💳 Buy Now, Gains Later

Plus, the number of EV stations created by the Biden administration

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 Were Mixed on Friday. Consumer sentiment data showed an increase in inflation expectations, which dampened the market. However, the Dow still gained 125 points, marking its 8th winning day in a row and its best week of 2024.

  • 📈 | One Notable Gainer: Taiwan Semiconductor Manufacturing (TSM) saw its stock rise 5% after reporting a 60% April sales jump to $7.3 billion due to sustained AI demand and a recovery in consumer electronics.

  • 📉 | One Notable Decliner: Shares of Yelp took a 7% dive after missing first-quarter estimates on the top and bottom lines despite reporting a 7% rise in revenue year-over-year.

  • 💳 | Tomorrow's Trade: Buy Now, Gains Later. Scroll down for more.

YESTERDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨🟨🟨⬜️⬜️⬜️ 🐻 Bearish

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

NVAX (+99%) Biotech company Novavax announced a multibillion-dollar deal with French drugmaker Sanofi to co-commercialise its Covid vaccine (CNBC)

SG (+34%) Sweetgreen is positioned to be this year’s fastest-rising restaurant stock after its first-quarter earnings beat Wall Street expectations (IBD)

VSCO (+5%) Shares of Victoria’s Secret rose after the lingerie company reported better-than-expected preliminary Q1 results (Investing.com)

NTRA (+10%) Natera, a company that primarily sells genetic tests to detect cancer, reported its first-ever quarter of positive cash flow (IBD)

CAKE (+4%) Citi upgraded Cheesecake Factory to a Buy rating from Hold, pointing to an increasingly derisked unit growth outlook (SA)

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OVERHEARD ON THE STREET

CNBC: U.S. consumer sentiment fell sharply to the lowest level in six months as Americans cited stubbornly high inflation, interest rates, and fears of a rise in unemployment.

WSJ: Following the recent layoff spree, Elon Musk said that Tesla will spend $500 million to expand its EV charging network this year.

Fortune: The Biden administration is expected to impose sweeping tariffs on China's strategic sectors, including EVs, batteries, and solar cells.

WSJ: Ford has hired Sherry House, formerly CFO of EV maker Lucid Group, to be its next CFO as the company contends with tepid demand for EVs.

WP: Biden’s $7.5 billion investment in EV charging has only produced 7 stations in two years.

TOMORROW’S TRADE IDEA, TODAY

Dont Believe It GIF by Better Call Saul

Don’t Sweat the Sell-off

Despite a rapid sell-off following its recent earnings report, JPMorgan (JPM) remains bullish on popular buy-now-pay-later (BNPL) lender Affirm (AFRM). According to analyst Reginald Smith, investors shouldn’t be scared by the sell-off and instead should use it to their advantage.

The analyst recently upgraded the stock to overweight with a price target of $43 per share, a 36% upside from Wednesday’s close.

Its Partner Isn’t Helping

Despite beating earnings expectations, Affirm stock fell 9.5% during the trading session Wednesday after reporting earnings. According to Smith, this has less to do with Affirm’s earnings and more to do with the fact that its partner Shopify’s stock fell 18%. This was attributed to management's acknowledgment of revenue growth issues in Q2.  

On Tuesday, Bloomberg reported a general lack of disclosure regarding consumer debt on lending platforms such as Affirm, a possible contributor to the stock’s fall on Wednesday.

Buy Low

Shop Pay, the home of Affirm’s financial resources, is another reason Smith is bullish on the stock. Its volume grew by more than 50% in Q1, and yet shares are down more than 35% year-to-date. According to Smith, this presents a buying opportunity. 

The analyst also noted that consumers are starting to concentrate on paying back their BNPL loans, which could be a tailwind for Affirm. 

The stock was back up 10% yesterday and Smith considers it a more volatile stock. Nevertheless, the analyst believes its current price represents the possibility of considerable value for investors.

Are you bullish or bearish on Affirm (AFRM) over the next 12 months?

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TOGETHER WITH MONUMENT TRADERS ALLIANCE

Peabody Award-winning journalist Bill Tucker sat down with a reclusive multimillionaire trader... 858 miles OUTSIDE of Wall Street... to discuss a revolutionary new trading strategy that involves...

One ticker... one trade... every week.

ON OUR RADAR

CBS: The California Public Utilities Commission unanimously approved a flat rate for electric bills, impacting investor-owned utilities like PG&E.

CNBC: After years of China being Germany’s main trading partner, the U.S. looks like it’s quietly taking that top spot as the year progresses.

CNBC: Is this just a trade war? As many as 42% of Americans see China as an enemy of the U.S., up from only a quarter two years ago.

Bloomberg: Doctors are now looking at GLP-1 Drugs, like Ozempic, as a possible solution for infertility in women.

AP: The Senate passed a $105 billion bill to improve air traveler safety a day before the law governing the Federal Aviation Administration expired.

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