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Wall Street comments on Microsoft, Activision Blizzard, Twitter, and other stocks

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The latest commentary on Microsoft, Activision Blizzard, Twitter, Meta, and some other stocks, straight from Wall Street. What are the best stocks to buy now? 

Wells Fargo lowered its target price for Microsoft stock to $350 from $400, maintaining an “above market” rating

The bank acknowledges that the situation in Q4 is certainly challenging, as key early indicators of a recession are becoming increasingly clear. While these macro issues could put various sub-segments of Microsoft’s business at risk and stifle some of the impressive pace of recent growth, Wells Fargo does not believe the impact of the current climate changes any element of Microsoft’s underlying value proposition or competitive positioning. 

Moreover, if the market downturn leads to the need to develop IT spending at businesses around the world, it sees Microsoft as one of the best companies to gain additional stocks today.

Activision Blizzard Inc. stocks today

Activision Blizzard Inc. stocks today are trading about 17% below the agreed-upon takeover price for Microsoft Corp. amid fears that regulators could block the deal. but MoffettNathanson sees the spread as an opportunity. The firm upgraded Activision’s stock to “above market” from “at market,” writing about the potential benefits on arbitrage related to the deal, though it doesn’t believe the merger will close immediately.

Jefferies commented on Twitter’s disappointing results 

Jefferies commented on Twitter (NYSE:TWTR) disappointing results. The firm noted advertising revenue growth of only 2% while costs continued to rise. Jefferies blamed this on a weakening advertising market. 

The firm believes that TWTR is interested in negotiating a deal with Ilon Musk below $54.20, given that Musk could incur significant costs if he drags it out. Jefferies believes that if Musk appeals the court’s decision (which will likely happen in late ’22), it could take another 3-4 years to fully resolve the case. If the case drags on, TWTR’s valuation could be further reduced, further forcing the company to settle for a lower price.

Wall Street stocks today: Raymond James upgraded Travelers’ rating 

Raymond James upgraded Travelers (NYSE:TRV) stock from neutral to “actively buy” as it stands a good chance of outperforming expectations on a relative basis. Specifically, the firm expects Travelers’ business insurance segment contract renewal prices to exceed loss costs in 11 of the last 13 quarters, combined with improved risk selection tools, to further improve underlying margins.

Wall Street stocks to buy: Mizuho lowered its target price for Meta

Mizuho lowered its target price for Meta Platforms* Inc. (META) stocks today to $250 from $325, maintaining a “buy” rating, as a review of leading ad agencies showed that seasonal spending growth in Q2 was about one-third of normal levels. The firm noted that the shift in revenue mix toward Instagram Reels, as well as privacy issues in iOS, are also hurdles.

Morgan Stanley

Morgan Stanley called jd.com (JD) a “catalyst-driven idea.” The bank thinks the catalyst could be a higher-than-expected revenue growth forecast when jd.com next reports earnings in August.

Morgan Stanley downgraded Snap (NYSE: SNAP) stock from “above market” immediately to “below market,” and its target price from $17 to $8

The bank cited concerns about the company’s revenue and earnings outlook, given disappointing Q2 results, Q3 trends and some specific issues. The lowered target reflects a 12% and 26% decline in revenue in 2022/2023, respectively. The bank also noted the growing threat of competition, mainly coming from TikTok. 


Forex

Dollar hands back gains after Israeli strike; weekly gains likely

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Investing.com – The U.S. dollar handed back early gains Wednesday in volatile action, as traders digested the reported Israeli strikes against Iranian sites and the impact on risk appetite.

At 05:25 ET (09:25 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 105.870, having earlier climbed as high as 106.190, just marginally below the five-month peak of 106.51 seen earlier in the week. 

Dollar hands back gains after Israeli strikes

The safe-haven dollar jumped higher earlier Friday following reports that Israel attacked Iran in an escalation of conflict in the Middle East, just a few days after Iran launched a drone strike on Israel.

This move marks a potential escalation in the Iran-Israel conflict, and could herald worsening geopolitical conditions in the Middle East, especially after initial reports showed strikes near locations holding Iranian nuclear facilities.

However, these gains have since dissipated after Iranian news agencies said there was no damage to the facilities, and the strikes have been seen to be rather limited in size. 

That said, the dollar is still likely to post a positive week as strong U.S. economic data and persistent inflation have prompted investors to drastically rethink the chances of the Federal Reserve cutting rates any time soon. 

A slew of hawkish comments from Fed officials have also helped the greenback, as evidenced by Atlanta Federal Reserve Bank President on Thursday saying that if inflation does not continue to move toward the U.S. central bank’s 2% goal, central bankers would need to consider an interest-rate hike.     

Sterling edges higher despite weak UK retail sales

In Europe, rose 0.1% to 1.0648, after fell less than expected in March, decreasing by 2.9% on the year, compared with a forecast 3.2% decline.

Additionally, Reuters reported the German government will raise its growth forecast for the German economy this year to 0.3%, from a previous forecast of 0.2%.

However, any euro strength may well be temporary with the now expected to cut interest rates before the Federal Reserve in an attempt to give the region’s struggling economies a boost.

climbed 0.1% higher to 1.2445, trading just above five-month lows despite British stagnating in March.

Sales volumes showed no growth last month, below the expected 0.3% increase, representing the first time that they have not grown in monthly terms since December.

Weakness in retail spending makes it more likely the will start cutting interest rates in the summer, probably before the Federal Reserve.

Yen boosted by safe-haven status

In Asia, traded 0.1% lower at 154.47, with the safe-haven yen boosted by the elevated tensions in the Middle East. 

The Japanese currency remained near 34-year lows, prompting caution over possible government intervention.

edged 0.1% higher to 7.2417, with the yuan near five-month highs amid uncertainty over the Chinese economy.

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Japan’s finance minister gives fresh warning on excessive yen moves

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WASHINGTON (Reuters) – Japanese Finance Minister Shunichi Suzuki said on Friday authorities would take appropriate action against excessive currency market moves, repeating his warning to investors against pushing down the yen too much.

There has been growing market interest in the timing and pace of a pivot by the U.S. and European central banks toward less restrictive monetary policy, Suzuki said.

“Uncertainty and market speculation over these developments have heightened volatility in financial markets, including foreign exchange markets,” Suzuki said in a statement to the International Monetary Fund’s steering committee.

“It is important that foreign exchange rates move stably, reflecting fundamentals, and excessive volatility is not desirable. We would take appropriate actions against excessive movements,” he said during the spring meetings of the International Monetary Fund and World Bank in Washington.

© Reuters. FILE PHOTO: Japanese Finance Minister Shunichi Suzuki speaks during an event about expanding health coverage for all during the IMF and World Bank’s 2024 annual Spring Meetings in Washington, U.S., April 18, 2024. REUTERS/Ken Cedeno/File Photo

A broad dollar rally driven by receding market expectations of a near-term U.S. interest rate cut has recently pushed the yen to a 34-year low, heightening the chance of currency intervention by Japanese authorities.

The U.S., Japan and South Korea agreed to “consult closely” on foreign exchange markets in their first trilateral finance dialogue on Wednesday, acknowledging concerns from Tokyo and Seoul over their currencies’ recent sharp declines.

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BofA lowers EURUSD year-end forecast to 1.12 amid Fed policy shift

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On Friday, Bank of America (BofA) revised its forecast for the currency pair, now expecting it to reach 1.12 by the end of the year, down from the previously anticipated 1.15.

The adjustment follows a change in the Federal Reserve’s interest rate policy, with the first cut now expected in December rather than June. BofA cited potential risks from the absence of Fed cuts and fluctuating oil prices.

The firm also highlighted the impact of escalating geopolitical tensions, rising oil prices, and persistently high U.S. interest rates on emerging markets (EM). These factors have been identified as significant challenges, prompting BofA to revise its forecasts for the exchange rate as well.

The bank now predicts the USD/JPY will climb to 155 by the end of 2024 and 147 by the end of 2025, which is an upward revision based on the latest Federal Reserve forecast adjustments.

BofA has also shifted its stance on the USD/JPY from a slightly short position to buying, indicating a change in their trading strategy. The firm noted that most of their positions are light, suggesting a cautious approach to currency trading at the moment.

In the broader context of currency market dynamics, BofA stated that a stronger U.S. dollar would likely depend more on real money movements rather than speculative trades. This perspective takes into account the actual flow of funds by institutional investors as opposed to short-term bets made by traders.

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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