6/7/24

6/7/24

US stocks creep lower; yields spike on strong job growth

The S&P 500 fell 0.1% to end the week after May’s US job report showed employment grew by much more than anticipated.

10-year Treasury yields rose nearly 15 basis points in the aftermath of the release, while traders pushed back the timing for expected rate cuts by the Federal Reserve. The iShares 20+ Year Treasury Bond ETF slumped 1.8%, its worst day since April 10 (when a surprisingly hot US CPI inflation report was released).

Financials was the top-performing sector, followed by Tech. Utilities continue to retreat, down 1.1%. Utilities have been the worst performing S&P 500 sector ETF for three straight days, the longest such streak since September.

Higher yields also hurt the iShares US Home Construction ETF which fell 1.8% to close at its lowest level since mid-February.

It was a jam-packed day for GameStop. Prior to the market open, management pre-released quarterly results. They also announced plans to sell another 75 million shares to raise cash off its meme stock status ahead of the eagerly anticipated YouTube livestream by Keith Gill.

It was a case of “better late than never,” as the livestream failed to rouse retail traders into another round of buying. Gill, who said he’s acting alone in his big bet on the brick and mortar retailer, has a thesis that’s not nearly as fleshed out as his initial iteration from almost four years ago. The stock closed down 39%.

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Tasha Matsumoto

The S&P 500 and Nasdaq 100 notch new closing highs as investors shake off the government shutdown

The S&P 500 closed 0.3% higher, the Nasdaq 100 was up 0.5%, and the Russell 2000 gained 0.2%.

Germany, Bull running on field

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Matt Phillips6h

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

Intel shares popped in afternoon trading Wednesday after Semafor reported that it’s in preliminary talks for 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 electric vehicles 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-for-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 Moreno7h

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 would 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 it’s 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 Phillips8h

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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