He once visited The Virgin Islands... they are now called The Islands
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Rubric Capital urges Xperi stockholders to vote for its nominees
Rubric Capital Management, an investment advisor whose managed funds and accounts collectively own approximately 9.0% of the outstanding shares of common stock of Xperi, issued the following statement in response to Xperi's recently updated investor presentation in connection with its 2024 Annual Meeting of Stockholders. The letter read, in part, "As longtime stockholders of Xperi, we have tolerated many things. Years of underperformance. Poor transparency. Excessive compensation. Wanton spending on 'science projects.' But we cannot tolerate the twisting of financial realities to present falsified versions of share performance and dilution to investors. That is a bridge too far...Xperi doesn't seem to understand why Rubric is seeking new representation on the Board. We are doing so because since the spin-off, it is apparent that the Xperi Board has set stockholders and insiders on two different paths. It is also clear to us that the path for stockholders is currently typified by investment losses and margin and growth disappointment, while the other path, for insiders, is one of personal enrichment based on tenure at the expense of stockholders. Rubric wants the paths of stockholders and insiders to align so that both can share in the benefit of an improved Xperi, and we are confident that electing Thomas A. Lacey and Deborah S. Conrad can help achieve this. That's what this proxy contest is about."
goooooooooooooooooooooood morning bobber
$AAPL 11.2 BILLION LESS shares outstanding since they started buying back their own stock in 2013
that's 42% LESS shares
and they are buying another $110 billion..
Treasuries and Wall Street futures are surging on the tame, goldilocks U.S. jobs report, and it's putting an extra bid into European markets as well. The DXY is suffering, however, and is lower against all of its G10 peers. Short dated Treasuries paced the move with the 2-year falling -16 bps to 4.707%, but has bounced back to 4.77%. It closed at 5.03% on Tuesday after the hot ECI and ahead of the FOMC decision. The wi 3-year richened -15 bps to 4.54%, but is back at 4.615%. The wi 10-year slid to 4.435%, down -14 bps, but is at 4.480. And, the wi 30-year is at 4.650 down 7.7 bps, versus the session low of 4.625%. Wall Street futures spiked as the data show the economy cooling but not crashing. The NASDAQ is up 1.5%, while the S&P 500 and Dow are 1.1% and 1.27% firmer, respectively. Stocks were already rallying after Apple's results last night. The DXY, meanwhile, has extended its post-FOMC losses, with JPY intervention adding to its weakening. The buck fell to 104.522 and is down from the 106.221 close Tuesday. USD-JPY has plunged to 151.86 from 157.80 Tuesday.
US FED FUNDS FUTURES RAISE CHANCES OF RATE CUT IN SEPTEMBER TO 78% AFTER JOBS DATA VS 63% JUST BEFORE
The U.S. jobs report revealed small but widespread undershoots across payrolls, hours-worked, wages, and the household data. Analysts saw a restrained 175k April payroll gain after -22k in revisions and an expected down-tick in the workweek back to 34.3 that allowed a -0.1% hours-worked decline. The goods sector posted a lean 14k jobs gain with a -0.4% hours-worked drop. Hourly earnings rose by just 0.2% to leave a drop in the y/y gain to a 3-year low of 3.9% from a prior low of 4.1% in March. Civilian employment rose by just 25k alongside an 87k labor force increase to allow a jobless rate rise to 3.86% from 3.83%, and the labor force participation rate sustained the March rise to 62.7% after three months at 62.5%, leaving the rate just below the 3-year high of 62.8% last seen in November. Payrolls are 4.4% above their level in Q4 of 2019, while hours-worked are 4.8% above that pre-pandemic level. The rise for real GDP from Q4 of 2019 to Q1 sits at 8.7%. Hours-worked have slightly outpaced payrolls since Q4 of 2019 due to a longer workweek, while real GDP has sharply outpaced both metrics due to the pandemic productivity climb, though both of shifts have been trimmed since 2021.
Largest decreases in stock option open interest $PTON $PFE $C $CCJ $SBUX $KTOS $PTON
Cohu price target lowered to $40 from $45 at B. Riley
B. Riley analyst Craig Ellis lowered the firm's price target on Cohu to $40 from $45 and keeps a Buy rating on the shares after the company reported Q1 results slightly above expectations while offering a Q2 outlook that was "fractionally lower as A&I bounces along." Following the report, the firm fine-tuned its estimates, with calendar 2024 a little lower and 2025 a little higher, the analyst tells investors.
? US Labor Apr Nonfarm Payrolls +175K; Consensus +240K
? US Apr Unemployment Rate 3.9%; Consensus 3.8%
? US Apr Average Hourly Earnings +0.20%, or +$0.07 to $34.75; Over Year +3.92%
? US Apr Private Sector Payrolls +167K and Government Payrolls +8K
? US Apr Average Workweek -0.1 Hour to 34.3 Hours
? US Apr Labor-Force Participation Rate 62.7%
? US Mar Payrolls Revised to +315K; Feb Revised to +236K
? US Labor Apr Nonfarm Payrolls +175K; Consensus +240K
? US Apr Unemployment Rate 3.9%; Consensus 3.8%
? US Apr Average Hourly Earnings +0.20%, or +$0.07 to $34.75; Over Year +3.92%
? US Apr Private Sector Payrolls +167K and Government Payrolls +8K
? US Apr Average Workweek -0.1 Hour to 34.3 Hours
? US Apr Labor-Force Participation Rate 62.7%
? US Mar Payrolls Revised to +315K; Feb Revised to +236K
? US Labor Apr Nonfarm Payrolls +175K; Consensus +240K
? US Apr Unemployment Rate 3.9%; Consensus 3.8%
? US Apr Average Hourly Earnings +0.20%, or +$0.07 to $34.75; Over Year +3.92%
? US Apr Private Sector Payrolls +167K and Government Payrolls +8K
? US Apr Average Workweek -0.1 Hour to 34.3 Hours
? US Apr Labor-Force Participation Rate 62.7%
? US Mar Payrolls Revised to +315K; Feb Revised to +236K
Texas Roadhouse price target raised to $160 from $138 at Barclays
Barclays raised the firm's price target on Texas Roadhouse to $160 from $138 and keeps an Equal Weight rating on the shares. The company's Q1 was better than expected top to bottom, and its comp momentum continued in Q2, the analyst tells investors in a research note.
Amgen reports Q1 adjusted EPS $3.96, consensus $3.87
Reports Q1 revenue $7.4B, consensus $7.44B. "With many of our innovative products delivering strong growth and promising new medicines advancing through our pipeline, we are excited about delivering attractive long-term growth," said Robert Bradway, chairman and CEO.
Okta call volume above normal and directionally bullish
Bullish option flow detected in Okta with 2,311 calls trading, 1.2x expected, and implied vol increasing over 1 point to 66.45%. May-24 100 calls and 5/3 weekly 96 calls are the most active options, with total volume in those strikes near 750 contracts. The Put/Call Ratio is 0.38. Earnings are expected on May 29th.
Synopsys nears $2 billion-plus software unit sale to buyout firms, sources say
GOOOOOOOOOOOOOOOOOooooooooooooooooooooooooooooooood morning
? 317000 ART INSTITUTES STUDENTS' DEBTS CANCELLED
? 317000 ART INSTITUTES STUDENTS' DEBTS CANCELLED
There's a famous adage on Wall Street called "Sell in May and go away," but investors are analyzing if the strategy still holds any merit. The investment approach posits that stocks tend to underperform in the six months through October, so investors should convert to cash at the start of May and then buy into a dip later in the fall. The origins of the saying go back quite a while, with reasons ranging from vacation cycles to bonus allocations, and others noting that the worst market crashes of 1929 and Black Monday in 1987 occurred during this period.
Thought bubble: Many academic papers and market research have been written on the subject, with breakdowns by stock class or time periods. While seasonal patterns do exist, and equities could face some increased risk in the summer months, they still tend to go up over the long term despite additional volatility. Staying fully invested could prove safer than trying to time the market in any given year, and there are countless indicators out there for better portfolio decisions, such as earnings, valuations, and the direction of interest rates.
"The 'Sell in May and go away' adage has a weak track record over the past 40 years, with the S&P 500 having positive returns in over 75% of summer periods," writes Lawrence Fuller, Investing Group Leader of The Portfolio Architect. "The S&P 500 has historically finished the year higher when the first four months posted a gain, supporting a continuation of the bull market."
Unconvinced? If anything, bears have been pointing to the outsized market gains seen since late October and the latest top hit in late March. In only five months, the S&P 500 Index (SP500) soared nearly 28% to hit a peak of 5,264, before slumping 4% in April. Dip buyers may still be waiting for the too-far, too-fast rally to fizzle before inching back into the market, especially given a new period of inflation uncertainty, slowing consumer spending and GDP, and signs of waning risk appetite. (5 comments)
Lack of progress
Recent data showing higher-than-desired inflation means it will take more time for the Fed to gain confidence that price pressures are sustainably easing. That was the main message coming out of Jay Powell's FOMC presser on Wednesday, where he dismissed talk of stagflation after the central bank maintained its key interest rate at 5.25%-5.50% for the sixth consecutive meeting. The FOMC also decided to ease quantitative tightening by slowing the pace of its balance sheet runoff, pushing Treasury yields lower. "Powell adopted a more dovish tone," noted SA analyst Christopher Robb, but also "expressed confidence that long-term inflation expectations are anchored." (35 comments)
Industry heavyweight
It's hard to trade earnings. Shares of Novo Nordisk (NVO) fell more than 3% in premarket trading despite an outlook boost on the back of strong Q1 results. The performance was driven by increased demand for Novo's blockbuster GLP-1 weight-loss drugs Ozempic and Wegovy, which have taken the industry by storm and sent the stock flying. The Danish drugmaker still faces stiff competition in the weight-loss drug market from Eli Lilly (LLY), which has seen surging demand for its GLP-1s. Novo also warned of continued pricing pressures on its diabetes and obesity drugs, as well as supply constraints and shortages. (9 comments)
Big Oil gets bigger
M&A activity in the Permian Basin is progressing, with the FTC poised to approve Exxon Mobil's (XOM) $60B purchase of Pioneer Natural Resources (PXD) after the companies agreed to minor concessions. The approval is likely within days, but it will reportedly be conditioned on Pioneer founder and former CEO Scott Sheffield not joining Exxon’s board as planned. The all-stock deal was announced in October and would make Exxon the most dominant producer in the region. Pioneer is the Permian's largest operator at 9% of gross production, while Exxon is no. 5 at 6% of gross production. (14 comments)
Today's Markets
In Asia, Japan -0.1%. Hong Kong +2.5%. China -0.3%. India +0.2%.
In Europe, at midday, London +0.4%. Paris -0.7%. Frankfurt +0.1%.
Futures at 7:00, Dow +0.5%. S&P +0.7%. Nasdaq +0.9%. Crude +0.6% to $79.50. Gold -0.2% at $2,306.80. Bitcoin +0.3% to $57,822.
Ten-year Treasury Yield -3 bps to 4.61%.
Today's Economic Calendar
Auto Sales
7:30 Challenger Job-Cut Report
8:30 International Trade in Goods and Services
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
Companies reporting earnings today »
What else is happening...
Big Tech earnings wind down with Apple (AAPL): Looking for GenAI.
IPOs on watch as Viking (VIK) debuts 10% above IPO pricing level.
UnitedHealth (UNH) CEO confirms $22M ransomware payment.
Earnings miss, but NYCB (NYCB) soars on new financial targets.
Tesla (TSLA) pulls back on gigacasting ambitions after cost cuts.
Embraer (ERJ) explores making planes to rival Boeing and Airbus.
Shorts may be put to the test as Carvana's (CVNA) stock drives higher.
More chip earnings: Qualcomm (QCOM) beats, gives strong outlook.
Pfizer (PFE) raises full-year guidance amid major cost savings push.
J&J (JNJ) seeks $6B settlement to resolve talc-related cancer claims.
There's a famous adage on Wall Street called "Sell in May and go away," but investors are analyzing if the strategy still holds any merit. The investment approach posits that stocks tend to underperform in the six months through October, so investors should convert to cash at the start of May and then buy into a dip later in the fall. The origins of the saying go back quite a while, with reasons ranging from vacation cycles to bonus allocations, and others noting that the worst market crashes of 1929 and Black Monday in 1987 occurred during this period.
Thought bubble: Many academic papers and market research have been written on the subject, with breakdowns by stock class or time periods. While seasonal patterns do exist, and equities could face some increased risk in the summer months, they still tend to go up over the long term despite additional volatility. Staying fully invested could prove safer than trying to time the market in any given year, and there are countless indicators out there for better portfolio decisions, such as earnings, valuations, and the direction of interest rates.
"The 'Sell in May and go away' adage has a weak track record over the past 40 years, with the S&P 500 having positive returns in over 75% of summer periods," writes Lawrence Fuller, Investing Group Leader of The Portfolio Architect. "The S&P 500 has historically finished the year higher when the first four months posted a gain, supporting a continuation of the bull market."
Unconvinced? If anything, bears have been pointing to the outsized market gains seen since late October and the latest top hit in late March. In only five months, the S&P 500 Index (SP500) soared nearly 28% to hit a peak of 5,264, before slumping 4% in April. Dip buyers may still be waiting for the too-far, too-fast rally to fizzle before inching back into the market, especially given a new period of inflation uncertainty, slowing consumer spending and GDP, and signs of waning risk appetite. (5 comments)
Lack of progress
Recent data showing higher-than-desired inflation means it will take more time for the Fed to gain confidence that price pressures are sustainably easing. That was the main message coming out of Jay Powell's FOMC presser on Wednesday, where he dismissed talk of stagflation after the central bank maintained its key interest rate at 5.25%-5.50% for the sixth consecutive meeting. The FOMC also decided to ease quantitative tightening by slowing the pace of its balance sheet runoff, pushing Treasury yields lower. "Powell adopted a more dovish tone," noted SA analyst Christopher Robb, but also "expressed confidence that long-term inflation expectations are anchored." (35 comments)
Industry heavyweight
It's hard to trade earnings. Shares of Novo Nordisk (NVO) fell more than 3% in premarket trading despite an outlook boost on the back of strong Q1 results. The performance was driven by increased demand for Novo's blockbuster GLP-1 weight-loss drugs Ozempic and Wegovy, which have taken the industry by storm and sent the stock flying. The Danish drugmaker still faces stiff competition in the weight-loss drug market from Eli Lilly (LLY), which has seen surging demand for its GLP-1s. Novo also warned of continued pricing pressures on its diabetes and obesity drugs, as well as supply constraints and shortages. (9 comments)
Big Oil gets bigger
M&A activity in the Permian Basin is progressing, with the FTC poised to approve Exxon Mobil's (XOM) $60B purchase of Pioneer Natural Resources (PXD) after the companies agreed to minor concessions. The approval is likely within days, but it will reportedly be conditioned on Pioneer founder and former CEO Scott Sheffield not joining Exxon’s board as planned. The all-stock deal was announced in October and would make Exxon the most dominant producer in the region. Pioneer is the Permian's largest operator at 9% of gross production, while Exxon is no. 5 at 6% of gross production. (14 comments)
Today's Markets
In Asia, Japan -0.1%. Hong Kong +2.5%. China -0.3%. India +0.2%.
In Europe, at midday, London +0.4%. Paris -0.7%. Frankfurt +0.1%.
Futures at 7:00, Dow +0.5%. S&P +0.7%. Nasdaq +0.9%. Crude +0.6% to $79.50. Gold -0.2% at $2,306.80. Bitcoin +0.3% to $57,822.
Ten-year Treasury Yield -3 bps to 4.61%.
Today's Economic Calendar
Auto Sales
7:30 Challenger Job-Cut Report
8:30 International Trade in Goods and Services
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
Companies reporting earnings today »
What else is happening...
Big Tech earnings wind down with Apple (AAPL): Looking for GenAI.
IPOs on watch as Viking (VIK) debuts 10% above IPO pricing level.
UnitedHealth (UNH) CEO confirms $22M ransomware payment.
Earnings miss, but NYCB (NYCB) soars on new financial targets.
Tesla (TSLA) pulls back on gigacasting ambitions after cost cuts.
Embraer (ERJ) explores making planes to rival Boeing and Airbus.
Shorts may be put to the test as Carvana's (CVNA) stock drives higher.
More chip earnings: Qualcomm (QCOM) beats, gives strong outlook.
Pfizer (PFE) raises full-year guidance amid major cost savings push.
J&J (JNJ) seeks $6B settlement to resolve talc-related cancer claims.
Australia’s Trade Surplus Narrows as Households Defy High Rates
China’s Climate Envoy Has an Economic Case to Make in Washington
Biden Calls Ally Japan ‘Xenophobic’ Along With China, Russia
Japan Likely Spent About $23 Billion in Latest Yen Intervention
Powell Keeps Rate Cuts on Table But Leaves Timing Less Certain
You Can’t Call Jerome Powell a Big Teaser
What Will It Take for the Fed to Lower Rates?
In Jamie Dimon’s America, the Stock Market Has Already Voted
Wall Street Seizes Opportunity to Gut SEC Trading Surveillance
The State of Crypto Is Anything But Strong
Why Banks These Days Are So Excited About Being Boring
Blackstone Taps Vast Source of Cash in $1 Trillion Credit Push
NYSE-Parent ICE’s Profit Rises on Record Surge in Energy Market Volatility
Strongest U.S. Challenge to Big Tech’s Power Nears Climax in Google Trial
The Judge Deciding Google’s Fate
Why Megacorporations Shouldn’t Overestimate Their Monopoly Power
Musk’s Starlink Persists in Unauthorized Areas Despite Shutdown Warnings
Huawei Secretly Backs US Research, Awarding Millions in Prizes
Intel Bets $28 Billion Comeback on High=Tech US Chip Designs
BYD’s First-Quarter Story Is in The Margins
Apple’s Earnings Come With a Low Bar and Big Buyback Hopes
Shell Beats Forecasts on Gas-Trading Resilience; Launches $3.5 Billion Buyback
Moderna Posts Quarterly Sales Beat, Smaller Loss than Expected
Novo Nordisk Hikes Guidance as Weight-Loss Drug Sales Surge. Why the Stock’s Falling
Peloton CEO McCarthy to Step Down; Firm to Cut 15% of Workforce
? U.S INITIAL JOBLESS CLAIMS ACTUAL: 208K VS 207K PREVIOUS; EST 212K
? U.S CONTINUING JOBLESS CLAIMS ACTUAL: 1774K VS 1718K PREVIOUS; EST 1800K
World Acceptance reports Q4 EPS $6.09, consensus $4.34
Reports Q4 revenue $$159.3M, consensus $149.35M."During the most recent quarter, we did not see a significant change in borrowing from new and former customers compared to the same quarter of fiscal year 2023. Our customer base decreased by 1.5% during the twelve-month period ended March 31, 2024, compared to a decrease of 15.9% for the comparable period ended March 31, 2023. During the quarter ended March 31, 2024, the number of unique borrowers in the portfolio decreased by 6.2% compared to a decrease of 7.0% during the quarter ended March 31, 2023. We continued to improve the gross yield to expected loss ratio for all new, former, and refinance customer originations and will continue to monitor performance indicators and intend to adjust underwriting accordingly."
DoorDash price target lowered to $125 from $150 at Oppenheimer
Oppenheimer analyst Jason Helfstein lowered the firm's price target on DoorDash to $125 from $150 and keeps an Outperform rating on the shares. The firm notes shares were down 15% in after-hours trading as investors factor in slowing GOV growth and less margin upside, likely pushing bull case EBITDA targets from 2025 to 2026. While 21% GOV growth was above Street, Q2 guided to +17%, and Street margin estimates seem headed down, as Q1 margins in line and Q2 below Street, Oppenheimer adds.
Instacart price target raised to $48 from $36 at Oppenheimer
Oppenheimer raised the firm's price target on Instacart (CART) to $48 from $36 and keeps an Outperform rating on the shares. Within the Gig Economy, Instacart is the firm's top pick. While conservative, Oppenheimer forecasts Instacart's share will remain largely unchanged by 2026 at 21%. Nonetheless, the firm expects Amazon's (AMZN) grocery delivery subscription will put some pressure on net adds for CART's Instacart+, as some Prime Members will be likely to adopt Amazon's solution before signing up for Instacart, especially given the compare monthly fee/order thresholds. This also supports the acquisition of Instacart by Uber (UBER) or DoorDash (DASH), allowing them to bundle into a single monthly subscription.
SoFi Technologies raises FY24 EPS view to 8c-9c from 7c-8c, consensus 8c
Raises FY24 revenue view to $2.39B-$2.43B from $2.37B-$2.41B, consensus $2.37B. Raises FY24 adjusted EBITDA view to $590M-$600M from $580M-$590M. The company said, "2024 remains a transitional year for SoFi as the Tech Platform and Financial Services segments together are expected to drive growth and increase from 38% of total adjusted net revenue in 2023 to approximately 50% for the full year of 2024. For the full year 2024, management expects to deliver adjusted net revenue of $2.39 to $2.43 billion, which is $25 million higher than the implied prior guidance range of $2.365 to $2.405 billion. This guidance assumes Lending revenue will be 92% to 95% of 2023 levels, which is unchanged from prior guidance, Tech Platform will grow approximately 20% year over year, which is also unchanged, and Financial Services revenue is expected to grow more than 75% year over year. Additionally, management now expects to deliver adjusted EBITDA of $590 to $600 million, above prior guidance of $580 to $590 million. This represents 15 to 17% adjusted net revenue growth and a 25% Adjusted EBITDA margin. Management now expects full-year GAAP net income of $165 to $175 million, above prior guidance of $95 to $105 million, and GAAP EPS of $0.08 to $0.09, above prior guidance of $0.07 to $0.08. Management now expects growth in tangible book value of approximately $800 million to $1 billion for the year versus previous guidance of $300 to $500 million, given the benefits of the recent convertible debt exchange along with the effects of new convertible issuance. We now expect to end the year with a total capital ratio of over 16%, due to those transactions versus our previous guidance of 14%. We continue to expect to add at least 2.3 million new members in 2024, which represents 30% growth. "
Roku price target lowered to $80 from $110 at Susquehanna
Susquehanna analyst Shyam Patil lowered the firm's price target on Roku to $80 from $110 and keeps a Positive rating on the shares. The firm said they reported a solid 1Q with revenue and profitability above expectations. While 2Q headline numbers were generally fine, tougher comps and 606 accounting are expected to impact platform revenue growth in 2Q.
SoFi Technologies sees Q2 revenue $555M-$565M, consensus $580.73M
The company said, "For the second quarter of 2024, management expects to deliver adjusted net revenues of $555 to $565 million, adjusted EBITDA of $115 to $125 million and Net Income of $5 to $10 million."
SoFi Technologies reports Q1 EPS 2c, consensus 1c
Reports Q1 revenue $645M, consensus $556M. Reports Q1 tangible book value per share $3.92. Anthony Noto, CEO of SoFi Technologies, Inc. commented: "Our first quarter was an exceptionally strong start to 2024, demonstrating significant momentum as we responsibly grow revenue and diversify toward our Financial Services and Tech Platform segments, sustain profitability, reinforce our balance sheet, and grow our member base. We delivered adjusted net revenue of $581 million, representing 26% year-over-year growth. Financial Services and Tech Platform segment revenue combined grew 54% and represented a record 42% of consolidated adjusted net revenue, offsetting flat Lending segment revenue given a more conservative approach in light of macroeconomic uncertainty."
Tractor Supply price target raised to $300 from $265 at Piper Sandler
Piper Sandler raised the firm's price target on Tractor Supply to $300 from $265 and keeps an Overweight rating on the shares following Q1 results, which saw EPS upside with inline sales/comp. With over 10% EPS growth in Q1, and healthy potential for upside to 2024 guidance, Tractor Supply has one of the more attractive 2024 outlooks in the firm's coverage universe.
TESLA SHARES GAIN 8.6% ON BAIDU FULL-SELF DRIVING PARTNERSHIP
Elon Musk visits China as Tesla seeks self-driving technology rollout
goooooooooood mornong
While Meta's (META) heavy AI spending and light revenue outlook alarmed investors, huge investments in the new technology from other Big Tech players Alphabet (GOOG, GOOGL) and Microsoft (MSFT) are paying off. Both companies reported earnings that topped expectations across the board, cementing their dominance in the AI field and convincing investors that their huge AI bets are reaping more immediate returns.
Search strength: Alphabet surged by double digits AH on Thursday - GOOG +11.4%, GOOGL +11.6% - after its Q1 results easily cleared analyst expectations, with strong performance particularly at YouTube. The tech giant also rewarded investors with its first ever dividend and announced a $70B stock buyback. "Our results reflect strong performance from Search, YouTube and Cloud," said CEO Sundar Pichai. "We are well under way with our Gemini era and there’s great momentum across the company." He also noted that Google's AI offerings boosted core search results in the quarter.
AI cloud boost: Microsoft (MSFT) rose 4.4% AH on Thursday, as the tech giant's Q3 results beat expectations, helped by AI adoption across its cloud services, and its forecast largely matched Street estimates. "Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry," said CEO Satya Nadella. To note, the company's AI-driven spending in the quarter was about $1B more than what analysts expected, but that didn't deter investors as it appears warranted given huge customer demand.
SA commentary: Investing Group Leader Ahan Vashi said while Alphabet is spending big on AI, it is on track to generate around $80B free cash flow in 2024. However, he is moving to the sidelines as its "valuation is now too rich, and long-term risk/reward warrants a rating downgrade." SA analyst Livy Investment Research noted that Microsoft has a "lofty" valuation premium relative to its Magnificent 7 and broader tech sector peers. "However, we remain confident in further upside potential, given its expansive reach into AI opportunities across different layers of the value chain." (89 comments)
Inflation fears
Don't expect the inflation picture to get much, if any, better when the Commerce Department releases its March data for personal income and outlays today. Economists expect both the PCE price index and core PCE, which excludes volatile food and energy prices, to rise 0.3% M/M in March. To note, Q1 GDP didn't rise as much as expected, but PCE inflation came in hotter, unnerving investors. "This implies upside risks to the key monthly core PCE deflator and makes a near-term rate cut even less likely," said ING Economic and Financial Analysis. Even so, Treasury Secretary Janet Yellen affirmed that the fundamentals are in line with inflation continuing back down to normal levels. (10 comments)
Net neutrality
The Federal Communications Commission has voted to bring back net neutrality rules that had been repealed in 2017 under Trump's administration. The rules would prohibit internet providers from favoring or limiting certain kinds of traffic across the network, by re-establishing the treatment of internet providers as Title II common carriers. The FCC also used its new authority to block certain Chinese firms from providing broadband services in the U.S. over national security concerns. The FCC's decision "will deter investments and innovation necessary to connect all Americans," said Jordan Crenshaw, senior vice president, U.S. Chamber of Commerce Technology Engagement Center. (3 comments)
NBA streaming
Discussions are ongoing for the National Basketball Association's next round of media packages, which will be effective after the 2024-2025 season, and competition is heating up. Amazon (AMZN) and Google's (GOOG, GOOGL) YouTube are vying for a new NBA streaming package. Meanwhile, Comcast's (CMCSA) NBCUniversal has set its sights on a major TV deal currently held by Disney's (DIS) ESPN and Warner Bros. Discovery's (WBD) TNT. Both Disney and Warner have pitched paying much more while airing fewer games under a new pact. The companies' exclusive negotiating window to renew their contracts has expired, allowing the NBA to negotiate with other suitors. (3 comments)
Today's Markets
In Asia, Japan +0.8%. Hong Kong +2.1%. China +1.2%. India -0.8%.
In Europe, at midday, London +0.5%. Paris +0.3%. Frankfurt +0.7%.
Futures at 7:00, Dow +0.1%. S&P +0.7%. Nasdaq +1%. Crude +0.7% to $84.11. Gold +0.8% to $2,360.20. Bitcoin +0.9% to $64,172.
Ten-year Treasury Yield unchanged at 4.70%.
Today's Economic Calendar
Personal Income and Outlays
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
Companies reporting earnings today »
What else is happening...
US2Y yield tops 5%, US10Y yield hits five-month high after GDP data.
Bristol-Myers (BMY) to cut 2,200 jobs as part of $1.5B cost savings plan.
Anglo American (OTCQX:AAUKF) rejects BHP's $39B takeover offer.
Intel (INTC) stumbles as weak guidance and AI, foundry issues weigh.
Cannabis stocks outperform as pressure mounts for rescheduling weed.
Microsoft (MSFT)-backed cybersecurity firm Rubrik soars 21% in debut.
PG&E (PCG) CEO: Warren Buffett 'got it wrong' on California wildfire risk.
Paramount (PARA) sinks amid report deal with Skydance is getting closer.
Hertz (HTZ) slides 20% as depreciating Teslas (TSLA) dent bottom line.
Cleveland-Cliffs (CLF) CEO still interested in acquiring U.S. Steel (X).
BOJ keeps interest rate unchanged; yen hits weakest level in 34 years.
U.S. PCE chain price indexes each increased 0.3% in March for the headline and core, in line with expectations.These follow respective increases of 0.3% for both in February, after January gains of 0.4% and 0.5%.They leave 12-month rates at a 2.7% y/y from 2.5% y/y for the headline, the hottest since November. The core rate was steady at 2.8% y/y, unchanged from February (for 2 decimal points), and ties the slowest since March 2021.Personal income rose 0.5% from 0.3% previously.Compensation increased 0.6% from 0.7%.Wage and salary income climbed 0.7% from 0.7% (was 0.8%).Disposable income rose 0.5% from 0.2%.Spending surged 0.8% again, as it did in February.The savings rate fell to 3.2% from 3.6%.
Snap price target raised to $16 from $12 at Truist
Truist raised the firm's price target on Snap to $16 from $12 and keeps a Hold rating on the shares. The company's stronger than expected Q1 results reflect broad-based improvement across DR and Brand businesses, along with traction with Snapchat+ and good cost management, the analyst tells investors in a research note. The inflection observed in both DR and Brand growth suggest that changes to the ad products are starting to resonate with the growing roster of advertisers, the firm added.
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