The futures were mixed, after a second straight day of selling turned into an afternoon rally before all the major indexes sold off again into the close and finished lower. The song remains the same, as the Fitch downgrade of the U.S. government debt was still eyed as the culprit, spurring the selling along Thursday. All eyes turned to the latest nonfarm payroll report, which came in largely as expected. That, plus a big backup in yields for the second straight day, is adding to the risk-off attitude. Some top strategists feel that hedge fund selling also contributed to the overall trend, as overbought conditions have sparked many investors to take profits.
The Treasury yields jumped in a big way, with the longer maturities getting hit hard. It did not help when hedge fund manager Bill Ackman said his fund was shorting the 30-year long Treasury bond, which closed at 4.29%. Treasury yields move inversely, so as the short sellers continue to pound the bid and sell, the bond trades down and the yield goes higher. The 10-year note closed at 4.18%, the highest since October of 2022. The two-year ended the day at 4.88%. While the inversion recently has narrowed to 70 basis points from well over 100, recession still looks possible.
Brent and West Texas Intermediate crude both rebounded from Wednesday’s drubbing after Saudi Arabia announced it will extend its 1 million barrel per day output cut through September. Russia also announced it would cut its oil exports by 300,000 barrels per day in September. Brent closed up 2.5% at $84.27, while WTI finished up 2.86% at $81.76. Natural gas also closed up 3.31% at $2.56.
Gold was modestly lower Thursday, despite the ISM services index data dropping more than expected in July. While still over the 50% level at 52.7%, which indicates growth in the economy, the recession risk is still in the cards as rates move higher. The December contract closed modestly lower Thursday at $1969.30. Bitcoin also rebounded, closing at $29,259.20, up 0.33%.
24/7 Wall St. reviews dozens of analyst research reports each weekday with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top Wall Street analyst upgrades, downgrades and initiations seen on Friday, August 4, 2023.
Crestwood Equity Partners Inc. (NASDAQ: CEQP): Citigroup’s downgrade to Neutral from Buy included a target price trim to $28 from $30. The consensus target is $29.22. Thursday’s final trade was reported at $27.40 a share.
Doximity Inc. (NYSE: DOCS): Piper Sandler cut its Overweight rating to Neutral and its $38 target price to $36. The consensus target is $37.23. The shares closed on Thursday at $33.24.
DXC Technology Co. (NYSE: DXC): Citigroup downgraded the stock from Buy to Neutral. The analyst also lowered the $39 target price to $31, below the consensus target of $35.50. Thursday’s close at $19.08 was down 30% for the day due to an earnings miss and guidance cut.
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