7/15/24

Small caps surge as investors stack US election bets

The S&P 500 and Nasdaq 100 each ended up 0.3% after seeing initially strong gains fade as the trading day progressed. The Russell 2000 had another strong session, with small caps up 1.8%. Bitcoin also enjoyed a robust rally, gaining 6%.

Investors doubled down on bets that this weekend’s attempted assassination of Republican nominee Donald Trump improved the likelihood of him recapturing the presidency. Shares of companies that would supposedly stand to gain from Trump and the Republicans winning in November had their best day of the year, up 1.5%. On the other hand, shares of firms that purportedly benefit from Democrats’ electoral success had their worst day of the year, down 2.4%.

Energy stocks paced gains despite a modest drop in the price of West Texas Intermediate futures. Financials were the second best-performing S&P sector ETF, up 1.5% on the day. Goldman Sachs gained 2.7% after reporting strong trading results that outweighed plans to dial back buybacks in light of higher capital requirements.

At the other end of the spectrum, utilities were crushed, down 2.4% with a 7% drop in the sustainable energy-centric NextEra Energy.

Burberry is soooooooo 2009. As in, the stock sank 16% to its lowest level since 2009 as the company reported underwhelming earnings, suspended its dividend, and had its CEO step down.

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15m

Nio surges to an 11-month high following an upgrade from UBS ahead of its new SUV launch

Chinese EV maker Nio is climbing for the fourth straight trading day, following an upgrade from UBS to buy from neutral. Nio’s nearly 7% jump propelled the stock to its highest level since last October.

UBS also bumped its price target for Nio up to $8.50, a 37% hike.

Nio will begin deliveries of its new ES8 SUV this weekend, priced to compete with Tesla’s Model Y. Last week, the EV maker said it planned to raise up to $1 billion on a share offering.

According to UBS analyst Paul Gong, Nio’s latest products “could further attract consumers after the US $1 billion equity offerings strengthened visibility on its healthy operations.”

markets

J. Edward Moreno

36m

Moderna is up on the release of positive results for reformulated Covid vaccine

Moderna rose on Tuesday after it announced encouraging trial results for its next Covid-19 vaccine.

The data from its phase 4 clinical trial showed its 2025-2026 formula of its Covid-19 vaccine, which targets a new variant and was recently approved by the FDA with some limitations, produced a strong immune response among people ages 12 through 64. Covid vaccine sales account for virtually all of Moderna's revenue.

The company has had a tumultuous year as the Trump administration makes moves to limit who is able to access the vaccine. Last month, the FDA limited approval for the coronavirus vaccine to higher-risk populations; previously, anyone older than 6 months was eligible for it.

markets

41m

Rivian climbs as it breaks ground on a $5 billion EV plant that could produce 200,000 vehicles a year by 2028

EV tax credits may be ending this month, but Rivian’s still optimistic about future demand.

The electric vehicle maker on Tuesday broke ground on it’s delayed, $5 billion Georgia plant that it says will be able to produce 200,000 vehicles per year by 2028 (Rivian expects to deliver up to 46,000 EVs this year). Its shares climbed more than 6%.

The plant will create 7,500 permanent jobs once complete, according to Rivian, with the first phase of production beginning next year.

2026 also marks the planned launch year for Rivian’s R2 electric SUV, expected to start around $45,000 and compete with Tesla’s Model Y. Earlier this month, Lucid confirmed that it too would be creating a roughly $50,000 electric SUV.

If it seems like an odd time to build an EV plant, it probably is. But unlike larger rivals GM and Honda, Rivian doesn’t have the ability to scale back its EV ambitions — they’re the only vehicles the automaker produces. Last month, the company posted a steeper loss than analysts expected, losing $1.12 billion over its second quarter.

It's 'do or die' for electric vehicle maker Rivian as it breaks ground on a $5 billion plant

It's 'do or die' for electric vehicle maker Rivian as it breaks ground on a $5 billion plant

The plant will create 7,500 permanent jobs once complete, according to Rivian, with the first phase of production beginning next year.

2026 also marks the planned launch year for Rivian’s R2 electric SUV, expected to start around $45,000 and compete with Tesla’s Model Y. Earlier this month, Lucid confirmed that it too would be creating a roughly $50,000 electric SUV.

If it seems like an odd time to build an EV plant, it probably is. But unlike larger rivals GM and Honda, Rivian doesn’t have the ability to scale back its EV ambitions — they’re the only vehicles the automaker produces. Last month, the company posted a steeper loss than analysts expected, losing $1.12 billion over its second quarter.

markets

2h

Plug Power jumps on elevated call demand

Plug Power is up today amid a wave of bullish options action.

As of 11:40 a.m. ET, 28,819 calls have traded, nearly double the 20-day average of 14,527.

The two contracts seeing the most activity are calls with a strike price of $2 that expire on October 17 and on this Friday.

The put/call ratio is below 0.13 as of 11:40 a.m., versus a 20-day average of 0.32.

markets

2h

Warner Bros. Discovery dips after TD Cowen downgrade cools deal frenzy

Warner Bros. Discovery shares were down over 8% after TD Cowen downgraded the stock from “buy” to “hold,” even as it kept its $14 price target.

The dip comes on the heels of a sharp rally sparked by reports that Paramount Skydance may bid for the media giant. TD says that while a successful bid could send WBD north of $20, the current risk-reward feels lopsided. If nothing materializes, shares could slip back toward $11 to $12.

Analysts noted that much of the upside from deal chatter is already priced in. TD also flagged limited potential buyers if Paramount Skydance fell though and the lack of concrete details around a bid. In short: the rumor mill has been driving the stock, but fundamentals haven’t clearly caught up.

Reaction has been mixed: last week, Wells Fargo reiterated an equal-weight rating on the stock and hiked its price target to $14 from $13.

Even with today’s dip, WBD shares are still up 67% year to date.

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