Stocks rebound as investors shake off Mideast tensions, focus on earnings

U.S. stocks rose Monday as concerns about fallout from Iran’s attack on Israel eased, shifting the focus back from earnings season and inflation risks to rate cut hopes.

The S&P 500 (^GSPC) gained about 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.5%, or more than 360 points, after ending the week with strong losses. The tech-heavy Nasdaq Composite (^IXIC) rose 0.4%.

The focus is shifting as investors shrug off initial fears of a full-scale war in the Middle East following Iran’s direct missile and drone attack on Israel on Saturday. U.S. efforts to encourage Israel not to retaliate helped ease tensions, in part because the well-telegraphed attack helped contain the damage.

Stocks have been under pressure in recent days as earnings season got off to a weak start and concerns persisted that inflation was slowing toward the Federal Reserve’s 2% target. Traders have scaled back their bets on the extent of the Fed’s interest rate cuts this year in the face of disappointing economic data.

Retail sales in March increased 0.7% from the previous month as consumers continued to spend despite a higher interest rate environment. The monthly figure exceeded economists’ expectations with an increase of 0.4%, according to Bloomberg data.

Goldman Sachs (GS) got this week’s results off to a strong start on Monday, as investors look to company results to reignite the early 2024 stock market rally. Shares of the Wall Street lender rose more by 5% after first-quarter profits beat estimates.

In the commodities sector, oil prices fell more than 1% on Monday after rising on the eve of the Iranian airstrikes. West Texas Intermediate crude futures (CL=F) were trading around $85 per barrel, while Brent crude futures (BZ=F) were near $90.

Meanwhile, the 10-year Treasury yield (^TNX) added about 10 basis points to trade near 4.61%, coming back from a sharp decline Friday to eye a return to the five-year high month of last week. Another safe-haven gold (GC=F) fell after gaining as much as 1.2% last week as tensions in the Middle East intensified.

Live6 updates

  • Goldman Sachs Stocks Rebound, Leading Financial Sector Higher

    Financial stocks (XLF) rose on Monday, led by shares of Goldman Sachs (GS).

    David Hollerith of Yahoo Finance reports:

    Goldman Sachs’ profits rose 28% in the first quarter, driven by higher revenue at the investment bank, giving CEO David Solomon the boost needed as 2024 begins.

    Net profit was $4.1 billion, beating analysts’ expectations. Its revenue of $14.2 billion also jumped from last year, driven in part by a 32% rise in investment banking fees. Asset and wealth management revenues have surged, as has trading.

    Goldman’s stock rose 5% in early trading Monday before paring some of those gains.

    Learn more here.

  • Trump Media shares fall 15% on plans to issue millions of shares

    Shares of Trump Media & Technology Group (DJT) fell 15% after the parent company of Donald Trump’s social media platform, Truth Social, filed to exercise warrants, which could mean the issuance of nearly 21.5 million common shares.

    Monday’s decline was an extension of last week’s selloff after an updated regulatory filing showed the company was suffering heavy losses and facing “greater risks” associated with the former president’s ties with the platform.

    Trump Media went public on Nasdaq in late March after merging with special purpose acquisition company Digital World Acquisition Corp.

    The stock soared as high as $66 per share on its first day of trading. On Monday, shares were hovering just above $27 per share.

  • S&P 500 rebounds as investors focus on earnings-rich week

    Stocks rose Monday amid easing concerns about fallout from Iran’s attack on Israel over the weekend. Investors focused on earnings season as shares of Goldman Sachs (GS) rose more than 5% after the bank’s first-quarter profits beat estimates.

    The S&P 500 (^GSPC) gained about 0.8%, while the Dow Jones Industrial Average (^DJI) rose about 0.8% after ending the week with steep losses. The tech-heavy Nasdaq Composite (^NDX) rose 0.9%.

    Oil prices fell about 1% following Iran’s airstrike, signaling easing fears of a possible supply disruption. West Texas Intermediate crude futures (CL=F) were trading around $85 per barrel, while Brent crude futures (BZ=F) were near $90.

    Retail sales rose 0.7% in March, more than the 0.4% month-over-month rise economists had expected.

  • Salesforce might be looking for bargains

    Multiple reports have revealed that Salesforce (CRM) is close to reaching a deal to buy data management company Informatica (INFA) for around $11 billion. – as a result, both tickers are at the top of Yahoo Finance’s “Trending Ticker” page this morning.

    Salesforce shares are down on the news because the mood on the Street is that it’s unclear whether the company would be a good fit (it has lower margins than Salesforce, for example).

    The Street also enjoyed a sales force more focused on increasing profit margins last year, after facing a surprise attack from activist investors (in part due to a series of dilutive acquisitions). This would be Salesforce’s first big deal since purchasing Slack in 2021 for $28 billion.

    Informatica stock is lower because Salesforce may not offer a premium to the company, according to reports.

    Knowing Marc Benioff, co-founder and CEO of Salesforce, I’m a little surprised by the potential return of trading. He told me several times in recent months that Salesforce remains focused on increasing profit margins. In fact, the company disbanded its M&A team last year!

    Still, Benioff loves doing big deals, and the company has the cash to make them happen. So why not.

  • Eyes on Nvidia and Intel

    Citigroup opens ‘upside watches’ on shares of Nvidia (NVDA) and Intel (INTC) after shares of the chipmakers fell last month.

    On NVIDIA:

    “Recent supply chain discussions indicate that demand visibility has extended into the first half of 2025, with the outlook for GPU units (chips) for calendar year 2024/2025 well aligned with our model base of 4.3 million/5.2 million. We expect supply chain comments from major foundries/memory suppliers during earnings and Computex Taiwan on June 2, where Nvidia CEO Jensen Huang will deliver a speech that could be a positive catalyst for the title.

    On Intel:

    “Intel stock is down about 29% year-to-date and we believe the stock is experiencing negative sentiment due to losses at the foundry businesses. Given the positive data from the March workbook d With a 44% month-over-month increase, we believe there is upside potential versus consensus estimates and expect the stock to trade higher given that. ‘Intel derives about 31% of its revenue from laptop processors.

    Further analysis: I took a slightly contrarian view on Nvidia’s stock price performance in the Sunday Morning Brief newsletter. More information on this one here.

  • Continue to connect the dots on the Iran-Israel conflict

    As markets comfortably process the weekend’s news of Iran’s attack on Israel, it is important to continue to connect the dots on these geopolitical risks.

    Most notably when it comes to oil, which Citi says could now hit $100 a barrel.

    I liked the connection that the Deutsche Bank team made this morning on the oil front:

    “More directly, the effects of rising oil prices will be felt globally, and this comes at a time when there are already concerns about persistent inflation in several countries. which could create a dilemma for central banks, as we also discovered after Russia’s invasion of Ukraine in 2022. On the one hand, there is the risk that a geopolitical shock could harm growth, thus advancing the timetable for rate cuts Indeed, the markets clearly priced in this risk on Friday, with the possibility of a Fed rate cut in June, going from 24% to 30%, although this figure is. returned to 24% this morning But again, if rising oil prices lead to more inflation and there are second round effects on other prices, then this could imply monetary policy must remain. longer in a restrictive territory. The potential effects can therefore work both ways.

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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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