The futures were lower after a dreadful trading day on Thursday that saw all the major indexes pummeled by 1% or more. Once again the culprit was inflation data from January that came in hotter than expected. The producer price index jumped 0.7%, versus expectations for a 0.4% increase, and the core (which excludes food and energy) jumped 0.5%, versus 0.3%. In addition, the Philadelphia Fed’s manufacturing index dropped to −24.3, well below the −7.8 estimate.
With only one more inflation data point before the Federal Reserve meets in March, you can bet that Chair Powell and crew likely will be planning on three more 25-basis-point rate hikes, in March, May and July. That would get the funds rate to 5.25% to 5.50%, and there is no guarantee that will be enough to tamp inflation down to the 2% target level, which looks increasingly unlikely.
Treasury yields across the curve jumped higher again Thursday on the inflation data and the strong retail sales print earlier in the week. The 10-year note closed the day at 3.84%, while the two-year paper closed at 4.65% keeping the inversion between the two securities at the widest level in 40 years. Bond traders view the inversion as a precursor to recession.
Brent and West Texas Intermediate crude both closed lower on the day, despite demand estimates from OPEC and the U.S. Energy Information Administration that were higher than expected. Natural gas also closed down almost 3%, as a nasty bout of selling over the past week followed through on Thursday. Gold closed modestly higher, while Bitcoin continued its short squeeze move higher, closing up almost 1% at $24,541.
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 Friday, February 17, 2023.
Activision Blizzard Inc. (NASDAQ: ATVI): Deutsche Bank upgraded the video game giant to Buy from Hold and raised its $83 price target to $90. The consensus across is $91.43. The final trade for Thursday came in at $77.51.
Analog Devices Inc. (NYSE: ADI): Goldman Sachs raised its $186 target price on the Buy-rated stock to $210. The consensus target is $206.69. The stock closed on Thursday at $193.83.
Avient Corp. (NYSE: AVNT): Oppenheimer’s upgrade was from Perform to Outperform with a $50 target price. The consensus target is $45.95. Thursday’s close was at $42.07.
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Baker Hughes Co. (NASDAQ: BKR): Piper Sandler upgraded the oilfield services giant to Overweight from Neutral. It also raised its $34 target price to $43, well above the $36.95 consensus target. Thursday’s closing print was $32.26.
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