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Tech Leads Market Rally as Powell Calms Rate Cut Nerves

Tech stocks led markets higher on Thursday as investors turned their attention to the upcoming U.S. jobs report in search of interest rate clues.

The Dow Jones Industrial Average (^DJI) rose about 0.4%, giving the blue-chip index three straight days of losses. The S&P 500 (^GSPC) gained 0.7%, while contracts on the tech-heavy Nasdaq Composite (^IXIC) gained about 0.8%, with both indicators based on slight closing gains.

The market is shaking off stocks' rocky start to the second quarter after Chairman Jerome Powell allayed fears that the Federal Reserve might lose its nerve about cutting interest rates.

Recent signs of an acceleration in the economy increase the likelihood of further interest rate hikes – a so-called “no-landing”. By sticking to the same line – that the Fed will cut interest rates this year, but will choose the right time to do so given inflation's bumpy downward trajectory – Powell appears to have ended the debate for now.

The focus now shifts to the March jobs report, due out Friday morning, a key economic input for the Fed's data-driven policymaking. On the whole, experts believe that there will be no signs of cracks in the good situation on the US labor market. Labor Department data released Thursday showed initial jobless claims rose by 9,000 last week to 221,000, the highest since January.

On the corporate front, shares of Levi Strauss (LEVI) rose 18% after the jeans maker raised its full-year profit forecasts. Meanwhile, U.S.-listed shares of BlackBerry (BB) soared as the Canadian company's cybersecurity division contributed to a surprise quarterly profit.

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  • Thu, April 4, 2024 at 10:00 a.m. CDT

    Ford shares rise on delay of all-electric SUV and expansion of hybrid offerings

    Ford (F) shares rose nearly 2% after the automaker said it is “postponing” the launch of its upcoming electric SUV to 2027 as it allows the electric market to mature.

    The company also announced that it is expanding its offering of hybrid electric vehicles. Ford announced that it would offer hybrid vehicles across its entire product range by the end of the decade.

    Legacy automakers have recently scaled back their electric vehicle introductions amid signs of slowing EV growth. Meanwhile, a surge in hybrid sales has prompted manufacturers to expand the offerings of these types of vehicles.

  • Thu Apr 4, 2024 at 9:19am CDT

    Meta hits new high, helping lead Nasdaq higher

    Meta (META) shares gained more than 2% during Thursday's session to hit a new high of $523.85.

    The stock is up 47% year-to-date and is the second-best performer among the Magnificent 7 behind Nvidia (NVDA).

    Shares of the social media giant helped lift the Nasdaq Composite (^IXIC), the biggest gainer among major averages, on Thursday.

  • Thu Apr 4, 2024 at 8:33am CDT

    Tech stocks are leading the markets higher

    Stocks opened higher on Thursday, with technology stocks leading gains after a difficult start to the second quarter.

    The Dow Jones Industrial Average (^DJI) rose about 0.7%, marking three straight days of losses for the blue-chip index.

    The S&P 500 (^GSPC) gained 0.7% while the tech-heavy Nasdaq Composite (^IXIC) gained about 0.9% after both indicators posted modest gains in the previous session.

    The S&P 500 Technology Sector ETF (XLK) was up about 1% at the open. Stocks related to real estate (XRE) and consumer discretionary (XLY) also rose.

    On Wednesday, Fed Chairman Jerome Powell said central bank officials expect to cut interest rates “at some point” this year.

  • Thu, April 4, 2024 at 5:05 a.m. CDT

    Citi makes some good points about General Motors

    One of the most underrated stock moves in 2024 was General Motors (GM).

    Shares are up 25% year to date, outpacing Ford's (F) 12% gain and the 9% gain for the S&P 500. The move has been rounded out, in this writer's humble view, by better execution at GM to drive the EV transition and a new desire to return cash to shareholders.

    Wall Street may finally be buying into the stock after years of disbelief.

    “As we close out the first quarter, it is becoming clearer that GM is likely to have another robust quarter. While industry headwinds and execution risks remain, the more than five-year setback that GM's last strong quarter/year will be its last is looking increasingly stale,” Citi analyst Itay Michaeli said this morning in a customer message.

    Michaeli adds that GM's “comeback” is well underway and he sees the stock as one of his top picks.

    I was impressed after spending the day touring an EV facility in Detroit with GM Chairman and CEO Mary Barra (video below).

    The company is working on many difficult things that require precise execution to achieve profitably. Given this organized chaos, one positive is that GM is still a pleasingly profitable automaker and is using its excess cash to buy back shares.

    It might be time to get GM stock out of the single-digit P/E range it's been stuck in for eons.

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