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Why it's time for investors to go on defense

 

Howard Marks, co-chairman of Oaktree Capital, explains why investors should start treading lightly.

Premarket: 7 things to know before the bell

 

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Barnes & Noble stock soars 20% as it explores a sale

 

Barnes & Noble jumped more than 20% after it said it would review a sale of the troubled company.

Toys 'R' Us brand may be brought back to life

 

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands.

Honda teams up with GM on self-driving cars

 

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Aston Martin falls 5% in London IPO

 

Aston Martin is joining the ranks of listed automakers with an IPO that values the British company at more than $5 billion.

JCPenney names Jill Soltau as its new CEO

 

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Tesla calms fears with strong sales numbers

 

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S&P downgrades debt-riddled GE and GE Capital

 

New General Electric boss Larry Culp just got a fresh reminder of the debt-riddled balance sheet he's inheriting.

Amazon announces $15 minimum wage for all US employees

 

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What To Expect in the Markets This Week

 

Coming up: Inflation data; earnings from Salesforce, Costco, and Dell; and a closed market on Monday for Memorial Day

Why Investors Snubbed Target's Earnings but Cheered Walmart's

 

<p>Bloomberg / Contributor / Getty Images, SOPA Images / Contributor / Getty Images</p>

Bloomberg / Contributor / Getty Images, SOPA Images / Contributor / Getty Images



Key Takeaways

  • Walmart and Target both recently reported earnings that beat analysts' estimates, but investors reacted differently to their results.
  • Walmart's stock price jumped after the retailer posted its first-quarter financial results, while Target's stock price tumbled after it released its earnings report.
  • Both retailers highlighted how inflation is affecting customers' habits, with spending focused on necessities amid a pullback on discretionary items. However, those trends appeared to benefit Walmart more than Target.
  • Walmart's revenue and profit rose from the year-ago period as it said it gained from "value-seeking behaviors," while Target's revenue and profit declined.


Two of the biggest retailers in the U.S., Walmart (WMT) and Target (TGT), recently reported earnings that beat analysts' estimates, but only Walmart's stock price jumped following the news of its performance. Target's stock price tumbled when it posted results.

Both companies highlighted how inflation is affecting customers' habits, with spending focused on necessities and less on discretionary items—a common theme across recent earnings reports from other retailers such as Lowe's (LOW) and Home Depot (HD). However, those trends appeared to benefit Walmart more than Target.

Target Hit by Pullback in Discretionary Spending

While Target's first-quarter earnings came in slightly above analysts' estimates, its report Wednesday showed profit and revenue declined from a year ago as the retailer said it continued to be negatively impacted by a pullback in discretionary spending as inflationary pressures weigh on consumers.

Target shares tumbled 8% Wednesday after the company’s earnings release and have lost over 9% of their value this week, erasing most of their gains since the start of the year.

Walmart Says It Benefitted From Customers' 'Value-Seeking Behaviors'

By contrast, Walmart's report last week showed first-quarter revenue and profit surged from a year ago, with the retailer suggesting that it gained from consumers' "value-seeking behaviors" and the retail giant's focus on offering lower-cost options as inflation "stretched" many consumers' budgets. Walmart also noted that its share of higher-income consumers who make over $100,000 annually increased.

Shares of Walmart surged close to 7% last Thursday after the company’s results were released, and have climbed about 2% over the period since.

Slashing Prices To Stimulate Sales

In a bid to appeal to price-conscious shoppers, Target announced a plan Monday to lower prices on some 5,000 of its popular items over the course of the summer. The announcement came after Walmart said last week it has rolled back prices on nearly 7,000 items.

"While near-term sales remain pressured, we believe TGT's focus on value positions it well for share gains going forward," Bank of America analysts wrote in a Wednesday note, reiterating a "buy" rating for Target stock with a price target of $190.

Bank of America analysts also reiterated a “buy” rating for Walmart after the company's earnings report last week, and raised their price target for Walmart stock to $75 from $67, citing Walmart's “strong value offering” and “momentum across all income cohorts.”

Target shares were about 2% higher for the year so far at $145.23 as of Friday's close, while Walmart shares were up more than 24% over the same period, finishing at $65.38 Friday.

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Why McDonald’s, Burger King, and Others Are Rolling Out Value Meals

 

Both announced $5 "value meal" deals as fast-food chains try to win over inflation-weary customers

What A Shorter Stock Trade Settlement Cycle—Known as T+1—Means For You

 

New Cycle Goes Into Effect May 28

S&P 500 Gains and Losses Today: Deckers Outdoor Jumps on Uggs and Hoka Demand

 

<p>G Fiume/Getty Images</p>

G Fiume/Getty Images



Key Takeaways

  • The S&P 500 added 0.7% on Friday, May 24, 2024, closing out a week that saw reemerging inflation concerns cast a shadow over strong earnings news.
  • Footwear maker Deckers Outdoor topped quarterly estimates, driven by demand for its Uggs and Hoka shoe brands, and its shares soared.
  • Shares of Intuit tumbled after the financial software firm said it would lose 1 million customers who had used the free version of its TurboTax program.


Major U.S. equities indexes moved higher, boosted by outperformance from the technology sector. The gains on Friday closed out a week that saw a blockbuster earnings report from semiconductor giant Nvidia (NVDA) but also several signs of sticky inflation, which raised doubts about how long interest rates might remain elevated.

The S&P 500 gained 0.7% on Friday. The Nasdaq jumped 1.1%, while the Dow was mostly flat but edged out a gain of less than 0.1%.

Shares of footwear maker Deckers Outdoor (DECK) logged Friday's biggest gains in the S&P 500, soaring 14.2% to hit an all-time high following a strong quarterly earnings report. Robust demand across its Uggs and Hoka shoe brands helped Deckers beat sales and profit estimates for its fiscal fourth quarter of 2024.

First Solar (FSLR) shares jumped 10.8%, shining yet again on Friday after notching the S&P 500's top performance for two consecutive sessions earlier this week. First Solar stands to benefit from tax credits under the Inflation Reduction Act, and analysts have recently pointed to the company's opportunity to meet the high energy demand from artificial intelligence (AI) processes.

The enthusiasm around powering AI may have extended to other renewable energy companies. Shares of GE Vernova (GEV), the energy equipment maker that completed its spinoff from the General Electric conglomerate earlier this year, added 9.8%. Shares of fellow renewable energy technology provider Enphase Energy (ENPH) were up 6.5%.

Intuit (INTU) shares tumbled 8.4%, marking the weakest performance of any S&P 500 stock, after the financial software provider said it expects to lose 1 million customers from the free version of its TurboTax tax filing program.

Shares of cloud-based human resources platform Dayforce (DAY) sank 7.6% after rival Workday (WDAY) issued softer-than-expected guidance for its subscription revenue. The firm expects sales scrutiny and slower customer headcount growth to drag on results. Workday shares plunged 15.3% on Friday.

Elevance Health (ELV) shares dropped 4.1%, receding from the all-time highs posted by the stock earlier this week. The health benefits company announced earlier this week that it would launch a $10 million impact investing program aimed at addressing health equity issues.

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Nvidia’s Market Cap Gained $338B This Week—That’s Larger Than the GDPs of Most Countries

 

That's also more than the combined market value of Morgan Stanley and Goldman Sachs, two of America’s largest investment banks

What the SEC's Pivot To Approve Spot Ether ETFs Means

 

<p>Getty Images</p>

Getty Images



Key Takeaways

  • The Securities and Exchange Commission (SEC) on Thursday approved a rule change that will allow the listing of spot ether exchange-traded funds (ETFs) in the future.
  • However, because of remaining regulatory steps in the process, the new ETFs likely won't be available for trading until July or August.
  • The approval from the SEC, which seemed unlikely a week ago, may indicate a positive change in the regulatory environment for the crypto industry in the U.S.
  • The inflows of funds into these new ether products may be limited by the lack of access to staking that rewards users for their liquidity.


On Thursday, the U.S. Securities and Exchange Commission (SEC) surprised market watchers when it effectively approved the listing of spot ether exchange-traded funds (ETFs) on U.S. exchanges. Ether is the underlying cryptocurrency of the Ethereum crypto network, the second-largest such network after bitcoin by market capitalization.

What will be the impact of this landmark regulatory decision on the crypto market?

Spot Ether ETFs May Not Be Listed for Months

While Thursday's decision to approve spot ether ETF 19b-4 forms from issuers hoping to launch the funds was a major step forward, the associated products in the works from BlackRock, Grayscale, Fidelity, and others can't be listed quite yet.

That's because the S-1 registration filings submitted for these products must also be approved, which could take anywhere from weeks to months. According to a report from Galaxy Digital, July or August are the likely months when spot ether ETFs will begin trading.

The SEC's Change of Heart

The SEC's recent turnaround to approve spot ether ETF applications wasn't predicted by many before some major developments earlier this week. The SEC had asked spot ether ETF applicants to make alterations to their filings on an accelerated basis as the deadlines for the agency's decisions on them were approaching.

There appears to have been a reversal of policy behind the scenes at the SEC, which in the crypto industry view as political in nature. An unidentified source told the crypto publication The Block that the decision was "a completely unprecedented situation, which means it's entirely political," due to the lack of internal coordination among SEC departments on the matter.

Earlier in May, former President Donald Trump in a speech courted the crypto industry that the Biden administration has moved to regulate, a shift from Trump's criticism of cryptocurrency during his presidential term.

The recent SEC decision on spot ether ETFs also could have implications for the broader crypto industry. While Republicans generally have been receptive of crypto and blockchain technology, especially in terms of bitcoin, Democrats have been mostly seen as opponents of the technology.

Democrats, led by the Biden administration, taking a softer regulatory approach on crypto may mean more crypto businesses and projects would be likely to consider the U.S. for their base of operations.

In addition, the pivot on the spot ether ETF ruling could have implications for ether's status as a security, which is a legal avenue the SEC had been exploring. According to Bloomberg analyst James Seyffart, the SEC is explicitly saying with these recent approvals that ether is not a security, as the future ETFs are referred to as commodities-based trust shares.

How Will These ETFs Affect Ether's Price?

Ether rose about 20% this week, but opinions differ on how much higher the price can go. While bitcoin has benefited robustly from the approval of spot bitcoin ETFs, with those products experiencing roughly $13 billion of inflows since their approval in January, it's unclear if Wall Street will have a similar appetite for ether.

Notably, futures-based ether ETFs didn't gain much traction after they launched in 2023.

Also, the existence of an earlier ether fund from digital asset manager Grayscale could limit inflows to the new ETFs over the short term, as was the case with a similar bitcoin product. That said, some analysts, such as Lekker Capital founder Quinn Thompson, still think that the spot ether ETF approvals can help the alternative crypto asset outperform bitcoin.

One of the key limitations of spot ether ETFs, at least for now, will be their lack of access to staking. Ether can be staked on the Ethereum network to participate in the consensus and validation process, similar to the proof-of-work mining process in bitcoin.

Stakers are rewarded with transaction fees and newly issued ether, which allows them to earn a yield on their ether in exchange for their liquidity. Because ether held by ETF issuers can't be staked, opting for a spot ether ETF instead of an alternative option to buy into the cryptocurrency will come with tremendous opportunity cost.

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What You Need To Know Ahead of Dell's Earnings Report

 

<p>NurPhoto / Contributor / Getty Images</p>

NurPhoto / Contributor / Getty Images



Key Takeaways

  • Dell Technologies is set to release its first-quarter earnings report for the 2025 fiscal year after the bell on Thursday, May 30.
  • The company is expected to report that revenue gained from the year-ago period while net income fell, according to analyst estimates compiled by Visible Alpha.
  • Investors will be watching for the impact of artificial intelligence (AI) servers on Dell's Infrastructure Solutions Group segment.
  • Dell recently announced AI initiatives that strengthen its relationships with AI heavyweights Nvidia and Microsoft.


Dell Technologies (DELL) is set to report earnings for the first quarter of the 2025 fiscal year after the bell on Thursday, May 30, with investors likely to be watching for updates related to artificial intelligence (AI).

Analysts project Dell's revenue to be $21.56 billion for the first quarter of fiscal 2025, down from the previous quarter, but up from the same period in fiscal 2024, according to estimates compiled by Visible Alpha.

Net income is expected to be $428.65 million, down from the quarter prior and the $578 million recorded in the first quarter of fiscal 2024. Analysts anticipate diluted earnings per share (EPS) of 57 cents, compared with 79 cents in the same period a year earlier.

Dell said seasonality affects its sales quarter to quarter, with its strongest results in the fourth fiscal quarter, according to its filing with the Securities and Exchange Commission (SEC).

  Analyst Estimates for Q1 FY 2025  Q4 FY 2024  Q1 FY 2024
 Revenue  $21.56 billion $22.32 billion $20.92 billion
 Diluted Earnings Per Share  57 cents  $1.59  79 cents
 Net Income  $428.65 million  $1.16 billion  $578 million

Key Metrics: Infrastructure Solutions Group Revenue and AI Server Orders

Back in February, Dell shares surged after the company reported a revenue beat as its Infrastructure Solutions Group (ISG) grew 10% sequentially with AI-optimized server orders jumping nearly 40%.

The company indicated that it's just the start of Dell realizing its AI potential, with Dell CEO Jeff Clarke saying that "strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion."

Analysts expect ISG revenue to come in at $8.96 billion, which would represent a decline from the previous quarter, but a nearly 18% increase year-over-year. Seasonally, the fiscal fourth quarter tends to see stronger ISG revenue driven by storage sales.

Business Spotlight: AI Opportunity and Nvidia Ties

Dell has worked to show investors that the legacy computer company is positioned to gain amid the AI era.

The company recently announced that it would be expanding its AI factory through its partnership with Nvidia (NVDA). The Dell AI factory with Nvidia "offers a full stack of AI solutions from data center to edge, enabling organizations to quickly adopt and deploy AI at scale."

Dell's partnership with Nvidia has helped the company share in some of the AI darling's gains. After Nvidia reported blockbuster earnings, Dell stock popped as Nvidia CEO Jensen Huang called out the company as part of the chipmaker's "rich ecosystem of partners."

Dell also unveiled new AI PCs as part of Microsoft's (MSFT) new category of Windows PCs designed for AI. Dell could offer investors more insight into how it is positioning itself to gain from the AI boom when it reports earnings and how AI offerings may affect its financials.

Dell shares have more than doubled in value since the start of 2024, at $160.91 as of 2:45 p.m. ET Friday.

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Tesla Reportedly Cuts Output of Best-Selling Model Y in Shanghai

 

<p>Artistic Operations / Getty Images </p> A black Tesla Model Y.

Artistic Operations / Getty Images

A black Tesla Model Y.


Key Takeaways

  • Tesla has cut output of the best-selling Model Y at its Shanghai plant amid slowing demand for its cars in China, where domestic rivals have come up with cheaper EVs.
  • Data from the China Association of Automobile Manufacturers showed Tesla's Shanghai factory produced 33% fewer Model Y vehicles in April than the same month last year.
  • China is Tesla's second-largest market after the U.S.


Tesla (TSLA) has slashed production of its best-selling Model Y at its Shanghai plant, according to Reuters, amid slowing demand for its cars in China, where a price war has erupted between the electric vehicle maker and domestic rivals.

The Shanghai plant, Tesla's biggest manufacturing hub, planned to cut Model Y output by at least 20% between March and June, Reuters said, citing an undisclosed source.

Meanwhile, recent data from the China Association of Automobile Manufacturers (CAAM) appeared to bear out the claim. Tesla produced 36,610 Model Y cars in April, 33% fewer than a year ago, according to CAAM data.

Tesla reportedly slowed down production at its Shanghai facility in March as the EV market's growth cooled.

China is Tesla's second-largest market after the U.S. The EV maker reportedly won tentative approval from Chinese regulators last month to deploy its Full Self-Driving (FSD) software. Expanding this service, which Tesla owners can pay a monthly fee for or purchase outright, could significantly enhance the company's revenue and profit margins, which have suffered in recent quarters after a string of price cuts in the U.S. and abroad.

Tesla's shares were up 3% at $179.28 as of about 1:30 p.m. ET Friday but were still down more than 27% this year.

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Top Stock Movers Now: Deckers, Ross Stores, Intuit, and More

 

<p>Bloomberg / Contributor / Getty Images</p>

Bloomberg / Contributor / Getty Images



Key Takeaways

  • U.S. equities gained at midday Friday, May 24, 2024, lifted higher by tech stocks ahead of a long holiday weekend.
  • Booming sales of Hoka and Ugg brand shoes helped Deckers Outdoor post stronger-than-expected profit, and shares surged.
  • Intuit shares fell after the maker of financial and other software warned it anticipates losing 1 million free users of its TurboTax tax filing software this fiscal year.


U.S. equities were higher at midday, boosted by tech stocks ahead of the long Memorial Day holiday weekend. The Nasdaq jumped more than 1%, while the Dow and S&P 500 were higher as well.

Deckers Outdoor (DECK) was the best-performing stock in the S&P 500, with shares hitting an all-time high as the fashion footwear company beat profit estimates on soaring sales of its Hoka and Ugg brand shoes.

Shares of Ross Stores (ROST) jumped after the off-price apparel and home goods retailer beat earnings and revenue forecasts as it slashed costs.

Intuit (INTU) shares sank after the maker of financial and other software warned it anticipates losing 1 million free users of its TurboTax tax filing software this fiscal year.

Shares of Workday (WDAY) slumped as the provider of human resources software trimmed its subscription revenue guidance on elevated sales scrutiny and lower customer growth. The news dragged down shares of rival Dayforce (DAY) as well.

Oil futures and gold prices rose. The yield on the 10-year Treasury note was little changed. The U.S. dollar lost ground to the euro, pound, and yen. Trading in most major cryptocurrencies was mixed.

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