Top 10 things to watch on Monday, April 13th
1. Dow futures dropped around 500 points this morning, with WTI crude oil prices surpassing $100 a barrel. This follows President Trump’s announcement regarding the potential closure of the Strait of Hormuz after peace talks between the U.S. and Iran fell through over the weekend. I had a bit of a gut feeling that the market was getting a bit too confident lately.
2. In his Sunday update for Investing Club subscribers, he examines three significant battlegrounds on Wall Street: the Iran conflict, a crash in software stocks, and the current earnings season, trying to address the question, “Why are markets staying strong?” He notes the bond market’s influence on this resilience.
3. Goldman Sachs reported first-quarter profits that beat expectations, highlighting increased investment banking revenue and a record in stock trading. The return on equity was impressive as well, even though bond trading faced a downturn. The stock price, although numerically lower, still reflects a significant 16% increase since mid-March. I’m curious about their deal pipeline, which will be discussed in a conference call at 9:30 a.m. ET.
4. Best Buy faced a disappointing double downgrade from Goldman Sachs, shifting from a buy to a sell recommendation with a lowered price target of $59 from $76. There are concerns about the escalating memory prices affecting computer sales, which could hinder consumer electronics. Despite Best Buy’s ongoing dividend increases, the sustainability of this trend seems questionable under continued sales pressure, especially with a yield already at 6%.
5. On a more positive note, Goldman upgraded Williams Sonoma from Hold to Buy. The stock has decreased about 14% since February, which analysts believe offers a good buying opportunity. They’re particularly optimistic about West Elm’s improvements, mentioning plans for new store openings and the anticipated relaunch of the university decor brand, Dormify. CEO Laura Alber seems to be steering the ship well here.
6. TD Cowen upgraded Constellation Brands from Hold to Buy, anticipating conservative guidance for 2027 released last week. They mentioned the upcoming World Cup may drive sales, and noted that easing pressures on Hispanic consumers could also benefit Home Depot, but there’s still some uncertainty with that situation.
7. It’s not often you see this, but Evercore has upgraded several homebuilders, suggesting that much of the negative news regarding the housing downturn has been absorbed by the market. They shifted Pluto Group and Toll Brothers from Hold to Buy. They also upgraded Masco, known for Behr paint and plumbing products.
8. BTIG initiated coverage on Adobe, maintaining its rating while expressing concerns about long-term earnings and profit margin trajectories. Analysts believe the rise of AI may threaten the creative ecosystem, a sentiment that seems to echo throughout the industry, although it’s noted that the risk of Adobe’s role being overshadowed is more pronounced than for Salesforce.
9. Starbucks was upgraded from Sell to Hold at Jefferies. The analysts appear to be growing more optimistic now that the company has wrapped up its joint venture in China and its U.S. operations are stabilizing. That said, the stock still seems a bit pricey for some tastes. I’m still bullish on what CEO Brian Niccol is trying to achieve.
10. Citi raised its price target for Cummins from $630 to $710 ahead of the first-quarter earnings. Analysts have noted improvement in the North American truck market, which bodes well for manufacturers of heavy-duty engines. The stock seems to lag among machinery stocks, although it remains a respected name in trucking. Also, Citi increased their target for Caterpillar from $785 to $905.
