🍻 Splurging on Beer

Plus, are Target employees becoming conduits for AI?

Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

  • 🟥 | US Stocks Fell on Thursday. The Nasdaq Composite fell nearly 1%, and the S&P 500 pulled back after briefly touching a record high of 5,500 earlier in today’s trading session.

  • 📈 | One Notable Gainer: Shares of Gilead Sciences popped 9% on news that its new twice-yearly shot prevented 100% of HIV cases in women and adolescent girls in Africa.

  • 📉 | One Notable Decliner: Jabil Inc, a manufacturer of electronic circuit boards, saw its stock tumble 11% after it reported Q3 2024 revenue of $6.77 billion, a 20.2% year-on-year decline.

  • 🍻 | Tomorrow's Trade: Splurging on Beer. Scroll down for more.

Plus, today’s partner explains why a staggering 31 billionaires are selling their stocks.

YESTERDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Bullish

🟨🟨🟨🟨⬜️⬜️ Bearish

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

CRM (+4%) Salesforce has integrated new AI tools to automate various tasks, such as crafting pitches (Benzinga)

DRI (+2%) Darden Restaurants reported mixed quarterly results but showed its acquisition of Ruth’s Chris Steak House fueled a 6.8% jump in net sales (CNBC)

KR (-3%) Kroger reported revenue for the first quarter that beat analysts’ estimates but said it would pause its stock buyback plan (Investopedia)

NEM (+2%) Newmont Corporation and other mining stocks rose along with the prices of gold, copper, and other metals (Investopedia)

QCOM (-5%) Qualcomm’s stock fell despite CFRA upgrading the stock, seeing it as a major beneficiary of AI shifting towards the device level (Barron’s)

TOGETHER WITH INVESTOR PLACE

Are we on the edge of the biggest ‘TECH RESET’ in decades? The expert who called the dot-com crash of 2000, says: 

 “A $17 trillion stock market panic could FORCE America’s most-loved tech stocks to MELTDOWN.

 Ultimately, dragging down thousands of other stocks in their wake – in what will be an unprecedented market panic.” 

This is why a staggering 31 billionaires are selling their stocks, right now, at a record pace.

OVERHEARD ON THE STREET

WSJ: Honeywell International has struck a roughly $2 billion deal to buy aerospace and defense technology company CAES Systems.

Reuters: Eli Lilly said it is suing six more entities for selling products claiming to contain tirzepatide, the active drug in Lilly’s diabetes drug, Mounjaro.

NBC: Rite Aid is closing 27 more locations, bringing the closure total to nearly 550 nationwide as the company works through its bankruptcy proceeding.

Axios: Target announced today that it's rolling out its "Store Companion chatbot" as an app for employee efficiency at all of its nearly 2,000 stores.

CNBC: OpenAI competitor Anthropic announced Claude 3.5 Sonnet, its most powerful artificial intelligence model yet.

TOMORROW’S TRADE IDEA, TODAY

Surviving Spending Cutbacks

According to Jefferies analyst Kaumil Gajrawala, Hispanic households are expected to continue purchasing one company’s beer despite consumer spending cutbacks. 

Constellation Brands (STZ) makes beer like Corona and Modelo, and Hispanic customers keep purchasing the beer despite economic troubles. Hispanic consumers currently make up over 40% of its beer sales.

Steady Sales

The majority of households purchasing Constellation products earn less than $80,000 per year, which would typically worry investors in a high-inflation environment. However, according to Gajrawala, families are opting to cut back spending in other areas, with beer purchases remaining steady. 

Across the board, Hispanic consumers’ beer purchases have fallen 9% over the past 13 weeks. But Constellation has seen a 4% increase over the same period.

Staying Loyal

Total spending on beer products across all ethnicities has fallen 2% over the past 13 weeks, while Constellation’s beer sales have risen 1%. Loyal spending from the Hispanic community is making a significant impact on the company. 

The stock is up 8% YTD, and Gajrawala has given it a $310 price target. That’s around an 18% upside from Tuesday’s close. For investors seeking inflation-resistant companies, Constellation might fit the bill.

Are you bullish or bearish on Constellation Brands (STZ) over the next 12 months?

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TOGETHER WITH INVESTOR PLACE

Are we on the edge of the biggest ‘TECH RESET’ in decades? The expert who called the dot-com crash of 2000, says: 

 “A $17 trillion stock market panic could FORCE America’s most-loved tech stocks to MELTDOWN.

 Ultimately, dragging down thousands of other stocks in their wake – in what will be an unprecedented market panic.” 

This is why a staggering 31 billionaires are selling their stocks, right now, at a record pace.

ON OUR RADAR

YF: Thousands of US car dealerships were ground to a halt yesterday by a cyber incident at CDK Global, a major software provider for dealers across the US.

CNBC: The Swiss National Bank trimmed its key interest rate by 25 basis points to 1.25% in its second cut of the year.

AP: Same continent, different story… The Bank of England maintained its interest rate at a 16-year high even though inflation fell to its target of 2%.

CNN: Beginning June 25, McDonald’s US locations are selling a “$5 Meal Deal” for a limited time to lure back customers who’ve cut back due to inflation.

YF: MicroStrategy Inc. bought approximately $786 million in Bitcoin with the proceeds raised from the sale of convertible notes.

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