💂‍♂️ Playing the Labour Party Victory

Plus, the percent of Americans without an emergency fund

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 Rose on Monday. The S&P 500 and the Nasdaq Composite notched fresh record highs, showing investor optimism ahead of the new inflation data that will be released later in the week.

  • 📈 | One Notable Gainer: Shares of Ideaya Biosciences surged 15% after reporting positive results from a phase 2 trial of its cancer treatment.

  • 📉 | One Notable Decliner: Chipotle’s stock tumbled 5% as the restaurant chain continues to face backlash over its portion sizes, and consumers point to what they see as shrinkflation.

  • 💂‍♂️ | Tomorrow's Trade: Playing the Labour Party Victory. Scroll down for more.

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LAST FRIDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Eaton (ETN)

🟨⬜️⬜️⬜️⬜️⬜️ Powell Industries (POWL)

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

GLW (+12%) Tech manufacturing company Corning saw its shares soar after raising its second-quarter guidance, expecting $3.6 billion in Q2 sales (CNBC)

DVN (-1%) Shares of Devon Energy fell after it announced it is acquiring Grayson Mill Energy for $5 billion (YF)

LCID (+8%) EV maker Lucid Group saw its shares surge after it reported that its vehicle deliveries jumped 70% in Q2 (MW)

COLM (+5%) Shares of Columbia Sportswear rose after Stifel upgraded the stock from Hold to Buy, citing potential revenue growth (SA)

ETSY (-5%) E-commerce company Etsy’s shares fell to a 1-year low after a number of brokerages decreased their price target on the stock (MB)

TOGETHER WITH CBOE

OVERHEARD ON THE STREET

CNN: John Deere announced it will lay off 600 employees across three US factories as the company shifts production to a new facility in Ramos, Mexico.

WSJ: Thousands of Samsung Electronics unionized workers in South Korea walked off job sites Monday as part of a three-day strike.

CNBC: Danish brewer Carlsberg will buy soft drinks maker Britvic in a $4 billion deal after an improved offer.

WSJ: A WSJ analysis of Medicare records found that insurers pocketed $50 billion from Medicare for diseases no doctor treated.

NBC: Airlines are seeing record summer travel demand, but profits haven’t risen in parallel, as companies are pushing fares down to remain competitive.

TOMORROW’S TRADE IDEA, TODAY

A Strong Post-Election Market

The results are in for the UK election, and the Labour Party won in a landslide. 

According to RBC Capital, today’s market and the market in 1997 show some similarities. 1997 was the last time the UK transitioned from a Conservative to a Labour government. 

Market performance was strong in 1997, as it is today, but analysts believe today’s strong performance is even broader. If history is any indicator, RBC analyst Mark Fielding says the market could rise around 2.3% over the next month.

Homebuilding

The investment bank highlighted some stocks and sectors it thinks could thrive under the new government. 

The homebuilding industry is expected to get some assistance from the Labour Party. According to Citi (C) analyst Ami Galla, some of the party’s promised reforms could boost homebuilders’ land banks in the near term.

Citi is bullish on Barratt (BDEV-BG), Persimmon (PSN-GB), and Taylor Wimpey (TW-GB) as a result.

Building Materials

In the same vein, RBC analysts expect some companies in the building materials sector to benefit from the election results. 

Among the stocks highlighted in the building materials space were Genuit (GEN-GB), Howden (HWDN-GB), and Travis Perkins (TWZ-GB). 

A new government means new policies and a new outlook. These factors could significantly impact certain stocks, and RBC is keeping an eye on a few.

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TOGETHER WITH CBOE

ON OUR RADAR

AP: Hurricane Beryl swept into Texas Monday with heavy rains and powerful winds, knocking out power to 1.5 million homes and businesses.

CNN: The US federal government will spend $892 billion on interest payments in the current fiscal year — more than it has earmarked for defense.

Bloomberg: France’s leftist alliance would raise the top marginal income tax rate to 90% if it were to take over the government following legislative elections.

TC: X, formerly Twitter, could be bringing back a downvote feature for posts, something previously tested back in 2021 prior to Musk’s acquisition.

CNBC: More than half of Americans don’t have an emergency fund and 40% of those who do have less than $10,000.

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