A view from the US Department of the Treasury constructing in Washington DC, United States on Dec. 30, 2024.
Celal Gunes | Anadolu | Getty Images
My top 10 things to observe Monday, May 19
1. Bonds are crushing stocks this morning, with the 30-year Treasury yield north of 5% and the 10-year Treasury yield topping 4.5%, in response to Moody’s downgrading its rating on U.S. sovereign debt. The S&P 500 is on target to open lower by about 1%.
2. The S&P 500 fell 6.66% in a single session in August 2011 when Standard & Poor’s cut its rating on U.S. debt to AA+ from AAA. We lost 1.38% the day after Fitch’s downgrade in August 2023. Now it’s Moody’s turn to remove its highest-possible rating on U.S. debt.
3. It is a raid on dollar-denominated assets again, like what we saw last month within the wake of President Donald Trump’s “reciprocal” tariff announcement. The alternatives are too positive. Germany and Spain’s stock markets have soared this yr, and the cash doesn’t stop coming their way.
4. Trump over the weekend lashed out at Walmart after the retailer said tariff-related price hikes were coming. Trump said Walmart should “eat the tariffs.” I feel the administration is fighting the improper retail war.
5. Club name Nvidia announced a brand new networking equipment called NVLink Fusion at Taiwan’s big electronics tradeshow Computex. The gist is that it’ll enable Nvidia’s leading AI chips to attach with other corporations’ data-center processors, giving it access to more markets that were previously closed.
6. JPMorgan downgraded Netflix to a neutral hold rating from chubby. The analysts said the stock has run an excessive amount of too soon, making the chance/reward more balanced. They still like Netflix long-term, though.
7. Reddit shares are tumbling greater than 6% this morning after a downgrade from Wells Fargo, which argued that user disruptions look more everlasting. The firm went to a hold-equivalent rating from chubby and slashed its price goal to $115 a share from $168.
8. Evercore ISI added Club name Home Depot to its “tactical outperform list,” while rival Lowe’s went on its “tactical underperform list.” Unsure if these short-term calls matter, though, especially ahead of earnings this week. Home Depot reports tomorrow. Lowe’s is on Wednesday.
9. One other Club stock reporting this week is TJX Firms, with numbers due out before the bell Wednesday. JPMorgan upped its price goal on TJX to $130 a share from $127 and kept its chubby buy rating on the name. A little bit of late call, though, with the stock already at $133.
10. TD Cowen downgraded UnitedHealth Group to carry from buy after a difficult stretch for the corporate and the stock price. But in a show of confidence, there’s been a number of insider buying amongst executives. Stephen Hemsley, back again as CEO, bought $25 million price of stock while CFO John Rex purchased $5 million.
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