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- Can stocks snap their losing streak? 📈
Can stocks snap their losing streak? 📈
Futures are pointing higher in the premarket, but only by a thin margin.
Chris Dinello
April 16, 2024
Presented By
Good Morning!
It's Chris from Elite Trade Club, here to give you this morning's premarket trading news.
Let’s get ready to trade!
Markets 📈
Stocks reversed an early lead to close Monday’s session lower, extending Friday’s sell-off.
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However, futures are indicating a higher open in today’s session. S&P 500 contracts are up by 0.2% in early trading.
What to Watch Today:
Federal Reserve Chairman Jerome Powell is set to speak publicly at 1:15 p.m. (ET) today, and the central bank boss’s comments could spark volatility in today’s trading session. It’s also a busy day for earnings, with reports from Bank of America, UnitedHealth, Johnson & Johnson, and others.
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Premarket Highlights 🔎
✂️ Tesla Announces Major Layoffs
Tesla Motors [TSLA], the electric vehicle giant led by CEO Elon Musk, is set to reduce its global workforce by more than 10%, according to an internal memo. This decision aligns with the company’s strategy to enhance productivity and cut costs as it gears up for its next growth phase. The news, first reported by Electrek and later detailed by CNBC, indicates a significant shift in the company's operational focus.
Stock Moves 📉
Following the announcement, Tesla's shares experienced a downturn, closing down over 5% on Monday. This decline is part of a larger trend for Tesla, which has seen its stock plummet by 31% year-to-date.
Despite the growing global demand for electric vehicles, Tesla’s sales growth has decelerated, partly due to increasing market competition.
Competition Intensifies 🌍
Tesla faces mounting challenges, particularly from Chinese manufacturers. By the end of 2023, China’s BYD even surpassed Tesla as the world’s leading EV producer.
Additionally, new players like Xiaomi are entering the EV market, with the tech giant announcing its first electric car priced significantly lower than Tesla’s Model 3. This development underscores the competitive pressures Tesla confronts, especially in China where it operates one of its major factories.
Musk’s Perspective 🚗
Elon Musk has acknowledged the competitive landscape, particularly highlighting the potential dominance of Chinese firms in the global car market. In a statement last November, Musk speculated that the future could see Tesla competing primarily against Chinese companies, a prediction that is gradually manifesting as the market evolves.
Looking Ahead 🔮
As Tesla navigates through these challenges, the job cuts represent a critical part of its strategy to streamline operations and sustain its pioneering role in the electric vehicle industry.
The company's efforts to adapt to an increasingly competitive environment will be crucial for its future success and stability in the global market.
Featured Earnings 💰️
UnitedHealth Group [UNH] ... AM
Johnson & Johnson [JNJ] ... AM
Bank of America [BAC] ... AM
Morgan Stanley [MS] ... AM
PNC Financial Services Group [PNC] ... AM
The Bank of New York Mellon [BK] ... AM
Northern Trust [NTRS] ... AM
Interactive Brokers Group [IBKR] ... PM
J.B. Hunt Transport Services [JBHT] ... PM
Omnicom Group [OMC] ... PM
Economy 🏗
Housing starts [Mar] ... 8:30a
Industrial production [Mar] ... 9:15a
Fed Chair Jerome Powell speaks ... 1:15p
Running Hot 🔥
Gainers
Dynatronics [DYNT] >> +95.9%
WISA Tech [WISA] >> +55.4%
Adams Natural Resources [PEO] >> +57.9%
Decliners
Ryvyl [RYVL] >> (18.6%)
Praxis Precision [PRAX] >> (26.9%)
Singularity Future [SGLY] >> (24.4%)
UnitedHealth [UNH] - Last Close: $445.63
The mega-cap health insurer posted a double-line beat on its Q1 2024 earnings report this morning, despite difficulties from a recent cyber attack.
UnitedHealth generated EPS of $6.91 on revenues of $99.8 billion, with both figures topping the Street’s consensus estimates.
The company also revealed a cyber attack against its Change Healthcare subsidiary in February cost the company $872 million.
UNH is leading the S&P 500 with a 7.5% gain, and more 230K shares have changed hands in today’s premarket.
My Take: UNH is a mega-cap stock so it takes a lot to move the needle like this. The stock has performed poorly as of late, but this catalyst could put it back on track.
Dragonfly Energy [DFLI] - Last Close: $0.45
Dragonfly Energy is also flying high after publishing its Q4 2023 earnings in Monday’s after-market.
Revenues came in at $10.4 million, down from $20.2 million a year ago and below the consensus, but it posted a surprise profit of $0.05 per share.
Analysts had expected a loss of $(0.20) per share for the quarter.
DFLI is up 54.0% on over 6 million shares traded.
My Take: DFLI’s surprise profit might be a flash in the pan. The company’s earnings guidance set expectations for a Q1 loss of $(0.13) to $(0.17) per share, and, given the huge YoY sales decline, I am bearish on this one.
Macatwa Bank [MCBC] - Last Close: $9.93
This micro-cap bank has agreed to be acquired by Wintrust Financial [WTFC] in an all-stock merger deal announced in Monday’s aftermarket.
The aggregate purchase price is to MCBC shareholders is expected to be $14.85 per share, or $510.3 million total, and the deal should close in 2H 2024.
Macatwa’s chairman said the company will retain its name, key employees, branches, and board, as a separately chartered bank.
MCBC is a top mover with a 39.2% gain, but volume is light at just under 50K shares traded today.
My Take: All-stock merger deals between pubcos is usually a wash if you’re not in the right place at the right time. No point chasing MCBC’s merger at this point when you can just buy WTFC.
BioRestorative Therapies [BRTX] - Last Close: $1.32
Early this morning, BioRestorative announced FDA clearance for its Phase 2 BRTX-100 clinical study protocol amendment.
The protocol amendment removes saline injection in the control arm of the study and replaces it with a sham injection.
CEO Lance Alstodt said in a company press release, “This positive change in our protocol will not have any impact from a timing perspective, affirming our already established 2024 enrollment completion target.”
BRTX is up 29.2% on over 5 million shares traded.
My Take: This is a significant move for such a minor announcement. I question whether BRTX will be able to hold onto these gains.
That's it for today! Thanks for reading, and good luck out there!
Best Regards,
— Chris D.
Elite Trade Club
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