February 6, 2023

Stocks are rising as investors await inflation data, and the Nasdaq is attempting four straight days of gains

Guggenheim Promotes Warner Bros. Discovery, and cites an attractive risk reward

Warner Bros. Discovery It was upgraded to Buy from a Neutral rating by Guggenheim, who said risk-reward looks attractive at these levels.

“We see an attractive narrative for the first half of 2023, with the impact of recently announced domestic renewals, strong cost controls, and the upcoming launch of our restructured Max product as key catalysts,” analyst Michael Morris wrote in a note to clients Wednesday.

He added, “Cost discipline in direct dealing with consumers in particular should enhance confidence in the company’s ability to meet EBITDA estimates for 2023 and reduce leverage targets.”

Morris set a price target of $16.50 on the shares, which would mean up 31% from Tuesday’s close. The stock is down 60% in 2022.

Morris said that while cord cutting and slowing ad spending continue in 2023 and could put pressure on revenue within the networking segment, the stock looks attractive at the current multiple, trading at 5 times 2024E EBITDA and 6 times 2024 free cash flow.

“However, we see a 200 basis points sequential improvement in sequential improvement in distribution revenue trends in the new year with around 30% of our domestic affiliate base renewing and potential for further support as the base balance is renewed over the next several years,” he wrote.

– Samantha Sobin

The bull index in the weekly Investor Intelligence survey jumps to 41.4% from 36.6%

Bullish sentiment in the latest weekly poll of financial newsletter writers rose to 41.4% from 36.6% last week, according to Investors Intelligence. The bulls approached the December high of 43.3%, which itself was close to the mid-August high of 45.0%.

“The stats for bulls in the mid-40s don’t yet suggest tops. Our rules say more than 55% of bulls return defense to the field,” Investors Intelligence said.

Bearish views eased to 32.9% from 33.8%, while those forecasting a short-term correction fell to 25.7% from 29.6%. The “bull bear spread” remained positive for an eighth week, to +8.5 from +2.8 last week.

“Modest positive spreads, after a negative stat, point to the stock rally,” II said.

– Scott Schneiber

Charles Schwab said 2022 brought the most +/- 1% per day on the S&P 500 since 2008

the Standard & Poor’s 500 posted the most daily moves of at least 1% in either direction since 2008, underlining the volatility the stock market has seen in the past year, according to data Analyzed by Charles Schwab.

The general index has either moved up or down 1% or more in just over 120 trading days. In 2008, the last time this number of days was exceeded, the index recorded daily movements of this magnitude in more than 130 trading days.

These fluctuations reflect the volatile business landscape seen in 2022. The S&P 500 lost 19.4% on the year as investors grew increasingly concerned about a potential recession.

The index is up 2.1% so far in 2023.

– Alex Haring

Citi downgrades Levi Strauss, citing slowing demand for denim

Levi Strauss Shares fell more than 2% before the bell after Citigroup analyst Paul Leguize downgraded the jeans maker to neutral from a buy rating.

“While LEVI is a strong brand with good long-term global prospects, in the near and medium term we expect a challenging US backdrop featuring weaker denim trends to pressure results,” he wrote in a note to clients on Wednesday.

CNBC Pro subscribers can read more at CNBC Pro Contact from Citi here.

Stocks making the biggest pre-market moves

These are the stocks that make the biggest moves in pre-market trading.

For more information, check out the full list here.

– Tanaya McHale

The Fed’s barometer shows that inflation may be hotter than what you would expect on the street

Thursday’s consumer price index report may show that inflation is running faster than Wall Street expects, as measured by the Cleveland Fed.

central bank Real-time inflation tracker It indicates that the core CPI rose at a monthly pace of 0.1%, while the core index, excluding volatile food and energy prices, indicates a rise of 0.5%.

Both numbers are ahead of Dow Jones estimates of a 0.1% drop in the headline and a 0.3% gain on the core.

On an annual basis, the Cleveland Fed model indicates gains of 6.6% and 5.9% for the core, compared to related Dow Jones estimates of 6.5% and 5.7%.

– Jeff Cox

Mortgage applications are up 1.2% weekly

Coinbase drops after Bank of America downgrades

Bank of America downgraded Coinbase It underperformed from neutral, sending the stock down 4% in the primary market.

“While it is encouraging that COIN will remain nimble on expenses as it navigates its first crypto winter as a public company and seeks to maintain balance sheet liquidity, we believe that the ‘23 consensus cycle rate could be too high,” Bank of America said Wednesday.

– Samantha Sobin

JPMorgan downgrades CarMax

carmax Shares fell 3 percent after JPMorgan downgraded the used-car seller from neutral, saying investors were not fully pricing in the risks surrounding the company.

“To be clear, we believe KMX is likely to be a long-term winner in the used car market and finally see the investments over the past three years pay off,” he said. JPMorgan said. “However, the path to realizing this potential continues to push, making it difficult to rule out the timing and magnitude of natural margins.”

– Samantha Sobin

European markets are mixed as investors look ahead to US inflation data

European markets It opened mixed as investors braced for more inflation data this week, with US consumer price data for December due Thursday.

The pan-European Stoxx 600 Index rose 0.1%, with major sectors and stock exchanges showing a mix of marginal gains and losses. Mining and retail stocks saw the biggest gains, both up 0.9%, while the construction sector led slight losses, down 0.4%.

Gundlach “significantly” prefers non-US stocks

Jeffrey Gundlach speaks at the SOHN Conference 2019 in New York on May 6, 2019.

Adam Jeffery | CNBC

DoubleLine Capital CEO Jeffrey Gundlach said in a webinar on Tuesday that he would “significantly” favor non-US stocks in 2023.

One of the reasons Gundlach is bullish on emerging markets in particular is currency effects. The dollar rose sharply last year as the Federal Reserve raised interest rates, but the investor said he expected that to reverse.

“I think the dollar is going down,” Gundlach said.

Read more about Gundlach’s market outlook on CNBC Pro.

– Jesse Pound, Yoon Lee

Wells Fargo is backing out of the mortgage business

Wells Fargo he Reduce its footprint in the mortgage market Where the bank manages regulatory pressures and the impact of higher interest rates on housing.

Wells Fargo, at one time the nation’s largest mortgage lender, will limit home loans to existing customers and borrowers from minority communities.

The changes will bring Wells Fargo closer to rivals like JPMorgan Chase and Bank of America, which have previously pulled out of home loans.

Wells Fargo shares fell less than 1% in the extended trading period.

– Jesse Pound, Heo Soon

Stock futures have changed little

It was a quiet open for stock futures, with all contracts for the three major averages down less than 0.1%.

– Jesse Pound

Market statistics after the first six trading days of the year

Wall Street pulled together another positive session on Tuesday. Here’s a look at how the major market averages have fared so far this year.

  • The S&P 500 rose 0.70% on Tuesday and is now up 2.08% for the year.
  • The Nasdaq Composite was up 1.01% on Tuesday and is now up 2.64% for the year.
  • The Dow Jones Industrial Average rose 0.56% on Tuesday and is now up 1.68% for the year.
  • The small cap Russell 2000 rose 1.49% on Tuesday and is now up 3.49% for the year.

– Jesse Pound