6/27/24

6/27/24

US stocks creep higher; small caps get their day in the sun

The S&P 500 crawled 0.1% higher on Thursday with small caps enjoying a rare day of standout performance.

The Russell 2000 of small-cap US companies bested the S&P 500 by 90 basis points, its biggest outperformance of the month.

Breadth was also positive, ending the streak of sessions where the S&P 500 went one way and the advance-decline line went in the opposite direction. The weirdness of this five-session streak, which tied a record from April 1999, is now over.

Real estate, consumer discretionary, and communication services were the best-performing S&P sector ETFs; consumer staples and materials lagged. Amazon continued its strong run of form with a 2.2% gain, while Meta closed up 1.3%.

Micron fell 7.1% despite reporting better than expected quarterly results, as its guidance was merely in line with, rather than above, analysts’ expectations. Demand for its HBM chips (which support the AI data center build out) is solid, sold out through August 2025, while the outlook for semiconductors for the PC and mobile markets are considerably less rosy.

Walgreens had its worst day since at least 1980, plummeting 22% after cutting its guidance and announcing tons of store closures would be in the offing.

Chewy spiked as much as 34% after Keith Gill, aka Roaring Kitty, tweeted a picture of a dog. However, the move reversed sharply, with the stock ending down 0.3%.

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Matt Phillips45m

Intel jumps on report of customer talks with AMD for foundry division

Intel shares popped in afternoon trading Wednesday after Semafor reported that Intel is in preliminary talks with AMD to come aboard as a customer for Intel’s troubled contract chip manufacturing division, known as a foundry.

Shares were recently up 5.7%.

Semafor stressed that sources said “it’s unclear how much of their manufacturing would shift to Intel if the two companies reach a deal, or whether it would come with a direct investment by AMD, similar to the deals cut by other companies. It is possible that no agreement will be reached, the people said.”

The addition of AMD — which competes with Intel in the CPU space — as a customer would be another big win for the US chipmaker following its partnership with Nvidia announced in mid-September.

TSMC, the primary manufacturer of AMD chips, was only briefly rattled by the news, and remains well in the green on the day.

Intel in early talks to add AMD as foundry customer

Intel in early talks to add AMD as foundry customer

Semafor stressed that sources said “it’s unclear how much of their manufacturing would shift to Intel if the two companies reach a deal, or whether it would come with a direct investment by AMD, similar to the deals cut by other companies. It is possible that no agreement will be reached, the people said.”

The addition of AMD — which competes with Intel in the CPU space — as a customer would be another big win for the US chipmaker following its partnership with Nvidia announced in mid-September.

TSMC, the primary manufacturer of AMD chips, was only briefly rattled by the news, and remains well in the green on the day.

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ChargePoint jumps as EV sales soar

Riding along with some other EV stocks, shares of ChargePoint jumped 4.1% in recent trading. The last rush to take advantage of Biden-era federal EV incentives has put a bunch of new EVs on the road, sending ChargePoint up, along with Tesla, Rivian, and Lucid.

Ford said earlier Wednesday that its EV sales hit a quarterly record, and it and other EV makers have been exploring unorthodox ways to replicate the EV tax credits for consumers through year end.

Still, ChargePoint is down over 47% for the year, and narrowly escaped NYSE delisting with a 20-1 reverse stock split back in July. And it’s not hard to see why: The company has never had a profitable quarter.

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J. Edward Moreno2h

Trump admin reportedly backs off on pharma tariffs

The Trump Administration will not be imposing tariffs on pharmaceutical companies by the deadline it had initially given them, a White House official told STAT.

Last week, President Trump announced on Truth Social that starting on October 1 there will be a 100% tariff on patented, branded pharmaceuticals “unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America." As of October 1, those tariffs have not gone into effect and its unclear when they will, according to STAT.

Trump administration backs off 100% pharma tariffs threatened to start today

Trump administration backs off 100% pharma tariffs threatened to start today

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Matt Phillips3h

GE Vernova declines after analyst downgrade of top AI energy trade

Power turbine maker GE Vernova is down midday after RBC analysts cut their rating on the stock from “outperform” (essentially a “buy”) to “sector perform” (essentially a “hold”), suggesting that long-term earnings expectations for the company might have gotten too optimistic.

RBC’s Christopher Dendrinos wrote:

“Our longer-term expectations are more conservative than consensus expectations which we think could be over appreciating the cadence of revenue growth in the power segment in 2029-2030. We believe investors are already fully valuing the company on the longer-term 2030 outlook and there could be more limited opportunity for positive rate of change in current expectations.”

Dendrinos argues that the Street’s expectations for when the river of payments will materialize from the service contracts GE sells to maintain the newly installed turbines is too soon. He wrote that it will take a much longer cycle:

“Mgmt sees an opportunity to double the installed base of baseload power over the next 10 years which should support significant rev growth and stronger margins (we estimate gas service margins over 30%).

However, the first major service cycle typically occurs ~3-4 years after installation so the benefit of service price increases and new LTSAs are unlikely to begin to benefit the income statement until later in the decade and will be a gradual increase.”

Earlier in the year, GE Vernova was a top performer as the AI data center trade boomed. It was up roughly 100% for the year in late July, making it the third-best gainer in the S&P 500 for the year.

It has stalled since then, though it remains up more than 80% in 2025.

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Matt Phillips3h

GEO Group rises on ICE contract announcement

Federal immigration and prison operator GEO Group popped after announcing late Tuesday that it has won a new contract from US Immigration and Customs Enforcement to continue in its role as a vendor of electronic monitoring, case management, and supervision services under the Intensive Supervision Appearance Program.

(That’s a program that keeps track of people as they undergo the immigration review process.)

Since the election, GEO Group has been one of a number of stocks whose business — or leadership — is seen as closely tied to the Trump administration, or set to benefit from White House policy changes.

GEO Group is up 150% since President Trump was elected last November.

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