Market Summary
The stock market showed signs of recovery today after experiencing significant declines last week. Despite a slow start, the market gained momentum in the afternoon, driven by early buying activity and short-covering. This resurgence helped the major indices, including the S&P 500, which closed above the 5,000 mark.
Notable Stock Performances
Two major companies, Microsoft (MSFT, Financial) and Meta Platforms (META, Financial), reversed their earlier losses to close higher. Microsoft, initially down by 0.8%, closed with a 0.5% gain, while Meta Platforms turned around a 1.6% loss to close slightly higher by 0.1%. These movements are noteworthy as both companies are among the large-cap tech firms set to report earnings this week, alongside Tesla (TSLA, Financial), Alphabet (GOOG, Financial), and others.
Earnings Week Ahead
By the end of this week, nearly 40% of S&P 500 companies will have reported their earnings. Key reports include Tesla after Tuesday's close, Meta Platforms on Wednesday, and both Microsoft and Alphabet on Thursday.
Market Highlights
- The Invesco S&P 500 Equal Weight ETF (RSP, Financial) saw a gain of 0.8%, and all 11 sectors of the S&P 500 finished higher.
- Information technology and financials sectors were the top performers, with gains exceeding 1%.
- Bank stocks, in particular, boosted the financial sector, with the SPDR S&P Regional Banking ETF (KRE, Financial) and the SPDR S&P Bank ETF (KBE, Financial) closing higher by 1.8% and 1.7%, respectively.
Economic Indicators and Market Outlook
This week also features important economic data, including the Advance Q1 GDP report on Thursday and the core-PCE Price Index on Friday, the latter being the Federal Reserve's preferred inflation measure. Meanwhile, bond yields saw minimal changes, with the 10-year note yield slightly up and the 2-year note yield unchanged.
Global Markets and Commodities
Global markets had a mixed day, with European indices generally closing higher, while Asia saw mixed results. Commodities experienced a varied day, with slight movements in crude oil and natural gas, but significant decreases in gold and silver prices.
Guru Stock Picks
Carl Icahn has made the following transactions:
- Add in IEP by 4.9%
Today's News
Cadence Design Systems (CDNS, Financial) announced Q1 results, with Non-GAAP EPS of $1.17 beating expectations and revenue of $1.01B slightly missing forecasts. The company raised its 2024 revenue outlook, expecting between $4.56 billion to $4.62 billion, and anticipates improvements in both GAAP and Non-GAAP operating margins. The positive financial outlook reflects the company's robust performance and strategic planning for growth.
CoStar (CSGP, Financial) revealed plans to acquire spatial data company Matterport (MTTR, Financial) in a significant $1.6 billion cash and stock transaction. This strategic move is expected to enhance CoStar's digital offerings by integrating Matterport's advanced 3D capture technology, indicating a substantial step forward in digitizing real estate assets globally.
Goldman Sachs analysts highlighted the stocks with the highest growth investment ratio, forecasting a slowdown in capex and R&D growth from 10% in 2023 to about 7% in 2024. Despite this deceleration, first-quarter real GDP growth stood at 3%, supporting solid capex growth for the next year. However, high interest rates could pose challenges to accelerating capex growth.
Alexandria Real Estate Equities (ARE, Financial) reported Q1 FFO of $2.35, surpassing expectations, and revenue growth of 9.7% year-over-year. The company also revised its 2024 FFO per share outlook, reflecting strong operational performance and continued growth in its real estate portfolio.
SAP SE (SAP, Financial) disclosed Q1 results, showing a notable 8.1% year-over-year increase in revenue, driven by a significant 24% rise in cloud revenue. The company also updated its 2024 outlook, expecting substantial growth in cloud and software revenue, highlighting SAP's successful shift towards cloud-based services.
AGNC Investment (AGNC, Financial) shared Q1 earnings, with Non-GAAP EPS slightly beating estimates. The company noted a tangible net book value per common share increase and a positive economic return on tangible common equity, despite operating in a challenging interest rate environment.
Palantir Technologies (PLTR, Financial) saw its shares rebound, closing 2.5% higher after a six-day losing streak. The company's impressive 141% surge in the last 12 months outperforms the broader market, reflecting strong investor confidence in its data analytics capabilities.
Cleveland-Cliffs (CLF, Financial) reported Q1 earnings, with Non-GAAP EPS missing expectations and a slight decline in revenue. However, the company highlighted significant share repurchases and improvements in adjusted EBITDA, demonstrating its commitment to shareholder value and operational efficiency.
Goldman Sachs analysts expect stock dividends to grow by more than 6% this year, supported by strong earnings per share growth. Large-cap technology firms initiating dividends are anticipated to contribute to this growth, showcasing the potential for increased shareholder returns in the technology sector.
Oppenheimer analysts predict a rally in the second half of the year as they expect rates to moderate, indicating potential opportunities for investors in the coming months. This outlook suggests a positive shift in market conditions, potentially leading to increased market activity and investor engagement.
The New York Stock Exchange (ICE, Financial) is exploring the interest and implications of a 24/7 stock trading exchange. This initiative reflects the growing demand for extended trading hours and could revolutionize the way stocks are traded, offering investors more flexibility.
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