Become a logicalchat Member

Latest Post

What are Your Biggest Financial Challenges for Canadians?

Canadians are known for their resilience, but there's no denying that our financial landscape is getting tougher. From rising inflation to staggering housing costs,...

Your story starts here. Sign up and let's connect in ways that truly matter!

HomeNewsWeekly newsStocks recap and outlook for the week ahead 14-18 Aug

Stocks recap and outlook for the week ahead 14-18 Aug

Stocks recap

WEEKLY STOCKS RECAP

IN TECH

Alibaba’s ‘all-around clean quarter’

Alibaba (NYSE:BABA) shares rose Thursday as the China-based e-commerce giant reported fiscal Q1 adjusted core income that beat analyst estimates, driven by high consumer spending during a June shopping event.

China, the world’s second-largest economy, is facing a slow post-pandemic recovery, as consumer prices fell earlier this week.

Boosted by the 618 shopping festival, Alibaba’s Taobao and Tmall retail platforms’ June quarter revenues rose 12% to 114.95B yuan (1 yuan = $0.1387).

On this news, DZ Bank raised the stock to Buy from Hold, while Benchmark, also a buy, dubbed the print a “all-around clean quarter.”

Benchmark’s BABA objective is $180.

U.S. shares rose 4.6% Thursday but down 2.1% for the week to $95.72.PayPal debuts stablecoin.

PayPal debuts stablecoin.

PayPal (NASDAQ:PYPL) launched the first large financial services firm stablecoin to promote digital token payments.

PayPal announced Monday that their stablecoin, PayPal USD, will be backed by U.S. dollar deposits, short-term Treasuries, and other cash equivalents. Paxos Trust Company will issue PayPal USD.

U.S. consumers can now buy PayPal USD to move money between PayPal and other wallets, pay friends, and buy things.

After the epidemic, internet spending dropped, therefore PayPal is trying to expand its digital payment choices. Shares are down 40% year-to-date, including a 16% drop last week on gross profit fears after its earnings report, but they rose 2.7% Monday on stablecoin news.

Stock fell 2.4% to $61.54.

Post-earnings Lyft shares soar.

Last week, LYFT (NASDAQ:LYFT) shares fluctuated on earnings and management commentary, ending higher.

On Wednesday, the company reported Q2 adjusted profits per share of $0.16 and revenue of $1.02 billion. It expects Q3 revenue of $1.13B to $1.15B, better than Wall Street.

After rising on Wednesday, shares sank on cautious management commentary.

After a 10% drop Wednesday, shares more than recovered in the next session after the firm said in a blog post that it will start displaying ads on its app to generate more predictable revenue.

The decision should benefit Lyft, which relies only on ride-hailing, and CEO David Risher’s recovery efforts.

Lyft sells ads through Rokt and partners with Bilt Rewards, Amazon’s (NASDAQ:AMZN) Audible, and Comcast’s (NASDAQ:CMCSA) Universal Pictures.

Shares rose 4.9% to $11.38.

Roblox falls on weak earnings, then gains upgrades.

Roblox (NYSE:RBLX) posted a Q2 loss of $0.46 per share, $0.02 worse than expected, sending shares plunging Wednesday.

Bookings were $780.7 million, above the $785.4M expectation, while Average Daily Active Users (DAUs) rose 25% to 65.5 million.

Wednesday’s 22% sell-off prompted Morgan Stanley and Wedbush upgrades.

Morgan Stanley upgraded the stock to Equal Weight due to a better risk-reward.

Wedbush upgraded the stock to Outperform from Neutral with a $37 price target, saying Roblox “may have the most compelling growth trajectory among the video game names in our coverage universe after taking into account its user base size, its new products, and the potential to revisit its approach to profits.”

“The risk/reward profile has become favourable to the upside,” the analyst wrote to clients.

After the improvements, shares rose about 4% Thursday but fell over 20% for the week to $29.82.

Twilio exceeds goals.

Twilio (NYSE:TWLO) reported Q2 EPS of $0.54, beating the consensus estimate of $0.30, while revenue rose 10% to $1.04 billion.

Communications revenue was $913.1M, up 10%, while Data & Applications revenue was $124.6M, up 12%.

The business predicts Q3 EPS of $0.33-$0.37, above the $0.30 consensus, but revenue of $998B to $99B, below the $1.02B average analyst estimate.

After these results, Argus upgraded the stock to Buy from Hold with a $72 price objective, and Barclays raised its price target by $10 to $60.

Bernstein called the updated projection “the highest quarterly revenue guide they’ve ever had.”

Shares rose 2.2% Wednesday and 1% for the week, closing at $61.94.

IN EV SPACE

VinFast joins Nasdaq.

Vietnam-born player joins Nasdaq. Black Spade (NYSE:BSAQ) shareholders approved a merger with EV manufacturer VinFast on Thursday, allowing the Vietnamese business to trade on the U.S. market next week.

VinFast and Black Spade announced Friday that VFS shares of the publicly traded business will be available “on or around August 15.After the announcement, Vingroup’s (HM:VIC) stock rose over 7% to 72,600 dong ($1 = 23,760 dong), its one-year high. In New York, Black Spade’s shares rose 73% to $18.50 on Thursday before settling at $14.64 by Friday afternoon.

Mullen struggles.

After a 9:1 reverse stock split on August 11, Michigan EV startup Mullen Automotive Inc. (NASDAQ:MULN) took steps to repair its Wall Street image.

This month’s annual stockholders meeting approved a reverse split proposal. The plan ensured the company’s compliance with Nasdaq’s listing standards, particularly the $1 minimum bid price.

Unfortunately, MULN shares fell 8.6% at the opening of trading on Friday, dropping the adjusted share price below $1. Shares soon recovered, reaching a monthly high of $1.07 before completing the week at $1.01, barely above the minimum.

Mullen must maintain a $1 share price for 10 business days to comply with Nasdaq.

UAW negotiations trash-talk

The “big three” EV makers—General Motors (NYSE:GM), Ford (NYSE:F), and Chrysler parent Stellantis (NYSE:STLA)—saw large share-price drops this week due to worker strike fears.

As contract discussions heat up, reports suggest a huge difference between auto firms and the United Auto Workers (UAW) labour union.

Last week, UAW president Shawn Fain termed Stellantis’ proposals “a slap in the face” and appeared to throw a copy in a garbage receptacle during an online negotiation conference.

“The management’s actions can only be seen as a deliberate affront to us,” stated Fain.

The UAW wants 40% salary increases over four years, increased time off, and the resumption of defined-benefit pensions for newer employees.

In a letter to staff, Stellantis COO Mark Stewart warned that giving in to UAW demands could “endanger our ability to make decisions in the future that provide job security for our employees.” Stewart continued, “Theatrics and personal insults will not help us reach an agreement.”

Stellantis, General Motors, and Ford contracts end September 14.

“The clock is ticking – time to get down to business,” cautioned Fain.

STLA fell 5.9%, F 5%, and GM 6.8% last week.

Outlook for the week on energy and precious metals

WTI Crude Forecast

Crude prices rose for a seventh straight week as the International Energy Agency predicted record oil demand this month. Oil bulls’ longest winning streak since June 2022.

The U.S. West Texas Intermediate, or WTI, hit a 9-month high of $84.89 per barrel on Thursday, proving Moya’s point regarding the long oil crowd’s optimism. The U.S. oil standard rose 20% in two months.

I disagree with Moya about the rally’s durability, especially that it’s not slowing. WTI climbed less than 0.5% last week. The U.S. crude standard had its weakest weekly gain since the run-up began on June 16. It compares to the near-5% surge two weeks ago and the 5% rally’s second week.

Not only WTI. Brent crude rose somewhat this week. It finished little under $87 per barrel, up 0.5% on the day and 0.7% for the week.

Brent’s weekly rise was similar to WTI’s. On Thursday, the global crude benchmark reached a seven-month high of $88.10, following the U.S. Brent rose 18% in two months.

After a seven-week run-up, the oil market was complacent enough “sometimes that… you get a decent pullback,” Moya said.

If two important resistance levels are triggered next week, longs may be forced to take profit or shorts may attack an overextended market.

Sunil Kumar Dixit, chief technical expert at SKCharting.com, said that oil markets would test the 100-week SMA, or Simple Moving Average, resistance of $85.60 or even the monthly Middle Bollinger Band of $86.90 in the coming week.

If bulls fail to defend current heights, bears will want a stronger risk-reward maths.

Dixit observed that seven weeks of bullish comeback pauses at $84.90 as prices approach the horizontal resistance zone. 100-Week SMA $85.60

Dixit stated a break below the daily Middle Bollinger Band of $80 will signal momentum depletion and a rapid decline to the 50-week EMA, or Exponential Moving Average, of $78.80.

Gold: Forecast

After days of stagnation, SKCharting’s Dixit said gold was at a critical inflection point.

“Outright rejection from $1,947 high keeps pushing spot gold down towards the ascending 200-day SMA that’s dynamically positioned at $1,902, which if broken, can extend its decline towards the 50-week EMA of $1,896,” said Dixit.

Dixit said daily settlement below the 5-week EMA dynamically positioned at $1,919 keeps spot gold’s short-term trend bearish.

“It will be interesting to see the market reaction to the $1,902-$1,896 zone, which may significantly impact the price action for gold, which can either lead to a deeper correction into $1,850 or the resumption of the short-term uptrend towards $1,950.”

If buyers enter this zone, the 5 Day EMA of $1,919 will be followed by immediate resistance at $1,929. Strong acceptance above this mark will smooth the next move higher at $1,941-$1,946.”

Gas Price Forecast

Dixit expects gas to rise toward the monthly 100 SMA of $3.247 and the 200-day SMA of $3.29 after retesting the breakthrough zone from $3 to $2.70.“The $3.57 descending 50-week EMA is major resistance,” he said.

“If gas drops further below $2.70, the next immediate support would be the 50-day EMA of $2.60, while major support remains at the 100-day SMA of $2.42, which aligns with the weekly Middle Bollinger Band,” Dixit said.

Insider trades & hedge funds

Hanesbrands reforms under activist investor Barrington.

Barington wrote to Hanesbrands’ (NYSE:HBI) chairman to reduce costs and debt and challenge leadership.

Barington advised the company to slash SG&A, inventory, margins, and management due to its falling stock price. Hanesbrands pledged to advance and regularly consult with shareholders, including Barrington.

Treehouse Foods gains $2M from Jana Partners.

Jana Partners purchased 41,500 Treehouse Foods (NYSE:THS) shares for $1.9M.

This transaction gives the fund 4,795,414 shares.

VF (NYSE:VFC) Director Richard Carucci purchased 40,000 common shares at $19.0911, worth $763,644.The new transaction gives Carucci 162,699.331 shares.

Axalta Coating Systems (NYSE:AXTA) CEO Chris Villavarayan bought 33,710 common shares at $29.67, worth over $1M. Villavarayan bought 68,150 shares.

Asana (NYSE:ASAN) CEO Dustin Moskovitz bought additional 160,000 common shares at $21.27–$21.82, totaling $34.4M. The recent purchase is part of Moskovitz’s March 2023 intention to buy up to 30M common stock by 2023.

DEALS

Tapestry buys Michael Kors parent Capri for $8.5 billion.

Tapestry (NYSE:TPR) agreed to buy Capri, the parent company of Michael Kors, for $57 per share in cash on Thursday, sending Capri shares up more than 55%. It costs $8.5 billion.

The firms expect cost synergies above $200 million within three years of closing the deal. In the previous fiscal year, the firms had $12B in global sales and $2B in adjusted operating profit.

The announcement sent Tapestry shares down nearly 16% on Thursday.


Digital World Acquisition and Trump Media & Technology Group pledge to merge
.

After Wednesday’s market close, Digital World Acquisition (NASDAQ:DWAC) and Trump Media & Technology Group (TMTG), which operates the Truth Social platform, announced an amendment to their October 2022 merger agreement that will allow TMTG to go public via a $1.7B SPAC deal with DWAC.

After Truth Network emailed DWAC about a specific agreement section, this happened. DWAC believed that by getting shareholder permission to extend the liquidation deadline to September 8, 2024, it might also extend the agreement’s “Outside Date” by three months. Truth Network claimed its commitments expire on September 8, 2023.

The revised agreement extends the merger’s “Outside Date” to December 31, with joint due diligence before SEC filings.

DWAC shares rose almost 11% Thursday.

Amazon considering anchoring Arm’s IPO

According to Reuters, Amazon (NASDAQ:AMZN) is in talks with other tech companies to invest in SoftBank Group (TYO:9984) Arm before its initial public offering.

Amazon’s prospective IPO participation emphasises Arm’s importance in cloud computing. Arm designs Amazon Web Services’ Graviton processing processor.

One source said Arm plans to list on the Nasdaq in early September to raise $8B to $10B. Amazon and Arm declined comment.

Regeneron to acquire Decibel

On Wednesday, Decibel Therapeutics (NASDAQ:DBTX) shares rose 80% after Regeneron Pharma (NASDAQ:REGN) announced a $4 per share cash acquisition with a non-tradeable contingent value right (CVR).

The CVR allows shareholders to receive $3.50 per share in cash if Decibel’s main investigational product, DB-OTO, is successful in meeting clinical development and regulatory goals for paediatric patients with congenital, profound deafness due to otoferlin (OTOF) deficiency.

The proposed acquisition values Decibel at $109M based on the amount payable at closure and up to $213M if the CVR milestones are met.

Weekly Earnings Calendar

Monday, August 12

Suncor Energy (SU), Roivant Sciences (ROIV), Monday.com (MNDY), Reata Pharmaceuticals (RETA), Rumble (RUM), and Embraer (ERJ)

Tuesday, August 13

Home Depot (HD), Agilent Technologies (A), Sea Limited (SE), Nu Holdings (NU), Cardinal Health (CAH), Legend Biotech (LEGN), Tencent Music Entertainment Group (TME), CAVA Group (CAVA), and H&R Block (HRB) 

Wednesday, August 14

Cisco Systems (CSCO), TJX Companies (TJX), Synopsys Inc. (SNPS), Target Corp. (TGT), JD.com (JD), Amcor (AMCR), and Wolfspeed (WOLF) 

Thursday, August 15

Walmart (WMT), Applied Materials (AMAT), Ross Stores (ROST), Keysight Technologies (KEYS), NICE Ltd. (NICE), and Tapestry Inc. (TPR)

Friday, August 16

Deere & Company (DE), Palo Alto Networks (PANW), Estee Lauder Cos. (EL), Vipshop Holdings Ltd. (VIPS), and XPeng Inc. (XPEV)

For Details

Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks recap Stocks reca

Related Post