Nasdaq leads US futures higher after Biden backs out

Live3 updates

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  Mon, July 22, 2024 at 5:23 AM EDT

  Starbucks finds Elliott at its doorstep

  Good to see Starbucks (SBUX) getting a wakeup call.

  WSJ reported late Friday that Elliott Management took a stake in struggling Starbucks.

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

  I outlined 10 things wrong with Starbucks on X. Many of these are deeply rooted issues I have seen spread over the past decade, so Elliott despite all of its power is unlikely to fix them.

  But, Bernstein restaurant analyst Danilo Gargiulo sees a path to unlocking shareholder value at Starbucks.

  Here they are:

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

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

  • Reset the value perception.

  • Accelerate throughput and improve predictability of service times.

  • Enhance consumer experience.

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

  • Reestablish neutrality of the brand on political stances (move HQ away from Seattle?).

  • Franchise China operations.

  • Optimize expenses.

  • Reset long-term guidance and market expectations.

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  Mon, July 22, 2024 at 5:13 AM EDT

  Eyes on: Nvidia

  Nvidia (NVDA) is catching a bid this morning, up 2% pre-market on a bullish 30-day trading call by Citi.

  Says Citi’s Atik Malik:

  “We are opening a positive catalyst watch on NVDA into SIGGRAPH 2024 conference for three reasons. First, NVIDIA CEO Jensen Huang and Meta (META) CEO Mark Zuckerberg will likely discuss the future of AI and we believe NVIDIA could announce the much-anticipated standalone Arm-Based Grace CPU for servers. Second, the CEO discussion should shed positive light on how NVIDIA’s end customers make money or their ROI profile, a key topic on investors’ minds these days. Third, we expect to hear accelerating AI demand trend at the conference with no signs of an air pocket and view the recent pullback in the stock (13% P/E discount to 3-year average) on geopolitical concerns as a buying opportunity.”

  SIGGRAPH kicks off on July 28. Huang is slated to perform two fireside chats.

• 

  Mon, July 22, 2024 at 5:06 AM EDT

  One thing to watch in today’s session following Biden’s decision

  Keep an eye on the “Trump Trade” following Biden’s decision to not seek re-election.

  Over the past month, stocks seen as tied 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 on 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 linked to the “Trump Trade.” This is understandable as markets will be forced to reassess the odds of Trump winning without knowing his official challenger. Furthermore, we believe that Biden exiting leaves the House as more of a toss up than leaning Republican. With that being said, we continue to view 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 firms exposed to an uptick in M&A. Trump’s trade policy would likely be largely the same in a divided government scenario as well. We continue to expect a punt and extension of most of the $4.6T in expiring tax provisions, but as a general matter spending should be relatively easier in a divided government scenario.”