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Update—April 9, 2024: For today's live markets news, see here.
U.S. stocks were little changed Monday, as market participants awaited economic data and comments from Federal Reserve officials this week that could shed light on where interest rates are headed.
The Nasdaq Composite ticked up less than 0.1%, while the S&P 500 and Dow Jones Industrial Average dipped less than 0.1%.
The calendar for corporate and economic news is light on Monday. Minneapolis Fed President Neel Kashkari, who caused a stir in markets last week when he said the Fed may not cut its benchmark rate in 2024, is due to give a presentation after the markets close late Monday.
The big economic data this week will come on Wednesday, with the release of consumer price index numbers for March. The Fed will also release the minutes from its latest interest rate policy meeting, and several more Fed officials are slated to speak during the week.
JPMorgan Chase (JPM) Chief Executive Jamie Dimon said Monday in his annual letter to shareholders that he sees the chance of a "soft landing" as slimmer than expected by stock markets and also sees interest rates rising to more than 8% as inflation persists amid record-high deficit spending and geopolitical issues. JPMorgan reports earnings on Friday.
Treasury yields, which have risen recently amid signals the Fed may not cut rates soon, were rising, with the 10-Year Treasury at 4.43%.
Bitcoin was near $72,000, about 10% higher than its lows last week, while gold remained near record highs around $2,350.
On Friday, stocks and Treasury yields rose after a stronger-than-expected jobs report, the latest in a string of indicators that have demonstrated the resilience of the U.S. economy even in the face of interest rates that are at two-decade highs.
Equity Indexes Wrap: Real Estate Gains on Blackstone Deal; AI Darlings Nvidia, Super Micro Slip
The Dow
Nike (NKE) rose 1.3% to lead the index, one of many consumer discretionary stocks to advance Monday.
JPMorgan Chase (JPM) rose 0.6% as the bank released CEO Jamie Dimon’s annual letter to shareholders in which he discussed the potential impact of artificial intelligence on businesses and the benefit the bank will derive from last year’s acquisition of First Republic Bank.
Intel (INTC) fell 1.9% as R2 Semiconductor filed a patent infringement lawsuit against its French unit.
The S&P 500
GE Vernova (GEV) rose 5.9% after analysts at JPMorgan Chase upgraded the GE spin-off to “buy,” citing a recent pullback in its stock price that, in analysts’ opinions, presents an attractive buying opportunity.
Multifamily housing real estate investment trusts gained after private equity firm Blackstone (BX) offered about $10 billion to acquire AIR Communities (AIRC). Camden Property Trust (CPT) rose 5.7% and Mid-America Apartment Communities (MAA) advanced 4.4%.
Huntington Bancshares (HBAN) rose 3% after Bank of America analysts upgraded the stock to “buy,” citing its resilience to a higher-for-longer rate environment when compared with its mid-sized bank peers.
Paramount Global (PARA) tumbled 7.6% after investor Matrix Asset Advisors expressed concerns about its acquisition talks with Skydance Media.
Solventum (SOLV) fell 4.4% as Wells Fargo analysts warned the 3M (MMM) spin-off may have too much debt to make strategic acquisitions.
AI beneficiaries lagged the broader market. Super Micro Computer (SMCI) fell 2.1%, while Meta (META) lost 1.5% and Nvidia (NVDA) slid 1%.
The Nasdaq 100
Tesla (TSLA) led the index, rising 4.9% after CEO Elon Musk late last week announced the EV maker would unveil its long-awaited robotaxi on Aug. 8.
Alphabet (GOOGL) rose 1.5% ahead of its Cloud Next Conference, which starts tomorrow.
Key Takeaways From Jamie Dimon's Annual Shareholder Letter
JPMorgan Chase (JPM) Chair and CEO Jamie Dimon released his annual letter to shareholders Monday, giving his perspective on a range of topics from the rise of artificial intelligence (AI) to the health of the economy and its outlook.
Amid a boom in demand for AI, Dimon highlighted the "critical impact" of the technology, and said that JPMorgan has taken a number of steps to expand its capabilities with AI.
Dimon said the company currently uses AI in over 400 different ways, from fraud detection to finding new marketing strategies, with plans to explore whether using generative AI for things like customer service or software development could help the business.
Dimon also expressed doubt about the odds of a "soft landing" amid sticky inflation. While the markets are currently pricing a 70% to 80% chance of the economy maintaining modest growth as inflation and interest rates decline, Dimon said, "I believe the odds are a lot lower than that."
Read more of what Dimon had to say, including thoughts on the bank regulations and JPMorgan's acquisition of First Republic Bank.
Cryptocurrencies Surge Ahead of Bitcoin Halving
Cryptocurrencies surged on Monday as markets awaited a highly anticipated Bitcoin halving, the first in nearly 4 years.
Bitcoin traded just below $72,000 Monday afternoon, while the price of Ethereum surged to nearly $3,700.
This year’s halving, which is when the reward for mining bitcoin is cut in half, is expected to take place around April 20. It will be the cryptocurrency’s fourth halving and its first since May 2020.
This halving, experts say, could be vastly different from prior halving, considering the recent launch of spot bitcoin ETFs has “fundamentally changed” the market dynamics for bitcoin.
“If we assumed that the pace of new inflows into US-based ETFs slowed from $6 billion in February to say a steady state of $1 billion of net inflows per month, a simple mental model suggests that measured against ~13.5k BTC mined per month (in a post-halving environment) the equilibrium price for bitcoin should be closer to around $74,000,” Coinbase analysts wrote.
See here for more insights on what makes this halving unique.
GE Vernova Jumps After Getting First Upgrade From JPMorgan Analysts
GE Vernova (GEV) shares jumped in intraday trading Monday after the recently spun-off energy division of conglomerate General Electric received its first upgrade, from JPMorgan (JPM) analysts.
The analysts upgraded GE Vernova to "overweight" from "neutral," indicating their confidence that the stock should perform better in the future. Analysts held their year-end price target at $141, about 15% above where GE Vernova closed last week at $122.70.
JPMorgan analysts wrote Monday that they view GE Vernova's 14% stock-price pullback from last week's debut as an "attractive entry point for what we believe will be a core holding for investors in the US/global electrification theme."
They also wrote that the company could benefit from increased electricity demand from things like data centers that power artificial intelligence (AI) models.
GE Vernova stock was up 5.5% at $129.43 Monday afternoon.
Tesla Stock Jumps on Planned Robotaxi Unveiling
Tesla (TSLA) shares climbed Monday as the market responded to CEO Elon Musk's announcement Friday afternoon that the electric vehicle (EV) maker would unveil its long-awaited robotaxi on Aug. 8.
The announcement on Friday came just hours after Musk denied a report that the EV maker was canceling plans to build a lower-priced car, and would instead focus on an autonomous vehicle that would render other vehicles obsolete.
The robotaxi is a next-generation self-driving vehicle that Musk has said owners could rent out while not personally in use, a taxi service akin to Uber or Lyft from which Tesla, like those companies, would take a cut of the fare.
Since its announcement, the robotaxi project has been severely delayed. Musk said at an investor event in 2019 that robotaxis would be on the road in 2020.
Tesla stock surged nearly 5% to $173 on Monday after sinking 3.6% Friday.
Blackstone To Take Rental Housing Owner AIR Communities Private in $10B Deal
Blackstone (BX) said Monday that it was taking Apartment Income REIT (AIRC) private in an all-cash deal worth about $10 billion, sending shares in the real estate investment trust (REIT) known as AIR Communities skyrocketing.
AIR Communities shareholders will receive $39.12 per share, a nearly 25% premium over the REIT's closing price on Friday. AIR Communities owns 76 rental housing communities, primarily in U.S. coastal cities, including Boston, Los Angeles, Miami, and Washington, D.C.
Blackstone said that it plans to spend more than $400 million “to maintain and improve the existing communities in the portfolio and may invest additional capital to fund further growth.”
The transaction is expected to close in the third quarter of this year.
AIR Communities shares surged 22.6% to $38.40, their highest level in more than a year, on Monday. Blackstone shares were up 0.9% at $128.74.
Midday Movers
Apartment Income REIT Corp. (AIRC): Shares jumped more than 20% after Blackstone (BX) agreed to acquire the apartment building owner for nearly $10 billion.
Tesla Inc. (TSLA): Shares of the EV maker rose more than 5% after Elon Musk on Friday said the company would unveil its robotaxi on August 8.
Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange climbed more than 5% as Bitcoin surged to nearly $72,000 ahead of a highly anticipated halving that’s expected to take effect in mid-April.
Taiwan Semiconductor Manufacturing Co. (TSM): Shares of the chipmaker rose more than 2% after it was awarded up to $6.6 billion in CHIPS Act funding for its Arizona factory.
TSMC Shares Rise on News of Billions in CHIPS Act Funding
Shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose in early trading Monday following the announcement of up to $6.6 billion in direct federal funding for the Arizona factory complex the company started construction on in 2021.
The project is the latest announcement of funding from the CHIPS and Science Act, a 2022 piece of legislation supported by President Joe Biden that earmarked over $50 billion for investment in semiconductor research and manufacturing facilities to be built in the U.S. after the industry mostly has moved overseas in recent years.
Biden's administration has said it wants to make the U.S. a leading semiconductor manufacturer because of how important the chips are in everyday objects like smartphones and cars, and to address weaknesses in the global supply chain that were revealed by the pandemic.
The federal funding announcement also came with TSMC's own announcement that it would build a third factory at the Phoenix site, growing the company's total investment in the area to at least $65 billion by the time the factories are completed, the company said in a statement. It also is eligible for up to $5 billion in loans.
TSMC shares were up 2.2% at $144.50 half an hour into Monday's session. The stock is up 40% since the beginning of the year.
Solar Eclipse Provides Big Boost To Cities in its Path
Monday’s total solar eclipse is possibly a once-in-a-lifetime event for the 30 million people who live in its path, and the millions more who are traveling to see it. It’s also a chance to spend money, and a lot of it.
The total economic impact, including secondary downstream effects, could be as much as a $6 billion boost to the U.S. economy, according to an analysis by The Perryman Group. The economics consulting firm says the eclipse is likely to generate more interest than North America’s previous total eclipse in 2017 because its duration is longer and the next opportunity to view a similar event in North America won’t come until 2044
Indeed, visitors from all over the world are flocking to the 115-mile-wide band of the U.S., stretching from Texas to Maine. They'll be spending on everything from accommodations to food, fuel and memorabilia, providing a burst of economic activity for cities and towns across the country.
For hotels and short-term rental hosts along that strip, the effect is like a Taylor Swift concert taking place simultaneously in every city and town, said Jamie Lane, chief economist at AirDNA, a company that provides data about AirBnBs (ABNB) and other short-term rentals.
The occupancy rate for rentals along the total eclipse path Sunday night is 92%, compared to 30% in the same places during a typical week, Lane said.
Read more about the economic impact of the eclipse, including the experience of one city that has had the good fortune of being in the "path of totality" two times in a row.
-Diccon Hyatt
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AirDNA
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