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- 🛒 Big Things Are Coming
🛒 Big Things Are Coming
Plus, Indiana just got its largest capital investment ever from this company.
Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟥 | US Stocks Fell On Thursday. Another high inflation reading worried investors and poured water on the idea that the Fed will cut interest rates in the near term.
📈 | One Notable Gainer: Shares of Chipotle rose 6% following quarterly earnings and revenue results that beat analyst expectations. Chipotle reported same store sales growth of 7%.
📉 | One Notable Decliner: Meta’s stock plunged 11% after revealing its plans to “invest aggressively” in artificial intelligence. This spooked investors who now see Meta as competing with Microsoft and Google to unlock AI’s potential.
🛒 | Tomorrow's Trade: Big Things Are Coming. Scroll down for more.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 Bullish
🟨🟨⬜️⬜️⬜️⬜️ Bearish
S&P 500 Heatmap. Credit: Finviz
All stocks on US exchanges. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
LUV (-7%) Southwest Airlines reported plans to stop service to 4 airports due to rising losses and more Boeing delivery problems (CNN)
VSCO (-3%) Goldman Sachs gave Victoria's Secret a Sell rating, noting a tough macro environment and competitive pressures (Investing.com)
IBM (-8%) IBM confirmed plans to acquire HashiCorp for $6.4 billion and reported quarterly revenue below expectations (Investopedia)
MNST (-2%) JPMorgan downgraded Monster Beverage from overweight to neutral, citing cost pressure (CNBC)
NVDA (+4%) Shares of Nvidia rose despite the broader market decline as Meta’s increased AI investment plan is good news for the chip giant (Barron’s)
TOGETHER WITH TRADESMITH
There's been a lot of buzz surrounding A.I. over the past year…
Most of it is just hype and speculation.
Because it's going to have a very real impact on the lives of everyday Americans...
Billion-dollar fund manager Louis Navellier recently recorded an urgent message going over all the details.
OVERHEARD ON THE STREET
Bloomberg: According to the Philadelphia Fed, about 10% of credit card borrowers now have an account balance that exceeds $5,200.
WSJ: US gross domestic product expanded 1.6% in the first quarter, far under the Dow Jones forecast of 2.4% GDP growth.
Bloomberg: The US economy is slowing while inflation is rising, dampening hopes for a soft landing. First-quarter core inflation accelerated to a 3.7% rate.
BI: CEO Henrik Fisker told employees during a recorded meeting that Fisker is in talks with four automakers about a possible acquisition.
FT: US chipmaker Micron Technology is set to receive more than $13 billion in government funding and loans to help build new memory chip factories.
TOMORROW’S TRADE IDEA, TODAY
Upside Potential
JPMorgan (JPM) is bullish on Assaí Atacadista (ASAI), one of Brazil’s largest retailers. Assaí is a self-service wholesaler that operates over 300 stores throughout the country.
According to the firm, it has been steadily improving its operating trends, leading analyst Joseph Giordano to upgrade it to an overweight rating. The firm has also raised its price target to $17.50, about a 30% upside from Tuesday’s close.
Reducing Debt and Improving Margins
According to Giordano, food inflation is finally starting to cool off, and suppliers were able to transfer some impacts of cost increases by raising their prices.
The bank sees Assaí benefitting from three distinct factors: improved margins, same-store sales, and de-leveraging.
Improved margins might be around the corner as stores mature and achieve better operating efficiency. JPM expects the chain to beat its competition in terms of high short-term, same-store sales. It also expects faster-than-expected debt reduction, which will help out expansion plans.
Ready to Expand
Giordano also expects Assaí to benefit from adjusting its capital structure to reduce debt and provide more flexibility. This will allow the company to expand with ease, giving it an edge over competition.
He also stated that the stock’s price is relatively cheap when compared to its expected EPS bounce-back.
JPMorgan is confident that the Brazilian wholesaler is poised for growth. If it’s right, the stock could see a nice boost.
Are you bullish or bearish on Assaí Atacadista (ASAI) over the next 12 months? |
TOGETHER WITH TRADESMITH
There's been a lot of buzz surrounding A.I. over the past year…
Most of it is just hype and speculation.
Because it's going to have a very real impact on the lives of everyday Americans...
Billion-dollar fund manager Louis Navellier recently recorded an urgent message going over all the details.
ON OUR RADAR
The Hill: Senator Bernie Sanders launched an investigation into “unacceptable” diabetes and weight loss drug prices.
Reuters: Amazon’s cloud-computing arm said it would invest $11 billion in Indiana to build data centers, marking the state's largest capital investment.
NYT: The FCC voted to restore net neutrality rules, which declare broadband a utility-like service that can be regulated like phones and water.
AP: Strict new EPA rules would force coal-fired power plants to capture emissions or shut down in Biden’s “most ambitious” climate effort yet.
Bloomberg: But, but, but—Proposals for new US power plants have jumped 90% due to surging demand as EVs and data centers strain the grid.
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