Yesterday, the Dow Jones was pulled up by IBM's 7.8% gain after the publication of its results and the rise of its two heavyweights, UnitedHealth and The Home Depot. The world's oldest stock market index is rather unusual, as it is based on share prices, not market weight. For example, the insurer UnitedHealth, whose share price is USD 546, has three times more influence than Apple, which is worth USD 167, even though the capitalization of the Apple brand is more than five times higher. This is a legacy of the past, whereas so-called modern indexes are calculated on the basis of the capitalization of the companies that make up the index, and more generally even on the basis of the floating capitalization, i.e. the share of capital actually available for sale. This is the case of the S&P500, which has lost 0.06%, weighed down by Amazon (-2.6%), Meta Platforms (-7.8%) and Tesla (-5%). However, after the close, the car manufacturer stock bounced back due to record results.
And then of course there's Netflix's, which declined 35% after losing subscribers for the first time in a decade. In its wake, rival Walt Disney fell 5%. Investors seem to be wondering if the sector has reached a ceiling. Even seasoned investors like the famous financier Bill Ackman are giving up. His Pershing Square fund, which invested heavily in the promise of a return to better fortunes for Netflix at the beginning of the year, yesterday scrapped its positions in a hurry, like a common small holder who had fallen in love with the latest biotech craze, incurring an estimated loss of $430 million.
In other news, in Eastern Europe, while Russia tested a ballistic missile, fighting continues in Mariupol. The Fed's Beige Book released yesterday did not reveal anything we did not already know. The small spike in US debt yields seems to have subsided and the 3% mark for ten-year yields has not been breached. There are nine trading sessions left before the U.S. central bank announces its next rate hike: the CME's FedWatch prediction tool gives a 95.4% probability of a half-point rate hike.
Today, Wall Street is in the green, especially the Nasdaq, lifted by a surge in Tesla shares. Airline stocks are also doing well, after United Airlines and American Airlines forecast a return to profitability in Q2.
Economic highlights of the day:
European inflation for March, the Philly Fed index for April and the weekly unemployment figures in the United States are today's main indicators.
The dollar is down 0.3% to EUR 0.9189. The ounce of gold is trading at USD 1943. Oil is little changed from the previous day's prices with North Sea Brent crude at USD 107.88 per barrel and US light crude WTI at USD 103.57. The yield on 10-year U.S. debt is down again at 2.86%. Bitcoin is up to $42,690.
* Tesla reported quarterly results Wednesday that beat Wall Street expectations, as higher vehicle prices helped the U.S. automaker offset rising costs and supply chain issues. The stock is up 7% in trading before the Wall Street opening.
* Netflix - Pershing Square Capital Management, the hedge fund of billionaire William Ackman, announced on Wednesday that it had sold the 3.1 million shares it acquired in the capital of Netflix just three months ago, resulting in a loss of $400 million, as the share price of the world's number one video streaming company collapsed on Wednesday by 35% against the backdrop of a drop in the number of subscribers. Netflix shares are still losing 1.1% in pre-market trading.
* American Airlines posted a smaller-than-expected net loss in the first quarter, as a rebound in demand in March offset a decline in January following the emergence of the Omicron variant of the coronavirus. The stock jumped 10.1% in pre-market trading.
* United Airlines forecast a surprise second-quarter profit on strong demand, sending the stock up 7.5% in premarket trading.
* Dow gained 2.09% in premarket trading after reporting a better-than-expected quarterly profit on the back of a rate increase amid strong demand.
* AT&T on Thursday reported a 2.5% increase in revenue in its cell phone business in the first quarter thanks in part to the sustained rollout of 5G services, but the group's overall revenue fell in the period by 13%. The stock gained 1.5% in pre-market trading.
* Blackstone on Thursday reported a 63% increase in quarterly distributable profit for the first quarter, as strong performance in its real estate and credit businesses offset weakness in its hedge fund division. The stock is up 4% in premarket trading.
* Snap is scheduled to report its first-quarter results after the close of Wall Street.
* Alphabet - Russia has fined Alphabet-owned Google 11 million rubles for what it says is its failure to remove "false" information about its "special operation" in Ukraine, the TASS news agency reported Thursday.
* Didi - The Wall Street-listed Chinese group specializing in VTC and meal delivery services has decided to close its delivery business in Japan two years after its launch, the Nikkei daily reported.
- Amazon.com: UBS adjusts price target to $4,550 from $4,625, maintains buy rating.
- Aviva: Jefferies remains "Hold" with a price target raised from GBp 435 to GBp 460.
- Chevron: RBC Capital Markets downgrades to sector perform from outperform. PT down 4.4% to $165.
- Domino's Pizza: UBS adjusts price target to $430 from $475, maintains neutral rating.
- Equifax: Evercore ISI downgrades to inline from outperform. PT down 9.7% to $200.
- Exxon: RBC Capital Markets upgrades to outperform from sector perform. PT up 14% to $100.
- Monarch Casino: Jefferies downgrades to hold from buy. PT down 3.3% to $90.
- National Grid: Berenberg upgrades from buy to hold, targeting GBp 1210.
- Netflix: UBS downgrades to neutral from buy, adjusts price target to $355 from $575.
- PBF Energy: Wells Fargo Securities upgrades to equal-weight from underweight. PT up 3.5% to $30.
- Pennymac Financial Services: BTIG starts at Buy with $60 Price Target.
- Rio Tinto: Berenberg lowers its recommendation to Neutral versus Buying. The target price has been modified and is now set at GBXp 6500 compared to GBp 6700.
- Rivian: Mizuho Securities lowers price target for rivian automotive to $90 from $95, maintains buy rating.
- Saia: Raymond James lowers price target to $275 from $350, maintains outperform rating
- Sleep Number: Piper Sandler downgrades to neutral from overweight. PT down 4.8% to $49.
- Tesla: Citi raised the target on Tesla Inc. to $375 from $313. Maintains sell rating.
- The Boston Beer Company: Consumer Edge Research lowers price target to $393 from $421, maintains equalweight rating.
- The Carlyle Group: Morgan Stanley adjusts price target to $54 from $59, maintains equalweight rating.