In a day marked by a general downturn in the stock market, Vizio Inc. (VZIO, Financial) emerged as a standout performer, surging 25% amid reports that Walmart Inc. (WMT, Financial) is considering an acquisition of the TV manufacturer. The potential deal, which could exceed $2 billion, is seen as a strategic move by Walmart to bolster its advertising revenue rather than focusing on selling more TVs. Vizio, with a market cap of $1.5 billion, could provide Walmart with valuable TV operating system technology, advertising inventory, and viewership data. Conversely, Roku Inc. (ROKU, Financial), known for its TV streaming devices, saw its shares drop by 9% in reaction to the news.
The sentiment among fund managers has turned bullish, reaching its highest level since January 2022, as reported by a BofA survey. However, this optimism could signal upcoming challenges for stocks. The survey, which included 249 panelists with $656 billion in assets under management, indicated that cash levels, equity allocation, and growth expectations have all increased. Strategist Michael Hartnett suggested that a contrarian trade in anticipation of a hard economic landing would involve being long on cash (VMFXX, SPRXX, VMVXX, SWVXX) and defensive stocks (XLV, XLU, XLP), while shorting U.S. stocks (SPY, IVV, VOO, QQQ, IWM, VO) and Japanese stocks (EWJ).
Enviva (EVA, Financial) experienced a significant decline, dropping 23% following a report that the wood-pellet exporter is preparing for a potential bankruptcy. The company, which is currently in a grace period after missing a $24 million interest payment, may file for bankruptcy by the end of the week or negotiate an extension with creditors.
Analysts at Mizuho Securities have raised the price target for Nvidia Corporation (NVDA, Financial) from $625 to $825, citing the company's dominance in the AI/ML market. Nvidia's stock has risen 45% since the beginning of the year, reflecting investor confidence in its market position. Broadcom (AVGO, Financial) and Advanced Micro Devices (AMD, Financial) also received price target increases from Mizuho, which maintains a Buy rating for all three companies.
SoundThinking Inc. (SSTI, Financial), previously known as ShotSpotter, saw its shares plummet by 18% after Chicago's Mayor announced the city's decision not to renew its contract with the gunshot detection system. The termination of this contract is expected to impact the company's financial performance significantly.
APA Corp. (APA, Financial) has agreed to pay $4 million to settle a civil suit regarding air emissions from its oil and gas wells. The settlement also includes a commitment to invest at least $5.5 million in projects to ensure compliance with clean air regulations, which is expected to result in significant reductions of volatile organic compounds and methane emissions.
FibroBiologics (FBLG, Financial) saw its shares soar 82% after reporting preclinical data for a cell therapy treatment for psoriasis and announcing a private placement of shares. The company, which recently went public, is focused on developing fibroblast-based cell therapies.
The Federal Reserve's likelihood of initiating rate cuts has diminished following the release of hotter-than-expected inflation data. The consumer price index's rise in January has led traders to adjust their expectations for the Fed's monetary policy, with the odds of a March rate cut falling and rate cuts now anticipated before the end of the July meeting.
Diamondback Energy (FANG, Financial) is speculated to become an acquisition target in 2025, following its significant deal for Endeavor Energy Resources. Analysts suggest that larger oil companies like Chevron (CVX, Financial), ConocoPhillips (COP, Financial), and Exxon Mobil (XOM, Financial) may consider acquiring Diamondback to expand their presence in the Permian Basin.
Realty Income (O, Financial) has been initiated with a Market Perform rating by BMO Capital Markets. While the REIT is positioned to make accretive investments, its large size may limit its ability to outperform peers significantly.
Cisco Systems (CSCO, Financial) is preparing to report its second-quarter earnings, with analysts expecting a decline in both revenue and earnings due to reduced demand for its networking equipment. The company's focus on AI tools and excess inventory issues are contributing factors to the anticipated results.
ESPN (DIS, Financial) has extended its rights deal with the College Football Playoff, securing a six-year extension worth approximately $7.8 billion. This agreement ensures ESPN's continued coverage of the tournament through the 2031-2032 season.
2U Inc. (TWOU, Financial) shares plummeted 42% after the company expressed doubts about its ability to continue as a going concern. The online learning platform's fourth-quarter results fell short of expectations, and its outlook for the first quarter was also below market estimates.
BYD Company Limited (BYDDF, Financial) is exploring the possibility of establishing a plant in Mexico as part of its global expansion strategy. The automaker is conducting a feasibility study and has initiated discussions with government officials and local authorities.
Twilio (TWLO, Financial) is set to report its fourth-quarter results, with analysts anticipating an increase in both revenue and earnings. The company's focus on profitability and revenue growth is expected to yield positive results.
Deutsche Bank Research has highlighted the immense scale of the "Magnificent Seven" tech companies, which include Alphabet (GOOGL, Financial), Apple (AAPL, Financial), Amazon (AMZN, Financial), Meta Platforms (META, Financial), Microsoft (MSFT, Financial), Nvidia (NVDA, Financial), and Tesla (TSLA, Financial). These companies' combined market cap and profitability are comparable to entire countries, underscoring their significant impact on the global economy.
Spot gold prices (GLD, Financial) fell below $2,000/oz for the first time in two months after U.S. inflation data suggested a delay in expected Federal Reserve rate cuts. The precious metal's price decline reflects the market's reaction to the persistent inflationary pressures.
Barrick Gold (GOLD, Financial) is set to announce its Q4 earnings, with expectations for a consensus EPS of $0.22 and revenue of $3.14 billion. The company has a history of consistently beating EPS estimates and has seen a mix of upward and downward revisions in recent months.
Energy Transfer (ET, Financial) is also due to report its Q4 earnings, following a year in which the stock rose 28%. The company's distributable cash flow and industry ranking will be key points of interest for investors.
