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Market Moves Yesterday
S&P 500 @ 5,306.04 ( ⬆️ 0.025%)
Nasdaq Composite @ 17,019.88 ( ⬆️ 0.88%)
Bitcoin @ $68,782.33 ( ⬆️ 0.67%)
Hey Scoopers,
Happy Wednesday! Are you ready to tackle the midweek hustle?
👉 JPMorgan lowers Boeing estimates
👉 Apple’s iPhone shipments in China
👉 A Bitcoin mining acquisition
So, let’s go 🚀
Market Wrap 📉
The tech-heavy Nasdaq Composite index closed at a record level yesterday as Nvidia surged over 7%. Buoyed by the chip manufacturer’s rally, the index topped the 17,000 threshold for the first time.
However, over 350 stocks part of the S&P 500 index declined as sectors such as healthcare, industrial and financials slipped 1%.
The rally surrounding big tech companies over the last 18 months has meant the five largest stocks in the S&P 500 account for 27% of the index. Nvidia’s meteoric rise has increased the semiconductor sector’s allocation to 11% of the flagship index, up from just 2% in 2014.
Today, Nvidia's market cap is $2.8 trillion, which is $1 trillion more than the entire energy sector. The stock is up 130% in 2024 after tripling in 2023.
Trending Stocks 🔥
American Airlines - Shares of the airline company are down over 6% in pre-market after slashing its sales outlook for Q2. Shares of peer companies such as JetBlue and Southwest also slid 2% each in sympathy.
Robinhood- The retail broker added 3% after announcing a $1 billion share repurchase program.
DraftKings - Shares of the betting platform slid over 10% after Illinois senators approved a budget that would raise state taxes on sports betting while implementing a progressive tax rate for sport-betting operators.
Investment bank JPMorgan lowered its estimates for Boeing’s free cash flow due to lower delivery numbers.
JPMorgan estimates Boeing to record a free cash outflow of $4 billion in Q2, higher than outflows in Q1. It also expects the airline manufacturer to end 2024 with outflows of $2.3 billion.
Boeing has been unable to deliver aircraft to China as regulators are reviewing batteries for cockpit voice recorders. Due to this recent development, JPMorgan estimates that over 60 inventoried 737s for customers in China are still with Boeing, which might impact free cash flow by $1 billion this year.
However, JPMorgan maintained its price target of $210 for Boeing stock, indicating an upside of 20% from current levels.
Apple’s iPhone Sales in China
Apple’s iPhone staged a turnaround in China in April, with a 52% rise in shipments amid a flurry of retailer discounts, according to a Bloomberg report.
Smartphone shipments have been surging in China, with foreign brands accounting for 3.5 million units in April. The iPhone accounts for the majority of these devices, following steep shipment declines in the first two months of 2024.
Apple and its retail partners in China have slashed prices year-to-date with these deals extending into the country’s shopping festival that will begin next month.
Apple has trailed the broader markets in 2024 as it has lost market share to Huawei and other domestic players in China and experienced longer replacement cycles.
Earlier this month, a Bloomberg poll of Chinese consumers showed that the iPhone is returning as the most favored mobile device and that there is a surge in interest in device upgrades.
Over half of the survey respondents stated they would spend over $550 on their next phone, compared to just 33% who currently own premium handsets.
This means the iPhone’s shrinking market share in China should stabilize in the near term as the country's premiumization trend takes off. China is among Apple's largest iPhone markets and a key driver of growth.
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Riot Platforms May Acquire Bitfarms
Shares of Bitcoin miner Bitfarms surged over 5% after Riot Platforms disclosed plans to acquire it.
Riot Platforms is the largest publicly listed Bitcoin mining company and proposed acquiring Bitfarms’ outstanding shares at $2.30 per share. Bitfarms closed trading at $2.21 per share yesterday.
Riot Platforms is already the largest shareholder of Bitfarms and holds a 9.25% stake in the company.
The proposal comes as CleanSpark expanded its mining operations with the acquisition of two data center facilities in Wyoming. The crypto-mining industry could experience consolidation as the Bitcoin halving event has lowered mining rewards by 50%.
Headlines You Can't Miss!
IMF upgrades China’s growth forecast to 5%
Porsche reveals first-ever hybrid 911 sports car
HubSpot gains on potential Google deal
Hess shareholders approve $53 billion Chevron deal
Semler Scientific adopts Bitcoin as the primary reserve
Chart of The Day
According to a Visual Capitalist report, families in the five most expensive U.S. states require an annual income of over $270,000 to live comfortably. The report illustrates the income necessary for two working adults with two children to maintain a comfortable lifestyle in each state.
But what is comfortable? It means the family can allocate 50% towards housing and utilities, 30% to discretionary spending and 20% to savings or investments.
Massachusetts is the most expensive state, requiring a family income of over $300,000, followed by Hawaii and Connecticut. Alternatively, Mississippi is the least expensive state for a family to live in, requiring “just” $177,798 per year.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.