Economic figures released at the start of trading on Thursday showed that producer price inflation (PPI) fell by 0.5% in March, below expectations of a flat number, and weekly jobless claims increased more than expected by 11,000 to 239,000. The two readings suggest that a cooling trend in pricing pressures and the labor market is already underway.
The market’s interpretation of these two data releases has rekindled hopes for a pause in interest rate hikes following the Federal Reserve’s May meeting, with rate cut bets rising from the July meeting.
The stock market reacted positively, with major U.S. and global equity markets all in the green, celebrating the growing conviction the rate hike cycle that began in March 2022 is soon coming to an end. Both the SPDR S&P 500 Trust ETF SPY and the Dow Jones Industrial Average ETF DIA rose 0.3%, while the tech-heavy Invesco QQQ Trust, Series 1 QQQ gained 1%.
U.S. Stock indices surged following Thursday’s PPI, Jobless data – Chart: TradingView
5 Stocks To Watch
These five stocks are responding strongly to the economic data.
1) Newmont Corporation NEM
The world’s biggest gold mining company was among the S&P 500’s best performers midday Thursday, rising more than 3%.
The precious metal gained more than 1.4% approaching $2,050/oz on growing expectations of a Fed policy shift.
Newmont has gained 10% so far this year, but is up more than 20% over the last month.
The stock trades at a forward P/E ratio of 17.18x and offers a 3.22% forward dividend yield, according to Benzinga pro data.
Next earnings date: April 27, 2023.
2) Freeport McMoran, Inc. FCX
The metal miner, headquartered in Arizona, is up 2.7% on Thursday.
Freeport McMoran is profiting from broad-based price increases in major commodity metals the business explores, such as gold, silver, copper, and platinum.
Freeport McMoran has gained 12% so far this year.
The stock trades at a forward P/E ratio of 24.2x and offers a 1.46% forward dividend yield, according to Benzinga pro data.
Next earnings date: April 21, 2023.
3) Netflix, Inc. NFLX
The streaming platform is up 3.4% on Thursday, reversing two sessions of losses.
Netflix thrives when projections for future interest rates fall, as the company’s valuations grow.
Netflix has gained 17% so far this year, with the whole increase occurring in the previous month.
The stock trades at a forward P/E ratio of 28.7, according to Benzinga Pro data. This metric is well below the five-year average, which stands at 60x.
Next earnings date: April 18, 2023.
4) Old Dominion Freight Line, Inc. ODFL
The carrier lost 3% on Thursday, marking the worst trading day so far in 2023.
A decrease in producer inflation has a negative impact on freight carriers since their margins begin to contract.
Bank of America Securities, Morgan Stanley, Wells Fargo and Susquehanna have recently reduced their price targets for the stock.
Old Dominion Freigh Line has gained 17% so far this year, but the company is down 3% month-to-date.
The stock trades at a forward P/E ratio of 27.4 according to Benzinga pro data.
Next earnings date: April 18, 2023.
5) Marathon Digital Company, Inc. MARA
The digital-assets mining company is up 15% on the day, screening among the best-performing small-cap stocks in the Russell 2000 index on Thursday.
MARA is benefiting from a crypto asset rally, with Bitcoin surging more than 1.9% on the day. The news that Elon Musk may soon enable stock and cryptocurrency trading on Twitter has fueled an industry climb.
MARA has risen 220% so far in 2023 and by 115% over the past month alone.
The stock trades at a forward P/E ratio of 53.76 according to Benzinga Pro data.
Next earnings date: May 9, 2023.
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