NEWS
Dow 40k & The Reddit IP-YOOOOOO

Today’s market had something for everyone, with boomers celebrating the Dow Jones Industrial Average hitting a new milestone and Millennial and Gen Z degenerates trading the Reddit IPO pop. Let’s see what you missed. 👀

Today's issue covers Reddit running despite retail skepticism, FedEx flying in the face of weak revenues, and what’s driving the Dow Jones Industrial Average’s new highs. 📰

Here's today's heat map:

10 of 11 sectors closed green. Industrials (+0.99%) led, & utilities (-0.16%) lagged. 💚

The Bank of England is the latest developed market central bank to lay the groundwork to cut rates as soon as this summer, with two of the most hawkish rate-setters dropping their guard this week. ✂️

Meanwhile, the Turkish central bank surprised markets by raising rates 500 bps to 50%. It’s now more than quintupled rates since last June and says it will tighten further if soaring inflation (>70%) doesn’t fall soon. 🚨

U.S. home sales soared 9.50% in February, with the median existing-home price rising 5.70% YoY. This is the first time in more than two years that sales have risen for two consecutive months. Falling mortgage rates and rising inventory of homes have given eager buyers more choices. 🏘️

It was a mixed day in the retail world. Nike shares jumped 5% after holiday sales topped estimates, driven by North American growth. Meanwhile, Lululemon experienced slowing North American growth, causing shares to fall 10% on its weak forward guidance. 🛍️

Tech consulting giant Accenture dipped 9%, cutting its full-year outlook after experiencing a mixed second quarter of results. Consulting revenues fell 3% YoY, partially offset by managed services revenue, which rose by 3%. 👨‍💼

Olive Garden owner Darden Restaurants fell 7% after reporting slightly lower-than-expected sales and cutting its full-year financial guidance. It claims that older and lower-income customers are pulling back on discretionary eating, given sustained and elevated inflation levels. 🍝

Mall-based clothing retailers continue to recover, with Guess surging 21% after its earnings and revenues both topped expectations. Meanwhile, online pet retailer Chewy lacked traction again, falling 11% on soft guidance. 🛒

Other active symbols: $MU (+14.13%), $SOUN (-15.76%), $OCGN (+8.06%), $APAC (-10.36%), $LXEH (-85.74%), $GOEV (+27.27%), & $GS (+4.35%). 🔥

Here are the closing prices: 

IPOs
Reddit Roars In Initial Public Offering

After patiently waiting for other companies to test the initial public offering (IPO) waters, social media giant Reddit finally took the plunge itself. And it appears its patience paid off! 👍

Not only did the nearly 20-year-old site price at the top of its $31-$34 per share anticipated range, but shares also popped immediately and opened at $47. That allowed the company and selling shareholders to rake in $750 million from the offering, with the company keeping about 69% of that (nice). 🤑

Overall, it was a solid day of trading, with shares hitting a high of $57.80 and a low of $45.05 before settling near $50 at the close.

It was an absolute blast following all the action on the $RDDT Stocktwits stream. The symbol gained thousands of followers as message volume surged, but notably, sentiment is sitting at a bearish extreme! 🤯

With all the tech wrecks that have happened over the last few years and the animal spirits pushing the stock and crypto markets to new heights, it’s easy to find reasons to be bearish on the unprofitable social media platform. 🐻

However, some users say it’s important not to underestimate the power of community and the value of the platform’s data in the age of artificial intelligence and large language models (LLMs). 🐂

Still, we want to hear what everyone has to say about this. That’s why we’re giving away merch to whoever can guess tomorrow’s closing price using the Stocktwits price prediction tool. 🎯

Details below on how to enter and best of luck to everyone guessing! 🫡

STOCKTWITS CONTENT
New “Trends With Friends” 🍿

Stocktwits co-founder Howard Lindzon chops it up with pals JC Parets and Phil Pearlman every Thursday on "Trends With Friends."

Watch the latest on YouTube and Spotify, and subscribe to catch each episode when it goes live!

STOCKS
What’s Driving The Dow Jones?

The Dow Jones Industrial Average is the index most popular among boomers and the journalists who cater to them. However, the 30-stock, price-weighted index is rarely talked about, especially when so many other, more exciting parts of the market are absolutely roaring. 😴

That said, with the index briefly crossing the 40,000 milestone mark, we owe it some time in the sun before we disregard it again for a while, lol.

The index making new all-time highs is an exciting development, with Stocktwits sentiment sitting in “extremely bullish” territory and message volume surging. 🤩

But what many people don’t talk about is what’s actually driving the index’s performance.

So far, the index is up 6.02% this year, with financials accounting for roughly half of all of that performance. Think of companies like American Express, Travelers, Visa, and JPMorgan Chase.

Information technology is up next, with another 1/3 of the performance, followed by consumer discretionary and communication services. Those are stocks like Microsoft, Salesforce, IBM, and more.

But, the biggest winner has actually been in the industrial space. Caterpillar is up 24% YTD and has driven 121 bps of performance for the index.

Sounds like broad participation to us. 🤷

One component that isn’t doing so well is Apple. The consumer tech giant was the primary focus today, falling 4% on news that the Department of Justice has sued the company, accusing it of maintaining an iPhone Monopoly.

The stock has gone essentially nowhere for the last three years, and so far, the Stocktwits community’s cautious outlook on it has paid dividends. Sentiment remained in bearish territory today as message volume ticked up and users rushed to add the stock to their watchlist (it was the 9th most newly watched stock on the platform today).

We’ll have to wait and see if Apple’s luck changes anytime soon. But for now, there are still plenty of leaders in the Dow Jones Industrial Average pulling it higher. Party on, boomers. 🥳

EARNINGS
FedEx Flies As Buyers Spread Funds Around

Laggards in the stock market continue to play catchup, with catalysts like earnings accelerating the trend further today. Let’s take a look at FedEx, which is soaring after hours despite reporting mixed results. 🤔

The transportation giant’s earnings per share of $3.86 topped estimates of $3.43, while sales of $21.70 billion were $0.30 billion shy of estimates.

That marked the sixth consecutive quarter of YoY revenue declines, but it also marked the third consecutive quarter of YoY improvements in operating profit margins. Its 6% margin was up about 100 bps YoY and pushed it well ahead of Wall Street’s 5.50% expectations. 🔺

As we’ve seen from large companies struggling to drive sales in the current macroeconomic environment, cost-cutting is the way they continue to drive results. And investors love that because once the tide turns and revenue growth picks up, the company’s leaner operations will result in keeping more of that revenue growth as profits.

Executives said business-to-business volumes remain weak but that e-commerce activity has normalized for the post-pandemic world and is growing again. As a result, they raised their full-year earnings guidance, putting it well in the range to beat consensus estimates. 📊

While it wasn’t a blockbuster report, it was good enough for investors in today’s very forgiving environment. With stocks continuing to take off, portfolio managers are buying things that have yet to see major moves in hopes of gaining ground on their benchmark indexes.

We’ll have to wait and see how long that continues. But for now, FedEx shares are up 13% after the bell, and the Stocktwits community is bulled up, expecting it to “deliver” further gains. See what we did there? 😜

STOCKTWITS CONTENT
ICYMI: Our Live Discussion With Raoul Pal 👀

We had an absolute blast chatting with Raoul Pal of Real Vision and have highlighted some of our favorite quotes from the chat below. 👇

• “BlackRock is kind of the government proxy to keep people from migrating into crypto land, but I actually think its more of a trojan horse. People go into the ETF and eventually become curious, and before you know it, they’ve moved into crypto land. “

• There’s no reason for adoption to have happened. We’ve essentially “memed into existence” $2.7 trillion, and it’s only just started. It’s likely to move onto $10 trillion [maybe] in this cycle and maybe onto $100 or $200 trillion. And it’s all driven by a move from a “trust me” system to a “proveable trust” backed by mathematics and cryptography.

The quotes above barely scratch the surface of everything covered during the hour. If you missed it, listen to the recording here. 🎧🎶

Bullets From The Day

₿ With crypto booming again, FTX customers don’t want a refund; they want their crypto back. Nearly 300 pages of letters from all over the world were sent to the federal judge handling the criminal case against FTX’s founder. While every creditor is unhappy for a variety of reasons, the common theme is that they feel being made whole isn’t good enough; they want their coins back as those assets have appreciated significantly since the loss occurred. Axios has more.

🌐 The Browser company raises $50 million to build the next-gen web browser. The startup behind the Arc browser has raised another round of funding at a $550 million valuation, bringing its total raised to $128 million since 2019. The company’s founders believe that the successor to the personal computer is imminent and that the transition starts with the browser. Now, the company is implementing a variety of AI features to take advantage of the recent hype but is facing pushback over its implementation. More from TechCrunch.

🧠 Elon Musk’s Nueralink is playing chess while we all play checkers. The company’s first human patient said the technology has changed his life but that ‘there’s still a lot of work to be done."‘ The 29-year-old patient was shown in a video using Nueralink’s brain implant to control a mouse cursor and play a game of chess via “telepathy.” Additionally, the patient said the implant allowed him to play the RTS video game Civilization VI for eight hours straight, limited only by battery length. Shit, when you put it that way, count me in! The Verge has more.

Links That Don’t Suck

🤑 Donald Trump to make $3.4bn if shareholders back plan to float Trump Media

🤪 SBF repeatedly lied to get out of “supervillain” prison term, FTX CEO alleges

📺 ESPN’s model is eroding. Past and present execs are split on how it can protect its dominance

🏭 United Steelworkers union endorses Biden, giving him more labor support in presidential race

🤔 Landmark $418 million settlement could slash homebuying costs by tens of thousands of dollars—here’s how it works

Get In Touch

Follow our social channels for great, real-time content on Stocktwits and Twitter. And check out our YouTube channel for in-depth video content! 📲

Help us deliver the best content possible by completing this brief survey. 📝

Email me (Tom Bruni) your feedback; I’d love to hear from you. 📧

Want to sponsor this newsletter and reach hundreds of thousands of crypto enthusiasts? Reach us here. 👍

Disclaimer: Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. Read the full terms & conditions here. 🔍