As markets concluded on 01-08-2024, the S&P 500 advanced by 1.39%. The Dow Jones Industrial Average saw an uptick, finishing 0.58% higher. Meanwhile, the Nasdaq Composite rose by 2.15%. The 10-year Treasury yield fell 0.96% to 4.012.
Major market averages rallied at the end of 2023 and into 2024, but some investors remain pessimistic about individual stocks. Here is a list of the most shorted stocks, with Plug Power (PLUG, Financial) and scPharmaceuticals (SCPH, Financial) among the top ten, indicating a bearish sentiment on these companies. High short interest percentages like 29.11% for PLUG and 29.13% for SCPH suggest that many investors are betting against these stocks.
B. Riley analyst Bryce Rowe downgraded several business development companies, citing concerns over potential Federal Reserve rate cuts and deteriorating macro conditions. Among the downgraded stocks were Ares Capital (ARCC, Financial) and Main Street Capital (MAIN, Financial), which moved to Neutral from Buy, while Horizon Technology Finance (HRZN, Financial) and Stellus Capital Investment Corp. (SCM, Financial) were cut to Sell from Neutral. These downgrades reflect a cautious outlook on the sector's earnings and dividend distributions.
Citi's Thematic Equity Strategy report highlighted 30 top buy-rated stocks for 2024, with a focus on Artificial Intelligence. Amazon.com (AMZN, Financial) and Alphabet (GOOGL, Financial) are expected to see significant total returns, according to the report. These stocks are anticipated to outperform in sales growth compared to the Russell 1000 and have favorable valuation metrics, suggesting a bullish outlook for these companies.
Microchip Technology Incorporated (MCHP, Financial) reported a preliminary revenue indication for the December 2023 quarter that was down about 22%, worse than the expected 15% to 20% decline. This news sent MCHP shares down nearly 6% in extended trading, reflecting the impact of a weakening economic environment on the semiconductor industry.
Nvidia (NVDA, Financial) reached a new record high as it prepared to begin mass production of a China-focused artificial intelligence chip, while Boeing (BA) faced a temporary grounding of its 737 Max 9 aircraft after an accident. These developments had a mixed impact on the market, with tech stocks, particularly chip names, helping to drive the Nasdaq Composite higher.
Netflix (NFLX, Financial) emerged victorious from a lawsuit accusing the company of hiding the impact of account sharing on growth. The dismissal of the lawsuit removes a legal overhang and may boost investor confidence in the streaming giant's transparency and growth prospects.
CRISPR Therapeutics (CRSP, Financial) announced that Vertex Pharmaceuticals (VRTX) subsidiary ViaCyte has opted out of their development partnership for gene-edited stem cell therapies for diabetes. CRISPR will now fully own the collaboration's assets, including CTX211, and intends to continue advancing a Phase 1 trial for the treatment of type 1 diabetes. This news could have implications for CRISPR's future revenue and research directions.
Canoo (GOEV, Financial) saw its shares rise after acquiring manufacturing assets to boost electric vehicle production. The acquisition, made at a significant discount, is expected to enhance Canoo's production capabilities at its Oklahoma City facility, signaling progress in the company's growth strategy.
Bausch + Lomb (BLCO, Financial) shares fell following comments from the company's CFO at the JPMorgan Healthcare Conference, indicating that 2024 is expected to be an investment year. This suggests that while the company is poised for growth, investors may need to be patient as it ramps up its investment in new product launches.
Baird downgraded several financial stocks, including Capital One Financial (COF, Financial), Wells Fargo (WFC, Financial), and American Express (AXP, Financial), due to the sector's recent outperformance and valuation concerns. This move reflects a more cautious stance on the banking sector's near-term prospects.
Kyndryl (KD, Financial) shares gained on an upgrade from Evercore ISI, which recognized the company's ability to execute on its plan to improve profitability. The upgrade suggests confidence in Kyndryl's strategic initiatives and potential for future growth.
BARK (BARK, Financial) announced preliminary third-quarter revenue that exceeded analyst estimates, indicating strong customer acquisition for its BarkBox and Super Chewer products. This positive performance could signal a robust growth trajectory for the company.
Tilray Brands (TLRY, Financial) is set to report its Q2 results, with a focus on expanding its footprint in the beverage market. The company's strategic acquisitions and product launches in the beverage sector could influence its financial performance and investor sentiment.
AllianceBernstein (AB, Financial) announced the hiring of Jackie Marks as its new CFO, signaling a continued focus on growth and financial controls. This leadership change could have a positive impact on the company's financial strategy and execution.
Nvidia (NVDA, Financial) and AMD (AMD, Financial) led semiconductor stocks higher, with Nvidia planning to start mass production of an AI chip for China and AMD introducing a new graphics card. These developments highlight the ongoing innovation and market opportunities for these leading chipmakers.
Jefferies Financial Group (JEF, Financial) reported Q4 earnings that beat estimates, with an increased share buyback authorization. This financial performance and shareholder-friendly action could be viewed positively by investors.
Realty Income (O, Financial) disclosed that lawsuits have been filed challenging its agreement to acquire Spirit Realty Capital (SRC), potentially complicating the merger process. The outcome of these legal challenges could affect the companies' future strategies and operations.
Ardelyx (ARDX, Financial) stock surged after projecting that its drug Ibsrela would generate peak US net product sales revenue of more than $1B. This optimistic forecast could significantly impact the company's revenue and growth expectations.
Lumen Technologies (LUMN, Financial) is seeking a lender to support its debt deal, as it negotiates with bank lenders to extend debt maturities and raise fresh capital. This financial restructuring could influence the company's debt profile and investor confidence.
