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💾 Big Year For Small Chips
Plus, Walmart store managers are going to make bank.
Happy Friday 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 rose Friday to end the week. The S&P 500 hit an all-time high.
📈 | One Notable Gainer: Wayfair's stock jumped 10% following its announcement to lay off 13% of its global workforce, including 19% of its corporate team, to streamline management and cut costs.
📉 | One Notable Decliner: iRobot's shares fell nearly 27% amid concerns that its proposed acquisition by Amazon might not materialize.
💾 | Tomorrow's Trade: A Big Year For Small Chips. 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
HTZ: Hertz's shares declined 4% after Jefferies downgraded it due to concerns over rising costs and vehicle depreciation. Remember: shares of the rental car company popped yesterday after an upgrade from Morgan Stanley. Oy vey.
CELH: Celsius Holdings' stock dropped over 12% after Bank of America downgraded it to neutral, citing uncertainty in sales momentum.
AVGO: Broadcom's shares rose 6% as Goldman Sachs reinstated coverage with a buy rating, expecting significant revenue growth in AI and a cyclical rebound in semiconductors.
SAVE: Spirit Airlines' shares jumped over 17% following an upbeat fourth-quarter forecast, with expected revenue at the higher end and adjusted negative margins between 12% and 13%.
TXN: Texas Instruments shares rose 4% after UBS upgraded it to buy, citing clearer comparisons and stronger fundamentals, and the potential for early order growth.
TOGETHER WITH GUNDRY MD
There are two different types of coffee drinkers in this world. Those who like to drink their coffee black. And those who like to add a little cream.
According to Dr. Steven Gundry, one of these options is more likely to disrupt digestion, and it might surprise you.
Check out his video to see how he recommends consuming coffee (and keep on watching for some other key digestive tips!)
OVERHEARD ON THE STREET
Bloomberg: Federal Reserve Bank of San Francisco President Mary Daly said it's “premature” to think interest-rate cuts are around the corner, noting she needs to see more evidence that inflation is on a consistent trajectory back to 2% before easing policy.
POLITICO: The Justice Department and the Federal Trade Commission are deep in discussions over which agency can probe OpenAI, including the ChatGPT creators’ involvement with Microsoft, on antitrust grounds.
CNBC: The Biden administration announced Friday it would forgive $4.9 billion in student debt for 73,600 borrowers.
WaPo: Much of the staff of Sports Illustrated, and possibly all remaining writers and editors, received layoff notices Friday, which essentially could spell the end of a publication that for decades was the gold standard of sports journalism.
Fox Business: Walmart announced that its U.S. store managers will get a raise in February, increasing the average hourly wage at the superstore to more than $18. Beginning on Feb. 1, the current average salary for store managers of $117,000 will be raised to $128,000, the retail giant said.
TOMORROW’S TRADE IDEA, TODAY
Ready For a Rebound
TSMC (TSM) is the world’s largest contract chip maker. Despite boasting that prestigious title, the Taiwanese semiconductor company had a bad year in 2023.
Supply chain issues plagued the company all year and revenue fell 2% year over year in Q4. Net profit was also down a dismal 19% over the same time period.
However, analysts think TSMC, along with the rest of the industry, will rebound in the year ahead.
Strong Partnerships
TSMC believes its revenue will see an impressive 20% jump in 2024 as smartphone and computer makers finally begin to expand again.
The company's global shipments in Q4 of 2023 saw an 8.5% rise year over year — a good sign that demand is coming back.
That increase in demand was largely due to the rise of generative AI. In fact, the company has become Nvidia’s (NVDA) favorite chip maker. It has also partnered with Apple and Qualcomm, which isn’t bad company to keep.
The Cost of Success
The turnaround won’t be easy, however. Production costs may hamper TSMC’s profit margins this year. The company is increasing production of its 3-nanometer process technology, which will prove costly as it constructs new plants.
The chipmaker estimates that this cost could lower their yearly gross margin by 3 to 4 percent. That being said, TSMC expects margins to stay north of 53% long term.
Are you bullish or bearish on TSMC (TSM) stock in the next 12 months? |
TOGETHER WITH GUNDRY MD
Coffee is one of the healthiest things you can put in your body. Some studies have found people who drink coffee have healthier hearts, blood sugar, and it can even help you lose weight.
Coffee is so healthy because it’s packed with polyphenols which can help activate a host of benefits in your body, including weight loss and digestive benefits. However, dairy can cancel out those effects.
One ingredient can actually be very good for you: Coconut milk. Now, coconut milk is healthy, but there are 3 other foods people should have every morning that actually blow this out of the water. It’s part of how one doctor lost 70 pounds and has kept the weight off for over twenty years.
ON OUR RADAR
BBC: US home sales fell to a 30-year low, with just 4.09 million homes sold in 1995-levels, due to rising interest rates and record prices amidst tight supply, reports the National Association of Realtors.
BI: Americans are more optimistic about the economy this year, with the University of Michigan's consumer sentiment index rising to 78.8 in January, the highest since July 2021, up from 69.7 last month and 64.9 a year ago.
Euronews: UK retail sales fell 3.2% in December, marking the largest decline since January 2021 and fueling recession fears.
Reuters: Trading companies in China's Fujian province are severely impacted by Red Sea freight disruptions, with shipping costs to Europe surging from $3,000 to $7,000 due to increased Houthi attacks in Yemen.
Bloomberg: This year, half of the global population and GDP will be involved in elections.
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