Markets React to Developments in Iran; Nasdaq, S&P 500 Turn Positive; Oil, Treasury Yields Jump

Elevance Health Stock Dives on CMS Plans to Impose Sanctions

FROM 25 minutes ago

Elevance Health (ELV) investors are not responding positively to the company’s latest filing with the Securities and Exchange Commission.

Shares of Elevance Health sank 9% Monday after the Indianapolis-based firm revealed in a regulatory filing that the Centers for Medicare & Medicaid Services intends “to impose intermediate sanctions suspending enrollment of Medicare beneficiaries into the Company’s Medicare Advantage-Prescription Drug plans and suspending certain communication activities to Medicare beneficiaries.”

Elevance Health said CMS “indicated that the proposed sanctions relate to alleged noncompliance by the Company with certain Medicare Advantage risk adjustment data submission requirements for dates of service prior to April 3, 2023.” The sanctions are slated to take effect on March 31 “unless CMS determines that the issues identified have been satisfactorily addressed.”

Shares of Elevance Health, which said it “is committed to working cooperatively with CMS to address its stated concerns,” are down about 17% year-to-date.

Crypto-Tied Stocks Surge Along With Bitcoin

FROM 2 hr 16 min ago

Major cryptocurrencies are in the green Monday. So are stocks affiliated with them.

Shares of crypto-tied stocks MARA Global (MARA), Strategy (MSTR), Coinbase Global (COIN), and Robinhood Markets (HOOD) surged a respective 8%, 7%, 4.5%, and 4% in recent trading.

Bitcoin was trading around $69,500, up from as low as $63,000 early Saturday in the immediate aftermath of the U.S. and Israel’s military strikes on Iran.

Ethereum was up nearly 7% at $2,060, while XRP was up more than 4% at $1.40.

Coherent, Lumentum Stocks Gain on Nvidia Deals, Investments

FROM 3 hr 52 min ago

Deals with Nvidia are having a positive effect on the stocks of Coherent and Lumentum Holdings on Monday morning.

Shares of photonics and laser makers Coherent (COHR) and Lumentum (LITE) are rising a respective 6.5% and 4.5% in early trading after Nvidia (NVDA), the world’s most valuable company, announced separate partnerships.

Nvidia said its deal with Saxonburg, Pa.-based Coherent includes “a multibillion-dollar purchase commitment and future access and capacity rights for advanced laser and optical networking products,” as well as a $2 billion investment in Coherent.

Nvidia also will invest $2 billion in Lumentum and made a multibillion-dollar purchase commitment to the San Jose, Calif.-based firm for “future capacity access rights for advanced laser components.”

Shares of Lumentum and Coherent are up roughly 100% and 50% year-to-date.

Here’s How Much Target Stock Is Expected to Move After Earnings

FROM 4 hr 16 min ago

Target is slated to post fourth-quarter earnings on Tuesday morning, with traders anticipating a big move in the retailer’s stock following the results.

Current options pricing suggests traders expect Target (TGT) stock could move up to 8% in either direction by the end of the week. A move of that size from Friday’s close could lift it to $123 or drag it back down to $104, giving up some of its recent gains. Target stock has rallied more than 16% since the year began, amid a broader rotation in favor of consumer-focused stocks, though it’s still down about 8% from a year ago as sales slumped.

The retailer is widely expected to report a year-over-year decline in sales and profits for the fourth quarter, but analysts said more attention will likely be on Target’s outlook under new CEO Michael Fiddelke, who took over at the start of the month.

UBS analysts recently said they expect focus to be on Target’s forward-looking comments, with its CEO transition seen as an opportunity for Target to undertake a “fundamental reshape of many of its key processes, assets, and culture.” That could also mean higher spending this year on store remodels, along with improvements to Target’s supply chain and e-commerce capabilities, they said.

Read the full article here.

–Aaron McDade

What If the Real Reason Homes Are So Expensive Isn’t A Housing Shortage? Here’s What It Means for You

FROM 4 hr 51 min ago

An analysis by researchers at the Federal Reserve Bank of San Francisco challenges the common assumption that homes have gotten more expensive because too few have been built.

The analysis, published earlier this month, showed that cities across the country have built housing faster than their populations have grown. Home prices, meanwhile, tend to rise alongside incomes. Indeed, the housing supply grew faster than the population, even in expensive markets like San Francisco.

In other words, rising incomes, not a shortage of housing, could be fueling the soaring cost of houses.

The research by a team led by Schuyler Louie, a doctoral student at the University of California, Irvine, could reframe the debate over what’s causing the housing affordability crisis—and how to fix it.

Read the full article here.

–Diccon Hyatt

Why the New Fed Chair May Struggle to Slim Down the Central Bank

FROM 5 hr 8 min ago

When Federal Reserve Chair nominee Kevin Warsh joined the Fed in 2006, the central bank had less than $850 billion in assets. It now has $6.6 trillion, or nearly eight times more.

The gargantuan rise has long drawn skepticism from Warsh, who may now decide it’s time to reduce the Fed’s footprint in financial markets. But that footprint also helped calm markets during panic. The Fed absorbed trillions of bonds during the 2008 and 2020 crashes. And it spurred ultra-low mortgage rates in 2020, prompting a boom in homebuying and refinancing.

Moreover, markets are now used to a massive Fed balance sheet—and a return to pre-2008 conditions would be tricky, to say the least.

“Doing it is akin to forcing the toothpaste back into its container. Not impossible, but it risks being a right mess,” wrote Padhraic Garvey, regional head of research for the Americas at the Dutch bank ING.

Read the full article here.

–Polo Rocha

Big Oil, LNG Shares Soar on Middle East Conflict

FROM 5 hr 47 min ago

Stock futures may be sinking Monday morning because of the escalating conflict in the Middle East, but it is proving beneficial to energy shares.

Big oil stocks and those of liquefied natural gas (LNG) providers are soaring before the bell along with West Texas Intermediate crude and natural gas futures, which jumped about 8% and 5%, respectively.

Shares of U.S. oil giants Exxon Mobil (XOM) and Chevron (CVX) surged 5% and 4%, respectively, about 90 minutes before the bell, while those of Occidental Petroleum (OXY) and Phillips 66 (PSX) were up a respective 7% and 3%.

Meanwhile, LNG suppliers Venture Global (VG) and Cheniere Energy (LNG) soared 11% and 7.5%, respectively, while QatarEnergy said it had stopped LNG production because its facilities were attacked by Iran.

Airline Stocks Sink as Middle East Flights Canceled

FROM 6 hr 37 min ago

Global airline stocks dropped Monday as numerous carriers’ operations in the Middle East shut down following U.S. and Israeli bombings of Iran and Iran’s retaliatory strikes.

According to FlightAware data, Middle Eastern carriers Emirates, FlyDubai, Etihad Airways, Gulf Air, and El Al all have canceled at least 60% of their flights today. Dubai-based Emirates was particularly hard-hit, with the carrier canceling 500 flights, or 95% of its scheduled operations today.

Shares of several large European carriers that fly to or through the Middle East sank. Air France-KLM plunged 12% in Paris trading, Deutsche Lufthansa retreated 6% in Frankfurt trading, and British Airways parent International Consolidated Airlines Group, or IAG, sank 6% in London trading.

Meanwhile, U.S. carriers Delta Air Lines (DAL), United Airlines Holdings (UAL), and American Airlines Group (AAL), which also fly to the Middle East, were down between 5% and 6.5% in premarket trading.

Stock Futures Plunge After US, Israel Attack Iran

FROM 7 hr 26 min ago

Futures contracts connected to the Dow Jones Industrial Average pointed 1.1% lower.

S&P 500 futures also were down 1.1%.

Nasdaq 100 futures pointed 1.4% lower.