Stock Markets
Wall St gains ground after Fed-driven selloff; Big Tech earnings in focus
© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 31, 2024. REUTERS/Brendan McDermid/File Photo
By Ankika Biswas and Johann M Cherian
(Reuters) -Wall Street bounced back on Thursday, after a selloff in the previous session as the U.S. Federal Reserve dashed hopes for early interest rate cuts, with focus moving to Big Tech earnings due later in the day.
The and the Nasdaq on Wednesday notched their biggest one-day percentage declines since September and October, respectively, after the Fed reminded markets of its undeterred focus on battling inflation, smashing speculations of policy easing kicking off in March.
Consumer staples shares led gains with a 1.6% rise among the 11 major S&P 500 sectors, boosted by a 3.3% jump in Altria Group (NYSE:) after the tobacco giant posted a fourth-quarter profit beat and authorized a new share buyback plan.
Communication services shares gained 1.1%, while the financial sector was the only one in the red and down 0.4%.
A selloff in shares of U.S. regional banks continued on Thursday, with New York Community Bancorp (NYSE:) down 10.7%.
The KBW Regional Banking index fell 3.7%, on track for its steepest two-day decline since March last year.
On the data front, weekly jobless claims rose to a seasonally adjusted 224,000, higher than the expected 212,000, while a report showed job cut announcements in January rose to a 10-month high.
Separately, U.S. manufacturing stabilized in January amid a rebound in new orders, but inflation at the factory gate picked up.
“The Fed needed more time to explore incoming data and they didn’t feel the need to be in a hurry to cut. I was never expecting March,” said Todd Morgan, chairman of Bel Air Investment Advisors.
Focus moves back to Big Tech earnings that would shed light on whether megacap stocks can sustain their recent rally, fueled by the hype around artificial intelligence and hopes of early rate cuts.
Apple (NASDAQ:)’s iPhone sales are expected to have seen the best growth in five quarters, but analysts see a tough year for the company in China, while investors will monitor whether Amazon.com (NASDAQ:) can cash in on its delivery heft by boosting fee revenue from its “Buy With Prime” service.
Meta Platforms (NASDAQ:) is likely to see a muted impact from generative AI on its advertising business.
The three tech giants, up between 0.9% and 1.6%, will report earnings after the closing bell, a day after investors punished Alphabet (NASDAQ:) and Microsoft (NASDAQ:) on mounting costs of developing generative AI-powered products.
At 12:10 p.m. ET, the was up 225.17 points, or 0.59%, at 38,375.47, the S&P 500 was up 40.29 points, or 0.83%, at 4,885.94, and the was up 137.74 points, or 0.91%, at 15,301.75.
Merck climbed 3.5% following the drug maker’s upbeat fourth-quarter results, while Dow component Honeywell (NASDAQ:) dropped 3.1% after the diversified industrial firm forecast a weak first-quarter profit.
Qualcomm (NASDAQ:) fell 3.9% on concerns over Android sales in China.
Advancing issues outnumbered decliners for a 2.32-to-1 ratio on the NYSE and a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and five new lows, while the Nasdaq recorded 51 new highs and 96 new lows.
Stock Markets
Billionaire hedge fund manager Loeb shifts portfolio, eyes possible Republican U.S. election wins
By Svea Herbst-Bayliss
NEW YORK (Reuters) – Billionaire investor Daniel Loeb adjusted his portfolio to capture a potential boom in corporate activity after the Nov. 5 U.S. election where he expects the Republican Party will chalk up wins.
Loeb believes the Republican presidential candidate, Donald Trump, is more likely to win the White House and that his party’s policies could help boost financial markets.
“The likelihood of a Republican victory in the White House has increased, which would have a positive impact on certain sectors and the market overall,” Loeb wrote to investors in his hedge fund Third Point on Thursday. Reuters obtained a copy of the letter.
Third Point has made stock and option purchases and increased positions that “could benefit from such a scenario” while also shifting the “portfolio away from companies that will not,” the letter said. He did not elaborate on what trades the firm has been making.
A Reuters/Ipsos poll this week found that Democratic Vice President Kamala Harris held a marginal lead of three percentage points over Trump as the two stayed locked in a tight race.
Even if Trump loses, Loeb expects the Republican Party will establish a majority in the U.S. Senate which he expects can limit the “economic downside of a “Blue Sweep” by the Democratic party.
Many large investors have expressed concern about the Democrats’ economic and fiscal proposals and Loeb wrote that the party’s plans could result in “crushing taxes,” and “stifling regulations” that could hurt growth.
Wall Street has long held out for a rebound in mergers and acquisitions activity and Loeb wrote that fewer regulations and the elimination of the current administration’s “activist antitrust stance” will “unleash productivity and a wave of corporate activity.”
Since January, Loeb’s flagship fund has returned roughly 14% with the broader stock market index gaining about 23.6%.
Turning to the broader economy, Loeb said that interest rates still need to come down, at a time there is no evidence of a looming recession and as inflation is slowing.
But he also thinks markets should remain underpinned by healthy consumer spending and active levels of individual investing.
In a robust display of market confidence, New York Mortgage (NASDAQ:) Trust Inc Preferred (NYMTM) stock has soared to a 52-week high, reaching a price level of $24.55. This milestone underscores a significant period of growth for the company, which has witnessed an impressive 1-year change with an increase of 13.71%. Investors have shown increased interest in NYMTM, rallying behind the stock as it climbs to new heights, reflecting a strong performance in the face of market dynamics. The 52-week high serves as a testament to the company’s resilience and the positive sentiment surrounding its financial prospects.
InvestingPro Insights
New York Mortgage Trust Inc Preferred (NYMTM) has reached a significant milestone with its stock price hitting a 52-week high. This achievement is particularly noteworthy given the company’s current financial landscape. According to InvestingPro data, NYMTM boasts a substantial dividend yield of 8.07%, which aligns with one of the InvestingPro Tips highlighting that the company “pays a significant dividend to shareholders.” This attractive yield may be a key factor driving investor interest and contributing to the stock’s recent performance.
Despite the stock’s strong showing, it’s important to note that NYMTM faces some challenges. The company’s revenue for the last twelve months stands at $151.99 million, with a concerning operating income margin of -32.06%. This negative margin correlates with another InvestingPro Tip indicating that “analysts do not anticipate the company will be profitable this year.”
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide valuable insights into NYMTM’s financial health and future prospects. These additional tips could be particularly useful for understanding the stock’s potential trajectory beyond its current 52-week high.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
In a recent transaction, Jill Bourland, a director at Isabella Bank Corp (OTC:ISBA), acquired additional shares of the company’s common stock. The transaction, dated October 16, 2024, involved the purchase of 9.5238 shares at a price of $21 per share, totaling approximately $199.
Following this acquisition, Bourland’s total direct ownership in Isabella Bank increased to 4,872.5363 shares. This figure includes shares acquired through the company’s quarterly dividend reinvestment program, as noted in the filing.
Isabella Bank Corp, headquartered in Mount Pleasant, Michigan, operates as a state commercial bank. The bank continues to focus on providing financial services to its local community and beyond.
In other recent news, Isabella Bank Corp revealed a potential loss of around $1.6 million due to negative balances in deposit accounts linked to a single customer. The total exposure to this customer, including loans and lines of credit, amounts to $4.0 million. Piper Sandler maintained a Neutral rating on the bank’s shares following this disclosure. The bank also declared a third-quarter cash dividend of $0.28 per common share. In addition, Piper Sandler raised its price target for Isabella Bank from $20.00 to $22.00 and increased its earnings per share estimates for 2024 and 2025 to $1.80 and $2.10, respectively. These recent developments underscore the bank’s commitment to enhancing shareholder value and its resilience in navigating challenging situations.
InvestingPro Insights
As Jill Bourland increases her stake in Isabella Bank Corp (OTC:ISBA), investors may find additional context in the company’s financial metrics and market performance. According to InvestingPro data, Isabella Bank currently boasts a market capitalization of $158.11 million and trades at a price-to-earnings ratio of 9.81, suggesting a potentially attractive valuation relative to earnings.
The bank’s dividend policy stands out as a key strength. An InvestingPro Tip highlights that Isabella Bank has maintained dividend payments for 17 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by the current dividend yield of 5.27%, which may be particularly appealing to income-focused investors in the current market environment.
Despite a challenging economic backdrop, Isabella Bank remains profitable, with an operating income margin of 26.1% for the last twelve months as of Q2 2024. However, another InvestingPro Tip indicates that net income is expected to drop this year, which investors should monitor closely.
It’s worth noting that Isabella Bank’s stock is trading near its 52-week high, with the current price at 95.51% of that peak. This performance aligns with the company’s recent positive price returns, including a 20.91% total return over the past six months.
For investors seeking a deeper understanding of Isabella Bank’s financial health and market position, InvestingPro offers additional insights with over 10 more tips available for this stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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