My Top 10 Things to Watch Wednesday, Dec. 11
1. Wall Street is set for a higher open after the consumer price index report for November came in as expected. Headline CPI was up 0.3% month over month and 2.7% on an annual basis. Ex-food and energy, core CPI was up 3.3% on a 12-month basis. Traders are betting that these numbers are enough to get another Federal Reserve rate cut next week.
2. General Motors called it quits on Cruise, its driverless ride-hailing service. GM said it’s folding Cruise into its tech team and focusing on autonomous driving for personal vehicles. Robotaxi competition was one reason cited. Waymo, owned by Alphabet, continues to pick up momentum and enter new markets.
3. Macy’s shares dropped after lowering its full-year adjusted earnings outlook to $2.25 to $2.50 a share, down from $2.34 to $2.69 previously. It also put the investigation into a former employee who hid expenses behind it. Macy’s other brands – higher-end Bloomingdale’s and Bluemercury – are doing better than the namesake.
4. The department store is increasingly irrelevant – as is the drugstore. Walgreens is not in good shape, and I doubt a deal can be pulled off. It is reportedly in talks with private equity firm Sycamore Partners about a sale. Walgreens has so much debt here. Are you kidding?
5. The retail winners are headlined by the likes of Walmart, which got a price target boost at KeyBanc. Analysts went to $105 a share from $96. Just a juggernaut. Ollie’s Bargain is another one doing well, and it picked up multiple PT boosts after earnings. Closeouts are high and real estate potential is big. A downgrade last week looks dead wrong.
6. The latest price target hike for Tesla comes courtesy of Goldman Sachs, which went to $345 a share from $250. Goldman lowered its earnings outlook on weaker electric vehicle demand but was upbeat on Tesla’s AI opportunity. Shares of Elon Musk’s EV maker have soared nearly 60% after Musk-backed Donald Trump won last month’s presidential election.
7. Apple released its latest software system for iPhones, iPads and Macs that includes the ChatGPT integration with Siri. The key question is whether this long-awaited step makes Apple Intelligence more desirable for consumers and leads to more upgrades.
8. Wells Fargo initiated coverage of Reddit with a buy rating and price target of $206 a share. This keeps happening, irrespective of where the stock is. Shares have more than tripled since debuting on the NYSE in March. I’ve called Reddit the holy grail for advertisers.
9. S&P Global cut its credit rating on Intel to BBB from BBB+. That is significant because Intel owes a lot of money. Elsewhere in chips, Bernstein reiterated its buy-equivalent outperform rating and PT of $195 on Broadcom ahead of earnings Thursday. Analysts said some “near-term flutters” are increasingly anticipated by investors.
10. Shares of U.S. Steel were stabilizing after tumbling Tuesday on reports that President Joe Biden will formally block Nippon Steel’s planned acquisition of the Pittsburgh-based company. President-elect Trump also is opposed to the deal.
