News
Stocks Plunge, Treasury Yields Jump on Another High Inflation Report
Closing of stock indices: Real estate leads lower indices; Discount stores, energy gain
April 10, 2024, 4:09 pm EDT
The Dow Jones
Wal-Mart (WMT) rose 1.4%, one of several low-cost retailers to advance following Wednesday’s hotter-than-expected inflation data.
Chevron (CVX) rose 0.4%, driven by rising oil prices as tensions in the Middle East increased.
HomeDepot (High definition) shares fell 3.1% after Wednesday’s inflation data raised concerns that higher interest rates for longer could delay a recovery in the U.S. housing market.
Boeing (BA) fell 2% a day after the New York Times reported that a whistleblower raised concerns about the safety of its Dreamliner 787s, adding to the jet maker’s woes.
The S&P 500
Axon Company (AXON) gained 2.3% after Needham raised his price target on the stock, citing increased demand for its security products.
Nvidia (NVDA) rose 2% alongside Constellation Energy Group, another AI beneficiary (CEG), which gained 1.6%.
Dollar Tree (DLTR) rose 1.1% and Dollar General (DG) advanced 0.8%.
Outdoor Deckers (COVERED AREA) fell 6.7% after Truist downgraded the stock and its price target, citing decreased demand for its Hoka running shoes.
Real estate stocks fell amid concerns about higher interest rates following Wednesday’s inflation report. Extra space storage (EXR) fell 6.5%, while construction company DR Horton (DHI) fell 6.4%, and leading office real estate developer Boston Properties (BXP) fell 6.1%.
Delta Airlines (DAL) gave up initial gains to close down 2.5%, despite beating earnings estimates due to strong demand for travel.
Nasdaq 100
Goal (GOAL) rose 0.6%, as revealed the latest version of its custom AI chipbecoming the latest tech giant to step up efforts to reduce its dependence on Nvidia and profit from huge investments in AI.
Commercial real estate analytics provider CoStar Group (CSGP) followed the decline of other real estate stocks, falling 5.3%.
Most semiconductor stocks fell, including Advanced Micro Devices (OMG), down 2.1%, and Marvell Technology (MRVL), which fell 2.6% before its AI event on Thursday.
Roblox Shares Rise as Online Gaming Platform Teams Up with PubMatic for Video Ads
April 10, 2024, 3:39 pm EDT
Roblox (RBLX) shares rose on Wednesday afternoon, bucking a broader slowdown for U.S. stocks, after the online gaming platform reached a deal with advertising technology company PubMatic (BOMB) that will provide media buys from Roblox’s video advertising inventory when it becomes available later this year.
PubMatic said the partnership will allow more brands to have easy access to Roblox’s more than 71 million daily active users and will give the company “scaled access to advertising demand from premium brands.”
In November, Roblox began experimenting with video ads, explaining that it hopes they will “increase developer payments and advertiser value per impression.”
Financial terms of the deal were not disclosed.
Roblox shares rose 1.3% to $39.61 at the end of Wednesday’s session. The stock has lost about 15% of its value over the past 12 months. PubMatic shares fell 3.4% in late trading.
TSMC revenue rises in Q1, beating expectations amid boom in AI-fueled demand
April 10, 2024, 2:42 pm EDT
Taiwan semiconductor manufacturing company (TSM) on Wednesday reported quarterly revenue which was above analysts’ expectations and just above the midpoint of the company’s performance guidance.
TSMC, which will release a full earnings report next week, has seen a boom in demand for its products, which it supplies to several tech giants including Apple (AAPL) and Nvidia (NVDA), thanks in part to artificial intelligence (AI) last year’s craze.
The company reported revenue of 195.21 billion New Taiwan Dollars ($6.07 billion) in March, a 34% increase from the year-ago month. For the quarter, revenue rose 17% to TWD592.64 billion ($18.42 billion), above analysts’ expectation of TWD580 billion ($18.03 billion), according to estimates compiled by Visible Alpha, and also above the midpoint of TSMC’s guidance of between $18.8 billion and $18.8 billion.
American depositary receipts (ADRs) of the Taiwanese company rose 0.3% to US$145.87 on Wednesday afternoon, after rising to US$148.43 earlier in the session. Earlier this week, they gained from the announcement that TSMC would receive up to US$6.6 billion in CHIPS Act financing to expand its plans to three factories at an Arizona facility it began construction in 2021.
Macy’s names activist investor board picks, ending proxy fight
April 10, 2024, 1:28 pm EDT
Macy’s (M) on Wednesday ended a proxy fight with activist investor Arkhouse Management in agreeing to calls for a board change.
Macy’s announced it has named two new independent directors, Richard Clark and Richard Markee, both Arkhouse nominees. The retailer added that with this decision, Arkhouse agreed to withdraw its candidates for board seats and shareholder proposals that it intended to be voted on at Macy’s annual shareholder meeting.
The move is expected to bring the largest U.S. department store chain closer to being taken private by Arkhouse and its partner, Brigade Capital Management. The company noted that it “continues to collaborate with Arkhouse and Brigade in connection with their proposed acquisition of the Company.”
Macy’s shares were little changed Wednesday afternoon and were down about 2% in 2024.
SoundHound AI sinks after share sale announcement
April 10, 2024, 12:19 pm EDT
SoundHound AI’s recent big breakthrough (SOUND) shares continued to fall on Wednesday after the artificial intelligence (AI) products for speech and sound recognition announced a share sale.
SoundHound AI said it has entered into an agreement with five financial institutions to sell up to $150 million worth of its shares from time to time.
In March, SoundHound shares soared more than 300% since the start of the year after AI darling Nvidia (NVDA) revealed that he had made a bet in the company.
However, they have fallen steadily over the past month due to concerns about the company’s financial situation. Still, even with Wednesday’s 9% drop to $4.40, shares have more than doubled in 2024.
Construction companies and real estate are hit hard by inflation data
April 10, 2024, 11:34 am EDT
Homebuilders and real estate investment trusts tumbled on Wednesday after stubbornly high inflation data amplified concerns that interest rates will remain high for some time.
Higher interest rates for longer are expected to weigh on both residential and commercial real estate markets. The real estate market went into a deep freeze last year, when rising mortgage rates put home ownership out of reach for almost all first-time buyers. Rates have retreated in recent months – partly in anticipation of imminent rate cuts –raising hopes of a busy spring selling season.
Construction companies such as DR Horton (DHI) and Lennar (LEN) were some of the worst-performing stocks in the S&P 500 on Wednesday morning, falling 4.4% and 4%, respectively.
The commercial real estate sector also struggled under the weight of higher rates and historically low post-Covid occupancy rates. The prospect of lower interest rates has eased some of the pressure on landlords facing pressure to refinance loans as pre-Covid leases come up for renewal in the coming years.
Boston Properties (BXP), developer of high-end workplaces, fell 5% on Wednesday morning, while CoStar Group (CSGP), provider of commercial real estate analytics, fell 5.1%.
Delta Soars as Profits Drop, Upbeat Guidance on Strong Travel Demand
April 10, 2024, 10:07 am EDT
Delta Airlines (DAL) shares rose in early trading Wednesday, after the carrier reported record first quarter revenuewith adjusted income It is earnings per share (EPS) the numbers also exceeded expectations.
Delta reported an 8% year-over-year revenue increase to $13.75 billion, along with adjusted net income of $288 million, or 45 cents per share, well above analyst estimates compiled by Visible Alpha of $13.15 billion, $230.8 million and 36 cents per share, respectively.
Executives said they expect the strong travel numbers seen so far this year to continue into the busiest summer travel season, as Delta reported a load factor—the percentage of available seat capacity occupied by passengers—of 83% in the quarter, up from 81% last year and within the company’s pre-pandemic averages of 82% to 88%.
Delta shares rose about 2.8% to $48.65 in early trading Wednesday. It increased by almost 21% in the year and 43% in the last 12 months.
Stocks Making Biggest Moves in Premarket
April 10, 2024, 9:29 am EDT
Earnings:
- Delta Air Lines Inc.DAL): The operator’s shares rose more than 3% after reporting record revenue in the first quarter and higher-than-expected profit.
- (RBLX): Shares of the online video game company rose more than 1% after it hired advertising technology firm PubMatic (PUBM) to boost his nascent advertising business.
Losses:
- Monday.com Inc.MNDY): Shares of the project management software company fell about 6% after Citi analysts downgraded the stock to neutral, citing concerns about demand and pricing.
- Vistra Corp.VST): The utility’s shares fell about 4% after pricing a $1.5 billion senior note offering.
- (M): Shares of the department store fell about 2% after the company said it had resolved a proxy fight with activist investor Arkhouse Management and agreed to add two Arkhouse nominees to its board of directors.
Futures fall off a cliff after March inflation data
April 10, 2024, 8:48 am EDT
Dow futures tumbled, trading 0.9% lower immediately after the March CPI was released.
S&P 500 futures sank 1.2%.
Nasdaq 100 futures fell 1.4%.
Stock futures rise ahead of March CPI
April 10, 2024, 8:27 am EDT
Futures contracts tied to the Dow Jones Industrial Average rose about 0.3% in premarket trading on Wednesday.
S&P 500 futures rose just over 0.2%.
Nasdaq 100 futures also traded up about 0.2% just over an hour before markets opened.