Home > Blog > Markets commentary > Seeking cues to Fed moves

Shares closed mixed Monday, with the S&P 500 retreating from record highs while the Dow extended its climb. Investors await key earnings reports and upcoming economic data, including the CPI report later today and Retail Sales due on Thursday. Profit-taking may have contributed to late weakness, particularly in overbought technology shares. The banking and retail sectors performed well, with the Russell 2000 reaching its highest level since December. Semiconductor stocks, though initially strong, ended lower amid concerns of overbought conditions.  In Europe, the Stoxx 50 index extended its 23-year high, gaining 0.6%, buoyed by strong performance in financial companies, with Axa and UniCredit rising close to 2%, while consumer goods also advanced, led by LVMH and L’Oreal. Summary for 12.02.2024 

  • Shares in Japan scaled fresh 34-year highs on Tuesday, leading Asian markets higher amid strong corporate earnings and a weakening yen.  Investors also digested Japanese producer inflation data, while awaiting US consumer inflation figures later in the day.  Shares in Australia and South Korea gained as well, while markets in Hong Kong and China were closed for holidays. 
  • European shares are expected to edge lower, while US equity futures slip ahead of crucial inflation data, with investors awaiting the January consumer price index report and key earnings releases. 
  • Geopolitical tensions in the Middle East supported oil prices, with WTI crude futures maintaining recent gains. Israeli airstrikes in Gaza escalated tensions, while diplomatic efforts hinted at potential easing. Demand-side uncertainties persist amid inflation risks, awaiting US CPI data. Investors are keeping an eye on OPEC and IEA monthly reports for market cues. 
  • Bitcoin surged to over $50,000 this morning, reaching its highest level in over two years, propelled by robust capital flows into newly approved spot exchange-traded funds (ETFs). The market saw significant inflows, particularly into BlackRock’s iShares Bitcoin Trust. Analysts anticipate further growth driven by FOMO and optimism surrounding the upcoming halving event. 
  • Shares of JetBlue Airways soared over 16% in after-hours trading on Monday after activist investor Carl Icahn revealed a 9.91% stake in the company. Icahn, notorious for his aggressive investment tactics, seeks to engage with JetBlue’s management and board concerning potential board representation, citing undervaluation. 
  • Gilead Sciences is set to acquire CymaBay Therapeutics for $4.3 billion, aiming to bolster its liver disease treatment portfolio beyond HIV drugs. The deal includes CymaBay’s lead experimental drug, seladelpar, expected to generate $1.9 billion in sales by 2029 pending FDA approval for primary biliary cholangitis treatment. 
  • US regulators have urgently requested Citigroup to revise its risk measurement methods, while internal auditors found deficiencies in the bank’s oversight improvement plan. These issues may hinder CEO Jane Fraser’s efforts to enhance the bank’s performance amid ongoing regulatory scrutiny and the need to address past deficiencies.  
  • Nvidia briefly surpassed Amazon in market capitalisation, becoming the fourth most valuable US company, propelled by enthusiasm for artificial intelligence. Nvidia’s record high pushed its market value to $1.78 trillion, just shy of Alphabet’s $1.79 trillion. Strong demand for AI chips and robust earnings expectations drove Nvidia’s meteoric rise. 
  • Arm Holdings saw its shares surge over 40% on Monday, continuing a remarkable rally driven by optimism surrounding artificial intelligence. The share’s value has nearly tripled since its IPO last September, reaching a record $141 billion market cap. Traders have sold short about 10.5 million Arm shares. 
  • Shares in Italian listed company Tod’s surged 18.37% after L Catterton, backed by LVMH, offered to buy 36% of the luxury shoemaker. The bid values Tod’s at €1.4 billion. This follows a failed attempt in 2022 by the Della Valle family to take the company private, and L Catterton plans to merge Tod’s if the bid fails. 
  • B.Riley maintained a Buy rating on Applied Materials and raised the price target to $220, citing manageable consensus estimates and potential modest sales outperformance. Despite expected weakness in China’s DRAM and ICAPS sectors, the firm foresees growth in the Semiconductor Systems Group and anticipates improved gross margin and operating expenses management. 
  • JPMorgan analysts upgraded Lowe’s Companies to Overweight, adding it to their Focus List, with a target price of $265. They anticipate a rebound in the home improvement sector as consumer spending normalizes post-COVID, driven by wage growth and lower mortgage rates, potentially leading to a significant sales increase. 
  • Goldman Sachs reiterates a Buy rating on ASML Holding NV with a €980.00 price target, citing strong fourth-quarter order intake and positive industry indicators. Despite recent growth in the share price, ASML’s performance still lags behind peers, indicating further potential. The firm sees undervaluation considering ASML’s future growth prospects and technological edge in EUV technology. 
  • JPMorgan reiterates an Overweight rating on Netflix with a $610 price target, citing its substantial scale and diverse content offerings. Anticipating revenue growth acceleration in 2024, driven by subscriber numbers, pricing, and the Paid Sharing feature, the firm expects sustained margin expansion and multi-year free cash flow growth. 
  • UBS maintained Nike’s “Buy” rating despite disappointment in its digital strategy’s impact on product marketing. Analyst Jay Sole notes the company’s industry-leading brand name as a foundation for marketing efforts to rebuild. The price target remains at $138, reflecting confidence in Nike’s long-term prospects despite recent setbacks. 
  • Truist Securities raised its price target for Shopify shares from $65.00 to $90.00, maintaining a Hold rating ahead of the company’s fourth-quarter earnings report. Anticipating strong performance, their research suggests significant gross merchandise volume growth, potentially exceeding market expectations and driving an increase in valuation. 
  • Citi upgraded PepsiCo shares from Neutral to Buy, with a price target raised to $195 from $180. Analysts cited a favourable setup following lowered 2024 organic sales growth targets, believing it aligns with PepsiCo’s history of meeting or beating guidance. They anticipate a rebound in the stock given adjusted market expectations. 
  • Deutsche Bank reiterated a Buy rating on General Electric, raising the price target to $185 from $165 ahead of the GE Vernova investor day on March 6. Anticipating insights into business strategies and financials, analysts foresee potential hidden asset value in both GE Aerospace and GE Vernova. Argus raised Phillips 66’s price target to $167 from $134 while maintaining a Buy rating, citing its strong balance sheet and diverse operations as key strengths in navigating the volatile energy market. The company’s history of returning value to shareholders through buybacks and dividends was also highlighted. 
  • JPMorgan strategists reaffirm Japan’s overweight status in regional allocation, citing Tokyo Stock Exchange reforms and potential for increased investment flows. They also highlight the UK market’s historical discount, emphasising its dividend yield and commodity-heavy nature as potential growth catalysts, especially amidst volatility and China’s influence. 

    • Disclaimer

    The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly, any views or opinions expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the particular circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views, or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. CC does not accept liability for losses suffered by persons as a result of information, views, or opinions appearing on this website.

    Calamatta Cuschieri Investment Services Ltd is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act.