Tech stocks lead market rally as Powell soothes interest rate cut nerves

Tech stocks led the market's gains Thursday as investors looking for clues on interest rates shifted their focus to the upcoming U.S. jobs report.

The Dow Jones Industrial Average (^DJI) rose about 0.4%, snapping a three-day losing streak for the blue-chip index. The S&P 500 (^GSPC) rose his 0.7%, while the tech-heavy Nasdaq Composite Index (^IXIC) contract surged about 0.8%, with both indicators posting small gains at the close.

Markets are shaking off a tough start for stocks heading into the second quarter after Chairman Jerome Powell eased concerns that the Federal Reserve would be cautious about cutting interest rates.

Recent signs of economic acceleration have raised the possibility of further rate hikes, a so-called “no-landing.” Chairman Powell appears to have put an end to the debate for now by sticking with the same policy: the Fed will cut interest rates this year, but choose the timing to take into account the difficult path to lower inflation.

The focus now shifts to the March jobs report due Friday morning, a key economic indicator for the Fed's data-dependent policymaking. Experts generally don't expect to see any signs of cracks in America's strong labor market story. The number of new jobless claims rose by 9,000 last week to 221,000, the highest level since January, according to data released Thursday by the Labor Department.

On the corporate front, jeans maker Levi Strauss (LEVI) saw its stock price rise 18% after the company revised its full-year profit forecast upward. Meanwhile, BlackBerry (BB)'s U.S.-listed shares soared after the Canadian company's cybersecurity unit posted a surprise quarterly profit.

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Thursday, April 4, 2024, 8:00 a.m. (Pacific Daylight Time)

Ford stock soars as all-electric SUV launch delays, expands hybrid products

Ford (F) stock rose about 2% after the automaker announced it would “delay” the launch of its upcoming electric SUV to 2027 to allow the EV market to mature.

The company also said it is expanding its hybrid electric vehicle offering. Ford said it plans to offer hybrids across its lineup by the end of 2010.

Legacy automakers have recently scaled back their EV rollouts in response to signs of slowing EV growth. Meanwhile, the rise in hybrid sales has prompted manufacturers to expand their offerings for those types of vehicles.
Thursday, April 4, 2024, 7:19 a.m. (Pacific Daylight Time)

Meta hits new high, leading Nasdaq to rise

META (META) stock jumped more than 2% during Thursday's trading session, hitting a new high of $523.85.

The company's stock price has risen 47% since the beginning of the year, making it the second-best performer among the Magnificent Seven, behind Nvidia (NVDA).

The social media giant's shares helped lift the Nasdaq Composite Index (^IXIC) on Thursday, making it the biggest gainer among the major averages.
Thursday, April 4, 2024 06:33 PDT

Tech stocks lead market rally

After a tough start to the second quarter, stocks opened higher Thursday with tech stocks leading the way.

The Dow Jones Industrial Average (^DJI) rose about 0.7%, snapping the blue-chip index's three-day losing streak.

The S&P 500 (^GSPC) rose 0.7%, and the tech-heavy Nasdaq Composite Index (^IXIC) jumped about 0.9% after both indexes rose slightly in the previous session.

The S&P 500 Technology Sector ETF (XLK) gained about 1%. Real estate (XRE) and consumer discretionary (XLY) related stocks also rose.

Federal Reserve Chairman Jerome Powell said Wednesday that central bank officials expect to cut interest rates “at some point” this year.
Thursday, April 4, 2024 3:05am PDT

Citi makes good points about General Motors

One of the least-watched stock trends in 2024 is General Motors (GM).

The stock has gained 25% since the beginning of the year, outpacing Ford (F)'s 12% rise and the S&P 500's 9% rise. In my humble opinion, this move is being driven by GM's improved execution around the EV transition. And there was a new desire to return cash to shareholders.

After years of distrust, Wall Street may finally be starting to embrace the stock market in earnest.

“As the first quarter concludes, it becomes clearer that GM will post another resilient quarter. While industry headwinds and execution risks continue, GM's most recent strong quarter/year has ended. More than five years of consecutive rebounds to 2017 are starting to look increasingly stale,'' Citi analyst Itai Michaeli said in a client note this morning.

Michaeli added that GM's “comeback” is on track and sees the stock as one of his top picks.

After spending a day touring Detroit's EV facility with GM Chairman and CEO Mary Barra, I came away impressed (video below).

The company tackles many difficult challenges that require precise execution to be profitable and successful. Given this systemic turmoil, it's a positive that GM remains a reasonably profitable automaker and is using its excess cash to buy back stock.

It may be time for GM stock to break out of the single-digit P/E ratio it has been trapped in for years.