Month: January 2024

© Reuters.

(Updated – January 2, 2024 12:13 PM EST)

Investing.com — Main U.S. indexes traded lower Tuesday, with investors consolidating after a stellar year ahead of the release of key manufacturing activity data.

Here are some of the biggest U.S. stock movers today:​

Tesla (NASDAQ:TSLA) stock climbed 0.3% after the electric car manufacturer said it delivered 484,507 units in the four quarter, above the analyst consensus of 483,173.

Apple (NASDAQ:AAPL) stock fell 3% after Barclays downgraded its rating on the iPhone manufacturer to ‘underweight’ from ‘equal weight’, expressing concerns about a prolonged period of weak results and the potential for multiple expansion not being sustainable.

Coinbase (NASDAQ:COIN) stock declined 5% despite the cryptocurrency exchange benefiting from the rise in bitcoin to a 21-month high on increased speculation that the U.S. SEC was close to approving a spot ETF for the world’s largest cryptocurrency.

Exxon Mobil (NYSE:XOM) stock rose 2.4% and Chevron (NYSE:CVX) rose 1% amid volatility in crude prices after a naval clash in the Red Sea raised the chances of Middle East supply disruptions.

Hasbro (NASDAQ:HAS) stock fell 0.1% after DA Davidson downgraded its stance on the toy manufacturer to ‘neutral’ from ‘buy’, pointing to management uncertainty over when the toy business will resume growth.

ASML (AS:ASML) ADRs fell 3.6% after the Dutch government blocked the chipmaker from exporting some of its tools to China.

Voyager Therapeutics (NASDAQ:VYGR) stock soared 23% following the news of a deal with Novartis (SIX:NOVN) that includes up to $1.2 billion in milestone payments.

Moderna (NASDAQ:MRNA) stock climbed 14% after its CEO said the company expects to see sales growth in 2025.

Rivian Automotive ‘s (NASDAQ:RIVN) stock fell 9% following the release of their latest quarterly production and delivery figures.

Additional reporting by Louis Juricic

© Reuters. Bernstein sees Bitcoin ending 2024 at $80k before rising to $150k in 2025

Bitcoin (BTC) is on its way to hitting a fresh record high in 2024, before rising to as much as $150,000 in 2025, according to analysts at Bernstein.

“We are about to embark on a new crypto era, marked by unprecedented mainstream institutional adoption, driving capital from traditional markets to crypto markets. This moment is unprecedented,” analysts said in a client note.

“We are also in a favorable macro, with rates peaking, inflation declining and chances of monetary stimulus in a major election year globally. We are not brave enough to be circumspect, and we like Bitcoin and Bitcoin mining stocks way too much here.”

The analysts fully expect the world’s leading asset managers to go live with a Bitcoin ETF either this week or next. While the ‘buy the rumor, sell the news’ scenario may take place, they urge investors to focus “on multiple bullish Bitcoin catalysts (halving, transaction fees inflection, ETF marketing) through the year.”

“Don’t sell the news, buy the dip. ‘Sell the news’ is like selling for a 15-20% correction, but miss out on the multi-bagger returns ahead,” the analysts added.

One of the potential catalysts for BTC prices to propel higher in 2024 and 2025 could be much bigger-than-expected demand from corporate treasuries.

“We expect Bitcoin to touch all-time highs in 2024 in the second half-post halving and may likely close the year at ~$80K (based on our marginal cost based estimate). Our estimate for 2025 remains $150K as cycle high.”

“Crypto equities will hit mainstream institutional interest in 2024, as bears continue to get squeezed (given short interest) and equity investors feel under-exposed to crypto.”

Elsewhere, the analysts also expect ETH to be the only non-BTC asset to get a spot ETF.

“[C]ombined with its growing fees, scaling roadmap and sustainable token model, [this] will position ETH as the primary blockchain tech asset,” they added.

© Reuters. What Small-Cap Stocks Are Institutions And Hedge Funds Buying

Quiver Quantitative – Intro:
In our ongoing series of exploring the insights derived from 13F filings, we’ve often focused on the individual investment moves of renowned money managers. This time, however, we’ve shifted our lens to a broader perspective. Our aim is to uncover the aggregated investment patterns in specific companies, offering a bird’s-eye view of institutional and hedge fund trends. In this edition, we delve into three distinct yet equally intriguing large-cap companies: Applovin Corp, ONEOK Inc (NYSE:OKE), and Super Micro Computer (NASDAQ:SMCI) Inc. We’ve defined large cap companies as those with a market capitalization larger than $10 billion. By analyzing the institutional/hedge fund holders and market performance of these firms, we hope to provide a clearer picture of their standing in the current financial landscape.

For clarity, we counted the number of funds holding each ticker in the 13F universe for both Q2 and Q3 of this year. For example, in Q2, 4,416 unique filers recorded positions of one or more shares in Apple, Inc (NASDAQ:AAPL). In Q3 that number fell by 121 to 4,295 or by about -2.74%. In other words we would not consider AAPL stock for this article considering in this case institutional interest actually fell. You can also think of the numerical change, like -121 in the case of AAPL, as the total number of new positions each quarter minus the total number of positions closed out throughout the quarter. As you’ll see in the writing below however, a number of mid-cap stocks saw significant double digit percentage growth in institutional interest.

TeraWulf Inc (WULF):
Q2 Institutional Holders: 69
Q3 Institutional Holders: 92
Percentage Growth: 33.3%
YTD Return: 198%

TeraWulf Inc. is a company that has carved a niche for itself in the growing industry of Bitcoin mining. Demonstrating a consistent growth trajectory, TeraWulf has recently reported a notable increase in its Bitcoin mining capacity, with a month-over-month rise of 3%, culminating in the mining of 323 Bitcoin in November. This increase is reflective of the company’s strategic advancements and technological enhancements in mining operations they have made over the last year or so. Financially, TeraWulf has seen a remarkable surge in its revenue, escalating from $15 million in 2022 to a striking figure of nearly $70 million in the current year. This financial upswing is mirrored in the company’s stock performance, with shares skyrocketing by 196% year-to-date. Despite these impressive figures, the company’s earnings narrative presents a contrasting picture. TeraWulf has experienced some challenges, evidenced by five consecutive misses on quarterly earnings per share (EPS) estimates, indicating areas where the company might need to refocus its strategies. This would likely include profitability which has also proven to be an issue considering they have not posted positive quarterly net income in at least two years and their current net income for the TTM is about -158%. Nonetheless, the company maintains a robust financial standing, as highlighted by its balance sheet that boasts a debt to equity ratio close to 1. Shares of WULF can currently be purchased around $2.07 each, a more than 60% increase since the end of Q3. Funds like BlackRock (NYSE:BLK), Citadel, Vanguard Group, and Renaissance Technologies are all currently holding positions in the Bitcoin miner.

Archer Aviation Inc (NYSE:ACHR):
Q2 Institutional Holders: 138
Q3 Institutional Holders: 189
Percentage Growth: 36.9%
YTD Return: 235%

Archer Aviation, a trailblazer in the aviation industry, is primarily focused on revolutionizing air travel through the development of electric aircraft. October of this year marked a significant milestone for the company, as US automaker Stellantis (NYSE:STLA) acquired over 12.3 million shares of Archer. This strategic investment, likely part of a broader collaboration with other firms including ARK Investment Management, is aimed at supporting Archer’s ambitions to build and design cutting-edge electric aircraft. With an IPO relatively recently in late 2021, Archer Aviation’s financial history is somewhat limited. Notably, the company is still in a pre-revenue stage, which is not uncommon for firms in their early stages of development, particularly in the high-tech sector. However, despite the lack of revenue, Archer’s financial position appears robust. The company reported approximately $460 million in cash and cash equivalents, juxtaposed against total liabilities of just $175 million. This healthy liquidity ratio grants Archer considerable flexibility and the ability to concentrate fully on research and development, which is crucial for a company in the technology-intensive aviation sector. Another positive indicator of the company’s financial management is the significant reduction in its cash burn rate. In the third quarter, cash burn fell to $51 million, a substantial decrease from an average burn of over $100 million in the previous four to five quarters. This reduction in expenditure reflects efficient cost management and strategic planning, positioning Archer Aviation to focus on its core mission of advancing electric aircraft technology. Shares of the firm currently trade around $6.50, a gain of about 27% since the end of Q3. ARK Investment Management, Two Sigma Investments, JP Morgan, and more were all holding positions in Archer at the end of Q3 as well.

Opera Limited (NASDAQ:OPRA):
Q2 Institutional Holders: 75
Q3 Institutional Holders: 98
Percentage Growth: 30.6%
YTD Return: 157%

Opera Limited, a well-recognized player in the tech industry, is known for its innovative internet browser and related technology services. The company’s stock performance has been a topic of interest, with shares soaring by an impressive 155% year-to-date. However, this statistic is somewhat deceptive, as it more accurately reflects the stock’s volatility rather than a steady upward trajectory. This point is underscored by the fact that Opera’s shares have plummeted by 50% from their peak in mid-July. This significant drop can be traced back to a pivotal announcement by the company regarding a $300 million mixed shelf offering. The revelation that one of the shareholders participating in this offering was none other than the company’s CEO further fueled market reactions, resulting in a rapid 30% decline in share price as the market adjusted to the implications of the offering. Despite the volatility in its stock price, Opera’s financial health remains robust. The company boasts a remarkably low Price-to-Earnings (P/E) ratio of 15x, which is particularly noteworthy given its three-year revenue CAGR exceeding 60%. This strong growth metric, combined with a low P/E ratio, suggests that the company is undervalued relative to its earnings capacity. Furthermore, Opera has consistently demonstrated financial stability, evidenced by posting positive net income for five consecutive quarters. Another aspect of Opera’s financial strength is its exceptionally sound balance sheet. The company’s debt to equity ratio is less than 0.1x, indicative of a very conservative approach to leveraging. This minimal leverage is further highlighted by the company’s remarkably small debt load of about $8 million. Such a low level of indebtedness not only reduces financial risk but also provides Opera with greater flexibility to navigate market fluctuations and invest in strategic initiatives. The web browser company now trades close to $13.50 per share, close to a 20% gain post the end of quarter three. Funds and institutions that held positions at that time include Citigroup, Soros Fund Management, and D.E. Shaw.

Forestar Group (NYSE:FOR):
Q2 Institutional Holders: 127
Q3 Institutional Holders: 143
Percentage Growth: 12.6%
YTD Return: 120%

Forestar Group is a company that has established itself as a significant player in the real estate and land development sector. While the company has experienced relatively flat revenue growth since 2021, with figures oscillating between $1.3 and $1.5 billion, this stands as one of the few drawbacks in its otherwise strong financial performance. Forestar Group has consistently improved its profitability, as evidenced by the increase in net income for the fifth consecutive year. From an investment perspective, Forestar Group presents an attractive value proposition. The company trades at quite a cheap P/E ratio of about 10x, which, coupled with a price to free cash flow ratio of 4.6x, suggests that the stock is undervalued relative to its earnings and cash generation capabilities. This kind of valuation is especially appealing considering the current economic landscape. The company’s stock performance further underscores its financial strength, with shares climbing 118% year-to-date. Perhaps most impressive has been Forestar Group’s ability to deliver an 8% return on capital, a commendable achievement given the current interest rate environment and the subsequent challenges facing the real estate sector. This return on capital indicates not only the company’s proficiency in generating profits from its investments but also its resilience in navigating the complexities of the real estate market. Shares of the company can currently be bought for around $34, which represents a 27% gain since the end of Q3. Funds and/or institutions that also held positions at that time include Dimensional Fund Advisors, Renaissance Technologies, AllianceBernstein (NYSE:AB), and Invesco.

Final Thoughts and Conclusions:

In conclusion, this analysis of small-cap stocks that have garnered interest from institutions and hedge funds reveals a diverse set of companies with unique strengths and challenges. TeraWulf Inc, Archer Aviation Inc, Opera Limited, and Forestar Group each show different financial and market dynamics. That said, most interest from hedge funds, institutions, and so on was still focused on mid-cap stocks as we discussed in the large-cap article and is again evidenced by covering fewer small-cap companies. Also of note was the large amount of stock sold short on several of the companies we wrote about today. ACHR and WULF have both managed to garner short interest of more than 22% which is not nearly as high as the stocks with the most short interest but is still significantly higher than your average stock. Perhaps some hedge funds and institutional investors are hoping for another r/Wallstreetbets inspired or encouraged short squeeze on these names, meaning all the more reason to keep an eye on them.

This article was originally published on Quiver Quantitative

© Reuters

Investing.com — U.S. stocks retreated Tuesday, handing back some of the previous year’s hefty gains as investors awaited the release of key economic data to confirm the expected trend of lower interest rates this year.

By 09:55 ET (14:55 GMT), the Dow Jones Industrial Average was down 23 points, or 0.1%, S&P 500 traded 28 points, or 0.6%, lower and NASDAQ Composite dropped 205 points, or 1.4%.

The three main indices recorded a stellar 2023, benefiting from raised expectations that the Federal Reserve will start cutting interest rates in the first quarter, likely resulting in an economic soft landing.

The benchmark S&P 500 surged by just over 24% annually, closing out the year with a streak of nine consecutive winning weeks — its best since 2004. The tech-heavy Nasdaq Composite soared by 43%, driven in part by strength in mega-cap stocks and emerging enthusiasm over the possible applications of artificial intelligence.

The 30-stock Dow Jones Industrial Average jumped by just short of 14%, boosted by seven record closing levels as the year drew to a close.

Nonfarm payrolls loom large

These expectations that 2024 could mark the start of a global easing cycle remains the dominant market driver, and investors will have a barrage of key economic readings to contend with ahead of the Fed’s March meeting.

This started with disappointing U.S. manufacturing PMI, which confirmed that this important sector remained in contraction territory in December, ahead of the release of the minutes from the December Fed meeting on Thursday. 

But most eyes will be on Friday’s nonfarm payrolls data for December. This is expected to show that the number of jobs created during the last month of 2023 fell to 163,000, from just under 200,000 the previous month. 

Tesla faces competition from BYD 

In the corporate sector, Tesla Inc (NASDAQ:TSLA) stock fell 1% despite the world’s most valuable automaker delivering a record number of vehicles in the fourth quarter and hit its 2023 target of 1.8 million, helped by increasing discounts on key models.  

Tsla is facing increasing competition in China, the largest auto market in the world, after BYD (SZ:002594) said it produced a record 526,000 battery-powered cars in the fourth quarter, and over 3 million new EVs and hybrids in 2023, beating Tesla for the second straight year. 

Rivian Automotive (NASDAQ:RIVN) stock slumped over 8% after the EV maker missed market estimates for fourth-quarter deliveries as tough competition and high interest rates weighed on demand for its electric vehicles.

Apple (NASDAQ:AAPL) sock fell over 3% after Barclays downgraded its stance on the tech giant to ‘underweight’ from ‘equal weight’, expressing concerns about a prolonged period of weak results and the potential for multiple expansion not being sustainable.

Crude stabilizes after more Red Sea attacks

Oil prices stabilizing after early gains Tuesday, after traders digest the potential for supply disruptions in the Middle East after more violence in the Red Sea, a vital trade route between Europe and Asia.

By 09:55 ET, the U.S. crude futures traded 0.1% lower at $71.55 a barrel, while the Brent contract climbed 0.2% to $77.19 a barrel.

Reports over the New Year weekend showed that U.S. strikes had killed about 10 Houthi fighters and sank three boats of the Yemeni group, after a series of strikes by the Houthis on several military and commercial vessels in the region. 

Both benchmark contracts had shed over 10% each in 2023, coming under pressure from persistent concerns over sluggish demand and higher-than-expected supply conditions.  

Additionally, gold futures rose 0.4% to $2,079.15/oz, while EUR/USD traded 0.7% lower at 1.0966.

(Oliver Gray and Scott Kanowsky contributed to this item.)

S&P 500 at 5400 is ‘probable and even conservative’ – Oppenheimer

Oppenheimer Asset Management analysts suggest that a pause in the market rally would be reasonable after the robust gains witnessed in the fourth quarter of 2023.

Analysts note that it’s not uncommon for markets to take a breather following a substantial bull run, such as the one experienced from October through December.

Investors may naturally seize this opportunity to evaluate recent movements, emphasizing the market’s dependence on data until the fourth-quarter earnings season kicks off on January 12 with major banks reporting results.

Despite the potential pause, analysts remain optimistic, anticipating further upside in stock prices throughout the year, supported by improvements in fundamentals.

Notably, a record high for the S&P 500 could serve as a catalyst for additional gains, enhancing overall market sentiment.

Along these lines, analysts at Oppenheimer believe the S&P 500 is “conservatively undervalued below 5,400”.

“Our analysis indicates year-2 of the bull cycle is underway, and this road map leads us to expect upside into S&P 5,400,” analysts said.

“The 37% gain since Oct. 2022 is on par with typical returns following a non-recessionary reset, and the median return between months 15 and 27 (Dec. 2023 to Dec. 2024) has been 13% which is the basis for our expectation for S&P 5,400.”

“Many of our Big Numbers for 2024 confirms 5,400 as a probable, and even conservative, target based on a variety of historical studies. We see 4,600 as downside risk to start the year.”

The S&P 500 closed 2023 at 4,769.83.

© Reuters. FILE PHOTO: People walk around the New York Stock Exchange in New York, U.S., December 29, 2023. REUTERS/Eduardo Munoz/File Photo

By David French

(Reuters) – The S&P 500 and Nasdaq Composite closed the first trading session of 2024 lower, weighed by a fall in Apple shares (NASDAQ:AAPL) after a broker downgrade and declines among other big-tech names triggered by a move higher by Treasury yields.

The lackluster session follows a year where Wall Street’s three major indexes notched double-digit gains on the back of optimism around artificial intelligence and stabilizing inflation. The S&P 500 ended last week within 1% of a record closing high reached in early 2022.

However, equities were pressured on Tuesday as U.S. Treasury yields climbed, with the yield on 10-year notes ticking above 4.000% to a two-week high before easing slightly to 3.937%.

Such movement in Treasury yields reflected investors’ tempered expectations around cuts this year in U.S. interest rates. This, in turn, weighed on growth stocks – among them tech stocks – which would benefit from a more favorable rate environment.

Apple fell 3.6% after Barclays downgraded the tech giant to “underweight”, citing weakening iPhone demand. Other megacap stocks also declined, including Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), which slipped between 1.4% and 2.7%.

“Everyone was very excited by the tail-end rally, the Fed – on the surface at least – paring back a little, and the fact we didn’t have a recession,” said Jason Pride, chief of investment strategy & research at Glenmede.

“But does that mean we’re out the woods yet? I suspect, even if the Fed brings rates down gradually, monetary policy is still tight and still likely to be a hindrance to overall economic activity.”

The Fed’s December policy meeting minutes and a slew of labor market data are on the roster for this week as market participants look to ascertain the timing of potential rate cuts.

While the Fed is widely seen holding rates at its January meeting, traders expect a near 70% chance of a 25-basis point cut in March, according to the CME Group’s (NASDAQ:CME) FedWatch tool.

The S&P 500 lost 27 points, or 0.57%, to end at 4,742.83 points, while the Nasdaq Composite lost 245.41 points, or 1.63%, to 14,765.94. The Dow Jones Industrial Average rose 25.5 points, or 0.07%, to 37,715.04.

The S&P 500 sectors were mixed. Healthcare was the brightest performer, with its 1.8% gain taking it to its highest close since mid-December 2022. Moderna (NASDAQ:MRNA)’s 13.1% advance led the sector higher after the vaccine maker was upgraded by brokerage Oppenheimer, and it reiterated the company’s goal of achieving sales growth in 2025.

The energy index also rose 1.2% despite crude slipping on concerns about the economic outlook. [O/R]

Information technology led decliners with a 2.6% fall, the index’s largest one-day drop since Aug. 2.

Tesla (NASDAQ:TSLA) was flat despite saying it delivered a record number of electric vehicles in the fourth quarter, beating market estimates and meeting its 2023 target of 1.8 million vehicles.

Boeing (NYSE:BA) dropped 3.4% after Goldman Sachs removed the aerospace company from its “conviction list”.

Meanwhile, Citigroup advanced 3.1% to $53.04, its highest finish since August 2022, after Wells Fargo raised its price target for the bank to $70 from $60. Wells analyst Mike Mayo also said Citi was his top pick among large banks in 2024, and he expects the stock to double to $100+ over the next three years.

Crypto-related stocks such as MicroStrategy gained as bitcoin pierced above $45,000 for the first time since April 2022 on optimism around the possible approval of exchange-traded spot bitcoin funds.

The volume on U.S. exchanges was 11.86 billion shares, compared with the 12.4 billion average over the last 20 trading days.