The Street Sheet
Posts
🍫 Chocolate Slip-N-Slide

🍫 Chocolate Slip-N-Slide

Plus, would you rather own UPS or FedEx?

March 10, 2024

Happy Sunday to everyone on The Street.

In case you missed it, Boeing (BA) is making headlines again. On Friday, news broke that a 737 MAX rolled onto the grass and off the runway at George Bush Airport.

To make matters worse, the previous day, a Boeing 777 jetliner bound for Japan had to make an emergency landing after a wheel fell off and landed in the airport parking lot.

You may be asking yourself, “So what? Boeing had a bad week.” Well… it hasn’t just been a singular bad week; it’s been a bad year.

To Recap:

January 5th: Alaska Airlines Boeing 737 blew out its emergency door
January 7th: A Boeing oxygen leak stranded Secretary of State Antony Blinken at Davos
January 19th: Boeing 747-8 returned to Miami airport after engine failure
January 23rd: Delta Boeing plane headed to Colombia lost its front tire

The recent spate of incidents may have some real ramifications on the company’s bottom line as airlines move to ditch Boeing. At the start of the year, United CEO Scott Kirby expressed frustration with the manufacturer, stating he’s considering abandoning his company’s plans to purchase 100 models of the 737 MAX 10. So the question is:

🛬 Short Boeing?

POWERED BY FINANCE BUZZ

9 Easy Ways To Get Money Without Getting A Job

There’s nothing to be ashamed of if you're living paycheck to paycheck or struggling to make ends meet.

But not all of us have the time or luxury of picking up another job to make extra cash. It's tiring to work so many hours for very little take home pay.

Thankfully, there's a few ways that you can make some money (and save some too) by not getting a job. If you're struggling financially, here are 6 insanely easy things you can do right now that could help.

Review

The U.S. stock market surged to record highs this week, buoyed by Federal Reserve Chair Jerome Powell‘s testimony to Congress, where he indicated a readiness to ease monetary policy if continued positive data affirm the ongoing disinflation process.

Mirroring the stock market’s rally, rate-sensitive assets such as gold and Bitcoin soared to unprecedented heights, with gold reaching $2,170 per ounce and Bitcoin climbing to $70,000. This surge reflects investor anticipation of potential Federal Reserve rate reductions this year.

Nvidia’s Trillion-Dollar Triumph

Nvidia Corp’s market cap surged by over $1 trillion in just 67 days early in 2024, a feat that took Apple Inc. four years to achieve. This marks a monumental moment in the battle for mega-cap dominance, reflecting Nvidia’s explosive growth and its highly regarded position within the artificial intelligence space and the semiconductor industry.

Chip Sector Overheats?

The semiconductor industry is experiencing a rally that surpasses the heights of the dot-com bubble. A top Wall Street analyst expressed caution this week, naming the stock market's extreme rally and the dominance of the Magnificent Seven tech giants, which now make up 30% of the U.S. market cap, as reasons to be hesitant.

NYCB's Equity Lifeline

New York Community Bancorp secured a $1-billion equity investment, triggering significant dilution for current shareholders of the regional bank stock. While the financing deal offers a crucial respite amid ongoing challenges for the bank, this move is a double-edged sword, providing essential capital to regain market confidence at the cost of existing stakeholder value.

Microsoft Hack

Russian hackers targeted Microsoft Corp., stealing source code by spying on top executives’ emails. The attack, still active, has not compromised customer systems but poses potential breach risks. Microsoft is aiding customers with mitigation efforts.

AI Revolutionizes Banking

JPMorgan Chase & Co.’s AI tool has slashed corporate clients’ manual cash flow work by 90%, enhancing efficiency significantly. Deployed by 2,500 clients, the tool predicts cash flows, signaling AI’s growing influence on banking productivity.

Apple’s Blockbuster Bet

Apple’s $1-billion investment into filmmaking with “Killers of the Flower Moon,” “Napoleon,” and “Argylle” aims to enhance its Apple TV+ service. The films’ global gross of $470.4 million reflects Apple’s dedication to original content in a fiercely competitive streaming market.

Historic Fight On Netflix

Netflix Inc. will stream the Jake Paul vs. Mike Tyson boxing match, anticipated to be a historic and widely viewed event. The match signifies Netflix’s venture into live sports broadcasting.

Preview

Economic Data

Monday: None scheduled
Tuesday: Consumer price index, Core CPI, Monthly US Federal Budget
Wednesday: None scheduled
Thursday: Retail sales, PPI, Core PPI, Initial Jobless Claims, Business Inventories
Friday: Empire State manufacturing survey, import price index, industrial production, capacity utilization, preliminary consumer sentiment

Earnings

Monday: Asana
Tuesday: Allbirds, On Holding, Archer-Daniels-Midland, Kohls
Wednesday: Petco Health and Wellness Company, Biovie, Lennar Dollar Tree
Thursday: Immunoprecise Antibodies, Adobe, Ulta Beuty, Dollar General
Friday: Buckle

Signed, Sealed, Delivered

On the Up and Up

UPS (UPS) is looking to right the ship after a lackluster 12 months. The stock has slipped over 15% in that time while the S&P 500 has posted a 32% gain.

With disappointing 2024 guidance, Wall Street is hesitant to get behind the shipping company. But if investors exercise patience, Barron’s says there are nice returns to be had.

Cutting Costs

A new contract negotiated with the Teamsters Union in 2023 has ramped up costs.

Executives are now working to rein in those expenses. Management at UPS is targeting $1 billion in savings by trimming middle management jobs.

Baird analyst Garrett Holland believes UPS could also consolidate some of its facilities and reduce nonunion labor. He approves of the cost-cutting, upgrading UPS to Outperform last month.

Deliver the Goods

Barron’s acknowledges that the first six months of 2024 will be difficult for UPS, but the back half of the year could see profit and margins pick up.

Investors will be rewarded while they wait. UPS investors receive a dividend yield of 4.4%, the highest of any company on the Dow Jones Transportation average. The yield is significantly higher than rival FedEx (FDX) which offers a 2% dividend yield.

The stock currently trades around $150 per share, well below the $210 per share it traded at back in 2022. Investors looking for a delivery of returns in the future might find just that in UPS.

Which stock would you rather own?

POWERED BY FINANCE BUZZ

5 Weird Things To Do ASAP If You Have Amazon Prime

Do you shop on Amazon or use Prime? If so, you might be missing out on huge savings and a chance to earn extra cash on every purchase you make.

Our money saving experts put together a list of secret hacks that you should know about if you're an Amazon shopper. They can help you save money, earn cash, cancel unwanted subscriptions, and more.

Are you taking advantage of all of these hacks?

Chocolate Slip-N-Slide

Sky-High Cocoa Prices

Bitcoin isn’t the only thing flying high. There’s a commodity that’s soared almost 40% since the start of this year.

Cocoa, the commodity behind chocolate, has jumped in price due to poor weather, fires, and a virus that impacts the crop. It hit a record high recently, trading at over $6,500 per metric ton.

However, some analysts believe the rally will end this year.

Relief for Chocolate Lovers

Aakash Doshi, a strategist at Citi, argues that help from both supply and demand will bring down cocoa prices.

On the supply side, he writes that new crops and new weather are coming. There might be a surplus of cocoa in 2025 and 2026, and traders could price this in well before it takes place.

On the demand side, Doshi says consumers, even the ones with a sweet tooth, might balk at the lofty prices for chocolate.

Investors seem to agree, with Nestle (NSRGY) and Hershey (HSY) stocks slumping in February.

A Whole New (Chocolate) World

The Citi strategist expects cocoa to fall somewhere between 20% and 35% by the end of the year.

Unfortunately for candy bar lovers, he does not see prices dropping to where they were before the rally began.

Cocoa had traded between $2,000 - $3,000 per metric ton for about a decade. Doshi sees a new floor between $3,500 - $4,000.

With higher cocoa prices being the new norm, consumers may settle for just flowers next Valentine’s Day.

Where do you think cocoa prices will end the year?

Still Shorting

Not Everyone’s a Bull

February was a strong month for the market, and all three major indices finished the month with gains. The Dow saw its fourth straight positive month for the first time since the spring of 2021, and the Nasdaq and S&P were up 6.1% and 5.2%, respectively.

Despite the overall positive outlook for the market, some stocks are still being heavily shorted.

Aiming to find sectors investors are still bearish on, CNBC compiled a list of Nasdaq and NYSE stocks with the most short interest.

Skyrocketing Short Interest

To make the list, a stock had to have a minimum market cap of $100 billion and short interest making up at least 25% of outstanding shares.

According to CNBC, the companies with the highest short interest percentage of float are B. Riley Financial (RILY), Children’s Place (PLCE) and Novavax (NVAX).

The biggest movers in terms of short interest are Carvana (CVNA), Phathom Pharmaceuticals (PHAT), and Novavax. Carvana has seen its short interest jump to a massive 86.8% month-to-date. The auto company has also seen the greatest YTD change, at 51.9%.

Two Tales

The list is heavily composed of healthcare stocks. These include Novavax and Prime Medicine (PRME).

Novavax saw its short interest increase 5.3% during the first two weeks of February alone. In defiance of the short sellers and despite Q4 numbers coming in below expectations, shares are up over 16% this year.

Prime Medicine’s short interest increased by 47.9% in February, but its stock climbed over 25% over the same period.

2024 has been a strong year for the market so far, but not everyone is convinced it will continue. For investors looking to capitalize on falling prices, this list could provide some opportunities.