The semiconductor sector faced a downturn as Advanced Micro Devices (AMD, Financial) led a decline, with shares falling 2.2% after its fourth-quarter results and forward guidance. Nvidia (NVDA, Financial) also saw a 2.1% drop, while Intel (INTC, Financial) slightly bucked the trend with a 0.5% increase. Despite the current market oscillation, Northland Capital Markets maintains a positive outlook for AMD, assigning a $195 price target and anticipating demand improvement for non-AI products throughout the year.
Paramount (PARA, Financial) experienced a significant share price increase of over 8% following a takeover bid from Byron Allen. KeyBanc Capital Markets suggests that Paramount should accept the offer, which represents a substantial premium and is considered highly appealing in cash terms. The deal's success, however, could be influenced by Shari Redstone's control over National Amusements, the controlling shareholder of Paramount.
The Federal Reserve maintained its policy interest rate at 5.25%-5.50%, signaling a potential 'higher for longer' policy stance. The Federal Open Market Committee (FOMC) indicated that it requires greater confidence in inflation moving sustainably toward its 2% target before considering rate reductions, despite removing its tightening bias from the statement.
Goldman Sachs analysts have identified sectors and stocks that could either outperform or underperform with a Republican presidential win. The Financials sector (XLF, Financial) is expected to benefit from eased capital rules and antitrust, with companies like Jefferies Financial Group (JEF, Financial) and Morgan Stanley (MS, Financial) potentially thriving. Conversely, companies facing wage pressure or tariff risks, such as Best Buy (BBY) and Kroger (KR, Financial), could underperform.
US Steel (X, Financial) saw a 2.6% drop after former President Donald Trump stated he would block the company's sale to Nippon Steel if he were in office. The deal is currently under review by the Committee on Foreign Investment in the United States and may not be completed until late this year or next.
Eagle Bulk Shipping (EGLE, Financial) and Euronav (EURN, Financial) were downgraded by Jefferies, with the former's shares fully pricing in the all-stock merger offer from Star Bulk Carriers (SBLK, Financial). Euronav's diversification strategy is seen as positive, but increased capital expenditures and debt load may limit near-term share performance.
Federal Reserve Chair Jerome Powell commented on the easing of inflation without a significant rise in unemployment, which he considers good news. However, he emphasized that inflation remains above the Fed's goal, and a policy rate reduction is likely at some point this year, though not as soon as March.
MedTech stocks gained following strong financial reports from Stryker (SYK, Financial) and Boston Scientific (BSX, Financial), with the iShares U.S. Medical Devices ETF (IHI) reaching its highest level since July. Stryker hit a 52-week high after setting an optimistic 2024 outlook, while Boston Scientific's revenue growth forecast also boosted investor confidence.
Amazon (AMZN, Financial) is set to report earnings, with expectations of record revenue and a significant increase in Prime subscribers. Analysts have revised EPS estimates upwards, and Morgan Stanley anticipates improved retail efficiency and profitability for the e-commerce giant.
Lululemon (LULU, Financial) continued its share price decline, dropping 4% amid data suggesting decelerating trends in U.S. net revenue growth. The slowdown was particularly noticeable in the online channel and women's categories.
BofA Securities highlighted the potential for a shift in equity income investments away from the Magnificent Seven stocks if money market yields start to drop. The firm recommends overweight positions in financials (XLF, Financial), real estate (XLRE, Financial), consumer discretionary (XLY, Financial), and energy (XLE, Financial), while suggesting underweights in consumer staples (XLP), health care (XLV), and information technology (XLK).
Chinese tech stocks like Baidu (BIDU, Financial), Alibaba (BABA, Financial), and NetEase (NTES, Financial) saw gains, contrasting with the declines in U.S. tech giants AMD, Microsoft (MSFT), and Alphabet (GOOG) (GOOGL) following their quarterly results.
MercadoLibre (MELI, Financial) announced a significant investment in Brazil with the naming of a Sao Paulo soccer stadium, signaling its commitment to expanding its market presence in the region.
Rockwell Automation (ROK, Financial) shares plummeted 14% after reporting fiscal first-quarter results that missed expectations due to supply-chain constraints and high customer inventories, leading to a downward revision of its full-year earnings outlook.
Albertsons (ACI, Financial) shares fell 2.5% as a large block of shares was reportedly being offered at a discount, amid uncertainty regarding its planned sale to Kroger (KR, Financial) and scrutiny from the Federal Trade Commission.
Paramount Global (PARA, Financial) and Starbucks Corporation (SBUX, Financial) were among the biggest stock gainers, with Paramount's shares surging 21% following Byron Allen's takeover offer and Starbucks rising over 5% despite missing Q1 estimates.
