Stocks rise as investors await inflation data, Nasdaq attempts four-day winning streak

Warner Bros. Discovery Upgraded to Buy from Guggenheim’s Neutral rating, the risk-reward looks attractive at these levels.

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

“Direct-to-consumer spending discipline, in particular, should increase confidence in the company’s ability to meet consensus 2023 EBITDA estimates and reduce targets,” he added.

Morris set a $16.50 price target on the stock, which is up more than 31% from Tuesday’s close. The stock fell 60% in 2022.

While cord-cutting and slowing ad spending could continue into 2023 and squeeze earnings at its networks division, the stock looks attractive at current multiples of 5 times 2024E EBITDA and 6 times 2024 free cash flows, Morris said.

“However, we see ~200bps continuous improvement in distribution revenue trends in the new year,” he wrote.

– Samantha Subin

According to Investors Intelligence, it rose from 36.6% to 41.4% in its latest weekly survey of financial newsletter writers. Bulls neared the December high of 43.3%, which was a mid-August high of 45.0%.

“The number of bulls in the mid-40s has yet to mark tops. Our rules put more than 55% of bulls back into the field,” Investors Intelligence said.

Bearish views fell from 33.8% to 32.9%, while advisors expecting a short-term correction fell from 29.6% to 25.7%. The “bull-bear spread” was positive for the eighth week, up from +2.8 last week to +8.5.

“After negative numbers, moderate positive divergences will be good for stocks,” II said.

– Scott Snapper

The S&P 500 It has recorded daily moves of at least 1% in either direction since 2008, underscoring the volatility seen in the stock market over the past year. Information Analyzed by Charles Schwab.

The broader index has moved up or down 1% or more over 120 trading days. In 2008, the last time that number of days was exceeded, the index recorded daily moves over 130 trading days.

Those swings reflect the hectic trading landscape seen in 2022. The S&P 500 lost 19.4% for the year as investors grew more wary of a possible recession.

The index has increased by 2.1% so far in 2023.

– Alex Haring

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

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

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– Tanaya Machel

Thursday’s consumer price index report may show inflation running at a faster pace than Wall Street expected, a Cleveland Fed gauge said.

of Central Bank Inflation Nowcasting Tracker Headline CPI points to a 0.1% monthly pace, while the core, excluding volatile food and energy prices, points to a 0.5% gain.

Both numbers were 0.1% lower than Dow Jones consensus estimates in the headline and 0.3% gain in the center.

On an annualized basis, the Cleveland Fed model points to a 6.6% headline gain and 5.9% for the core, compared to the corresponding Dow Jones estimates of 6.5% and 5.7%.

– Jeff Cox

Bank of America was downgraded Coinbase To underperform neutral to push shares down 4% in the premarket.

“While it is encouraging to be active in COIN spending as it navigates its first crypto winter as a public company and seeks to preserve balance sheet liquidity, … we think consensus revisions for ’23 will be very high.” Bank of America said Wednesday.

– Samantha Subin

Carmax Shares fell 3% after JPMorgan downgraded the used car seller to neutral, saying investors had not fully priced in the risks surrounding the company.

“To be clear, we believe KMX will be a long-term player in the used car market, and the investments over the last 3 years are finally paying off.” JP Morgan said. “However, the path to realizing this potential continues to be pushed out, making it difficult to reduce the timing and size of normalized edges.”

– Samantha Subin

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

The pan-European Stoxx 600 index rose 0.1%, with sectors and major bourses showing a mix of modest gains and losses. Mining and retail stocks saw the biggest gains, both rising 0.9%, while construction pared smaller losses of 0.4%.

DoubleLine Capital CEO Jeffrey Gundlach said in a webinar on Tuesday that he is “overwhelmingly” supportive of non-U.S. stocks in 2023.

One reason for Gundlach’s bullishness, especially in emerging markets, is currency implications. The dollar rallied sharply last year after the central bank raised rates, but investors expect that to reverse.

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

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

– Jesse Pound, Yun Li

Wells Fargo There is Its footprint in the mortgage market is shrinking Manages bank regulatory pressure and the impact of higher rates on housing.

Wells Fargo, once 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 such as JPMorgan Chase and Bank of America, which have previously backed away from home loans.

Shares of Wells Fargo were up less than 1% in extended trading.

– Jesse Pound, Hugh Sonn

Stock futures were sleepy as contracts for the three major averages were all up less than 0.1%.

– Jesse Pound

Wall Street put 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%.
• The Nasdaq Composite rose 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