber (UBER) advanced after what Piper Sandler called "solid" gross bookings growth in Q3 and better than expected Q4 EBITDA guidance
GlobalFoundries (GFS) reported upbeat Q3 earnings and provided Q4 earnings and revenue guidance
Crescent Point (CPG) agreed to acquire Hammerhead Energy (HHRS) for C$21 per share
Hindenburg Research said in a short report that EHang (EH) has a "major credibility issue," but the company rebutted that the report published today by the short seller "contains untrue statements and misinterpretation of information"
CFPB has proposed federal oversight of providers of digital wallets and payment apps
Intel (INTC) is the leading candidate to potentially receive billions under the U.S. Chips Act, WSJ reports
Baidu (BIDU) has ordered AI chips from Huawei in 2023, in a shift away from Nvidia (NVDA), Reuters says
Italy regulators are seizing over $800M from Airbnb (ABNB) for tax issues, Bloomberg reports
Citi (C) weights major layoffs as part of CEO Jane Fraser's sweeping corporate overhaul, CNBC reports
Activist investor Elliott has built an over $1B stake in BioMarin (BMRN), Reuters reports
TransMedics (TMDX) increases after reporting quarterly results and raising its FY23 guidance
Olaplex (OLPX) and Alteryx (AYX) gains after reporting quarterly results
Rover Group (ROVR) higher after reporting Q3 results, raising its FY23 guidance, and providing its outlook for Q4
ADTRAN (ADTN) falls after announcing it has suspended its dividend
Olo (OLO) declines after reporting quarterly results
RingCentral (RNG) reported Q3 results and provided guidance for Q4 and FY23
Datadog (DDOG) reported Q3 results, with CEO Olivier Pomel commenting "We were pleased with our execution in the third quarter"
Planet Fitness (PLNT) reported Q3 results and raised its FY23 guidance
NXP Semiconductors (NXPI) announced Q3 results and provided guidance for Q4
Carlyle (CG) reported Q3 results, with CEO Harvey Schwartz commenting "Our portfolio continues to perform despite an increasingly complex environment"
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