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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/stock-market-movers-2b3602a5
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AMC Entertainment Holdings Inc. has submitted a revised proposal for its stock-conversion plan, after a judge rejected a settlement Friday that would have given a green light to the deal.
In a letter to investors that was posted Sunday on Twitter, AMC Chief Executive Adam Aron said that a modified proposal was filed Saturday with the Delaware Chancery Court intended to address the court’s concerns. If the court agrees, Aron said he hopes to implement the plan “as soon as possible.”
Movie-theater chain AMC
AMC,
has wanted to turn its its so-called APE
APE,
— or AMC Preferred Equity — preferred units into common stock as part of its battle to eliminate debt. But Delaware Chancery Court Vice Chancellor Morgan Zurn on Friday rejected a settlement with opposing shareholders that would have allowed that conversion to move forward. That sent AMC shares rocketing more than 60% higher in after-hours trading Friday.
“AMC must be in a position to raise equity capital,” Aron stressed in his letter Sunday, saying that if the company is unable to do so, the risk of running out of cash in 2024 or 2025 rises.
“The risk of financial collapse is not whimsical,” Aron said, noting the bankruptcies of rival theater chain Cineworld/Regal and retailer Bey Bath & Beyond.
AMC shares are up 8% year to date, but have sunk 54% over the past 12 months.
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Shares of AMC Entertainment Holdings Inc. rocketed more than 60% higher on Friday after a judge in Delaware shot down a settlement that would have allowed the movie-theater chain to move ahead with a plan, maligned by some investors, to dump more shares onto the market, according to reports.
AMC
AMC,
has wanted to turn its its so-called APE — or AMC Preferred Equity — preferred units into common stock. But Delaware Chancery Court Vice Chancellor Morgan Zurn rejected an earlier settlement that would have allowed that conversion to move forward.
The theater chain has been looking to find ways to boost its share count and sell more shares — a tack that helped it through the COVID-19 pandemic — as it tries to shore up its finances and rein in its debt, the Wall Street Journal noted.
But not every investor was on board with the plan, amid worries about share dilution.
“At this juncture, the Court’s only task is to approve or reject the proposed
settlement,” wrote in the ruling, obtained by Bloomberg Law. “The focus of the settlement is on the claims presented in this case. The Court cannot address issues that do not pertain to the fairness of the settlement.”
“Such issues raised by AMC stockholders include theories about synthetic shares, Wall Street corruption, dark pool trading, insider trading and RICO violations, and a request for a share count,” the ruling continued. “The Court’s role is limited to considering settlement-specific issues, like the strength of the plaintiffs’ claims, the consideration the class would receive, and the scope of the release the class would give in exchange for that consideration.”
“To cut to the chase, the settlement cannot be approved as submitted,” the ruling added later.
AMC did not immediately respond to a request for comment.
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For the first time in recent years, sales of electric vehicles didn’t grow as fast as market observers expected, creating what Barclays analysts characterized Wednesday as a “step back from EV euphoria” for companies that are not Tesla Inc. or BYD Co.
The analysts, led by Dan Levy, said that in 2020 and 2021, Wall Street was “willing to look past EV losses,” betting that demand was “unlimited.”
“We’ve now seen a market where demand is constrained, capital has been tighter, and there is less tolerance for EV related losses,” the analysts said in a note.
“Moreover, going a layer deeper, we find that while [Tesla
TSLA,
] and [China’s BYD
002594,
BYDDY,
] have continued to grow, … growth for the rest of the industry has been less robust in Europe and China,” they wrote.
Don’t miss: Tesla is looking at its best sales quarter ever
Global EV penetration volumes have tracked below expectations so far this year, at 13.5% through May, up 50 basis points, or 0.5%, from 2022 and “well below” estimates from BNEF of just under 18%. It is “likely marking the first time in recent years that EV penetration has disappointed,” the Barclays analysts said.
In comparison, penetration topped 16% for several months in the second half of 2022. While the second half of this year is likely to bring some improvement, it is possible that it will still fall short of expectations.
Aside from Tesla and BYD, growth has been modest, the analysts said. For Ford Motor Co.
F,
and General Motors Co.
GM,
there are “shades of softness in EV sales,” the Barclays analysts said.
There are concerns about weak U.S. EV sales and also reports of “sharply rising EV inventory,” the analysts said.
Citing data from Wards, Barclays pointed at EV inventory of 95,000 vehicles by the end of June, the highest ever, with the highest amount of stock for Ford’s electric Mustang Mach-E SUV, at about 16,000 vehicles in inventory, and Volkswagen’s ID.4, also an SUV, at 14,000 vehicles in inventory.
GM is not off the hook, either: Despite the company’s increase in EV sales and “robust” market-share gain, much of that came from its Chevy Bolt models, which are nearing the end of production, the analysts said.
GM announced in April it was phasing out the Bolt and the bigger Bolt EUV, underscoring the challenges in making a profit on EVs despite soaring new-vehicle prices and as several automakers throw all their weight toward a full transition to EVs.
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Shares of Mullen Automotive Inc. rocketed on massive volume for a second-straight day, after the electric vehicle maker announced plans to buy back a chunk of its shares.
The company
MULN,
said it believes its stock is “significantly undervalued,” given its current cash position of about $235 million. Therefore, the board of directors have authorized the repurchase of up to $25 million worth of its outstanding shares through the end of this year.
The buyback amount represents 17.1% of Mullen’s current market capitalization of about $145.8 million.
“We are initiating this buyback program as an attractive opportunity to deploy capital and return value to our shareholders,” said Chief Executive Officer David Michery.
The stock soared as much as 88.2% intraday, before paring gains to be up 32.8% in afternoon trading. Trading volume swelled to an already record 1.78 billion shares, compared with the full-day average over the past 30 days of about 205.0 million shares.
On Wednesday, the stock blasted 69.4% higher, the biggest one-day gain since it ran up 145.6% on Feb. 28, 2022, on then-record volume of 1.39 billion shares. That followed the company’s announcement that it retained a law firm to combat illegal naked short selling.
A short sale is a way for investors to bet that prices will fall. The short seller must pay to borrow stock owned by another investor so they can sell it with the hope of buying the stock back at a lower price. If the investor who originally owned the stock sells their stock, the borrower must cover their short so they can return the stock.
“Naked” short selling refers to the illegal act of shorting a stock without borrowing it first. While that is often blamed for what companies believe are unwarranted declines in their stock, market structure experts have often refuted those claims.
Read: Short sellers are not evil, but they are misunderstood.
Before the stock’s two-day bounce, it had closed Monday at a record low of 10.1 cents, even after the company reported last week that it recorded revenue for the first time, and that it received additional financing that put it in the “best financial position” in its history.
Mullen had said on Wednesday that it “believes it may have been” targeted by naked short sellers, and therefore decided to investigate any “potential wrongdoing.”
The latest exchange data showed that the percent of Mullen’s public float, or shares freely available to trade, that have been shorted was 16.2%, according to FactSet data. That’s less than half what the percentage was a month ago.
In comparison, fellow “meme” stock AMC Entertainment Holdings Inc.
AMC,
has 23.6% of its float shorted and 20.8% of GameStop Corp.’s
GME,
float is shorted.
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Shares of electric vehicle makers got a broad boost Monday, after upbeat delivery and production data from a host of companies, including industry leader Tesla Inc. and those based in China.
The Global X Autonomous and Electric Vehicles exchange-traded fund
DRIV,
jumped as much as 1.7% intraday, before paring gains to close up 1.1%. It has climbed 5.7% amid a five-day win streak. The ETF outperformed the broader stock market by a wide margin, as the S&P 500 index
SPX,
inched up 0.1% and the Nasdaq Composite
COMP,
edged up 0.2%.
The ETF’s most-active component was Tesla’s stock
TSLA,
which climbed 6.9% to $279.82, the highest close since Sept. 28, 2022. It has run up 16.1% amid a five-day win streak.
The rally comes after Tesla revealed over the weekend a blowout deliveries report, in which the EV leader said it delivered a record 466,000 vehicles in the most recent quarter, well above expectations of 449,000.
The ETF’s second-most active member was Rivian Automotive Inc.’s stock
RIVN,
which shot up 17.4% to its highest close since Feb. 17, and rocketed 45.4% amid a five-day win streak.
The company reported second-quarter EV production that was more than triple that of a year ago, and deliveries that nearly tripled.
Nio Inc.’s U.S.-listed stock
NIO,
rallied 3.5% to $10.03, the first close above the $10 mark since March 31, after the Shanghai-based EV maker reported June deliveries that jumped 74% from May, but were down 17.4% from a year ago.
Among its China-based peers, the U.S.-listed shares of Xpeng Inc.
XPEV,
advanced 4.2% to the highest close since Sept. 26, 2022, of Li Auto Inc.
LI,
hiked up 3.4% to the highest close since July 21, 2022 and of Boyd Co. Ltd.
BYDDY,
rose 3.1%.
Elsewhere, Lucid Group Inc. shares
LCID,
charged 7.3% higher to a record sixth-straight gain and the highest close since May 31, as the EV sector’s rally helped offset an effective downgrade at Citi Research.
Mullen Automotive Inc.’s stock
MULN,
bucked the trend, as it sank 6.3% toward a record low close of 10.1 cents, even after the EV maker reported last week that it recorded revenue for the first time, and that it was in the “best financial position” in its history.
In an interview on YouTube channel “Financial Journey,” as disclosed on Friday, Mullen Chief Executive Officer David Michery said he doesn’t believe the stock’s price reflects the true value of the company.
He said he expects manufacturing of the Mullen One class 1 last-mile delivery cargo vans to begin in August with “sellable” vehicles available in September.
For the Mullen Three class 3 trucks, with a gross vehicle Weight Rating (GVWR) of 11,000 pounds, Michery said manufacturing will start “right around the corner” in July, with sellable vehicles in August and September.
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By Joe Hoppe
Aston Martin Lagonda Global Holdings said Tuesday that it is on track to deliver on its 2024-25 financial targets and set out a range of new targets for 2027-28, and said it expects to invest around 2 billion pounds ($2.54 billion) over the next five years.
The luxury car maker said ahead of its capital markets day that it expects to meet its near-term targets of GBP2 billion in revenue and around GBP500 million in adjusted earnings before interest, taxes, depreciation and amortization by 2024-25. The company said it expects to achieve the targets in 2024, and with persistent momentum, is likely to exceed them in 2025.
The company also set out new midterm targets, aiming for revenue of around GBP2.5 billion, and an adjusted Ebitda of around GBP800 million for 2027-28, among others.
Aston Martin expects to invest GBP2 billion from 2023-27 into its long-term growth and the transition to electricification, comprising GBP1.8 billion of capital expenditure and around GBP200 million in technology access fees.
On Monday, Aston Martin said it had agreed preliminary terms for a deal with U.S. electric-vehicle maker Lucid Group, for the creation of ultra-luxury high-performance electric vehicles.
“With the heavy lifting now behind us, I have never been as confident in our future,” Executive Chairman Lawrence Stroll said.
Write to Joe Hoppe at joseph.hoppe@wsj.com
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The summer haze settling over stocks doesn’t look ready to budge Thursday, with the S&P 500 index
SPX,
in the throes of its longest losing streak since May.
On the bright side, the index is looking at a 6% gain for the June quarter, whose end is just a few days away.
In other corners of the market, the quarter has been less forgiving. Consumer staples, those things you can’t live without, have lost over 1%, perhaps reflecting the tougher economic times we are living in. Within that sector, though, is beer and one name that has indeed had a quartarius horriblis.
Anheuser-Busch InBev’s
ABI,
BUD,
U.S.-listed shares are down about 15%, as Bud Light sales have tumbled following consumer backlash to a social-media campaign featuring trans activist Dylan Mulvaney in April.
But our call of the day from Deutsche Bank says it’s time to buy this unloved stock, even if those Bud Light sales never recover. A team of analysts led by Mitch Collett have upgraded Anheuser-Busch shares to buy from hold and lifted their price target to €60 euros from €59 euros (they didn’t offer an ADR price target).
Recent underperformance of the stock “implies a permanent reduction in ABI’s U.S. business. Our proprietary survey data suggests these headwinds are likely to fade even if we do not expect the U.S. business ever to fully recover from its current challenges,” said Collett.
The analysts pointed to recent Nielson data that showed ABI’s U.S. business currently down 12%, with Bud Light sales off 24% and the rest of its portfolio down 7%. But an analysis of distribution data shows ABI itself isn’t “losing shelf presence” as sales velocity is the primary driver of the decline, which bodes well if consumer sentiment improves, said Deutsche Bank.
Those declines are about a 12% headwind to ABI’s annual net income, which is in line with European underperformance seen by the stock, added Collett and the team.
Read: Bud Light dethroned as top-selling beer by Modelo, as boycott cuts into sales
Deutsche Bank conducted its own survey that showed 24% of Bud Light consumers are no longer buying that brand, with 18% buying less, but 21% buying more and 37% buying the same amount. Those findings are largely consistent with Nielson;s, said the analysts.
Deutsche Bank’s own survey also showed that 42% of Bud Light drinkers expect to be buying Bud Light again in three to six months, versus 29% who see that as unlikely. And 50% expect that battered beer’s reputation will recover in time, versus 30% who says it won’t. “We believe this bodes well for the brand, recapturing some of its lost share,” said Collett and the team.
Analysts at RBC Capital also recently pushed back on the selloff for the stock, saying the hit to the shares and forecasts for the stock are “excessive,” as they don’t see Bud Light’s troubles hurting AB InBev outside the U.S.. They said AB InBev is a “nerve-racking buying opportunity.”
Ahead of Thursday’s open, U.S.-listed Bud shares were up about 1.3%, tracking gains from its Belgian shares.
U.S. stock index futures
ES00,
NQ00,
are drifting lower, with bond yields
TMUBMUSD02Y,
TMUBMUSD10Y,
on the rise and oil prices
CL.1,
also weaker. The Norwegian krone
USDNOK,
is up 1.5% against the dollar after the country’s central bank hiked interest rates 50 basis points. Switzerland also hiked rates, but the Swiss franc is steady
USDCHF,
The British pound
GBPUSD,
is higher after the Bank of England also hiked interest rates by 50 basis points. The Turkish lira was falling slightly after the central bank, under new management, hiked interest rate to 15% from 8.5%, against forecasts for a hike to 20%.
China markets were closed for a holiday, with losses elsewhere, such as Japan
NIK,
and Australia
XJO,
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.
Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill kicks off at 10 a.m. Eastern. On Wednesday, he said higher interest rates should be expected , but didn’t offer any clues on timing. U.S. weekly jobless benefit claims and current account data are due at 8:30 a.,m. ET, with leading indicators also at 10 a.m., alongside a speech from Cleveland Fed President Loretta Mester. Richmond Fed President Tom Barkin will speak at 4:30 p.m.
The Bank of England will announce an interest-rate decision at 7 a.m. ET and after worse-than-expected inflation data on Wednesday, a 50 basis-point hike hasn’t been ruled out.
Darden Restaurants
DRI,
will report ahead of the open, with Smith & Wesson
SWBI,
due after the close.
Tesla stock
TSLA,
is down 2% in premarket trading on the heels of the EV maker’s worst loss in two months.
Joining recent actions by other big stakeholders cashing in on big gains for Nvidia
NVDA,
a board member just sold $51 million in stock.
A giant drilling machine is moving Stockholm toward an emissions-free future
These were the top searched tickers on MarketWatch as of 6 a.m. :
| Ticker | Security name |
|
TSLA, |
Tesla |
|
MULN, |
Mullen Automotive |
|
NVDA, |
Nvidia |
|
AMC, |
AMC Entertainment |
|
APE, |
AMC Entertainment preferred holdings |
|
NIO, |
Nio |
|
PLTR, |
Palantir Technologies |
|
MANU, |
Manchester United |
|
SPCE, |
Virgin Galactic Holdings |
|
AAPL, |
Apple |
Are Elon Musk and Mark Zuckerberg ready for a cage match?
It’s summertime. Let your kids get bored.
Tokyo streets now offer the chance to snuggle an alpaca
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.
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Tesla Stock’s Winning Streak Ended. Wall Street Says Ford, GM, AI Made It All Happen.
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/ford-stock-analyst-buy-608f1c5c
Ford Motor
stock picked up an upgrade to Buy. Business execution is improving and Wall Street hasn’t caught up yet with what’s possible. That’s an opportunity.
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Mullen Automotive Inc. is attracting more meme-like attention from retail investors than traditional meme stock darlings AMC Entertainment Holdings Inc. and GameStop Corp., according to an influential meme-stock trader.
The electric vehicle company’s stock has become the “meme go to” for retail investors, said the trader, who goes by the name Obi. The trader participates in the WallStreetBets group on Reddit under the user name Major-Access2321.
Obi, whose Making Easy Money YouTube channel has over 28,000 subscribers, said that Mullen
MULN,
is generating plenty of buzz across social media. “When it comes to meme stock world on Reddit, Twitter and now even Facebook, groups are popping up calling themselves the ‘MULN army’,” he told MarketWatch.
The trader said that “less and less” people are speaking about AMC Entertainment
AMC,
and GameStop
GME,
“More and more people are speaking about MULN … they call it the meme that makes sense,” he added.
Mullen shares have seen a dramatic spike in trading volume recently, with average trading volume of 1.1 billion shares Wednesday and 547.8 million shares over the past five days, according to FactSet data. The stock’s 65-day average trading volume is 279 million shares. Mullen ended Wednesday’s session down 21.1% on the company’s announcement of a reverse stock split.
Related: Mullen Automotive shares plunge on reverse stock split announcement
AMC’s stock ended Wednesday’s session up 4.4% on trading volume of 25.1 million shares, below its 65-day average trading volume of 35.4 million shares. GameStop’s stock closed up 1.7% Wednesday on trading volume of 3.2 million shares, below its 65-day average of 4.8 million shares.
The stock was down 18% on Thursday.
The over outlook for the EV market looks bright, according to Obi. “Retail feel like they have something special here with MULN,” he added.
On Wednesday Mullen Automotive Inc. announced that it will conduct the 1-for-25 reverse stock split as the electric-vehicle company looks to maintain its Nasdaq listing.
The stock will continue to trade on the Nasdaq Capital Market under the existing symbol “MULN” and will begin trading on a split-adjusted basis at market open Thursday.
In March, Mullen announced that the Nasdaq had approved the company’s request for a 180-day extension to meet the $1 minimum-bid-price requirement. On Sept. 7, 2022, the Nasdaq notified the company that its stock was not compliant with rules as it had traded below $1 for more than 30 days.
Related: After TOP Financial’s surge, influential meme-stock trader looks for next big opportunity
Mullen’s stock soared last year after Amazon.com Inc.’s
AMZN,
delivery partner placed an order for up to 600 cargo vans, and the company has since teamed up with Rapid Response Defense Systems to supply vans for federal government business.
In December, Mullen announced that it is partnering with Loop Global Inc. to build public and private EV-charging technology, infrastructure and network solutions. Earlier this year, Mullen joined forces with Qiantu Motors to launch what they called an EV supercar.
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Ford Motor Co. late Tuesday swung to a quarterly profit and reported a 20% rise in sales, but the stock fell 1.4% in the extended session as Wall Street seemed to question Ford’s unchanged guidance.
Ford F “delivered a solid quarter while making real progress on our Ford+ growth plan,” Chief Executive Jim Farley said in a call with analysts following results.
“I…
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The stock of TOP Financial Group Ltd., a Hong Kong-based broker that went public last year, soared more than 890% Friday to a fresh record high with no apparent news to drive the move.
Volume of 2.4 million shares traded in the first two hours of trading far exceeded the average daily volume of 872,000 over the last 65 days. The stock TOP was halted for volatility several times in early trade.
TOP…
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The stock of TOP Financial Group Ltd., a Hong Kong-based broker that went public last year, soared more than 890% Friday to a fresh record high with no apparent news to drive the move.
Volume of 5.5 million shares traded by early afternoon far exceeded the average daily volume of 872,000 over the last 65 days. The stock TOP was halted for volatility multiple times during the session.
The…
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The Biden administration, pushing for more U.S. manufacturing, has issued its updated list of all-electric and gas-electric hybrid vehicles that qualify for the full $7,500 tax credit, and those that can earn at least a partial sweetener for buyers.
With the update, 16 models are now eligible for a full or partial tax credit, based on new thresholds that require a certain percentage of the battery parts and the minerals used in those batteries to come from North America, meaning the U.S., or a country with select trade agreements with the U.S.
The total is down from 25 electric and plug-in models previously eligible for a U.S. tax break, which were first introduced about 10 years ago.
The revision limits the selection to vehicles built by four car companies: Tesla Inc.
TSLA,
Ford Motor Co.
F,
General Motors Co.
GM,
and Stellantis NV
STLA,
which owns Jeep and Chrysler.
See the full list.
The government site also advises on tax incentives for used vehicles and leased vehicles.
For buyers to claim the full $7,500 tax credit, a percentage of the pre-determined battery parts must be made in North America and a percentage of critical minerals sourced in the U.S. or from certain trade-friendly countries. A partial $3,750 credit is available for meeting one of these two battery-sourcing requirements.
Not a single electric model from a foreign brand is eligible for the subsidy as revised. And EVs from startups, such as passenger- and commercial-truck maker Rivian Automotive Inc.
RIVN,
and luxury brand Lucid Group Inc.
LCID,
also missed making the list. That’s largely because their vehicles are too expensive for the price contingencies that inform which autos qualify. Income levels of buyers are also a consideration.
Still, the new rules make for certain immediate winners over others.
Nearly all of GM’s new EV models are eligible for the full $7,500 tax credit. Six Ford electric and plug-in hybrid models also qualify for a partial or full tax credit, including the Mustang Mach-E and F-150 Lightning.
Among Tesla’s models, some entry-level Model 3 sedans will get a $3,750 credit. That is because the car uses battery cells made in China. Higher-end Model 3s and all its Model Y configurations qualify for the full $7,500 credit.
Tesla has been cutting its retail prices, a move to boost sales and bring some offerings in line with the tax breaks. And analysts say the maker likely isn’t done cutting prices.
The tax credits made a big splash when they were included in 2022’s Inflation Reduction Act, the broad spending bill that observers labeled the biggest pro-climate action by an administration to date. But Biden’s pro-America stance soon came in conflict with the heart of the existing EV market, much of which is sourced abroad.
Read: Biden adds more EV charging across U.S., with pledges from Uber, Walmart, PG&E and others
The latest changes, which are intended to attract auto manufacturers into building domestically, apply to vehicles delivered to customers starting Tuesday. Several overseas makers, including Hyundai and Honda, have started to build battery plants in the U.S.
Other actions are intended to push EVs as well. The Environmental Protection Agency last week proposed its toughest restrictions ever on tailpipe emissions, a target that can likely only be met by turning out more EVs from assembly lines. The new standards aim for two-thirds of U.S. car sales to be electric by 2032.
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Be careful what you wish for. U.S. job openings dropped below 10 million, a symbolic sign that the Federal Reserve’s efforts to combat inflation by sapping labor-market demand was working — and U.S. stocks promptly fell. Perhaps the bigger issue is that investors were not willing to push stocks out of the 3,800 to 4,200 range the S&P 500
SPX,
has been trading in for months.
It might not be the most obvious time to be discussing a commodity supercycle, with recession talk growing, but then that’s what makes this call more interesting. Strategists at Wells Fargo investment Institute argue it’s year three of a commodity supercycle, which they say has plenty more room to run.
John LaForge, head of real asset strategy, and Mason Mendez, investment strategy analyst, say commodities are like black holes, in that escaping the gravity of a supercycle is difficult for any individual commodity. They point to this chart, looking at commodity momentum since 1800, plotted in 10-year moving averages, which shows that food, energy and the commodity complex as a whole tend to follow each other around.
Right now nearly all the signs, both technical and fundamental, point to a commodity bull market, they say. The early signs are mostly shifting prices and technical indicators, and the latter signs are more fundamental in nature, like restrained supplies. “The bottom line is that the key early technical indicators are confirming to us that a new supercycle likely began in 2020.”
The analysts went further into depth on what they call washed-out sentiment. They say the process goes something like this: near the end of a commodity bull supercycle, prices go so high that oversupplies become rampant and need to be worked off, which results in investment stopping to flow into production. They say that in both corn
C00,
and gold
GC00,
— not commodities with much in common — supply growth rates have turned negative in recent years. Both showed similar conditions at the start of the last supercycle, in 1999.
They advise using commodities as portfolio diversifiers, which certainly would have helped last year, when both stocks and bonds fell but the Bloomberg commodity index rose nearly 16%. They highlight commodity prices typically move differently than stocks or bonds over the long run. And they say that supercycles have historically lasted a decade or longer, and the shortest commodity bull market on record was nine years.
One caveat: the speed of technology advances. Sometimes technology can help fuel demand, but conversely, to the extent technology can make commodities easier to extract, it can also buoy supplies. The obvious example here, not pointed out in the note, is the shale-oil revolution. There’s an interesting article in The Economist (subscription required), how copper has yet to be the beneficiary of a technology boost.
U.S. stock futures
ES00,
NQ00,
edged lower. Oil prices
CL.1,
fell but held over $80 per barrel. The yield on the 10-year Treasury
TMUBMUSD10Y,
turned lower after the latest jobs data.
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.
ADP reported a slowdown in private-payrolls growth to 145,000 jobs in March, as well as a slowing pace of pay growth. Shortly after the open comes the the Institute for Supply Management’s services index. Cleveland Fed President Loretta Mester said interest rates would need to be increased “somewhat” from here.
Overseas, New Zealand’s central bank made a larger-than-expected 50 basis point rate hike, while a joint forecast of Germany’s leading institutes upgraded its view on the eurozone’s largest economy, now expecting a 0.3% advance.
Walmart
WMT,
forecast earnings in a range of $5.90 to $6.05 per share for its fiscal year, below the FactSet-compiled analyst estimate of $6.11.
Johnson & Johnson
JNJ,
proposed to pay up to $8.9 billion over 25 years to settle claims connected with cosmetic-talc litigation.
Alphabet’s
GOOGL,
Google says its chips are faster and more power efficient than comparable chips from Nvidia
NVDA,
Western Alliance Bancorp
WAL,
shares fell in premarket trade after the regional lender detailed the latest losses in its portfolio of loans and securities.
Brandon Johnson was elected mayor of Chicago, the country’s third-largest city. Former President Donald Trump was defiant in a speech to supporters after his indictment.
A popular Fed program is draining funds from the banking system.
Instant videos could be the next leap in artificial-intelligence technology.
OpenAI, the tech company backed by Microsoft
MSFT,
is facing what is believed to be its first defamation lawsuit over a claim by its ChatGPT chatbot that an Australian mayor served time in prison for bribery.
These were the most active stock-market tickers as of 6 a.m. Eastern.
| Ticker | Security name |
|
TSLA, |
Tesla |
|
AMC, |
AMC Entertainment |
|
BBBY, |
Bed Bath & Beyond |
|
GME, |
GameStop |
|
BUD, |
Anheuser-Busch InBev |
|
APE, |
AMC Entertainment preferreds |
|
MULN, |
Mullen Automotive |
|
NIO, |
Nio |
|
AAPL, |
Apple |
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AI, |
C3.ai |
Sure, higher gasoline prices naturally drive demand for electric vehicles. But at what point do high electricity prices make it more cost-effective to buy old gas guzzlers? This chart from Barclays breaks it down — roughly, 10 cents per kilowatt hour equates to $1 per gallon. Right now it’s cheaper to fill a car at the pump than recharge at peak hours.
Easter means the annual production of a 15,000-egg omelette.
This man was successful in his marriage proposal, at the cost of a one-year ban from Dodger Stadium.
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Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.
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Stock futures fluctuated Tuesday following a mixed session on Wall Street that saw the
Dow Jones Industrial Average
and
S&P 500
rise after a spike in oil prices.
These stocks were poised to make moves Tuesday:
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