28 Mins Ago
Can pickleball hurt health insurance stocks?
Health care stocks took a hit earlier this month after UnitedHealth warned of higher-than-expected utilization of care from customers. UBS analyst Andrew Mok said in a note to clients that the rise of pickleball may at least partly to blame.
“We estimate $250-500 mn of medical costs directly attributable to pickleball and see potential for greater medical costs indirectly linked to pickleball,” the note said.
Read more about the theory on CNBC Pro.
— Jesse Pound
31 Mins Ago
Walmart+ sees record memberships, Morgan Stanley estimates
Walmart’s membership service hit a new high, according to estimates from a Morgan Stanley consumer survey.
The latest AlphaWise survey estimated Walmart+, a service that includes free delivery and shipping, has about 21.4 million members. That equates to about 17% of U.S. household penetration.
It marks a nearly 3-million subscriber increase from May and is more than 1 million higher than the previous record.
“The positive inflection continues the broader trend of membership growth despite some brief blips,” analyst Simeon Gutman said in a note to clients Sunday.
The “TAM,” which gauges the number of actual members as well as respondents who reported being very likely to join, also rose but was still off previous highs.
— Alex Harring
37 Mins Ago
‘Crypto is far from dead’ after institutions enter the market, says Bernstein’s Chhugani
Bitcoin is coming off one of its strongest weeks of the year after it climbed 17% thanks to enthusiasm around financial institutions giving crypto their stamp of approval. ETF applications from WisdomTree, Invesco and others got the most attention but Wall Street is also optimistic about opportunities for custody, wealth management and tokenization using blockchains.
“Crypto is far from dead,” Bernstein analyst Gautam Chhugani said in a note Monday. “Institutional interest has remained alive through the crypto winter and we are seeing some early news flow with the current announcements. We will continue to see continued institutional participation in new crypto products and offerings, including institutions building tokenized products on public blockchains.”
Despite the crypto industry’s anarchist roots, much of the industry has been waiting and hoping to see institutions join the crypto market in a meaningful way that would bring about greater legitimacy of the asset class and more ways for more people to gain access to crypto. While the biggest institutions have done research and testing of blockchain-based products for years, most have been cautious to declare it as a priority for their businesses.
“Strong crypto-native survivors from this cycle, willing to play the long regulatory game as clarity evolves, are well placed,” Chhugani added. “The institutions are not just here for ‘regulatory capture’ but they see the commercial impact – both revenue and costs.”
— Tanaya Macheel
41 Mins Ago
JPMorgan lifts price target on Las Vegas Sands
JPMorgan boosted its price target on shares of Las Vegas Sands on Monday ahead of second-quarter earnings out next month from the casino operator.
“We like the entry point for LVS, with its shares flattish since it reported its 1Q23 earnings in mid-April,” wrote analyst Joseph Greff, as he upped his price target to $72 from $71 a share. The increase implies 26% upside from Friday’s close.
“The lack of positive share price momentum quarter-to-date is, unsurprisingly, related to mixed China non-Macau related macroeconomic signals, and provides a buying opportunity for investors willing to ignore the noise and focus on the [gross gaming revenue] recovery and what we think will be a positive estimate revision story,” he said.
— Samantha Subin
49 Mins Ago
Russia turmoil ‘supportive of oil prices in the near term,’ UBS says. Others less sure.
While the crisis between Russian President Vladimir Putin’s Ministry of Defense and the the private mercenary Wagner Group “appears over as soon as it began, there will be questions and suppositions about what all of this means for days and weeks to come,” UBS analysts led by Roger Read wrote Sunday.
“Given that Russia is a major oil producer and exporter, we expect this uncertainty to be supportive of oil prices in the near term,” although the price effect will be seen in “the form of a risk-premium for future barrels as there are no indications of disruptions to production or exports at this time,” he said.
UBS and other Wall Street investment banks also considered the idea that internal dissent in Russia over the conduct of the war in Ukraine might conceivably lead to either an end to the conflict or, at least, a ceasefire — either of which might eventually lead to an easing of Western sanctions and lower oil prices.
But immediately, “this weekend’s events are not a cause to relieve sanctions, particularly with energy prices significantly lower” year over year, wrote Wolfe Research’s Sam Margolin on Saturday.
Goldman Sachs analysts agreed that the likely immediate effect of the Wagner Group mutiny will be on future crude oil pricing, not spot prices. “Markets may price a moderately higher probability that domestic volatility in Russia leads to supply disruptions or has a sizable negative impact on oil supply at some point in the future,” analysts led by Daan Struyven wrote Sunday.
One consideration noted by Goldman: the Wagner Group has provided protection for the Libyan National Army faction in eastern Libya since 2019, “entrenched in and around oil facilities,” with the ability “to disrupt oil production, although the incentives to do so seem unclear should revenue depend on these flows.” Libya produces about 1.1 million barrels of crude per day. Russia pumps about 11 million barrels.
— Scott Schnipper, with reporting by CNBC’s Michael Bloom
59 Mins Ago
Texas bankers seeing declining conditions, Fed survey shows
Banking conditions are deteriorating in Texas, with loan demand and volume falling while nonperforming loans are on the rise, according to a survey the Federal Reserve in Dallas released Monday.
“Loan demand declined for the seventh period in a row, and most bankers expect a further deterioration over the next six months. Overall loan volumes continued to fall, with particular weakness seen in consumer lending,” the Banking Conditions Survey stated.
The one bright spot was residential real estate, which was stable, though commercial and industrial loan volumes declines.
“Bankers’ outlooks remained pessimistic, with contacts expecting a further contraction in business activity and an increase in nonperforming loans over the next six months,” the survey said.
— Jeff Cox
An Hour Ago
Lululemon’s Chinese store revenue could nearly double this year, Piper Sandler says
Lululemon could double its store revenue in China as the country recovers from stringent Covid-19 lockdowns, according to Piper Sandler.
Analyst Abbie Zcejnieks wrote in a Monday note that because roughly 80% of Lululemon stores in the region were opened since the start of the pandemic, the company could be poised to benefit from a strong rebound in foot traffic.
“We think store productivity has been significantly impacted by store closures and lower traffic due to lock downs, and we estimate that store productivity could improve by ~35% in FY23,” Zcejnieks said. The firm reiterated an overweight rating on Lululemon stock.
— Brian Evans
An Hour Ago
Three key changes are helping the market this year, chart analyst says
Frank Cappelleri of Cappthesis pointed to three key technical changes that are helping the market this year:
- Bullish chart patterns are working, while bearish ones aren’t
- Big market moves are happening less often than last year
- “The number of big GAINS noticeably outnumber the number of big DECLINES.”
Despite last week’s decline, the S&P 500 is still up 13% for the year and more than 20% above its October low.
“Can the market keep up this pace? That’s been the question since a few days after the October’22 lows.” Cappelleri wrote in a note Monday. “While it would be ‘easy’ to pound one’s chest and declare it’s either a bull market or the mother of all bear market rallies, that wouldn’t help.”
“The key is understanding the vital changes that have taken place to get us here and what needs to happen to keep it going,” he added. “The bottom line is that these three points simply were not present in 2022, and the market floundered.”
An Hour Ago
Barclays says impact from failed Russia coup looks ‘limited’
Don’t be surprised if markets “largely ignore” the events occurring over the weekend in Russia, according to Barclays.
“While the short-lived Russian insurrection dominated weekend headlines, we think the market impact is limited, and macro factors are likely to remain the main drivers of risk assets,” wrote Ajay Rajadhyaksha in a Monday note.
Although the events may signal that Russia appears more unstable than anticipated, Rajadhyaksha said that markets seem more focused on implications for the war in Ukraine.
— Samantha Subin
2 Hours Ago
Berenberg says the tech rally is ‘running out of steam’
The tech rally is ‘running out of steam’ as challenges start to build, according to Berenberg.
“We highlight how US tech has outperformed US equities ytd without any support from falling bond yields – either there is a new and independent tech cycle (eg AI domination) or the break in this macro relationship needs to repair somewhat given tech’s role as a long-duration sector,” Jonathan Stubbs wrote Friday.
“In theory, tech would benefit from a significant fall in US bond yields; however, that likely would need a sharp economic slowdown, which could also drive risk-off sentiment across equities and be to tech’s disadvantage.”
— Sarah Min
2 Hours Ago
Homebuilding stocks among S&P 500 names trading near new highs
Despite the tepid market action, some stocks are hovering near fresh highs during Monday’s session.
Homebuilding stocks are also seeing another day of gains, with D.R. Horton, NVR and PulteGroup last trading near multi-decade highs dating back to their IPOs.
These stocks also hit new highs:
- Take-Two Interactive trading levels not seen since April 2022
- Eaton Corp trading at all-time high levels back to its IPO in July 1923
- WW Grainger trading at all-time high levels back to when it began trading in 1967
- Parker-Hannifin trading at all-time high levels back to its IPO in 1964
- Snap-On trading at all-time high levels back through our history to 1972
- Palo Alto Networks trading at all-time highs back to its IPO in July 2012
- Martin Marietta trading at levels not seen since January 2022
- Vulcan Materials trading at all-time high levels back through our history to 1972
Elsewhere, Campbell Soup Company traded at lows not seen since June 2022, while Pfizer traded at lows not seen since April 2021.
— Chris Hayes, Samantha Subin
2 Hours Ago
Student loans a potential headwind for consumer discretionary, Morgan Stanley survey shows
Morgan Stanley’s latest Consumer Pulse Survey showed an uptick in economic confidence but concerns about the resumption of student loan payments among loan holders. Those payments are expected to resume in October, after a Covid-induced pause.
“The majority across all income groups said they couldn’t afford this, or would have to adjust spending in other areas to afford the restart, a potential headwind for consumer discretionary categories,” analyst Brian Harbour wrote in a note Monday.
Some 78% of those who made under $50,000 said they wouldn’t be able to pay their monthly student loan bills or would have to cut back spending in other areas to make the payments. Meanwhile, 70% of those who made between $50,000 and $99,999 said the same, while 57% of those making over $100,00 and above agreed.
The survey polled 2,000 US consumers between June 16-19.
— Michelle Fox
3 Hours Ago
Shape of rally shows A.I. winners will be a small group, Barclays says
Barclays strategist Venu Krishna said in a note to clients on Monday that the narrowness of this year’s market rally is a symptom of how Wall Street sees the winners of artificial intelligence.
“Markets appear largely in agreement that widening AI adoption is likely to concentrate power into the hands of a few key Tech companies. Tech valuations have taken off, and AI-exposed stocks have captured nearly all equity gains YTD,” the note said.
However, the boom for those tech stocks doesn’t mean that the stocks are necessarily overpriced, Krishna said.
“Multiples remain far from the extremes that were seen during the dotcom bubble, and have yet to even return to the heights that were seen during the 2020 equity market rebound. Partly, this is because AI is already showing up at the bottom line,” the note said.
— Jesse Pound
3 Hours Ago
Stocks making the biggest moves midday
Check out the companies making headlines in midday trading.
- Lucid Group — Lucid shares jumped 6% after the electric vehicle maker said it will provide powertrain and battery systems to British luxury automaker Aston Martin.
- WSFS Financial — The regional bank added 4.5% after D.A. Davidson upgraded the stock to buy from neutral, noting WSFS could benefit from a higher-for-longer interest rate environment. The gain helped the SPDR S&P Regional Banking ETF (KRE), which traded about 2% higher.
- Pfizer — Pfizer slid 3.8% after it said it would end development of its experimental obesity and diabetes drug, lotiglipron, because of elevated liver enzymes that could indicate liver damage. Pfizer said no participants reported any symptoms or side effects.
Check out the full list here.
— Sarah Min
3 Hours Ago
Technology giants pressure Nasdaq Composite
4 Hours Ago
Energy, real estate stocks among biggest gainers in S&P 500
Energy and real estate stocks gained on Monday, lifting the S&P 500 sectors by 1.5% and about 1.3%, respectively, shortly before 12 p.m. ET.
The energy sector got a boost from a jump in oil prices and gains totaling nearly 3% from EQT Corp and Halliburton. Baker Hughes, Targa Resources, EOG Resources and Hess added about 2% each.
Boston Properties and Alexandria Real Estate Equities were the biggest gainers in the real estate sector, jumping 7.2% and 3.3%, respectively. Ventas, Digital Realty Trust and Kimco Realty each rose about 2%.
Communications services suffered the most extreme losses. The sector fell 1%, dragged down by losses from from Meta Platforms and Alphabet, declining by about 2% each. Netflix and Warner Bros. Discovery contributed to the declines, dipping 1%.
— Samantha Subin
4 Hours Ago
Berkshire continues cutting stake in Chinese electric carmaker BYD
4 Hours Ago
IBM to buy IT management software company for $4.6 billion
IBM shares rose nearly 1% on Monday after announcing plans to buy IT software management company Apptio for $4.6 billion from Vista Equity Partners.
IBM called the acquisition an extension of its investment in artificial intelligence and IT automation that will enable the Dow holding to build on its application management offerings.
The acquisition of Apptio, a vendor to more than 1,500 clients including technology giants Microsoft and Google, is expected to close in the second half of 2023.
— Ashley Capoot, Samantha Subin
5 Hours Ago
Pfizer shares fall after pharma giant stops development of experimental obesity pill
Pfizer shares dropped 5% after the pharmaceutical giant said Monday it would halt development of its experimental obesity and diabetes pill, called lotiglipron. The firm cited elevated liver enzymes, which could point to liver damage, in clinical patients who took the drug once a day.
The decision comes amid growing interest in a new class of drugs targeting weight loss. However, there remain questions on how long patients will need to take the drugs to keep the weight off.
Pfizer shares 1-day
— Sarah Min, Annika Kim Constantino
5 Hours Ago
Regional banking ETF poised for best session in 2 weeks
The SPDR S&P Regional Banking ETF (KRE) rose 2% in Monday’s session, putting the fund on pace for its best day in more than two weeks.
If the performance holds, it would end the ETF’s five session losing streak. It would also mark the best performance since June 7, when the fund finished 3.3% higher.
Monday’s rally has been helped in part by PacWest, WSFS Financial and Western Alliance, which have all gained more than 4%.
That advance also helps as the ETF looks to finish a winning month. The fund is up 4.4% since June began, which would be its first positive and best month since January, when it ended 5.8% higher. Investors have closely watched the KRE since the onset of the banking crisis in March, which prompted fears about the health of regional banks.
— Alex Harring, Gina Francolla