US Open: indices try to recover losses but a strong USD points in another direction 💲

• Main U.S. indexes are slightly gaining at the beginning of the session
• Strong NFP report shifts expectations of interest rate cuts
• Dollar returns above 104 points, putting pressure on indexes
• Bond yields gain to 4.36%

The last day of this week brings many interesting pieces of information. U.S. indexes are trying to rebound in the first part of the day after yesterday's collapse, in which losses on the US500 even exceeded 2.00%. However, today's rebound attempts have been halted after the publication of the U.S. labor market report. Currently, the US500 is up 0.60%, and the US100 is up 0.80%. Pressure on the stock market is also exerted by a strong dollar and rising bond yields. At the time of publication, yields are gaining to a level of 4.36% and have been moving in a steady upward channel virtually since the end of 2023.

US500

The index gains today by 0.60% to the level of 5230 points. After yesterday's drop, quotations clearly fell below the short consolidation channel at the peaks. In the face of correction, it is necessary to keep in mind the levels of 5,000-5,050 points which coincide with the 23.6% Fibonacci retracement of the last upward movement. Otherwise, the upper limit for the bulls remains the ATH level around 5330 points.

Source: xStation 5

USDIDX

The dollar is clearly gaining today. After the publication of the NFP report, market expectations for the first Fed rate cuts moved from July to September. At the same time, the dollar's quotations and the yields of 10-year bonds rose sharply. These are further arguments in favor of at least a temporary correction in the stock markets, which have been in a continuous upward trend since the beginning of 2024. The USDIDX dollar has broken above the 104 points level, and the next range of the upward movement seems to be the level of 104.800 points.

Source: xStation 5

Corporate News

Morgan Stanley has reduced its price target for Roku (ROKU.US) from $65 to $60, while maintaining an Underweight rating on the stock, due to increasing competition in the connected TV (CTV) advertising market. CTV advertising involves ads tailored for smartphones and smart TVs, delivered through streaming services.

Johnson & Johnson (JNJ.US) has agreed to acquire Shockwave Medical (SWAV.US) for $335.00 per share in cash, equating to an enterprise value of around $13.1 billion. This deal, expected to close by mid-year 2024, is set to enhance JNJ's presence in the MedTech sector. The acquisition will be funded through a mix of cash and debt and is expected to increase the operating margins of JNJ’s MedTech unit.

Source: xStation 5

Micron Technology (MU.US) has gained attention from the rise in dynamic random access memory (DRAM) pricing. According to Citi analysts, the company is positioned to see a dynamic revenue increase, particularly due to its high-bandwidth memory (HBM) being utilized for artificial intelligence applications.

HubSpot (HUBS.US) continues to draw attention, rising about 2.60% on Friday, followed a Reuters report on Thursday that Alphabet (GOOGL.US) was consulting advisers about a possible takeover bid for HubSpot. Analysts pointed out that such a deal would make sense, but with significant regulatory hurdles that should be anticipated.

Netflix (NFLX.US) gains approximately 2.00% after Pivotal Research raised its price target for the stock to the $765 per share, signifying a 24% upside from Netflix's last closing price of $617.14. Pivotal has increased its subscriber growth estimates for Netflix, now predicting the streaming giant will add 19.5 million subscribers in 2023, up from a previous estimate of 18.2 million. By 2030, Pivotal expects Netflix to have around 356 million paying subscribers, an increase from its earlier forecast of 347 million.