Shares slip from records with Nvidia leading declines

US equities ended lower on Friday due to a faltering chip rally, with Nvidia's shares plunging 5.4%, pulling down the S&P 500 and Nasdaq 100 by 0.6% and 1.5%, respectively, from recent highs. The Dow Jones dropped 68 points, mitigated by Apple's 1% rise, ending its seven-day losing streak. Investor reactions to the latest jobs report fueled expectations of Fed rate cuts, compounded by Broadcom's weak forecast. For the week, the S&P dipped 0.2%, the Nasdaq fell 1%, and the Dow posted its worst week since October, declining 0.7%. Despite a slight dip to 4,960 points on Friday, the STOXX 50 index marked its seventh consecutive weekly gain, bolstered by reinforced expectations of a midyear Fed rate cut following the US jobs report. 

Summary for 11.03.2024 

• Most Asian equities fell on Monday, echoing Wall Street's decline amid anticipation of US inflation data and concerns over interest rate hikes. Japanese shares plummeted, driven by speculation of imminent BOJ policy changes. Chinese shares saw mixed performance, buoyed by consumer inflation but tempered by weak producer inflation, while broader Asian markets retreated. 
• European shares are poised for a decline as US equity futures follow suit, influenced by Friday's tech sector profit-taking and anticipation of impending US inflation figures. 
• Oil prices declined in Asian trading as concerns about slowing demand persisted, despite expectations of tighter supply in 2024. Chinese demand worries lingered, offsetting supply concerns and disruptions in the Middle East. Markets awaited US CPI data for further direction on interest rates. 
• China's producer prices continued their 17th consecutive month of contraction in February 2024, dropping by 2.7% year-on-year, indicating persistent economic challenges despite government support measures. Meanwhile, consumer prices rose by 0.7% year-on-year, driven by increased spending during the Lunar New Year holiday, marking the first inflation since August 2023. 
• In Q4 2023, Japan's GDP grew by 0.1% qoq, contrasting expectations for a 0.3% rise. This performance diverged from flash data, which initially projected a 0.1% fall, and from the preceding quarter's 0.8% contraction. Despite positive revisions in capital expenditure, challenges persisted in private consumption and government spending. 
• In February, the US economy added 275,000 jobs, surpassing expectations of 200,000, with notable gains in healthcare, government, food services, and transportation. However, manufacturing saw a slight decline. Average hourly earnings edged up by 0.1%, marking the smallest gain since February 2022. January and December job figures were revised downward, totalling 167,000 lower than previously reported. 
• DocuSign exceeded Q4 expectations with revenue of $712.4 million and adjusted EPS of $0.76, driven by new business wins. Despite pandemic-related demand cooling, CEO Thygesen noted performance improvement. Q1 revenue guidance of $704-708M and full-year revenue projection of $2.92-2.93B signal optimism, although shares may stabilise pending sustained billings growth. 
• Costco's shares plummeted 7.6% on Friday – its worst day since May 2022 – after missing second-quarter revenue expectations due to lower gasoline prices. Despite the decline, seven brokerages raised their price targets, citing confidence in the retailer's ability to attract customers and drive revenue growth through strong demand and lower prices. 
• Rivian's stock rose over 2% on Friday following strong interest in its $45,000 R2 SUV, garnering 68,000 reservations post-launch. Pausing construction on its Georgia plant is expected to save over $2.25 billion, reducing the need for immediate capital raise. In the meantime, Deutsche Bank raised Rivian's price target to $15, expressing both optimism and concern. 
• Alfa Romeo, under Stellantis, plans to launch its new Stelvio SUV in the second half of next year, followed by the Giulia sedan in 2026. The brand aims for a 100% electric vehicle lineup by 2027. Both models will feature EV and hybrid options, designed and assembled in Italy. 
• Taiwan Semiconductor Manufacturing Co is reportedly set to receive over $5 billion in federal grants from the US government to establish a chipmaking plant in Arizona. This investment aligns with the US CHIPS Act's aim to bolster domestic semiconductor production amid global supply chain challenges. 
• Melius Research upgraded AMD to a Buy rating, dubbing it the "Nvidia-Mini," and raised its price target to $265 from $192 per share. The firm cited AMD's improving data centre prospects, particularly with the MI300X benefiting from the AI inferencing phase and noted strengthening traditional server CPU sales. 
• Truist Securities and BofA Securities both upgraded Broadcom Limited with Buy ratings, adjusting their price targets in response to the company's strong Q4 results. Truist raised its target to $1,566, emphasising Broadcom's expanding AI exposure, while BofA Securities lifted its target to $1,680, citing a positive sales outlook for FY24 driven by artificial intelligence. Both firms anticipate robust growth and increased earnings, reflecting confidence in Broadcom's prospects. 
• Piper Sandler raised Marvell’s price target to $100.00, maintaining an Overweight rating after the company’s earnings report met expectations but fell short for the April quarter. The firm expressed confidence in Marvell's strategy to mitigate risks and foresees potential rebound in undervalued sectors, especially in the second half of fiscal year 2025. 
• CFRA raised Novo Nordisk's price target to DKK950 with a Hold rating, citing a higher 2024 P/E ratio of 42x versus the three-year average of 32x, justified by anticipated growth. The company aims for over DKK25 billion in Obesity division sales by 2025, supported by a robust drug pipeline. 
• Mizuho increased DoorDash's price target to $162, maintaining a Buy rating, citing EBITDA upside from investments. They view DoorDash's key metrics positively, forecasting FY24 EBITDA 10% above consensus. With confidence in the company's execution and potential in grocery advertising, they consider consensus estimates conservative.  
• Wedbush upgraded Palantir to a $35 price target, maintaining an Outperform rating. The firm cited increasing momentum, dubbing Palantir the "Messi of AI," with its AIP gaining traction. Anticipating significant cross-sell opportunities and a share of the $1 trillion AI Global TAM, analysts expect Palantir to benefit from the AI revolution. 
• JPMorgan upgraded General Electric to Overweight, with a price target of $180, highlighting the company's strong fundamentals, particularly in Commercial Aerospace and the Vernova segment. Despite a recent rally, JPMorgan remains optimistic about GE's potential, citing its resilience and growth prospects. Similarly, Goldman Sachs raised GE's price target to $177, emphasising the promising outlook following GE Vernova's Investor Day. With ambitious goals set by management, GE is poised to capitalise on electrification and decarbonisation trends, driving further investor confidence. 

• BMO Capital Markets raised Sherwin-Williams' price target to $385 from $340, maintaining an Outperform rating. The revision reflects positive expectations following discussions with management, highlighting strategic investments to increase market share. Sherwin-Williams is viewed as well-positioned for significant earnings growth, with a reduced risk profile. 
• TD Cowen raised Deckers Outdoor's price target to $1,000 with an Outperform rating, noting its significant short interest but expressing confidence in the company's potential. They highlighted Deckers' EPS potential and brand gains. Deckers boasts robust financials, including a high market cap and impressive revenue growth, signalling investor confidence. 
• BMO Capital Markets reaffirmed an Outperform rating on Linde and raised the price target to $510 from $460 following discussions with company executives highlighting robust business operations. Linde's focus on shareholder returns and growth in the clean energy sector, coupled with strong free cash flow, supports anticipated double-digit earnings per share growth. 
• RBC Capital Markets upgraded Carvana Co. from Underperform to Sector Perform, raising the price target to $90 from $45. The move reflects potential continued upward momentum in the online used car retailer's shares, driven by anticipated unit growth and underestimated per-vehicle cash generation, despite valuation concerns. 
• As Nvidia shares were rising last week, speculation rose about a potential share split.  Analysts and experts including Ken Mahoney of Mahoney Asset Management, anticipate a split within the next year to make shares more accessible to retail investors.  In May 2021, Nvidia had announced a four-for-one share split when shares were around $600. 
• Reddit plans to raise up to $748 million with an IPO, offering 22 million shares priced between $31 and $34 each, potentially valuing the company at over $7 billion. The IPO includes a reserve of shares for users and moderators. Despite strong user engagement, Reddit reported a net loss for 2023. 
• Delta Air Lines Inc's CEO, Ed Bastian, anticipates potential delays in Boeing 737 Max 10 deliveries until as late as 2027 due to certification concerns and recent incidents. Delta, awaiting 100 Max 10 jets, negotiated protections against delays. Both Boeing and Delta are in discussions to address Max issues. 
• Brasil's government is urging Petrobras to channel its dividend cash into reinvestment, leading to a 10% share drop. CEO Prates clarified that the funds are intended for investors, not investments. This move raises concerns about politicised economic strategies and past debts, as the government aims to revise rules for reinvestment. 
• In the week ahead, major economic indicators include US inflation, retail sales, producer prices, the Michigan consumer sentiment index, and industrial production. The UK will monitor unemployment, industrial production, January's GDP growth, and foreign trade. China's focus will be on new yuan loans, car sales, and the house price index. Additionally, the Euro Area will assess industrial production figures.