The stock market rally was mixed in a holiday-shortened week. The Nasdaq fell modestly while the Russell 2000 rose solidly. Many AI and other growth leaders suffered solid to sharp losses. DraftKings fell sharply as the NCAA moved to ban special prop bets following claims regarding a pro athlete. Viking Therapeutics soared on new obesity drug trial data. Krispy Kreme spiked on a McDonald's deal. Tesla rose on self-driving hopes even as delivery and earnings estimates continued to fall.
Stock Market Rally Mixed
Small caps led during the holiday-shortened week, with the Russell 2000 hitting a 24-month high. The Dow Jones and S&P 500 rose modestly, right around all-time high levels. The Nasdaq fell slightly, as Nvidia and other growth leaders took a breather amid overall strong breadth. Treasury yields fell modestly while crude oil prices rose near 2024 highs.
Fed's Waller Is In 'No Rush' To Cut Rates
Fed Gov. Christopher Waller, a policy hawk, said late Wednesday that there is "no rush" to cut rates, saying recent inflation data "has made me uncertain about the speed of continued progress." The week's economic data through Thursday didn't have a big impact, with new-home sales flat, below views, durable goods data mixed and jobless claims largely in line.
Tesla Rises Into Deliveries Data
Tesla booked its second consecutive weekly gain ahead of reporting global first-quarter vehicle deliveries on April 2. Shares angled higher this week after Tesla announced it is offering free one month trials for its full self-driving service, with CEO Elon Musk making FSD test drives mandatory before deliveries. Full-year earnings estimates continued to fall and are now down 24% vs. consensus at the end of 2023. Analysts are also expecting Q1 vehicle deliveries to be well below Q4 2023's record 484,507 as EV demand appears to be slowing in both China and the U.S. Predictions appear to be more around Tesla's Q1 2023 deliveries of 422,875.
DraftKings Hit By Betting Scandals
DraftKings and FanDuel owner Flutter Entertainment reeled in the aftermath of sports betting and online gambling developments. With sports betting on the rise, the NCAA said it wants to ban prop bets "to protect student athletes and to protect the integrity of the game." The announcement came amid reports that the NBA is investigating Toronto Raptors player Jontay Porter over betting irregularities, with prop bets in focus. Prop bets — or proposition bets — are wagers unrelated to a contest's final score. MLB's biggest star, Shohei Ohtani, also surfaced in a federal probe of illegal sports gambling. Separately, the Wall Street Journal reported that lawmakers are starting to scrutinize marketing tactics of online betting companies, including DraftKings and Flutter. DraftKings stock tumbled from a high. Flutter sank below the 50-day moving average.
Obesity Drug Aspirants Diverge
Viking Therapeutics surged Tuesday after its weight-loss pill helped patients lose up to 5.3% of their body weight over 28 days. That was 3.3% better than the amount of weight lost by placebo recipients. Viking previously soared on positive news for the injectable version of the drug. The news didn't hammer weight-loss leaders Eli Lilly and Novo Nordisk. But, on Wednesday, Altimmune fell after saying roughly one-quarter of the weight that patients lost in its obesity treatment study came from lean mass.
Carnival Bullish Despite Mixed Results
The cruise line giant narrowed its first-quarter loss to 17 cents vs. 55 cents a year earlier, just beating views for an 18-cent loss. Revenue jumped 22% to $5.4 billion, fractionally below estimates, with growth slowing for the seventh consecutive quarter. Carnival noted "an early start to a robust wave season" and saw record booking volumes for all future sailings, as well as higher prices for Q1 reservations. The cruise operator said its booked position for the rest of the year "continues to be the best on record." Carnival's Q2 and full-year earnings outlook was in-line with analyst forecasts. CCL stock ticked up Wednesday on results but fell modestly for the week. Meanwhile, rival Royal Caribbean is trading near the top of a buy zone. Norwegian Cruise Line broke out but pulled back.
Boeing Shakes Up Leadership
The reeling Dow Jones aerospace giant on Monday announced a major executive shake-up amid various supply chain and quality control issues. CEO Dave Calhoun will step down at the end of the year. Stan Deal, head of Boeing's commercial airplanes division, retired effective Monday. COO Stephanie Pope was named CEO of commercial airplanes. Chairman Larry Kellner announced he will not run for reelection at the annual Boeing meeting in May. Board member Steve Mollenkopf was appointed to succeed Kellner and lead the search for a new CEO. Meanwhile, the FAA is considering new temporary measures against United Airlines following a string of flight incidents over the past month, many of which involved Boeing aircraft, according to Saturday reports. Potential actions include barring new route launches, pausing the introduction of new planes into service and halting internal certifications of new captains. Boeing and United Air shares rose for the week.
In Brief
Home Depot will acquire SRS Distribution for $18.25 billion, aiming to win a bigger share of the growing market of contractors and other housing professionals.
Arista Networks co-founder Andy Bechtolsheim will be barred from being an executive or board member of a public company for five years in an SEC settlement over insider trading. Bechtolsheim serves on the board and is Arista's "chief architect" for advanced AI, silicon and optics initiatives. ANET stock fell solidly, in part due to selling in AI hardware stocks
Adobe announced new generative artificial intelligence tools, including GenStudio for advertising and marketing professionals, at its Adobe Summit conference. The company also reiterated its full-year outlook and raised its total addressable market forecast.
Trump Media & Technology Group, parent of Truth Social, began trading on the Nasdaq following a long-delayed reversed merger. Shares skyrocketed, with former President Donald Trump owning nearly 60%.
Merck popped to a record high after the FDA approved its drug for patients with pulmonary arterial hypertension. PAH causes shortness of breath, dizziness and chest pressure. Winrevair, the brand name for sotatercept, treats the underlying cause.
Krispy Kreme rocketed 39% Tuesday after announcing a partnership with McDonald's, with plans to offer fresh doughnuts daily at all McDonald's locations by the end of 2026. DNUT stock pared gains but was still up sharply for the week.
