Stocks Post Modest Gains on Positive Corporate News

The S&P 500 Index ($SPX) (SPY) this morning is up +0.26%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.36%. 

Stock indexes this morning are slightly higher. Some positive corporate news is boosting the overall market.  Tesla is up more than +4% after CEO Musk said the company will unveil its robotaxis on Aug 8. Also, Ducommun is up more than +17% after confirming the board of directors received an unsolicited non-binding indication from Albion River to buy all outstanding shares for $60 per share in cash.  In addition, property stocks and real estate investment trust stocks are climbing today after the Wall Street Journal reported that Blackstone offered to acquire AIR Communities for $10 billion or $39.12 per share. 

However, rising bond yields are limiting gains in the overall market as the 10-year T-note yield rose to a 4-1/2 month high today.  Stronger-than-expected US economic news and recent hawkish Fed comments have curbed expectations for Fed rate cuts.

The markets are awaiting Wednesday’s US consumer price report for market direction along with Q1 corporate earnings season that begins in earnest this Friday with results from big banks, including JPMorgan Chase, Citigroup, and Wells Fargo.

The markets are discounting the chances for a -25 bp rate cut at 7% for the next FOMC meeting on April 30-May 1 and 54% for the following meeting on June 11-12.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is up +0.64%.  China's Shanghai Composite fell to a 1-week low and closed down -0.72%.  Japan's Nikkei Stock Index closed up +0.91%.

Interest Rates

June 10-year T-notes (ZNM24) this morning are down -12 ticks.  The 10-year T-note yield is up +3.0 bp at 4.432%. June T-note prices this morning tumbled to a 4-1/2 month low, and the 10-year T-note yield rose to a 4-1/2 month high of 4.462%.  T-notes are under pressure from last Friday’s stronger-than-expected US Mar payroll report, which reinforced speculation the Fed will be in no hurry to cut interest rates. Also, supply pressures are undercutting T-notes as the Treasury will auction $119 billion of T-notes and T-bonds this week, starting with Tuesday’s $58 billion auction of reopened 3-year T-notes. 

European government bond yields today are moving higher.  The 10-year German bund yield rose to a 2-1/2 week high of 2.456% and is up +3.6 bp at 2.434%.  The 10-year UK gilt yield rose to a 5-week high of 4.128% and is up +2.2 bp at 4.091%.

The Eurozone Apr Sentix investor confidence index rose +4.6 to a 2-year high of -5.9, stronger than expectations of -8.3.

German Feb industrial production rose +2.1% m/m, stronger than expectations of +0.5% m/m and the biggest increase in 13 months.

German trade data was mixed.  German Feb exports fell -2.0% m/m, weaker than expectations of -0.5% m/m. Feb imports unexpectedly rose +3.2% m/m versus expectations of -1.2% m/m.

US Stock Movers

GE Vernova (GEV) is up more than +6% to lead gainers in the S&P 500 after JPMorgan Chase upgraded the stock to overweight from neutral. 

Tesla (TSLA) is up more than +4% to lead gainers in the Nasdaq 100 after CEO Musk said the company will unveil its robotaxis on Aug 8.

Nike (NKE) is up more than +1% to lead gainers in the Dow Jones Industrials after Hedgeye Risk Management upgraded the stock to buy from hold.

Property stocks and real estate investment stocks are climbing today after the Wall Street Journal reported that Blackstone offered to acquire AIR Communities for $10 billion or $39.12 per share.  As a result, Mid-America Apartment Communities (MAA) is up more than +4%.  Also, UDR Inc (UDR) and Camden Property Trust (CPT) are up more than +3%.  Essex Property Trust (ESS), AvalonBay Communities (AVB), and Equity Residential (EQR) are up more than +2%.   

Ducommun (DCO) is up more than +13% after confirming the board of directors received an unsolicited non-binding indication from Albion River to buy all outstanding shares for $60 per share in cash. 

Take-Two Interactive Software (TTWO) is up more than +2% after Citigroup upgraded the stock to buy from neutral with a price target of $200.

Zebra Technologies (ZBRA) is up more than +2% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $337.

UiPath (PATH) is up more than +1% after KeyBanc Capital Markets assumed coverage on the stock with an overweight rating and a price target of $27. 

Paramount Global (PARA) is down more than -6% to lead losers in the S&P 500 after holder Matrix Asset Advisors raised concerns over the proposal that would see Paramount Global sell its voting stock and merge with Skydance Media. 

Skyworks Solutions (SWKS) is down more than -1% after KeyBanc Capital Markets downgraded the stock to sector weight from overweight. 

Kroger (KR) is down more than -1% after BNP Paribas Exane downgraded the stock to underperform from neutral. 

Dollar General (DG) is down more than -1% on signs of insider selling after an SEC filing showed EVP and CIO Wenkoff sold $958,616 of shares last Thursday.

Eaton Corp Plc (ETN) is down more than -1% after Wolfe Research downgraded the stock to underperform from peer perform.

Perion Network Ltd (PERI) is down more than -35% after cutting its full-year revenue forecast to $590 million-$610 million from a previous forecast of $860 million-$880 million, well below the consensus of $868 million. 

Earnings Reports (4/8/2024)

Eagle Pharmaceuticals Inc/DE (EGRX) and Waldencast plc (WALD).

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