Stock market today: Stocks mixed ahead of key inflation data

VaselineAugust 12, 2024

0 3 minutes read

Stock market today: Stocks mixed ahead of key inflation data

Stocks opened higher on Monday but quickly turned choppy as investors looked ahead to a week full of inflation updates. Today’s economic calendar was, however, relatively quiet, leading market participants to look at more single-issue stocks. Among the most important, Nvidia (NVDA) continued to jump and Starbucks (SBUX) has been the target of not one, but two activist investors.

at the end, Dow Jones Industrial Average fell 0.4% to 39,357. The S&P 500 scored a fractional gain at 5,344, while tech-heavy Nasdaq Composite added 0.2% to 16,780 on strength in a number of semiconductor stocks.

Nvidia was the best of the bunch, rising 4.1%. Since last Monday’s market crash, NVDA shares have risen 8.5% to regain a market value of $211 billion. Advanced microdevices (AMD, +1.9%) and Micron technology (MU, +1.7%) also gained ground.

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Starbucks is in the news for activist investors

Starbucks was another notable gainer on Monday, up 2.6 percent on reports Elliott Management wants its managing partner Jesse Cohn to join the coffee chain’s board. The firm has built a roughly $2 billion stake in Starbucks, but it’s not the only activist investor with an eye large cap stock. Indeed, according to a report late Friday in The Wall Street JournalStarboard Value took a position in SBUX.

However, even with today’s pop, SBUX remains 20% lower for the year to date, pressured in part by disappointing earnings. In it most recent printStarbucks disclosed a 3% year-over-year decline in same-store sales and a 7% decline in earnings per share.

Bank of Nova Scotia to invest $2.8 billion in KeyCorp

However, KeyCorp ( KEY ) was the best S&P 500 stock today, jumping 9.1% on the news Bank of Nova Scotia (NBS, -3.6%) will invest about $2.8 billion in the Cleveland lender, equivalent to a 14.9% stake.

The minority investment allows KEY to “raise capital on attractive terms,” the KeyCorp CEO said Chris Gorman in a press release. It will give the company “greater capacity to grow” and increase strategic agility amid an uncertain environment.

Following the news, CFRA Research analyst Alexander Yokum updated KEY to Hold from Sell. “We have a positive view on the investment as KEY shares have been hamstrung in recent years by large unrealized losses in the bank’s securities portfolio,” he writes in a note. “Following the investment, KEY will be well-positioned to reposition its securities portfolio, thereby improving the bank’s net interest income outlook.”

Most analysts are already bullish on financial stocks. Of the 20 analysts following KEY who are followed by S&P Global Market Intelligenceeight say it’s a Strong Buy, five have it at Buy and seven call it a Hold. This results in a consensus buy recommendation.

Inflation data, blue chip earnings on deck

Looking ahead, inflation data will be top of mind for investors. While tomorrow morning’s release of July’s producer price index (PPI), which measures the change in wholesale prices, is sure to attract attention, the most watched measure of inflation – the consumer price index (CPI) – will be released on Wednesday morning.

Mark Hacketthead of investment research at Nationwide, says next CPI report and blue chip retailer earnings Walmart (WMT, +1.1%) — which will be released Thursday morning — “will be crucial in determining the direction of investor sentiment. A quarter ago, retail earnings were the first to raise a consumer alarm, gradually leading to a shift in investors. perspective from “Buci de aur” to a recession.”

Hackett adds that it would not be surprising “to see potentially overreactions” to this week’s inflation and retail earnings data “given the heightened emotional responses in the market recently.”

VaselineAugust 12, 2024

0 3 minutes read

Vaseline

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