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Stocks Mixed on Positive Corporate News and Weakness in Chip Stocks
The S&P 500 Index ($SPX) (SPY) today is up +0.23%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.58%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.32%.
Stock indexes today are mixed. Some positive corporate news today is giving stocks a lift, with Spirit AeroSystems up more than +4% after Boeing agreed to buy the company for approximately $4.7 billion, or $37.25 per share, in an all-stock deal. Also, Chewy is up more than +4% after Keith Gill, known online as “Roaring Kitty,” disclosed a 6.6% passive stake in the company.
US stocks have carryover support from a rally in European stocks as the Euro Stoxx 50 rose to a 2-week high today after French parliamentary elections Sunday showed Marine Le Pen’s far-right party faces a tougher-than-expected road to an absolute majority, signaling there’s a reduced chance of French policymakers being able to enact extreme policies that would rattle financial markets.
On the negative side for equities today is higher bond yields as the 10-year T-note yield climbed to a 2-1/2 week high. Also, weakness in chip stocks is weighing on the Nasdaq 100
The markets are discounting the chances for a -25 bp rate cut at 9% for the next FOMC meeting on July 30-31 and 58% for the following meeting on September 17-18.
Overseas stock markets today are higher. The Euro Stoxx 50 rose to a 2-week high and is up +1.12%. China's Shanghai Composite rose to a 1-week high and closed up +0.92%. Japan's Nikkei Stock 225 Index rose to a 2-3/4 month high and closed up +0.12%.
Interest Rates
September 10-year T-notes (ZNU24) today are down -20 ticks. The 10-year T-note yield is up +4.9 bp to 4.445%. Sep T-notes today dropped to a 2-1/2 week low, and the 10-year T-note yield rose to a 2-1/2 week high of 4.447%. T-notes are sliding today on negative carryover from a decline in European government bonds. Also, an increase in inflation expectations weighed on T-notes after the 10-year breakeven inflation rate rose to a 3-week high today at 2.317%.
European government bond yields today are moving higher. The 10-year German bund yield rose to a 2-1/2 week high of 2.588% and is up +8.4 bp at 2.585%. The 10-year UK gilt yield rose to a 2-1/2 week high of 4.242% and ended up +6.9 bp at 4.241%.
The Eurozone Jun S&P manufacturing PMI was revised upward by 0.2 to 45.8 from the previously reported 45.6.
German Jun CPI (EU harmonized) eased to +2.5% y/y from +2.8% y/y in May, right on expectations.
Swaps are discounting the chances of a -25 bp rate cut by the ECB at 12% for the July 18 meeting and 65% for the September 12 meeting.
US Stock Movers
Merck & Co (MRK) is up more than +3% to lead gainers in the Dow Jones Industrials after it converted its co-exclusive license covering prostate cancer drug candidate Opevesostat with Orion into an exclusive global license for Merck.
Spirit AeroSystems (SPR) is up more than +4% after Boeing agreed to buy the company for approximately $4.7 billion, or $37.25 per share, in an all-stock deal.
Teleflex (TFX) is up more than +2% after Piper Sandler upgraded the stock to overweight from neutral with a price target of $245.
Cryptocurrency-linked stocks are climbing today, with the price of Bitcoin (^BTCUSD) up more than +4% at a 1-week high. As a result, Coinbase Global (COIN), Marathon Digital (MARA), and Riot Platforms (RIOT) are up +3% or more.
Chewy (CHWY) is up more than +5% after Keith Gill, known online as “Roaring Kitty,” disclosed a 6.6% passive stake in the company.
Birkenstock Holding Plc (BIRK) is up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $65.
Amkor Technology (AMKR) is up more than +2% after JPMorgan Chase initiated coverage on the stock with a recommendation of overweight and a price target of $48.
Chip stocks are under pressure today, with Super Micro Computer (SMCI) down more than -4% to lead losers in the S&P 500 and Arm Holdings Plc (ARM) down more than -4% to lead losers in the Nasdaq 100. Also, Advanced Micro Devices (AMD) is down more than -3%, and Nvidia (NVDA) and Micron Technology (MU) are down more than -2%. In addition, Intel (INTC) is down nearly -1% to lead losers in th Dow Jones Industrials.
Zimmer Biomet Holdings (ZBH) is down nearly -0.24% after Piper Sandle downgraded the stock to neutral from overweight.
Earnings Reports (7/1/2024)
Grail Inc (GRAL).
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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
