📊 Rate Fears, Equity Tears

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Ticker Tea
March 26, 2024

Mornin’ ☕

Yesterday major U.S. indices experienced slight declines amid hawkish Fed speak that drove Treasury yields higher, negatively impacting stocks. Atlanta Fed President Bostic indicated a cautious stance on interest rate cuts, projecting only one 25 basis point reduction this year, contrary to the FOMC forecast of three such cuts.

Further, negative corporate news contributed to the market downturn, with significant losses for key players: (1) Take-Two Interactive Software (chart) saw a sharp decline following reports of delays in the production of Grand Theft Auto VI, potentially missing its 2025 release window & (2) United Airlines (chart) faced downward pressure after the FAA considered sanctions over safety incidents.

Tech giants Intel and AMD were hit by news of China's plans to restrict the use of U.S.-made microprocessors in government computers.

However, some companies bucked the negative trend with notable gains. Super Micro Computer (chart) surged following an overweight rating and a high price target from JPM. Similarly, Micron Technology's (chart) expansion plans in China and an upgrade for Walt Disney (chart) from Barclays to overweight status provided some positive momentum amidst broader market challenges.

⬆️ Gainers: Reddit (+30%), Microstrategy (+22%), Astera Labs (+21%), Gamestop (+15%), Footlocker (+6%), Lucid (+5%) (list of top gainers)

⬇️ Losers: Abercrombie & Fitch (-10%), Chewy (-7%), New York Community Bank (-6%), Shake Shack (-6%) (list of top losers)

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» A pullback in the S&P 500 hints at market caution ahead of a key inflation report, amidst concerns of an overvalued market. RBC's Lori Calvasina suggests a correction is due, as equities retreat from record highs and analysts lower earnings expectations. Treasury yields and Bitcoin see gains, indicating a diverse reaction across assets. (link)

» Boeing ($BA) is undergoing a significant leadership overhaul as it faces challenges from safety crises, market losses, and regulatory scrutiny. The changes, prompted by pressure from major US airlines, offer a chance for a strategic reset and safety reassurance to customers and the flying public. (link)

» The AAA warns of a surge in US gas prices to $4 a gallon, the highest since 2022, amid rising oil costs and supply worries. Triggered by low inventory and the transition to summer-grade fuel, this increase, from the current $3.54 average, could lead to lifestyle changes and become a key topic in the presidential election debate. (link)

» Trump Media & Technology Group is set to start trading on Nasdaq under the symbol $DJT, following its merger with Digital World Acquisition Corp. ($DWAC). This move could net Trump over $5 billion in shares, amid significant anticipation and a 35% surge in DWAC shares ahead of the listing. (link)

» The successful IPO’s of Reddit ($RDDT) and Astera Labs ($ALAB) crack open the long-closed liquidity window for Silicon Valley, signaling a potential revival. Goldman Sachs's ($GS) exploration of a €3.5 billion sale of B&B Hotels and Elliott's triumph at Match highlight the day's financial maneuvers. With the IPO market stirring awake, Silicon Valley gears up for a return to form, reminiscent of the pre-2022 fervor. (link)

» Despite significant outflows of nearly $900 million from US spot ETFs last week, Bitcoin rebounded above $70,000, demonstrating strong investor confidence. This resilience, even in the face of substantial withdrawals from major funds like Grayscale Bitcoin Trust, underscores a market eager to 'buy the dip,' reflecting underlying strength and optimism in the digital asset space. (link)

Major ($10bn+) earnings releases scheduled the next five business days 👇 Click here for a comprehensive list of upcoming earnings releases

Results from yesterday’s economic releases & today’s schedule below 👇 Click here for full schedule & live updates of Wall Street estimates.

 

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