Stock market news for May 10, 2024

Goldman Sachs, the largest investment bank in the U.S., touched a record $458.75 on Friday before ending the week 3.8% higher.

Goldman has now risen for four straight weeks, climbing almost 17% during that span and single-handedly adding 431 points to the Dow Jones Industrial Average during the same period.

Looked at another way, Goldman Sachs has accounted for some 31% of the entire 1,405-point gain in the Dow Industrials over the past four weeks.

— Scott Schnipper

Novavax’s nearly triple-digit jump today has investors who have bet against the company running for the exits.

NVAX short sellers are down -$196M in mark-to-market losses based on today’s move, according to data from S3 Partners. NVAX short interest is 44.5M shares, about one-third of the company’s public float. Anything over 10% is considered elevated short interest. The company had more than doubled early in the session on news of a $1.2 billion licensing agreement with Sanofi, though has pulled back slightly.

Investors hoping to get in on the action would have a hard time. S3 reports less than 1M shares available to borrow in support of new short positions. Short sellers are paying 9.5% fees on their existing short positions and up to 10% on new short sales executed. Shorting a stock is a bearish move that involves borrowing shares, then selling them and hoping to buy them back at a lower price.

“We expect a rib crunching short squeeze in NVAX with short sellers taking huge losses on the market open and closing positions throughout the day,” said Ihor Dusaniwsky, managing director at S3.

Still, NVAX short sellers are up $2.34B in mark-to-market profits since the stock hit its all-time high in February 2021, per S3 data.

— Nick Wells

Zeekr traded more than 32% above its initial public offering price of $21 a share on Friday, the top of its expected range, marking a strong debut for the Chinese electric vehicle company.

The company planned to sell 21 million American depository shares to raise $441 million when it begins trading on the New York Stock Exchange under the ticker ‘ZK.’ Zeekr, which is backed by parent company Geely, a Chinese-based automotive group, makes luxury vehicle models. The company could be a competitor of Tesla, as it has reportedly outpaced Tesla in car sales in the province of Zhejiang, China, during the first three weeks of April.

For more on Zeekr’s IPO, read here.

— Pia Singh

Stocks are headed for a positive week, but breath during Friday’s session was downbeat. More than 1,600 S&P 500 companies were lower at the New York Stock Exchange, while just 1,076 advanced.

— Fred Imbert

Federal Reserve regional presidents Neel Kashkari of Minneapolis and Austan Goolsbee of Chicago said they are taking a patient approach to monetary policy as they weigh surprisingly strong inflation data this year.

“I’m in a wait-and-see mode. Let’s get a lot more data to see if this inflation is going to continue or if it’s stalling,” Kashkari said during a joint live interview on CNBC. “We are all committed to getting inflation back” to the Fed’s 2% goal.

Goolsbee noted the rapid disinflation that occurred in 2023 and said he is hopeful that can resume following the sticky upward trend seen so far this year.

“I don’t like tying our hands even partially when we’re going to get a lot of data and important information before the next meeting much less for the rest of the year,” he said. “The data dogs need to do some sniffing and figure out, are we going to be on the path like what we saw last year where inflation fell almost as much as it has ever fallen in a year without a recession? Or did we kind of use up all of our good luck and this bump of the beginning of the year is actually a sign of overheating?”

— Jeff Cox

Gen Digital was the top-performing stock in the S&P 500 on Friday.

Shares surged more than 14% after the cybersecurity software company behind LifeLock and Norton posted its latest earnings results. In its fiscal fourth quarter, Gen Digital reported adjusted earnings of 53 cents, a 15% increase from the year-ago period. Revenue of $967 million reflected a 2% rise.

Construction and mining equipment company Caterpillar is up 5.2% week to date, leading the Dow Jones Industrial Average’s weekly gains. The 30-stock index is up around 2.1% for the week.

Financial companies JPMorgan Chase, American Express and Visa are the following biggest gainers of the week. All three stocks have rallied more than 4% week to date.

— Hakyung Kim

CFRA’s Sam Stovall hiked his year-end target for the S&P 500 to 5,415 from 4,940. The new forecast represents a 4% gain from here and a 13.5% return for the full year.

This updated target marks one of the highest on the Street, behind only the 5,500 target from John Stoltzfus at Oppenheimer. It is also 6% higher than the average projection of 5,105, according to the CNBC Pro Market Strategist Survey, which rounds up the targets from the top 14 Wall Street strategists.

— Yun Li

Alphabet shares slipped more than 1% before the bell following a Reuters report that OpenAI could unveil a competitor to Google search.

The report, citing sources familiar with the matter, said the announcement could come Monday.

— Samantha Subin

The University of Michigan’s consumer sentiment index dropped due in part to a big uptick in inflation expectations.

The index’s preliminary May reading came in at 67.4. That is well below a Dow Jones estimate of 76 and under the 77.2 reading for April.

“This 10 index-point decline is statistically significant and brings sentiment to its lowest reading in about six months,” Surveys of Consumers Director Joanne Hsu said in a statement.

“While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions. They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead,” Hsu added.

Year-ahead inflation expectations jumped to 3.5% from 3.2%. Long-run estimates also went up to 31% from 3%.

— Fred Imbert

Inflation this year will run well above the Federal Reserve’s target and remain elevated for the next several years, according to a consensus forecast released Friday from some of Wall Street’s biggest economic names.

The Philadelphia Fed’s quarterly Survey of Professional Forecasters puts core inflation as measured by the personal consumption expenditures price index — the central bank’s preferred measure — at 2.9% through 2024. That is well above the previous forecast of 2.1% and the Fed’s 2% target.

The outlook is even less optimistic when measured by the consumer price index, which is expected to average 2.5% over the next five years and 2.33% over the next 10 years, with both forecasts also above previous outlooks.

The 34 participants in the survey include economists Jan Hatzius of Goldman Sachs, Ellen Zentner at Morgan Stanley and Michael Feroli at JPMorgan Chase, among other luminous Wall Street forecasters.

— Jeff Cox

Check out the companies making headlines before the bell:

Akamai Technologies — Shares of the cloud company fell more than 10% after issuing weak guidance for the second quarter. Akamai sees adjusted earnings ranging between $1.51 and $1.56 per share on revenue of $967 million to $986 million. Analysts polled by LSEG forecast earnings of $1.63 per share and revenue of $1 billion.

Sweetgreen — The salad chain popped 5% after Sweetgreen reported first-quarter revenue of $158 million, topping the LSEG consensus estimate of $152 million. The revenue forecast was basically in line with expectations.

Array Technologies — The solar energy stock rallied nearly 17%. Array’s first-quarter adjusted earnings came in at 6 cents per share on revenue of $153.4 million. Analysts polled by FactSet called for a loss of 4 cents per share on revenue of $141.2 million.

The full list can be found here.

— Hakyung Kim

Novavax shares surged 125% in premarket trading after announcing it signed a multibillion-dollar deal with Sanofi to co-commercialize its Covid vaccine starting next year.

The biotech company will also develop combination shots targeting the coronavirus and flu. The licensing agreement allows Novavax to lift the “going concern” warning it issued in February 2023 on concerns over its ability to continue operating.

Sanofi will pay Novavax an upfront payment of $500 million and up to $700 million in an additional payment. That total is roughly double Novavax’s current market cap of $627 million.

— Annika Kim Constantino, Michelle Fox

Zeekr, a Chinese electric vehicle maker backed by Geely, priced its initial public offering at $21 per share, implying the company is looking to raise more than $400 million in its U.S. public market debut.

The company on Friday will trade under the ticker ZK at the New York Stock Exchange. The offering also sits at the top end of Zeekr’s expected range of $18 to $21, according to a regulatory filing from earlier this month.

“Through developing and offering next-generation premium BEVs and technology-driven solutions, we aspire to lead the electrification, intelligentization and innovation of the automobile industry,” the company said in its SEC filing.

— Fred Imbert, Samantha Subin

European markets opened higher on Friday as positive momentum continued into the end of the week and the U.K. posted first-quarter gross domestic product that was better than expected.

The pan-European Stoxx 600 was 0.52% higher at 8:08 a.m. London time. The U.K.’s FTSE 100 was last up 0.41%, while Germany’s DAX rose 0.39% and France’s CAC 40 was 0.45% higher.

— Sophie Kiderlin

India’s interest rates are likely to stay “higher for longer” and the status quo could remain for “some time to go,” according to State Bank of India Chair Dinesh Kumar Khara.

The Reserve Bank of India is unlikely to follow the timeline of other central banks, he said.

“India’s central bank will probably decouple from the rest of the central banks,” Khara told CNBC’s “Street Signs Asia” on Friday, explaining that inflation in the country had dipped below 5%.

In April, the RBI held its benchmark interest rate unchanged at 6.5% for its seventh meeting in a row.

— Charmaine Jacob

Singapore’s second-largest bank OCBC posted record first-quarter revenue and profit, with total income rising 8% year on year to 3.63 billion Singapore dollars, or $2.68 billion, and net profit climbing 5% year on year to SG$1.98 billion.

On a quarter-on-quarter basis, revenue rose 11%, while net profit surged 22%. OCBC cited a “robust performance across all segments,” highlighting that its banking operations profit was at a record high, supported by higher wealth management income and assets under management.

Separately, OCBC also offered SG$1.4 billion to privatize its insurance subsidiary Great Eastern.

The company will buy the 11.56% stake in the insurer that it does not currently own at SG$25.60 per share, representing a 36.9% premium over Great Eastern’s last traded price of SG$18.70.