BofA Raises S&P 500 Year-End Target to Highest on Wall Street
37 minutes ago
Bank of America’s betting that the good times are ripe to continue for the S&P 500—in the long run, anyway.
The bank on Sunday raised its year-end target for the index to 5,400 from 5000, implying a 5% upside from Friday’s close.
The new target makes BofA one of the most bullish major international firms on Wall Street. Its target matches that of UBS, which became the Street’s most optimistic firm when raised its target last month.
BofA’s U.S. Equity and Quantitative Strategy lead Savita Subramanian said in a note that swings in interest rates and inflation haven’t hurt margins, with earnings surprising to the upside. Companies, she said, have shifted their focus to productivity, and as a result, there is an upside to the firm’s 2024 EPS forecast of $235.
In support of BofA’s bullish thesis is the observation that pension fund allocations to public equities are still at 20-year lows. Additionally, the euphoria that typically signals the end of a bull market, analysts say, is currently “thematic and secular.” The bull market has room to “broaden beyond” the themes of artificial intelligence and weight-loss drugs.
There are caveats, however. A small pullback is likely “after four months with no meaningful drop.” Plus, Subramanian wrote, “our bullish conviction has cooled since publishing our 2024 Outlook [in November] amid improving sentiment across Wall Street.”
JetBlue, Spirit Airlines Terminate $3.8 Billion Merger, Spirit Stock Skids
1 hr 20 min ago
JetBlue (JBLU) and Spirit Airlines (SAVE) have called off their $3.8 billion proposed merger after regulators blocked the deal.
Spirit Airlines stock fell 15% Monday morning, while shares in JetBlue were trading almost 4% higher.
The deal, announced in July 2022, would have created the fifth-largest carrier in the United States and that brought antitrust scrutiny from regulators. A federal judge ruled against the airlines at the beginning of this year.
While the companies said they still believed in the merits of the transaction, they are giving up on the merger since they won’t be able to acquire the necessary approvals by the July 2024 deadline. JetBlue will pay Spirit $69 million to settle the termination of the deal.
With Monday’s decline, Spirit Airlines shares have lost more than 70% of their value since the merger was first announced.
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Super Micro Computer Stock Jumps on S&P 500 Inclusion
2 hr 7 min ago
Shares in Super Micro Computer (SMCI) jumped more than 20% in premarket trading Monday following an announcement that it will be included in the large-cap S&P 500 Index.
Super Micro and Deckers Outdoor Corp. (DECK) will nudge out whitegoods maker Whirlpool (WHR) and regional bank Zions Bancorporation (ZION) from the blue-chip index, with the changes taking effect before the start of trading on March 18, according to S&P Global.
The San Jose, California company, whose stock price has more than tripled since the start of the year, has seen its market capitalization surge to more than $50 billion amid an AI-fueled buying frenzy.
Super Micro shares have remained in a steady uptrend since the 50-week moving average crossed above the 200-week moving average in May 2020 to generate a golden cross buy signal. Impressively, the few retracements the stock had in 2023 didn’t manage to reach the 50-week moving average, highlighting the uptrend’s strong momentum.
More recently, gains have accelerated on above-average volume after the price broke above a period of four-month consolidation in the form of an ascending triangle—a chart pattern that suggests a continuation of the current longer-term trend. If the stock sees a wave of profit-taking, monitor the $300 to $350 level where a pullback may find support from the triangle’s top trendline and rising 50-week moving average.
Macy’s Buyout Offer Jumps to $6.6B as Arkhouse and Brigade Raise Their Bid
2 hr 50 min ago
Macy’s (M) shares surged 16% in early trading Monday after the investor group whose previous offer for the embattled department-store chain was rejected raised its bid by nearly $1 billion.
Real estate-focused Arkhouse Management and asset manager Brigade Capital Management said Sunday that they are now offering to acquire the Macy’s stock they don’t already own for $24 a share, or $6.6 billion—up from December’s $21-per-share offer that valued the retailer at around $5.8 billion and 33% higher than the shares’ $18.01 close on Friday.
Arkhouse remains “open to increasing the purchase price further subject to the customary due diligence,” Managing Partners Gavriel Kahane and Jonathon Blackwell said in a statement. Outlining financing plans, Kahane and Blackwell said they were backed by investors Fortress and OneIM.
Macy’s board said it will review and evaluate the latest proposal.
Stocks Making the Biggest Move Premarket
3 hr 30 min ago
Gains:
- Super Micro Computer Inc. (SMCI): Shares of the data center company jumped 16% after S&P Dow Jones Indices said it would be added to the S&P 500 effective March 18. Shoe company Deckers Outdoor Corp. (DECK), which was also named to the index, rose about 5%.
- Macy’s Inc. (M): Shares climbed more than 14% after investors Arkhouse Management and Brigade Capital, who offered to buy the department store for $21 per share in December, raised their takeover offer price by nearly $1 billion.
- Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange jumped 6% as the price of Bitcoin climbed above $65,000 for the first time since 2021.
Losses:
- Li Auto Inc. (LI): Shares of the Chinese carmaker fell more than 7%, extending losses from Friday when it unveiled its first full-electric car with a slightly higher price tag than analysts were expecting.
- Apple Inc. (AAPL): Shares of the iPhone maker slipped nearly 2% after the European Union fined the company 1.8 billion euros ($2 billion) over its treatment of music streaming apps that compete with its Apple Music.
- Zions Bancorp. (ZION): Shares of the regional lender slipped about 1% after it was bumped from the S&P 500 to the mid-cap S&P 400 by Super Micro Computer. Whirlpool (WHR) also slid 1% after getting the boot.
Stock Futures Dip Before Markets Open
4 hr 17 min ago
Futures contracts connected to the Dow Jones Industrial Average were down 0.4% in premarket trading on Monday.
S&P 500 futures slipped about 0.1%.
Nasdaq 100 futures were little changed about an hour before markets opened.
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