HAPPY THURSDAY TO THE STREET.
Everyone’s talking about Nintendo’s Switch 2. Meanwhile, Microsoft $MSFT ( ▼ 0.59% ) is teasing its next-gen Xbox — and no one even noticed.
Is it an underreported catalyst? Or just a sign that no one’s checking for Microsoft gaming until we get Elder Scrolls VI?
🟩 | US stocks rose on another better-than-expected inflation print, this time measuring producer price hikes.
📈 | One Notable Gainer: Oracle’s $ORCL ( ▲ 0.32% ) stock soared to a record high after reporting strong earnings and a “dramatically higher” outlook.
📉 | One Notable Decliner: Boeing $BA ( ▼ 1.21% ) shares declined after an Air India crash killed hundreds, the first known fatal disaster involving a 787 Dreamliner.
— Brooks & Cas
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STOCK HEATMAPS
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
Market Movers
CHIME, GAMESTOP, CUREVAC
$CHYM ( ▲ 2.31% ) Chime opens at $43 in Nasdaq debut after pricing IPO above expected range (CNBC)
$GME ( ▲ 0.74% ) GameStop hints at its next bitcoin buy. The stock is tumbling. (MarketWatch)
$BNTX ( ▼ 0.85% ) / $CVAC ( ▼ 0.55% ) BioNTech takes over CureVac in $1.25 billion all-stock deal among COVID rivals (Reuters)
$SHOP ( ▲ 1.16% ) / $COIN ( ▲ 1.0% ) Shopify partners with Coinbase and Stripe in landmark stablecoin deal (Fortune)
$UNH ( ▲ 1.47% ) UnitedHealth Seeks $1B Latin America Exit (YF)
OVERHEARD ON THE STREET
AP: An Air India plane bound for London crashed shortly after takeoff, killing at least 240 people, with one passenger surviving.
Bloomberg: President Trump said he may raise US auto tariffs, and officially overturned California’s planned 2035 gas-car ban.
CNBC: AMD $AMD ( ▼ 0.77% ) unveiled its next-gen AI chips in San Jose, which will ship next year and be used by OpenAI.
Reuters: Kenvue $KVUE ( ▼ 0.47% ) is considering selling some of its skin health and beauty brands to streamline operations.
CNN: Multiple popular online services went down this afternoon due to a Google Cloud $GOOGL ( ▼ 0.2% ) disruption affecting some Cloudflare $NET ( ▲ 0.73% ) services.
Tomorrow's Trade Idea, Today
WALL STREET’S NOT LOVIN’ IT
One Week, Three Downgrades
Ronald McDonald should be quaking in his clown shoes, if analysts from Redburn Atlantic are to be believed.
Calling popular weight loss drugs like Novo Nordisk’s $NVO ( ▲ 3.71% ) Ozempic and Wegovy “demand disruptors,” the firm warns that the rise of these medications could result in millions fewer visits to McDonald’s $MCD ( ▼ 0.07% ) each year.
A $482M Bite
Specifically, Redburn forecasts 28 million fewer visits to McDonald’s annually, which could result in $482 million in lost revenue.
The broker’s not alone. On Tuesday, Morgan Stanley $MS ( ▲ 0.1% ) downgraded the fast-food giant to Equal Weight in its portfolio, following Loop Capital’s downgrade on Friday.
Shares of McDonald’s dipped on the news, but so far, they’re nowhere near Redburn Atlantic’s new $260 price target. Its stock closed at just over $300 today.
Blood or Ketchup?
Context is key. Nearly half a billion dollars in revenue sounds like a lot, but Redburn Atlantic’s projection constitutes a drop of just 0.9% in revenue annually. Compare it to the over $35 billion in revenue that McDonald’s brought in last quarter alone, and you can see why some traders viewed the downgrades as a buying opportunity.
As for the company itself, it wouldn’t be the first time its management pulled off a turnaround. We’re old enough to remember the dark days of 2014, when one analyst at Janney Capital Markets penned a memo on McDonald’s woes titled “That’s Not Ketchup… It’s Blood.”
$MCD is up almost 300% since.
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ON OUR RADAR
WSJ: ICE raids have led to a decline in sales for major brands like Coca-Cola $KO ( ▼ 1.13% ), as Hispanic consumers retreat from public life, including shopping.
Reuters: The fatal Air India crash poses a major test for Boeing CEO’s efforts to restore trust amid ongoing safety concerns.
AP: JetZero plans to build a $4.7B next-gen passenger jet plant in central North Carolina, aiming to create 14,500 jobs.
Bloomberg: Senator Alex Padilla (D-CA) was handcuffed and removed from a press conference in Los Angeles.
CNBC: Trump called Fed Chair Jerome Powell a “numbskull” today. Here’s what their beef means for your money.
WEDNESDAY’S POLL RESULTS
Are you bullish or bearish on GameStop $GME ( ▲ 0.74% ) over the next 12 months?
▇▇▇▇▇▇ 🐂 Bullish
▇▇▇▇▇▇ 🐻 Bearish
And, in response, you said:
🐂 Bullish — “GME is its own animal.”
🐻 Bearish — “The Game is about to Stop.”
