🐕 Old Dog, New Tricks

Plus, Joe Biden's drastic tariff hike on Chinese goods.

Happy Monday 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 Monday. The Dow fell 81 points today, bringing an end to its eight-day winning streak as investors have renewed concerns around rising inflation with key reports due later this week.

  • 📈 | One Notable Gainer: Shares of GameStop soared 74% after meme stock investor “Roaring Kitty,” who fueled the GameStop frenzy during the pandemic, posted on X for the first time since 2021.

  • 📉 | One Notable Decliner: Amazon’s stock slipped half a percent following news that a group of Amazon workers in Quebec formed a union at one of the company’s Canadian warehouses. Amazon is expected to appeal the labor tribunal’s decision, which would force the company to the negotiating table.

  • 🐕 | Tomorrow's Trade: Old Dog, New Tricks. Scroll down for more.

Plus, our partner is looking to provide treatment for millions of Americans struggling with AAD.

YESTERDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Yes ✅

🟨🟨🟨🟨⬜️⬜️ No ❌

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

AMC (+78%) Shares of American movie theater chain AMC Entertainment surged amid today’s meme-stock rally driven by Keith Gill, “Roaring Kitty” (MW)

WBA (+5%) Walgreens Boots Alliance announced plans to sell its UK arm of drugstores and will be holding discussions with potential buyers (Barron’s)

SQSP (+13%) Website-building platform Squarespace announced today that it will go private in a $6.9 billion all-cash deal with PE firm Permira (CNBC)

ARM (+8%) UK-based chip design giant Arm Holdings is reportedly planning to develop AI chips and launch the first prototype in 2025 (Investopedia)

INTC (+2%) Intel is in advanced talks with investment firm Apollo Global Management to supply the chip giant with $11 billion for a new plant (WSJ)

TOGETHER WITH IGC PHARMA

As of 2023, the estimated number of Americans living with Alzheimer’s disease was 6.7 million. However, a lesser-known subsection of Alzheimer’s is Agitation in dementia from Alzheimer’s Disease (AAD).

IGC Pharma (AMEX: IGC) is looking to provide treatment for millions of Americans struggling with AAD; its current drug, IGC-AD1, has been specifically designed to target the underlying causes of AAD and aims to fill the gap for a safe and effective therapy. Click here to learn more about this new drug!

OVERHEARD ON THE STREET

BI: We’ve entered a period of “zombie inflation” as recent signs point to an inflationary boom that’s leaving some on Wall Street “scared witless.”

Bloomberg: OpenAI is launching its faster and cheaper AI model with GPT-4o as the startup looks to hold its lead in an increasingly crowded market.

CNN: A federal judge blocked a new Biden administration rule that would prohibit credit card companies from charging customers late fees higher than $8.

The Verge: Solar storms are disrupting American farming GPS systems during a critical time at the peak of planting season.

Reuters: The NTSA has opened an investigation into Amazon’s self-driving Zoox vehicles after unexpected braking led to two rear-end collisions with motorcycles.

TOMORROW’S TRADE IDEA, TODAY

Too Much Fainting GIF

A New Era

3M (MMM) has had a rough go of it lately, largely due to lawsuits surrounding “forever chemicals” and a government contract for earplugs gone awry. Many of its other arms of business have struggled to grow over the past few years as well. 

The stock is down around 30% over the past 5 years and it’s not been a top choice for many investors.

But now the tides seem to be turning. 3M has been making improvements like spinning off its healthcare arm and settling lawsuits.

Making Moves

Between April 1st and May 1st, the company spun off its healthcare business, settled several lawsuits, reset its dividend, and hired a new CEO. It also began focusing on some of its core divisions, which experts believe will help growth. 

Following the spinoff, the company honed in on its transportation, industrial, electronics, and consumer businesses. 

3M announced plans to use 40% of its annual free cash flow to pay dividends to shareholders. According to analysts, this will allow for a dividend of around $3 per share, about half of what it was paying out prior to the spinoff.

Reasons to Buy

Currently, the 3M stock is trading around 12 times Wall Street’s 2025 earnings estimates. As execution and demand improved, the company’s most recent earnings report beat expectations. Organic sales were up 0.8%, the first increase in four quarters. Its non-healthcare operating profits were up as well, nearly 6% year-over-year.

As a result, JPMorgan (JPM) analyst Stephen Tusa upgraded the stock from neutral to overweight. He attributed the upgrade to 3M’s cheap price tag, improved balance sheet, decreased dividend, and earnings uptick. Tusa set a price target of $111 per share, a 12% upside from Friday’s close. 

As 3M looks to open a new chapter in its long history, analysts believe now could be a strategic time to buy before at a good price.

Are you bullish or bearish on 3M (MMM) over the next 12 months?

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TOGETHER WITH IGC PHARMA

As of 2023, the estimated number of Americans living with Alzheimer’s disease was 6.7 million. However, a lesser-known subsection of Alzheimer’s is Agitation in dementia from Alzheimer’s Disease (AAD).

IGC Pharma (AMEX: IGC) is looking to provide treatment for millions of Americans struggling with AAD; its current drug, IGC-AD1, has been specifically designed to target the underlying causes of AAD and aims to fill the gap for a safe and effective therapy. Click here to learn more about this new drug!

ON OUR RADAR

Bloomberg: The US and EU have funneled nearly $81 billion to fund the next generation of semiconductors, escalating a global showdown with China.

Forbes: Sanctions after the invasion of Ukraine sent tanker values soaring, creating at least seven new Greek billionaires in the shipping industry.

FT: Musk’s X won its Australia court fight over the censorship of a church stabbing video. Musk claims the takedown request set a “dangerous precedent” for the open internet.

BBC: Real estate firm JLL claims that 48% of its clients from the UK, Germany, and France are seeking to decrease their commercial footprints.

Fortune: Joe Biden will double, triple, and quadruple tariffs on some Chinese goods, with EV duties jumping to 102.5% from 27.5%.

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