1. The Bank of England on Thursday surprised investors by raising interest rates by half a percentage point, to 5%, in its 13th consecutive hike. The decision comes after recent rate increases from the European Central Bank, the Bank of Canada and the Reserve Bank of Australia. The U.S. Federal Reserve, meanwhile, held its benchmark rate steady when the central bank convened last week.
2. In congressional testimony Wednesday, Fed Chair Jerome Powell reiterated he expects future rate hikes to continue in order to combat inflation. But his appearance on Capitol Hill seems silly, given how much acetylene Congress and the White House have thrown on this economy.
3. Has the “Magnificent Seven” peaked? It sure looks like that. We’re riding Amazon (AMZN), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), Meta Platforms (META), Nvidia (NVDA) and Tesla (TSLA) into the sunset. In the movie, only Tesla (Yul Brenner) and Nvidia (Steve McQueen) survive.
4. Morgan Stanley on Thursday lowered its rating on Tesla to equal weight, or hold, from a buy equivalent. The firm argued that high expectations around the automaker as a beneficiary of artificial intelligence has brought the stock to “a fair valuation.” This is part of the dismantling of the “Magnificent Seven.”
5. Loop Capital on Thursday raised its price target on Amazon to $180 a share, from $140, and maintained a buy rating on the stock. The firm sees further upside for Amazon shares, with Amazon Web Services’ revenue deceleration set to bottom in the next two quarters and generative AI preparedness to accelerate.
6. A slate of Wall Street firms raised their price targets on KB Home (KBH) Thursday following the homebuilder’s second-quarter earnings. Credit Suisse raised its price target to $51 a share, from $42, while reiterating a neutral rating on the stock. UBS lifted its target to $65 a share, from $48, and maintained a buy rating on shares.
7. Deutsche Bank Thursday upgraded Budweiser parent Anheuser-Busch Inbev (BUD) to buy, from hold, while noting that recent underperformance fueled by boycotts suggests a “permanent reduction” in Budweiser’s U.S. business.
8. Bank of America lowered the boom on chemicals by reducing its rating on Dow to underperform, or sell, from neutral, citing “very back-half weighted earnings expectations” for U.S. commodity chemical companies in 2023. The firm also lowered its price target on Dow to $55 a share, from $64.
9. Wedbush on Thursday raised its price target on Celsius Holdings (CELH) to $155 a share, from $130, while reiterating an outperform, or buy, rating on the stock. The firm noted long-term U.S. market opportunity and international expansion as key reasons for the price raise.
10. Olive Garden parent Darden Restaurants (DRI) delivered an earnings beat Thursday for its fiscal fourth quarter, while announcing former CEO Gene Lee will step down as chair of the board.
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