6 Mins Ago.
Today’s market is set up for cyclicals, says Vice Chairman of Ariel Investments
Charles Bobrinskoy, Vice Chairman of Ariel Investments, is bullish on cyclical stocks for the near term.
“The market is not cheap, but cyclicals and consumer discretionary and certain financial industry stocks are very attractive,” Bobrinskoy said on “The Exchange.” “My prediction is, as we get on the other side of these recessionary fears, interest rates–long-term rates–will actually go up a bit, above 4% on the 10-year. And that will not be good for tech stocks.”
Cyclical names, such as oil and gas companies, are trading at values in a market that is pricing in for a recession, Bobrinskoy said. His top picks are Goldman Sachs, automotive supplier Borgwarner, flooring manufacturer Mohawk Industries and energy supplier Apache—which are all trading higher on Monday. Mohawk is leading the broader market on Monday, with its shares up 5.3% in afternoon trading.
“Those are names that are trading for less than 10 times earnings because people are worried about a recession, and if we don’t get one, they’re going to do very, very well,” Bobrinskoy said.
– Pia Singh
35 Mins Ago
Roundhill launches ‘Big Tech‘ ETF
ETF firm Roundhill launched the hyper-concentrated BIG Tech ETF on Tuesday, as it continues to build out a lineup of sector funds that give investors exposure to only the biggest, most well-known stocks.
The fund has exposure to just five companies: Amazon, Meta Platforms, Microsoft, Apple and Google-parent Alphabet. The fund uses equities and swaps to gain this exposure.
The new fund has a ticker of BIGT and an expense ratio of 0.29%.
The Big Tech ETF comes on the heels of a concentrated large bank ETF that Roundhill launched last month. The firm has filed to launch similar funds focused on airlines and defense stocks.
— Jesse Pound
An Hour Ago
Warren Buffett sold Taiwan Semi partly due to geopolitical tensions, Nikkei reports
Warren Buffett revealed in an interview with Nikkei that his decision to dump a significant portion of Taiwan Semiconductor recently stemmed partially from geopolitical tensions.
The “Oracle of Omaha” sold 86% of his stake in the chipmaker in the fourth quarter. He had just bought the stock in the third quarter and made it Berkshire’s 10th biggest holding.
Buffett said geopolitical tensions were “a consideration” in the divestment, the paper said. He called the Taiwanese chip company a well-managed one but said Berkshire had better places to deploy its capital.
— Yun Li
An Hour Ago
Airline stocks rise on jump in Boeing deliveries
2 Hours Ago
Consumers are pulling back sharply on goods spending, Barclays says
Consumers are pulling back sharply on goods spending in what could be a troubling signal for the U.S. economy, according to Barclays.
For the first time since 2021, aggregate spending growth on a year-on-year basis in the Barclays U.S. credit card spending database fell below zero, analyst Renate Marold wrote to clients in a Tuesday note. It’s been on the decline since the start of this year.
The biggest contraction in credit card spending comes from goods spending. While consumers across all income levels are lowering their spending, the sharpest pullback comes from higher income shoppers.
“[Goods] spending by high-end consumers is falling fastest, with current goods spending nearly 10% below last year’s level,” Marold wrote. “This may suggest that the higher-income consumers are feeling the pinch in their wallets from inflation and are in the position where reduced discretionary spending on goods is possible.”
What’s more, the decrease is not due to a smaller set of credit card users as the data had been corrected for any changes, read the note.
“Instead, it could be a more ominous sign for the US economy,” Marold wrote.
— Sarah Min
2 Hours Ago
BTIG’s Krinsky sees ‘very poor’ risk reward ahead
Investors should proceed with caution when getting into the market this week, according to BTIG’s Jonathan Krinsky.
“While today’s volumes are likely to remain light ahead of heavy data and EPS the rest of the week, we continue to see very poor risk/reward broadly here,” the chief market technician wrote in a note to clients Tuesday. “Daily stochastics for SPX are as overbought as they have been in the last year.”
He noted that both Thursday and Monday marked some of the lightest volume days of 2023. Both started out with weak breadth and saw the SPDR S&P 500 ETF Trust trading 20% below average.
The SPDR S&P Regional Banking ETF’s inability to rally, could be another sign of a possible leg lower ahead, Krinsky said. He noted that the KRE hasn’t been able to test its 20-day moving average since breaking below it to the downside in February.
“There is the possibility we get a short-term ‘buy the news’ relief rally as their EPS comes in, but when something gets extremely oversold and can’t bounce, there’s usually another leg lower on the horizon,” he wrote.
— Samantha Subin
2 Hours Ago
Jefferies gets bullish on NYCB after the bank scoops up Signature
Shares of New York Community Bancorp. rose about 2% on Tuesday after Jefferies upgraded the stock to buy from hold.
NYCB, through its Flagstar arm, purchased billions in assets and deposits from the failed Signature Bank last month, and its shares have rallied since then.
However, Jefferies analyst Casey Haire wrote that the bank is still undervalued and that the deal improved NYCB’s balance sheet. In fact, the move brings NYCB’s loan-to-deposit ratio below 100% for the first time in over 20 years, according to Jefferies.
— Jesse Pound
3 Hours Ago
Materials stocks outperform
4 Hours Ago
Information technology stocks lag
4 Hours Ago
Brazil ETF is up 4% in its best day since October 2022
The iShares MSCI Brazil ETF is up more than 4% during Tuesday trading in its best day since October 3, 2022.
Department store company Lojas Renner was up more than 9%. Personal care cosmetics group Natura & Co Holding SA rose 5%.
— Sarah Min, Gina Francolla
4 Hours Ago
Stocks open little changed
The major averages were little changed, with the S&P 500 and Dow advanced slightly, while the Nasdaq pulled back marginally.
— Fred Imbert
5 Hours Ago
IMF says global economy heading for weakest growth since 1990
The International Monetary Fund on Tuesday released its weakest global growth expectations for the medium term in more than 30 years.
The D.C.-based institution said that five years from now, global growth is expected to be around 3% — the lowest medium-term forecast in an IMF World Economic Outlook since 1990.
“The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic,” the Fund said in its latest World Economic Outlook.
— Silvia Amaro
5 Hours Ago
WeightWatchers’ parent rockets higher by 25% after Goldman says the stock will more than triple
WW International, the parent WeightWatchers, saw its shares skyrocket 25% in premarket trading Tuesday. Goldman Sachs upgraded the stock to buy from neutral as it’s bullish on the diet company’s new foray into obesity medications. The firm also raised its 12-month price target to $13, more than tripling from Monday’s close of $4.12.
WW acquired Sequence, a telehealth platform that provides its subscribers with access to GLP-1 medications such as Wegovy and Ozempic.
“We believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” Goldman said. “With this new service offering we expect a cohort of consumers to turn to it for help navigating what is poised to be an increasingly complex field of pharmaceutical solutions.”
— Yun Li
5 Hours Ago
Stocks making the biggest moves premarket
Check out the companies making headlines before the bell on Wednesday:
CarMax — Shares of the vehicle retailer soared 6.3% on the back of better-than-expected quarterly earnings. CarMax earned 44 cents per share, beating a Refinitiv forecast of 24 cents per share.
Moderna — The biotech giant slid 4.6% after the company said it’s delaying its flu vaccine due to a lack of enrolled cases in a late-stage trial. The news comes after a company spokesperson told CNBC on Monday that Moderna hopes to release a slew of new vaccines that target cancer, heart disease as well as other yet-to-be confirmed conditions by 2030.
WW International — Shares popped more than 28% after Goldman Sachs said the weight loss company could triple in value. “WW’s subscriber base and earnings power has been shrinking, but we believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” Goldman said.
Read here to see which other companies are making moves before the open.
— Pia Singh
6 Hours Ago
Upstart slides 3% following JPMorgan downgrade
Upstart, an artificial intelligence-powered loan platform, lost 2.7% in premarket trading after JPMorgan said the stock could struggle going forward.
Analyst Reginald Smith initiated coverage of the lending stock at underweight. His $11 price target implies the stock could tumble 36% over the next year from Monday’s close.
“We like the potential of UPST’s AI lending platform, but our long-term bullishness is offset by near-term headwinds including slowing originations, waning investor demand for sub-prime unsecured consumer credit, and elevated losses on held loans,” he said in a note to clients Tuesday.
He also said the stock’s year-to-date rally of nearly 30% is shocking. CNBC Pro subscribers can read the full story here.
6 Hours Ago
LendingClub gains 5% after JPMorgan says investors may have oversold shares
Shares of LendingClub popped 5% in premarket trading after JPMorgan said investors may have unfairly sold off.
Analyst Reginald Smith initiated the stock at overweight. He set a price target of $11, which implies the stock could surge 60.3% from Monday’s close.
“We like LendingClub’s marketplace-bank model, which combines the fee income of a marketplace with interest income of a bank, personal loan market opportunity, and competitive positioning,” he said in a note to clients Tuesday. “Investor concern has shifted from the credit quality of their loan portfolio to the availability of bank partner funding and the near-term earnings impact (and optics) of holding more loans on balance sheet. Our sense is these third-party funding concerns are transitory and LC’s marketplace model thrives in time.”
And, he said the stock “is a compelling way to express the view that the recession for which investors have been bracing for well over a year, will be milder than feared.”
Shares have fallen 22% so far this year, building on 2022′s 63.6% selloff. CNBC Pro subscribers can read more about the call here.
8 Hours Ago
Warren Buffett says he plans on buying more shares of Japanese trading houses
Berkshire Hathaway CEO Warren Buffett raised his stakes in five major Japanese trading houses, and said he plans on adding to his holdings.
Berkshire Hathaway raised its stakes in all five trading houses to 7.4%, according to CNBC’s Becky Quick. That’s up from positions of 6.6% in Mitsubishi Corp., 6.6% in Mitsui & Co., 6.2% in Itochu Corp., 6.8% in Marubeni Corp. and 6.6% in Sumitomo Corp, according to November filings.
The news sent shares of Mitsubishi, Mitsui and Itochu up more than 2% each in Tokyo trading. Marubeni and Sumitomo climbed 4.6% and 3.2%, respectively.
Buffett told Nikkei said he plans on meeting with the companies later this week “to really just have a discussion around their businesses and emphasize our support.”
— Jihye Lee
8 Hours Ago
Goldman says buy Whirlpool
Goldman Sachs upgraded Whirlpool shares to buy from neutral. The bank’s $160 price target implies the stock can rally 24% over the next 12 months.
“Although the near-term path is likely to remain choppy, we believe the current valuation provides an attractive entry point,” analyst Susan Maklari wrote.
CNBC Pros subscribers can read more here.
— Alex Harring
11 Hours Ago
European stock markets open higher; mining stocks lead gains
European stock markets opened higher Tuesday after the long Easter weekend.
The pan-European Stoxx 600 index was up 0.8% around market open, with most sectors and major bourses trading in the green.
Mining stocks made strong gains with a 3% uptick, followed by autos, which were up 1.3%. Food and beverages was the only sector trading in negative territory, with a 0.1% downturn.
— Hannah Ward-Glenton
12 Hours Ago
European markets: Here are the opening calls
European stock markets are expected to open higher across the board in a strong start to the trading week.
The U.K.’s FTSE 100 is set to be up 45.9 points to reach 7,795.2 and Germany’s DAX will increase 118 points to 15,718, according to IG data. France’s CAC index will be up 62.7 points to 7,381.8 and Italy’s MIB is set for a 205.5-point uptick to 26,894.6.
— Hannah Ward-Glenton
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