China targets 2024 GDP growth of around 5%

US equities retreated from recent highs on Monday as investors awaited key events, including Federal Reserve Chair Jerome Powell’s testimony and the Nonfarm Payrolls Report.  Semiconductor shares surged, propelled by Intel and Nvidia, with the latter surpassing a $2 trillion market cap. Meanwhile, Apple fell 2.5% following a €1.8 billion fine from the European Commission.  Major indices closed mixed, with the S&P 500 down 0.1%, Dow down 0.3%, and Nasdaq down 0.4%.  In the euro area, the Stoxx 50 index posted a slight gain of 0.4% yesterday, amid overall muted trading.  

Summary for 05.03.2024 

• Most Asian shares fell as profit-taking in the technology sector occurred alongside concerns about China’s economic outlook. Chinese equities were muted, with the Hang Seng dropping 2.5% as Beijing’s 2024 GDP target failed to impress. Weakness in tech also affected South Korea’s KOSPI and Japan’s Nikkei 225. 
• European shares are set for a quiet opening as attention remains on China’s National People’s Congress. In the US, futures suggest a lower start after declines in the S&P 500 and Nasdaq Composite, as are await earnings reports from major retailers and US economic data. 
• Oil prices in Asia remained stagnant, impacted by profit-taking in the technology sector and China’s unimpressive economic forecast. Concerns over weakening demand in 2024, coupled with geopolitical tensions such as Israel-Hamas ceasefire talks, kept markets cautious. 
• China has set its annual growth target at about 5%, signalling a potential increase in stimulus measures to combat economic challenges stemming from a property downturn and persistent deflation. Premier Li Qiang emphasised the difficulty of achieving these targets and called for policy support and collaboration from all sectors. 
• The European Union has fined Apple €1.84 billion for anti-competitive App Store practices following a complaint by Spotify. Apple plans to appeal but faces market scrutiny. The ruling reflects broader concerns about tech giants’ dominance and signals regulatory efforts to promote fair competition in the digital market. 
• Advanced Micro Devices encountered obstacles in its efforts to sell an AI chip designed for the Chinese market, as US government officials deemed the chip too powerful for export without a license. Despite seeking approval from the Commerce Department, AMD was informed that a license from the Bureau of Industry and Security was required. 
• Tesla shares dropped over 7% on Monday due to declining sales in China in February, attributed to Lunar New Year slowdowns. Lower sales dimmed global delivery prospects amidst rising competition. Tesla’s Shanghai factory saw a 19% decline in sales, prompting price cuts and incentives to combat weakening demand and competition from Chinese rivals like BYD. 
• American Airlines announced its largest plane order since 2011, purchasing 260 jets from Airbus, Boeing, and Embraer to capitalise on increased demand for premium travel. The order includes Airbus A321neo, Boeing 737 MAX 10, and Embraer E175 aircraft, with options for additional planes. 
• Billionaire investor Nelson Peltz criticised Walt Disney for poor oversight and slow adaptation to industry changes, proposing himself and Jay Rasulo for Disney’s board. Trian aims to address succession planning, organisational structure, and costs, while Blackwells Capital also vies for board seats. Meanwhile, Morgan Stanley raised Disney’s price target to $135, expecting profitability in streaming and accelerated growth in parks to boost stock performance. 
• GitLab Inc. reported strong fourth-quarter earnings, with revenue exceeding expectations. However, disappointing guidance for Q1 2025 and fiscal year 2025 led to a 22% decline in its share price in after-hours trading. Despite robust performance, lower-than-expected forecasts suggest challenges ahead as GitLab balances growth and profitability amidst market scrutiny. 
• Rosenblatt raises Broadcom Limited’s price target to $1,500, citing expected outperformance in AI semiconductors and stabilizing sectors like enterprise, wireless, and telecommunications. The surge in Broadcom’s shares reflects optimism over AI and industry recovery, with a new P/E ratio-based target reflecting strong cash generation and dividends. 
• TD Cowen upgraded Home Depot shares, raising the price target to $440, citing the company’s strategic initiatives targeting professional and DIY customers. Despite expecting a 1% decline in comparable store sales for 2024, Home Depot remains optimistic about industry tailwinds, positioning itself for long-term growth. 
• Wells Fargo maintains an Overweight rating on CrowdStrike Holdings, raising the price target to $380 from $315. Anticipating strong fourth-quarter results, the firm cites robust demand in the endpoint security market and expects significant growth fuelled by recent partnerships and product launches, projecting a 20% year-over-year increase in net new ARR. 
• Goldman Sachs initiates coverage on Super Micro Computer with a Neutral rating and a $941 price target. They highlight its emergence in AI infrastructure, leveraging partnerships with key suppliers like NVIDIA, AMD, and Intel. Despite recent surges, they anticipate revenue growth deceleration due to increased competition in enterprise AI infrastructure. 
• Citi downgraded Ferrari shares from Neutral to Sell despite acknowledging its quality and long-term growth potential. The move is driven by overvaluation concerns, as Ferrari’s current price exceeds Citi’s target, despite an increase in the target price. The firm believes the shares may not offer an attractive entry point for investors. 
• Guggenheim upgraded GSK plc from Neutral to Buy, citing positive revenue updates and increased confidence in margin benefits. Key factors include projected strong sales of Arexvy and Shingrix, growth in long-acting HIV treatments, and the successful relaunch of cancer treatment Blenrep. Guggenheim set a price target of £20.31, indicating a 22% upside potential. 
• Argus Research upgraded Uber Technologies Inc. to “Buy” and raised the price target to $95 from $69, reflecting the company’s updated financial targets exceeding expectations. Uber forecasts mid-to-high teens gross bookings growth and 30-40% EBITDA CAGR over three years, with bullish free cash flow conversion guidance. 
• DoorDash’s shares rose 3.9% in regular trading yesterday after RBC Capital Markets upgraded the delivery service to “Outperform” from “Sector Perform.” They anticipate DoorDash’s focus on expanding niche offerings and international presence to stabilize profits, suggesting a potential merger with Lyft could lead to further growth in orders. 

• UBS raised eBay’s price target to $47.00, maintaining a Neutral rating. Despite macroeconomic challenges, eBay anticipates a potential return to growth in the second half of 2024. Revenue is expected to surpass Gross Merchandise Volume growth, driven by increased take-rate and advertising revenues. Non-GAAP EPS is forecasted to grow 8-10% year-over-year. 
• Stifel maintains a Buy rating on Marvell Technology Group Ltd. with a $72.00 price target ahead of its earnings release. They anticipate in-line January quarter earnings but project significant growth in Data Center revenue alongside declines in Carrier Infrastructure, Enterprise Networking, Consumer, and Auto/Industrial sectors. Stifel remains optimistic about Marvell’s AI-based revenue guidance for FY 2025.