My top 10 things to watch Monday, Feb. 24
1. U.S. GDP is estimated to growth 2.3% in the first quarter, according to the Atlanta Fed's closely watched GDPNow model. That would be a slowdown from 2.9% in the fourth quarter. Is the consumer tapped out? That will be a theme as we try to understand the recent decline in bond yields. We have the tariffs. Where are the lower taxes?
2. Wall Street is poised for a solidly higher open today after Friday's sell-off. In my Sunday column for Investing Club subscribers, I explained my plan for approaching this market given there is doubt around what happens next.
3. Melius Research's Ben Reitzes issued a strong defense of Nvidia ahead of its pivotal quarterly release Wednesday night, keeping his buy rating on the Club stock. Spending on Nvidia's AI chips from the likes of Elon Musk and the OpenAI-led Stargate Project is real, and helps make up for some reported data center lease cancellations from Microsoft, another Club name.
4. At least five analysts initiated coverage of Smithfield Foods with a buy rating after its public debut in late January. Margin expansion, not top-line growth, is a key reason cited, so not really good enough for me. It's interesting there aren't a lot of IPOs yet. I think businesses are cautious about the scrutiny.
5. Citi resumed coverage of Cintas with a sell rating, expressing worry that shares are priced to perfection. This is a great stock to play the expansion in small-to-midsize businesses, so I totally disagree with the call to sell it.
6. Turns out that the reason why less-than-truckload (LTL) stocks such as ArcBest were weak Friday was speculation that Club name Amazon could move into the space. FedEx has no exposure to Amazon, but its shares went down hard anyways. Could be a chance to buy. Meanwhile, Stifel upgraded XPO, an LTL player, to a buy from hold.
7. Apple announced plans to spend and invest $500 billion in the U.S. over the next four years, which some are regarding as negative for the Club stock. It is important for Apple to get the support of the Trump administration, and it looks like the iPhone maker has it. Apple doesn't want to be on the wrong side of the Trump trade.
8. Guggenheim upgraded Wingstop to a buy from neutral after a vicious decline in the stock last week caused by a shortfall in same-store sales guidance. Analysts still like the long-term story at Wingstop and said they'd rather buy the stock early than late.
9. Domino's Pizza shares fell nearly 5% this morning after its same store sales in the U.S. grew just 0.4% versus the 1.1% consensus. Earnings per share also was a slight miss. International results were stronger, though. Domino's also raised its dividend 15%.
10. Bernstein upped its price target on Snowflake to $161 a share from $154, but kept its hold-equivalent rating on the stock, which closed Friday at $177.89. Snowflake has become a new market darling, and analysts that missed its recovery now need to catch up.
THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Comments
Leave a Comment