2023 Nov 14, US Market
Stocks rose while bond yields fell as an unexpected slowdown in inflation boosted bets that the Federal Reserve's aggressive hiking cycle has ended and that the next move will be a cut in mid-2024.
Approximately 95% of the S&P 500 companies rose, with the index rising nearly 2%. Tesla led megacap gains, while Nvidia rallied for the tenth consecutive session. Regional banks increased by nearly 6%. The Russell 2000 small-cap index gained more than 5%. Goldman Sachs' basket of the most-shorted stocks outperformed the market, indicating that some traders are preparing to cover bearish bets. Five-year yields have fallen by 24 basis points to 4.42%. The dollar dropped 1.2%.
While Wall Street's rally may risk further easing of financial conditions, complicating the Fed's job, bets on a "pivot" next year have risen. Fed swaps show that the chances of another hike have nearly vanished, with the market pricing in a 50 basis-point rate cut by July.
Fed's Goolsbee: This year could see fastest non-war-related one-year fall in US CPI inflation in a century, with unemployment rate that never gets above 4%.
Bernstein upgraded Kraft Heinz (KHC) to Outperform from Market Perform with an unchanged price target of $40. The firm believes the pullback in the stock price is overdone.
Bernstein upgraded J.M. Smucker (SJM) to Market Perform from Underperform with a price target of $119, down from $123. The firm sees an overreaction to GLP-1's impact on future food volumes, and believes the risk/reward for the sector is modestly attractive at these current levels.
Deutsche Bank upgraded Take-Two Interactive Software (TTWO) to Buy from Hold with a price target of $175, up from $155. The firm believes a major product announcement, such as the highly anticipated trailer for GTA 6, is likely to drive positive investor sentiment and should serve as a catalyst for the stock.
Baird upgraded Aspen Technology (AZPN) to Outperform from Neutral with a price target of $202, up from $194. With the stock down 28% since the fiscal Q3 results in March and the valuation at low end of the historical range, the share price discounts concerns around the achievability of Aspen's fiscal 2024 annual contract value guide and EMR integration, the firm tells investors in a research note.
Barclays double upgraded Mosaic (MOS) to Overweight from Underweight with a price target of $42, up from $40. After a volatile Q3 and relative underperformance of potassium versus and nitrogen, the firm switched Americas agribusiness recommendations and double-upgraded Mosaic and Nutrien (NTR) given their potassium exposure, while upgrading ICL Group (ICL) to Overweight as well.
JPMorgan downgraded Beauty Health (SKIN) to Underweight from Neutral without a price target. The company's Q3 report was headlined by both a significant negative revision to the financial outlook and the exit of CEO Andrew Stanleick, the firm notes. Piper Sandler also cut Beauty Skin's rating to Underweight, while Canaccord, Benchmark, William Blair, and TD Cowen downgraded the stock to Neutral-equivalent ratings.
BofA double downgraded Ansys (ANSS) to Underperform from Buy with a price target of $295, down from $356. The firm has concerns around broader demand trends and U.S-China export restrictions.
Lake Street downgraded Asure Software (ASUR) to Hold from Buy with a price target of $8, down from $20. The firm believes the company can grow total revenue double-digits organically over the coming year, but says that the absence of ERC revenue will weigh on comps in the near-term.
Barclays downgraded Corteva (CTVA) to Equal Weight from Overweight with a price target of $50, down from $66, due to its persistent destocking overhang.
Barclays downgraded CF Industries (CF) to Underweight from Equal Weight with an unchanged price target of $85 given its recent relative outperformance.
Roth MKM initiated coverage of AMD (AMD) with a Buy rating and $125 price target. AMD is well-positioned from a product portfolio perspective to address the growing data center infrastructure market, and the firm's checks indicate that AMD is poised to gain further share in the cloud server market and is making further inroads in the enterprise market.
Roth MKM initiated coverage of ON Semiconductor (ON) with a Buy rating and $75 price target. ON targets the large and growing SiC power device market, says the firm, which believes the stock "represents a differentiated investment in automotive and industrial power semiconductors."
Roth MKM initiated coverage of Marvell (MRVL) with a Buy rating and $60 price target. Marvell has an opportunity in the cloud AI market, particularly with newer generative AI driving a faster-than-typical upgrade cycle to 800G networking, says the firm, which believes that the company's broad data-infrastructure-centric portfolio is well-positioned to benefit from high-performance data center infrastructure upgrades.
CL King initiated coverage of Integra LifeSciences (IART) with a Buy rating and $50 price target. The firm believes the stock price is currently depressed due to the Boston recall and FDA Warning Letter, but as the company proceeds with its remediation plans, the stock price should move higher.
B. Riley initiated coverage of Real Good Food (RGF) with a Buy rating and $6 price target. Strong demand at retail is outstripping supply and the company is ramping production "toward utilization that brings the P&L to the precipice of positive AEBITDA," says the firm.
Home Depot (HD) reported upbeat Q3 results and narrowed its FY23 earnings and revenue guidance
Amazon (AMZN) has reached a deal with Snap (SNAP) to run shopping ads, The Information reports
Fisker (FSR) reported lower-than-expected Q3 earnings and revenue
Tencent Music (TME) reported mixed Q3 results, with executive chairman Cussion Pang saying the company reported "strong growth" in online music services despite social entertainment headwinds
Airbnb (ABNB) said it has acquired AI company Gameplanner.AI, with CNBC saying the purchase price was "just under" $200M
Uber (UBER) plans to launch a small test of "Uber Tasks" in select markets, Bloomberg reports
Google (GOOGL) has filed a lawsuit against unnamed individuals in India and Vietnam for tricking U.S.-based small business owners into clicking fake ads, WSJ reports
Fox Corp. (FOX) has been sued by former Fox News reporter Jason Donner for discrimination and retaliation, NY Times says
Pfizer (PFE) is set to cut 500 jobs as a result of it discontinuing its pharmaceutical sciences small molecule operations at Sandwich in Kent, Sky News reports
Stellantis (STLA) is getting ready to offer a new round of buyouts to approximately half of its U.S. white-collar staff, WSJ says
Harmony Gold (HMY) gains in New York after HSBC upgraded the stock to Hold from Reduce
Sabre (SABR) higher after announcing a multi-year renewal agreement with lastminut.com
On Holding (ONON) declines in New York after reporting Q3 results and raising its FY23 outlook
Sea Limited (SE) falls in New York after reporting quarterly results
Canadian Solar (CSIQ) lower in New York after reporting Q3 EPS and revenue that missed consensus
Asure Software (ASUR) reported Q3 results and provided guidance for Q4, FY23, and FY24
Beauty Health (SKIN) reported Q3 results and cut its FY23 guidance, with Piper Sandler downgrading the stock to Underweight and commenting there are "too many uncertainties to even be comfortable just remaining on the sidelines right now"
Sally Beauty (SBH) reported Q4 results, with CEO Denise Paulonis commenting, "We are pleased to report full year financial results in line with the expectations we laid out at the beginning of FY23"
Aramark (ARMK) reported Q4 results and provided guidance for FY24
Vipshop (VIPS) reported Q3 results, with CEO Eric Shen commenting, "we had a decent quarter, primarily driven by the sustained momentum in the apparel category
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