• Adobe (NASDAQ:ADBE): Barclays maintains its equalweight rating with a target price raised from $540 to $620.
  • Docusign (NASDAQ:DOCU): Morgan Stanley maintains its underweight recommendation with a target price increase from $49 to $51.
  • Edwards Life (NYSE:EW): Piper Sandler & Co maintains a neutral recommendation on the stock with a reduced target price of $83.
  • Fedex Corp (NYSE:FDX): Morgan Stanley maintains its equalwt/in-line rating with a target price increase from $186 to $200.
  • Johnson & Johnson (NYSE:JNJ): Barclays maintains its equalweight rating with a reduced target price of $158.
  • Lucid Group (NASDAQ:LCID): RBC Capital maintains its sector perform rating on the stock with a target price of $6.
  • Nucor Corp (NYSE:NUE): JP Morgan downgrades to underweight from neutral. PT up 0.7% to $151.
  • Paypal Holdings (NASDAQ:PYPL): Jefferies maintains a hold recommendation on the stock with a reduced target price of $65.
  • Roblox Corp (NYSE:RBLX): CITIC Securities Co Ltd upgrades to add from hold. PT reduced from $57 to $37.
  • Steel Dynamics (NASDAQ:STLD): JP Morgan downgrades to underweight from neutral. PT up 1.1% to $95.
  • T-mobile (NASDAQ:TMUS): DZ Bank AG Research maintains its buy recommendation with a raised target price from $170 to $175.
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The mood on Wall Street appears somber, partly due to weakening economic data in China and Europe, as well as indications of persistent inflation in the United States. Surprisingly, the U.S. services sector outperformed expectations in August, contradicting the notion of a cooling U.S. economy and inflation, thus bolstering the case for an extended period of higher interest rate hikes. Additionally, lower-than-expected jobless claims added to the concern, suggesting a tightly competitive job market. Even Apple, a cornerstone of the NYSE, is encountering difficulties.

In the previous day, market indices experienced significant fluctuations. In short, markets with a substantial presence of defensive stocks performed relatively well, while those heavily invested in technology and cyclical stocks faced some setbacks. For instance, the Swiss SMI, led by its three major defensive stocks – Nestlé, Roche, and Novartis – gained 0.6%, while Apple struggled, dragging the Nasdaq down by 0.7%.

The challenges faced by Apple, the creator of the iPhone, are particularly untimely for the tech sector, which is already grappling with concerns about its ability to maintain high valuation multiples. Today, it was reported that restrictions on the use of iPhones by government employees in China have expanded to local governments, as reported by the Nikkei. Apple’s stock has declined by 6.4% over two trading sessions, resulting in a nearly $200 billion reduction in market capitalization, equivalent to erasing a company like Netflix from the market. Given that Apple and its peers, including Nvidia, Microsoft, Amazon, and Meta, have contributed to roughly 60% of Nasdaq’s gains this year, any setback affecting this group has a magnified impact on the tech index. In contrast, the Dow Jones saw a marginal increase yesterday, thanks to its substantial healthcare stock holdings.

To sum up the concerns for September, inflation and high interest rates top the list, followed by the state of the Chinese economy and geopolitical tensions causing distortions in various markets, including energy and agricultural commodities. On the positive side, there is optimism surrounding corporate earnings strength, the resilience of the U.S. economy, and promising developments in artificial intelligence.

The energy market could experience renewed tensions, given apparent breakdowns in negotiations between Chevron’s Australian LNG division and its employees. Social unrest in the sector is affecting gas supplies to Europe, consequently impacting prices. Meanwhile, the offshore yuan in China has reached its lowest point against the U.S. dollar in its 13-year history. Observers suggest that Beijing may be comfortable with this depreciation as it bolsters the export competitiveness of a nation eager to revitalize its economic momentum.

In premarket trading, all three major Wall Street indices were relatively stable.

Key economic highlights for the day include U.S. wholesale inventories.

Currency exchange rates stand at USD 0.9341 and GBP 0.8007, while the price of gold hovers around USD 1924 per ounce. North Sea Brent oil is priced at USD 90.62 per barrel, and U.S. light crude WTI is at USD 87.05. The yield on 10-year U.S. government debt has eased to 4.22%, and Bitcoin remains around USD 26,000.

In corporate news:

  1. Tesla: Passenger car sales in China rebounded with year-on-year growth in August, driven by price reductions and subsidies. Tesla, in particular, nearly doubled its market share in August compared to July, according to data from the China Passenger Car Association.
  2. Nvidia and Reliance announced a partnership to develop artificial intelligence (AI) language models and generative applications for millions of users within the Indian telecom group.
  3. Gamestop experienced a 2.9% decline in pre-market trading following reports that its chairman, billionaire Ryan Cohen, is being investigated by the U.S. Securities and Exchange Commission (SEC) over the surprise purchase and sale of shares in Bled Bath & Rebond.
  4. Smith & Wesson Brands saw a 12.08% increase in pre-market trading after reporting higher quarterly earnings that exceeded analyst expectations.
  5. DocuSign shares gained 2.7% in premarket trading following the company’s better-than-expected quarterly results and an upward revision of its full-year sales forecast.

Friday’s Wall Street Highlights: Apple, Goldman Sachs, Morgan Stanley, DocuSign, and more

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