March 29, 2024

Daily Wrap

DJIA +80.03 (+0.53%) to 15,040.62;S&P 500 +13.66 (+0.85%) to 1,622.56;NASDAQ +13.16 (+0.45%) to 2,950.30

The looked poised to resume its downward move into Friday’s jobs number but just after noon EST firmed up and started an impressive rally off the lows which also continued into the after market (so far).  From the lows to the close the market rallied nearly 24 points.  In economic news today we had Unemployment claims which came in roughly inline with a 346K number.  As alluded to earlier, tomorrow we get Non-farm Employment data and I have current forecasts at 167K and 7.5% rate.

SodaStream (SODA) got an initial pop in today’s action on a report from an Israeli paper that PepsiCo (PEP) is in talks to buy the company.  I sometimes don’t give much credence to these rumors and PEP’s CEO CEO Indra Nooyi came out and said there is no truth to the claim but for fun I was thinking about the potential.  PEP could likely create a competing product for less than what SODA is selling for but then there is the development time and marketing which all also has a cost.  If a deal had some stock involved it would help mute the recent run of SODA with the run in PEP.  SODA is currently about 1% of PEP’s current marketcap and would be even less than a percent for Coca-Cola (KO) should they choose to take a swing at the company.  SODA could provide either with some US growth, albeit not likely to move the needle much, and remember that flavored water craze way back which resulting in some takeovers?  If America continues to vote for the DIY option, one of these majors may choose to buy or what about, especially if the dollar keeps moving lower like it did today, a foreign company willing to use a beneficial exchange rate to buy US operation and growth.

In merger news, Media General (MEG) closed up 33.7% after agreeing to merge with privately held New Young Broadcasting.  The deal is an all-stock transaction.

In earnings news Ciena (CIEN) gained over 17% on better than expected revenue while VeriFone (PAY) and Vera Bradley (VRA) lost 20.87% and 7.84% respectively on disappointing earnings.  PAY missed current quarter analysts expectations while VRA slightly beat but both guided below expectations.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: CBK, JKS, CRDS

In analyst notes today, Con-way (CNW) was upgraded to Buy at BofA/Merrill with a $46 price target.  Tenet Healthcare (THC) was upgraded to Buy at Deutsche Bank with a $55 price target.  Lastly, Freeport McMoRan (FCX) was resumed with a Buy at Jefferies along with a $44 price target.  On the downside was aforementioned Vera Bradley (VRA) receiving multiple downgrades and M&T Bank (MTB) which was downgraded to Neutral from Buy at SunTrust.  Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.

An extreme McClellan Oscillator reading coupled with a low “Stock below 10 day MA” reading proved to be the stretched rubber band helping to send the market strongly higher off today’s lows.  The ascent of the move looked to be saying that it was not going to soon revisit those lower levels but we are left with the Jobs number tomorrow morning.  The key will be to watch the action and how the first pullback reacts whether it be on the number or after the open and that pullback should be telling on where the market is heading in the short-medium term. (Please note the image below was actually taken slightly before the close today).

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