Indicators
Wake Up Call
- Hello ! Dow Jones futures, along with the other major stock indexes, sagged Monday as Wall Street looked ahead to a week of key economic data. GAMESTOP stock rebounded on the stock market today, while ADM dropped on an analyst downgrade. Meanwhile, NVIDIA's 10-for-1 stock split is set to go into effect.
- NVIDIA SPLIT - Nvidia begins to trade on a split-adj basis today following the 10-for-1 stock split that was implemented Friday after the close. A stock split theoretically should not impact a stock’s price, given that no new shares are issued in the process and shareholders’ ownership is not diluted. This corporate action merely makes the shares affordable for retail traders. With Nvidia’s 10-for-1 split, a Nvidia shareholder will have 10 shares for each share they held before the split but the value of the total holdings remain the same. Essentially, Nvidia’s market capitalization remains the same but the number of outstanding shares varies depending on the split ratio. Typically, shares see some weakness immediately after the split, potentially due to profit-taking following the pre-split run-up. They normalize thereafter and begin trading in line with fundamentals.
- WHAT TO WATCH THIS WEEK - The May consumer price index and the Federal Reserve meeting take the spotlight in this week's economic data. Wednesday's CPI is expected to show another 0.3% increase in core prices. And the Fed policy update and new economic projections are also due Wednesday. The last set of Fed projections released in March showed policymakers led by Chair Powell narrowly backing three quarter-point rate cuts in 2024, with a hawkish minority favoring two cuts. The same kind of division may be evident in the new projections, but with more dovish members now backing two rate cuts and the hawks bent on a single rate cut. Also, on the corporate news side, earnings from ADOBE, BROADCOM & ORACLE are expected.
Wall Street Movers
- APPLE flat developers conference today will show whether Co. can become a major player in the burgeoning field of AI, marking a critical moment for a company forced to adapt to a new era. Apple promises to demonstrate its AI prowess during a keynote address at its annual Worldwide Developers Conference, which starts at 10 am California Time (6pm UK Time).
- CROWDSTRIKE +5.90%, GO DADDY +2.80% , KKR +8% after it was confirmed the stocks would join the S&P 500 Index in the latest quarterly weighting change. Changes were also made to S&P Dow Jones Indices’s S&P MidCap 400 and S&P SmallCap 600. The trio replaces staffing companies ROBERT HALF, COMERICA and ILLUMINA. Robert Half and Comerica will move to the S&P SmallCap 600 SML, while Illumina will move to the S&P MidCap 400 MID. The changes are set to go into effect prior to the open of trading on June 24.
- HUNTINGTON BANCSHARES -2.80% said it expects FY NII down 1% to 4%, revised from its previous guidance of down 2% to up 2%.
- DIAMOND OFFSHORE +8% will be acquired by NOBLE for $1.59b in a stock-and-cash deal as the industry bets on continued fossil fuel use. Diamond's shareholders will receive 0.2316 shares of Noble plus a cash consideration of $5.65 for each share of Diamond stock held.
- NVIDIA has completed its 10-for-1 stock split, which will start trading on Monday 10 June 2024
- SOUTHWEST AIRLINES +8% after WSJ reported that Elliott Investment has built an almost $2b stake in the US carrier, making the activist firm one of the largest investors in the company.
At A Glance
- COGNIZANT TECHNOLOGIES has agreed to acquire digital engineering firm Belcan for nearly $1.3b in cash and stock as the industry bets on continued fossil fuel use.
- J&J’s blockbuster arthritis drug could soon see a limit on what Colorado health plans pay for the product after the state review board determined the treatment is “unaffordable” for patients.
- MICROSOFT’s Xbox unit announced new entries in the popular Doom and Gears of War franchises.
- MODERNA said its combination of flu and Covid shot met the goals of a pivotal late-stage trial.
- MOELIS & CO is investigating an incident involving one of its employees after a video circulated online showing a man identified as one of the firm’s senior bankers appearing to punch a woman.
- PFIZER’s vaccine for respiratory synctial virus was approved by US regulators in a younger age group, potentially giving it an edge over Pfizer and Moderna.
- SONOCO is implementing an increase in uncoated recycled paperboard in the US and Canada.
- T-MOBILE 6.7m additional shares were acquired by DEUTSCHE TELEKOM for $99.51/shr.
- TESLA Norway’s $1.7t sovereign wealth fund said it would vote against the $56b pay package for CEO Elon Musk, adding to opposition to the Co. ahead of its AGM meeting.
- UNITED AIRLINES violated a federal worker safety law by not taking steps to prevent a towed Boeing 737 from rolling over and crushing a worker’s foot, an administrative law judge held.
- VISTA OUTDOORS will reportedly say an unidentified bidder offered over $2bn for its ammo division, according to NYT dealbook. Will say new bid was reasonably expected to be superior to the $1.96b deal it struck with Czechoslovak group. Rejected latest takeover proposal by MNC which recently raised its offer for Co. to $3.
Broker Moves
UPGRADES
- ENPHASE ENERGY raised to buy at HSBC; PT $166
- PG&E raised to overweight at JPMorgan; PT $22
- WALMART raised to overweight at JPMorgan; PT $81
DOWNGRADES
- ADOBE downgraded to hold at Melius
- AMD downgraded to equal-weight at Morgan Stanley
- POWERSCHOOL downgraded to neutral at Macquarie; PT $22.80
Today's Key Events (UK Time)
16:00 US NY Fed 1-Yr Inflation Expectations
Game Of Corporate Actions
DIV EX DATE
- Today : Alphabet ($0.2); Assurant ($0.72); Becton Dickinson ($0.95); Elevance Health ($1.63); Fidelity National ($0.36); Occidental Petroleum ($0.22); Omnicom ($0.7); PPL ($0.2575); Travelers ($1.05)
- Tomorrow : Nvidia ($0.01); Ross Stores ($0.3675)
EARNINGS
- Today aft mkt : Autodesk
- Tomorrow aft mkt : Oracle