Nasdaq leads US futures higher after Biden withdraws

Live3 updates

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  Mon Jul 22, 2024 5:23 AM EDT

  Starbucks finds Elliott on the doorstep

  Good to see Starbucks (SBUX) waking up.

  WSJ reported late Friday that Elliott Management was taking a stake in the troubled coffee seller.

  In typical Starbucks form, they told Yahoo Finance that they “do not comment on rumors or speculation.” However, Elliott is now involved in this, based on my understanding of the situation.

  I sketched 10 things wrong with Starbucks on X. Many of these problems are deep-seated problems that I have seen spread over the past decade, so Elliott, for all his power, is unlikely to solve them.

  But Bernstein restaurant analyst Danilo Gargiulo sees a way to unlock shareholder value at Starbucks.

  There they are:

  • Invest in top talent and leadership with operational and restaurant experience.

  • Reduce unit growth and accelerate the transition to more purpose-built stores.

  • Reset the value perception.

  • Accelerate throughput and improve predictability of service times.

  • Improve the consumer experience.

  • Invest in targeted innovation to attract core consumers and younger generations.

  • Restore brand neutrality toward political views (move headquarters from Seattle?).

  • Franchise activities in China.

  • Optimize spending.

  • Reset long-term guidance and market expectations.

• 

  Mon Jul 22, 2024 5:13 AM EDT

  Face to face: Nvidia

  Nvidia (NVDA) is receiving a bid this morning, up 2% pre-market after a bullish 30-day trading call from Citi.

  Says Atik Malik of Citi:

  “We are opening a positive catalyst for NVDA at the SIGGRAPH 2024 conference for three reasons. Firstly, NVIDIA CEO Jensen Huang and Meta (META) CEO Mark Zuckerberg will likely discuss the future of AI and we believe NVIDIA could announce the long-awaited standalone version. Arm-Based Grace CPU for Servers Second, the CEO discussion should shed a positive light on how NVIDIA’s end customers make money or on their ROI profile, a key topic on investors’ minds these days as the conference shows no sign of an air pocket and consider the recent pullback in shares (13% price-to-earnings ratio to three-year average) due to geopolitical concerns as a buying opportunity.”

  SIGGRAAF starts on July 28. Huang will have two fireside conversations.

• 

  Mon Jul 22, 2024 5:06 AM EDT

  One thing to keep an eye on in today’s session following Biden’s decision

  Keep an eye on the ‘Trump Trade’ following Biden’s decision not to run for re-election.

  Over the past month, stocks seen as linked to Trump’s possible policies have risen nicely; for example, shares of Exxon Mobil Corporation (XOM) are up 5% in the past month. Lockheed Martin (LMT) is up 1.6%, outperforming the S&P 500 (^GSPC).

  Here’s the vibe around Trump Trade, according to BTIG’s policy expert Isaac Boltansky:

  “With a new Democratic presidential challenger expected, we could see a reversal in some market moves related to the ‘Trump Trade.’ This is understandable as markets will be forced to reassess the chances of Trump winning without knowing his official challenger. Additionally, we believe Biden’s departure leaves the House as more of a toss-up than a Republican. That said, we continue to see Trump as the slight favorite and note that many beneficiaries of a second Trump administration are based on administrative shifts rather than legislative changes. These beneficiaries include private prisons, digital assets, and companies that are likely to be largely exposed to an uptick in Trump’s trade policies as well in a divided government scenario. We continue to expect an increase and extension of most of the $4.6 trillion in expiring tax provisions, but overall, spending should be relatively easier in a divided government scenario.”