Elon Musk’s influence is such that he is now able to provoke involuntary chain reactions. Yesterday, Samsung Publishing's stock shot up. Why? Because the Korean company owns 19.4% of the music producer SmartStudy, the source of that irritating "Baby Shark" video, with 8.7 billion views on YouTube. Elon Musk just tweeted "Baby Shark crushes everything! More views than human beings". That's it.
In the same vein, but with far more money at stake, we have AMC Entertainment. The movie theater chain is, along with GameStop, the symbol of "meme stocks", those stocks that are pushed by individual investor communities on the grounds that they are unfairly maligned by the establishment, attacked by short sellers or whatever. Yesterday, AMC issued 8.5 million new shares to the Mudrick Capital fund for $230.5 million. So far, nothing very original: management would be wrong to deprive itself if it can finance itself at the end of a difficult period for the sector. The express capital increase was carried out at a little over $27 per share. I should point out that the stock has gained 1400% since the beginning of the year and was worth only $12 a week ago. In the previous session, the stock gained another 23% to trade around $32. Mudrick Capital sold its shares immediately after receiving them with a nice capital gain. The announcement of the fund's exit did not even cause a big impact on the stock price. To add insult to injury, Mudrick has suggested, according to a good source, that the stock is overvalued.
After all, the company got funded, the fund made money and the stock kept going up. Everybody's happy, right?
Yesterday on Wall Street, there was fairly strong bias towards the themes that have dominated asset allocations in recent months. The oil sector was particularly strong, as were financials and basic materials. Healthcare, on the other hand, took on a bright red hue. I wrote a few days ago that investors were wavering in May on which strategy to hold, with some deferrals to quality defensives. That was not the case at all yesterday, where we returned to the good times of the early months of 2021. In such a pattern, techs were again a bit left behind, with declines of 12% for Tesla and 6% for Apple in 2021, against increases of 46% for Exxon Mobil and 30% for JPMorgan Chase.
Oil stocks were in the spotlight again yesterday. OPEC+ was careful not to derail the well-oiled machinery of oil prices, confirming a slow trajectory of production growth. This willingness not to open the floodgates wide while economic growth is in full swing keeps the barrel on an upward trajectory. The cartel does not have a very difficult task at the moment.
Today's economic highlights:
Only one major indicator today, the April producer price index in the euro zone. Australia announced a quarterly GDP growth of 1.8%, slightly higher than expected.
The euro/dollar pair is trading at EUR 0.8205. Gold has fallen back below USD 1,903 per ounce. Oil remains strong at USD 70.90 per barrel of Brent and USD 68.27 per barrel of WTI. The US government bond is yielding 1.61% over 10 years. Bitcoin is stabilizing around USD 37,500.
* Pfizer - Israel's health ministry said Tuesday that a study found a likely link between Pfizer's Covid-19 vaccine and the occurrence of a few cases of heart inflammation, mainly in young men who received a second dose of the product.
* Tesla is recalling nearly 6,000 vehicles in the U.S. because of possible loose bolts in its braking system, according to documents sent to the U.S. National Highway Traffic Safety Administration (NHTSA) and made public Wednesday. The automotive group is down 0.7% in pre-market trading.
* Tyson Foods announced the immediate resignation for personal reasons of its president and CEO, Dean Banks, who was replaced by COO Donnie King.
* Zoom Video Communications on Tuesday said it expects to post higher-than-marketed revenue in the current quarter as demand for its services remains strong. The stock gained 2.4% in pre-market trading.
* Moderna announced Tuesday that it has reached an agreement with Thermo Fischer Scientific on the production and packaging of its COVID-19 vaccine.
* Etsy announced on Wednesday that it has bought the Depop application, which sells second-hand fashion items, for $1.63 billion.
* Southwestern Energy, a gas producer, announced the acquisition of its competitor Indigo Natural Resources for about $2.7 billion.
* AMC Entertainment jumped 23.2% in pre-market trading. The movie theater operator's stock remains the focus of individual investors mobilized against short sellers.
- AstraZeneca: Credit Suisse analyst Dominic Lunn has maintained his recommendation on the stock with a Buy rating. The target price is still set at GBp 9000
- Bank of America : Goldman Sachs changes PT to $46 From $45, maintains Buy rating
- Bodycote: Liberum remains long with target raised from GBp980 to GBp990.
- BP Plc: Cowen starts market performance tracking with a GBp 330 target.
- Chevron : Wells Fargo Adjusts Price Target on Chevron to $110 from $109, maintains Equal-Weight rating
- ConocoPhillips : Wells Fargo changes PT to $69 from $67, stays Overweight
- Costco Wholesale : Morgan Stanley lifts PT to $415 From $410, stays Overweight
- Cranswick: Jefferies remains at Hold with a price target raised from GBp 3700 to GBp 4370.
- Dow Inc: Goldman Sachs is keeping its Neutral rating. The target price is reviewed upwards from USD 64 to USD 66.
- easyJet: JP Morgan analyst David Perry maintains his Neutral opinion on the stock. The target price continues to be set at GBp 845.
- Exxon Mobil : Wells Fargo changes PT $67 From $65, stays Overweight
- Ferguson: Jefferies remains in charge with a price target raised from GBp 10,581 to GBp 11,560.
- Greencore: Jefferies upgraded from buy to hold with a target of GBP 140.
- Immunovant : Truist Securities lowers PT to $24 from $48, maintains Buy rating
- Marks and Spencer: Berenberg remains Buy with a price target raised from GBP 180 to GBP 195.
- McDonald's Corporation: Barclays retains his positive opinion on the stock with a Buy rating. The target price is being increased from USD 270 to USD 283.
- Morgan Stanley : Daiwea Securities increases PT to $100 from $86, maintains Outperform rating
- Occidental Petroleum : Wells Fargo adjusts price target to $28 From $27, maintains Equal-Weight rating
- Rolls-Royce: JP Morgan stays Neutral on the stock. The target price remains unchanged at GBp 105.
- Royal Dutch Shell: Cowen starts tracking at Outperform with a target of GBp 1727.70.
- Ryanair Holdings: JP Morgan confirms his opinion on the stock and remains Neutral. The target price is unchanged and still at EUR 15.80.
- International Consolidated Airlines group: JP Morgan research considers the stock attractive and recommends it with a Buy rating. The target price remains unchanged at EUR 2.70.
- Tate & Lyle: Berenberg upgrades from Hold to Buy targeting GBp 855.