The futures traded lower after attempts to carry over the massive Friday rally fell somewhat short to start the week. The major indexes closed mixed on Monday, with the Nasdaq closing up at an eight-month high at 12,256.
Investors will now turn their attention to the consumer price index report for April, which will be released early Wednesday. Wall Street economists are predicting a 0.3% month-over-month increase in inflation and a 5.5% year-over-year gain. Continued high inflation numbers, combined with the strong nonfarm-payroll print from last Friday, will push expectations up for yet another 25-basis-point increase in the federal funds rate when the Federal Open Market Committee meets June 13 and 14.
Treasury yields moved higher across the curve Monday, following up on the big selling in the Treasury complex last Friday. Bond traders will be closely watching the inflation numbers, in addition to hearing the results of the expected meeting Tuesday between President Biden and Speaker McCarthy and Senate leadership to address the impending debt ceiling limit crisis. The government is expected to run out of money on June 1. The benchmark 10-year note closed at 3.52%, while the two-year closed at 4%, keeping their inversion in place.
Brent and West Texas Intermediate (WTI) crude followed through on Friday with strong gains, both closing up well over 2%, which, while solid, did not cover last week’s 7% drop. Top analysts chalked up the strength in crude Monday to the lowest pricing since the fourth quarter of 2021 and the fact that oil has traded down for three straight weeks. WTI finished the day at $73.16, while Brent closed at $76.62. Goldman Sachs sees Brent at $95 by the end of 2023 and $100 in 2024. Natural gas had a strong day as well, closing up almost 5% at $2.24.
Gold was lower on Monday as the bullion closed modestly lower at $2,028. Bitcoin was the big loser, closing down over 3.5% at $27,468, after it was reported that Binance halted crypto trading for a few hours.
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 Tuesday, May 9, 2023.
Albemarle Corp. (NYSE: ALB): BofA Securities upgraded the stock to Neutral from Underperform. It also raised its $195 price target to $200. The consensus target is up at $264. The stock closed on Monday at $185.88, which was up almost 4% for the day.
Alcoa Corp. (NYSE: AA): J.P. Morgan started coverage with an Overweight rating and a $54 target price. The consensus target is $49.78, and shares closed most recently at $36.82.
American Airlines Group Inc. (NASDAQ: AAL): J.P. Morgan’s upgrade to Overweight from Neutral included a price target bump to $29 from $26. The consensus target is just $16.85. Monday’s $14.36 close was up almost 4% for the day after the upgrade.
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