Tech stocks led a rally in U.S. markets on Thursday, buoyed by excitement over advancements in artificial intelligence (AI). Alphabet (GOOG, Financial) (GOOGL, Financial) shares jumped following the unveiling of its new Gemini large language model, which is expected to power Google's AI chatbot, Bard. This move positions Google as a key player in the generative AI race, directly competing with Microsoft (MSFT)-backed OpenAI's ChatGPT. Advanced Micro Devices (AMD, Financial) also saw its shares climb after announcing its latest AI accelerator chips, signaling strong positioning in the rapidly expanding AI market.
In other news, Bristol Myers Squibb (BMY, Financial) announced the departure of Elizabeth Mily, EVP of Strategy and Business Development. The pharmaceutical giant is actively seeking a replacement for Mily, who played a significant role in the company since March 2020. Bristol Myers Squibb has been in the spotlight for its combination therapy's success in a colorectal cancer trial and recently boosted its stock buyback program by $3 billion, following a 5.3% dividend increase.
Amazon (AMZN, Financial) revealed plans to offer Prime members an option for unlimited grocery delivery from Whole Foods and Amazon Fresh for a monthly fee, starting with a rollout in select cities. This strategic move is part of Amazon's efforts to balance market share growth with margin maintenance. In a separate development, Amazon will discontinue accepting Venmo as a payment method after January 10, 2024, although Venmo debit and credit cards will remain usable.
Stem Inc. (STEM, Financial) saw its shares rise as TD Cowen named the energy storage solutions provider one of its Best Ideas for 2024. The company's Athena platform and new PowerBidder Pro are expected to drive software-related revenues and help achieve full-year adjusted EBITDA profitability by Q4 2023.
Stifel's Macro and Portfolio Strategy report highlighted the potential outperformance of cyclical value stocks and small caps (IWM, Financial) in the first half of 2024. Financials (XLF, Financial), industrials (XLI, Financial), materials (XLB, Financial), energy (XLE, Financial), and real estate (XLRE, Financial) are among the sectors expected to benefit from economic growth with persistent inflation.
Kenvue Inc. (KVUE, Financial), the consumer health company spun off from Johnson & Johnson (JNJ, Financial), experienced a share price increase amid a class action lawsuit hearing. The lawsuit alleges that prenatal exposure to Tylenol may contribute to autism in children. Observers noted that Kenvue seemed to be winning arguments during the hearing.
Semiconductor stocks, including AMD (AMD, Financial), were largely positive as the market reacted favorably to AMD's new AI accelerator. Analysts have mixed views on the impact of AMD's announcements but recognize the company's strong position in the AI market.
David Rubenstein, co-founder of Carlyle Group (CG, Financial), is reportedly in discussions to purchase the Baltimore Orioles, reflecting the ongoing trend of high valuations and ownership changes in U.S. sports teams.
Consumer credit experienced a slower increase in October, with a rise of $5.13B compared to the $9.00B consensus. The Federal Reserve's report indicated a deceleration in consumer borrowing, with both revolving and nonrevolving credit showing growth at reduced annual rates.
Concerns over reduced demand from China for U.S. Treasuries were raised by Apollo Global Management's chief economist, Torsten Slok. The slowdown in Chinese exports has led to fewer dollars being recycled into U.S. debt, potentially affecting U.S. interest rates.
Stock futures edged higher as investors anticipated the jobs report and harbored expectations of Fed rate cuts next year. Among the notable stock movers, Alphabet (GOOG, Financial) (GOOGL, Financial) and Vanda Pharmaceuticals (VNDA) saw significant gains, while Boeing (BA, Financial) approached a substantial order for 787 Dreamliner planes from Thai Airways.
The job market is expected to show continued deceleration in growth, with the November jobs report projected to add 180K jobs. The return of auto workers after strikes is likely to influence the figures.
Dollar General (DG, Financial) traded higher after beating Q3 earnings expectations, with a modest decline in same-store sales and a decrease in gross profit rate due to increased shrink and markdowns.
Cyclical value industries and small cap stocks (IWM, Financial) are forecasted to outperform in early 2024, according to Stifel analysts. They predict continued economic growth with sticky inflation, favoring cyclical value stocks.
Cowen tagged Biogen (BIIB, Financial) as a top pick for 2024, with optimistic projections for its Alzheimer's treatment Leqembi and Skyclarys for Friedreich's ataxia. The firm anticipates significant revenue growth from these treatments.
Boeing (BA, Financial) is reportedly nearing a deal with Thai Airways for approximately 80 787 Dreamliner planes, which would be a significant win for the aerospace company.
Carnival (CCL, Financial) shares continued their upward trend, marking potential gains for the ninth consecutive session, reflecting a strong performance in the consumer discretionary sector.
Diversified miners like Rio Tinto (RIO, Financial), Anglo American (AAUKF, Financial) (NGLOY, Financial), and Antofagasta (ANFGF, Financial) are seen as the best investment opportunities in the metals and mining sector, according to Citi analysts.
AbbVie (ABBV, Financial) shares extended their winning streak, reaching their highest point since mid-October, following the company's acquisition of Cerevel Therapeutics.
