My top 10 things to watch Friday, Feb. 24
1. The Fed’s favorite inflation gauge came in hot for January. The core personal consumption expenditures (PCE) price index suggests inflation picked back up at the start of 2023. The Dow, the S&P 500 and the Nasdaq open sharply lower on the news. Ahead of Friday morning’s PCE release, Cleveland Federal Reserve President Loretta Mester tells CNBC she sees a case to go back to a half-point interest rate hike.
2. JPMorgan CEO Jamie Dimon told me Thursday the Fed could take rates to 6%. What would that world look like? Current range: 4.5% to 4.75%. The most recent dot plot, released after the December meeting, put the so-called terminal rate at 5.1%. At its latest meeting, policymakers opted for a smaller quarter-point increase.
3. Still focusing on Club holding Nvidia (NVDA) and waiting for CEO Jensen Huang’s March 21 keynote at the chipmakers GTC developers conference. In focus: the H100 for accelerated computing, artificial intelligence and the metaverse. The H100 for mainstream computers comes with a five-year subscription to the Nvidia Software Enterprise suite that teaches everything you need to know about how to use chatbots and so much more. Jensen in deep dive mode.
4. Bausch + Lomb (BLCO) catches multiple price target boosts. Really great for Club name Bausch Health (BHC), which owns most of BLCO. Makes it so struggling BHC, which closed Thursday up 14% on solid earnings, can get rid of all short-term debt as it figures out a long-term strategy without best-selling drug Xifaxan. An appeals court is still considering BHC’s defense of Xifaxan’s patents.
5. HSBC takes Linde (LIN) to $380 per share from $375; keeps buy rating. This is an excellent Club name, perhaps the best growth cyclical because of the demand for industrial gases. We will talk about it at Saturday’s first-ever annual meeting for Club members. Here’s the link to the livestream.
6. The Justice Department is reportedly getting ready to block the Adobe (ADBE) purchase of privately held Figma. Even though it’s very expensive, a $20 billion deal, it’s so needed because Canva is really coming for Photoshop. Absorbing Figma would help Adobe make it a two-company battle with Canva for dominance in design software.
7. Evercore ISI goes to in line from underperform (hold from sell) on Block (SQ). Big defeat as this thing keeps signing up people like mad. Baird, Wells Fargo and Needham all raise price targets on the company formerly known as Square.
8. Barclays is warning to get out of Nordstrom (JWN). Big reduction in estimates ahead of earnings set for March 2. Analysts cut price target to $16 per share from $18; keep underweight (sell) rating. Citi sees the high-end department chain’s prospects differently, raising its PT to $20 from $17; keeps neutral (hold) rating. Citi doesn’t see any surprises in the quarter.
10. SVB Securities downgrades Moderna (MRNA) to underperform from market perform (sell from hold); cuts price target to $93 per share from $111. Cites dwindling Covid profits. Too short-sighted.
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