The futures were higher to start the first full trading week for 2023, after last week’s holiday-shortened week. All the major indexes closed higher Friday on a huge risk-off rally day after the December nonfarm payrolls came in above estimates at 223,000, but below the “whisper number” of 240,000. In addition, the figures for both October and November payrolls were revised lower and wage growth cooled.
While the lower-than-expected print Friday was probably somewhat encouraging, the likelihood of the “higher for longer” mantra at the Federal Reserve will stay in place, and most think the increase of the federal funds rate at the end of the month will be 50 basis points, then a final 25 basis point hike in March to get to the terminal rate of 5.00% to 5.25%. All eyes this week will be on the December consumer price index data early Thursday.
Treasury yields plummeted on Friday, which was another huge tailwind for the equity markets. The yield on the five-year note dropped a stunning 20 basis points, while the 10-year dropped a remarkable 15 basis points. The yield on the two-year paper also dropped 20 basis points to close at 4.26%. While narrowing the inversion, it still suggests that recession is on the way.
Brent and West Texas Intermediate crude basically were unchanged on Friday, after surging higher initially when trading opened. Though recession worries and demand fears have kept a lid on benchmark pricing for months, some industry experts feel that if China’s economy fully recovers and the Covid restrictions are loosened or removed, oil could surge as high as $140 per barrel this year. Natural gas was flat after a horrible week. Gold and Bitcoin closed higher on the day.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Monday, January 9, 2023.
Bank of America Corp. (NYSE: BAC): Deutsche Bank downgraded the stock to Hold from Buy and cut its $45 price target to $36. The consensus target is $40.49. The stock closed last Friday at $34.41.
Bloom Energy Corp. (NYSE: BE): Wells Fargo cut its Overweight rating to Equal Weight and lowered its $27 price target to $22. The consensus target is $29.05. The shares ended Friday’s session at $19.03.
Boot Barn Holdings Inc. (NYSE: BOOT): BofA Securities started coverage with a Buy rating and an $85 price objective. The consensus target is $89.70. Friday’s close was at $61.99.
Chevron Corp. (NYSE: CVX): Though BofA Securities downgraded the shares to Neutral from Buy, its $190 price target ticked up to $191. The consensus target is $192.41. Friday’s close was at $176.56.
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