🌐 The Midday Trade: Europe's Fantastic Five

Plus, surprising new data on China's export growth

Pencils down, it’s time for lunch. Here’s what you missed this morning:

  • 🟩 | Market Snapshot: The S&P 500 popped into record-high territory despite a stronger-than-expected jobs report.

  • 🏢 | In focus: The Labor Department announced that the US economy added 272,000 jobs last month, far above economists’ expectations for 180,000. However, the unemployment rate rose to 4%, while experts predicted it would stay flat at 3.9%

  • 🐼 | Noteworthy: The Chinese government announced that its exports in May rose at the quickest pace in more than a year as the nation’s appliances, cars, and electronics have flooded the global market. China’s trade surplus expanded to $82.6 billion, a 25.6% increase from a year earlier.

  • 🌐 | The Midday Trade: Europe’s Fantastic Five. Scroll down for more.

Plus, you can find credit cards that actually help you get out of debt faster through today’s partner.

TOGETHER WITH FINANCEBUZZ

Did you know some credit cards can actually help you get out of debt faster? Yes, it sounds crazy. But it’s true.

The secret: Find a card with a “0% intro APR" period for balance transfers. Then, transfer your debt balance and pay it down as much as possible during the intro period. No interest means you could pay off the debt faster.

Check out the full list of cards you can use to do this here.

STREET STATS

MORNING MOVERS

GME: GameStop’s stock plummeted after the retailer posted a surprise earnings release that showed a 29% sales decline (CNBC)

LYFT: Shares of Lyft rose after Bank of America gave the stock a double upgrade to a Buy rating following the company’s optimistic investor day (IBD)

MTN: American mountain resort company Vail Resorts saw shares tumble following the release of disappointing fiscal third-quarter earnings (Barron’s)

DOCU: DocuSign posted April quarter earnings that edged Wall Street estimates and inched up its full-year guidance, causing shares to fall (Barron’s)

BRZE: Shares of customer engagement platform Braze rose after reporting a smaller-than-expected EPS loss and beating revenue estimates (MW)

TOP CALLS

Tilly’s: Roth MKM Maintains Neutral on Tilly's, Lowers Price Target to $6 (Trade It)

Semtech: Needham Reiterates Buy on Semtech, Maintains $50 Price Target (Trade It)

Williams-Sonoma: RBC Capital Reiterates Outperform on Williams-Sonoma, Maintains $300 Price Target (Trade It)

Sagimet Biosciences: HC Wainwright & Co. Reiterates Buy on Sagimet Biosciences, Maintains $32 Price Target (Trade It)

Ispire Technology: Roth MKM Reiterates Buy on Ispire Technology, Maintains $11 Price Target (Trade It)

PowerSchool Holdings: Needham Downgrades PowerSchool Holdings to Hold (Trade It)

THE MIDDAY TRADE

Forget the Mag 7

According to Nicholas Anderson of Thornburg Investment Management, the key to low-risk growth may be held across the Atlantic. 

The analyst has identified a list of European stocks he believes can capture faster earnings growth than the United States’ Magnificent Seven. Those companies are Novo Nordisk (NVO), ASML Holding (ASML), LVMH (LVMUY), AstraZeneca (AZN) and SAP (SAP). He refers to these companies as the “Fantastic Five.”

These stocks outperformed the Magnificent Seven by 12% from the end of 2022 through Q1 of 2024, growing 32% overall.

Growth Outside of AI

Anderson expects this outperformance to continue as the European stock's forward PE ratio falls below that of the Mag 7 through 2028. The analyst is also predicting that their earnings will see a year-over-year jump of 18% over the next three years, also outpacing the Mag 7. 

He cites the fact that the European stock’s growth catalysts are more diverse, whereas the Mag 7 are very tech-heavy. Should the AI craze die down, the US grouping would feel a massive effect while the European companies have safety through diversification.

Top Picks

Of the five European stocks, Novo Nordisk and ASML are Anderson’s favorites. Novo is the manufacturer of popular weight loss drugs Ozempic and Wegovy, and ASML is a major producer of semiconductors. 

The stocks are up 38% and 45% YTD, respectively, and both trade on American exchanges.  

According to Anderson, international stocks such as these can provide much-needed diversification and insulation from tech to investors. Therefore, any of these companies could offer valuable portfolio protection with significant potential growth.

TOGETHER WITH FINANCEBUZZ

Did you know some credit cards can actually help you get out of debt faster? Yes, it sounds crazy. But it’s true.

The secret: Find a card with a “0% intro APR" period for balance transfers. Then, transfer your debt balance and pay it down as much as possible during the intro period. No interest means you could pay off the debt faster.

Check out the full list of cards you can use to do this here.

SURVEY THE STREET

In the past 48 hours, there’s been a lot of noise about bird flu:

  • NYT: The bird flu virus has adapted to sea mammals

  • Reuters: Cows infected with bird flu have died in five US states

  • NBC: WHO confirms first death in Mexico from bird flu never seen in humans

If bird flu spreading among humans becomes a real threat, it could be a boon to Moderna and other pharmaceutical stocks. Shares of Moderna rose last week after a report that the US government is nearing a deal to fund the drugmaker’s late-stage trials for an mRNA bird-flu vaccine.

🐦‍⬛ Will Bird Flu Have a Substantive Impact on Pharma Stocks?

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🟩🟩🟩🟩🟩🟩 Yes ✅ 

🟨⬜️⬜️⬜️⬜️⬜️ No ❌ 

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