Wall Street Is Growing More Confident About a Soft Landing. That's Great for Stocks and Bonds. — Barrons.com

Financial stocks were decreasing in Wednesday afternoon trading, with the NYSE Financial Index and the Financial Select Sector SPDR Fund (XLF) each shedding about 0.5%.

The Philadelphia Housing Index was easing 0.3%, and the Real Estate Select Sector SPDR Fund (XLRE) was down 0.3%.

Bitcoin (BTC/USD) was 0.2% lower at $93,523, and the yield for 10-year US Treasuries was rising 3.3 basis points to 4.41%.

In corporate news, Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh are scheduled for interview Wednesday for the Treasury Secretary role in President-elect Donald Trump's forthcoming administration, Bloomberg reported. Apollo shares were down 4.1%.

Wells Fargo's $1.95 trillion asset cap should not be removed until the bank has fixed its risk management and compliance issues, Democratic Senator Elizabeth Warren told the Federal Reserve in a letter, according to a Reuters report. Wells Fargo shares were down 0.7%.

Finance of America shares tumbled past 16% after UBS downgraded the financial services company to neutral from buy.

Headquartered in Jacksonville, Florida, Regency Centers Corporation is a leading player in the real estate industry. With a market cap of $13.4 billion, Regency Centers specializes in owning, operating, and developing high-quality open-air shopping centers.

REG stock has underperformed the broader market over the past year. The stock has gained 20.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.1%. In 2024, REG stock is up 10.8%, compared to SPX’s 24.1% returns on a YTD basis.

Narrowing the focus, REG has also lagged behind the Real Estate Select Sector SPDR Fund . The exchange-traded fund has gained about 21.1% over the past year.

Regency Centers has underperformed the broader market, reflecting challenges from market volatility and shifting investor sentiment. Despite this, the company's strong portfolio of high-quality, grocery-anchored retail centers and its strategic focus position it for long-term growth and resilience in the retail real estate sector.

Following its Q3 earnings release on Oct. 28, shares of Regency Centers rose 1%. The company reported a 10.1% year-over-year increase in net income attributable to common shareholders, reaching $98.1 million. Additionally, Regency reported Q3 funds from operations (FFO) per share of $1.07, surpassing analysts' consensus estimate of $1.04 by 2.9%. It also raised its 2024 Nareit FFO guidance to $4.27 to $4.29 per share and its core operating earnings guidance to $4.12 to $4.14 per share.

For the current fiscal year, ending in December, analysts expect Regency Centers’ EPS to grow 3.1% to $4.28 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.

Among the 17 analysts covering REG stock, the consensus is a “Strong Buy.” That’s based on 11 “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”

This configuration is less bullish than three months before, with 13 analysts advising a “Strong Buy.”

On Nov. 18, Wells Fargo analyst Dori Kesten maintained a “Buy” rating on Regency Centers.

The mean price target of $77.88 represents a 4.9% premium to REG’s current price levels. The Street-high price target of $84 suggests an upside potential of 13.1%.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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The S&P 500 Index today is down -0.56%, the Dow Jones Industrials Index is down -0.12%, and the Nasdaq 100 Index is down -0.75%.

Stocks today are moderately lower ahead of quarterly earnings results from Nvidia after the close. Target is down more than -20%, leading retailers lower after cutting its full-year outlook due to flat sales and an inventory buildup. Also, technology stocks are under pressure today from weakness in chip stocks.

On the positive side, health insurance stocks are climbing today after RBC Capital Markets said the nomination of Mehmet Oz to lead the Centers for Medicare and Medicaid Services is a positive for the sector. Also, geopolitical tensions in Europe were ratcheted lower after Reuters reported that Russian President Putin is willing to talk with US President-elect Trump about a cease-fire deal in Ukraine that could roughly freeze the war along current front lines.

Comments today from Fed Governor Cook were neutral to slightly dovish when she said, "It likely will be appropriate to move the policy rate toward a more neutral stance over time," but the "magnitude and timing" of reductions will depend on incoming data and the economic outlook.

US MBA mortgage applications rose +1.7% in the week ended November 15, with the purchase mortgage sub-index up +2.0% and the refinancing mortgage sub-index +1.8%. The average 30-year fixed rate mortgage rose +4 bp to a 4-month high of 6.90% from 6.86% in the prior week.

The markets are eagerly awaiting quarterly earnings results from Nvidia after today’s close to see if the world’s most valuable company will show that strong spending for its AI hardware can continue. The consensus is for Nvidia to report record Q3 revenue of $33.25 billion and forecast Q4 revenue of $37.1 billion. Also, the consensus is for 2025 revenue of $126.58 billion.

Of the 90% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.5% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 56% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.14%. China's Shanghai Composite Index closed up +0.66%. Japan's Nikkei Stock 225 Index closed down -0.16%.

Interest Rates

December 10-year T-notes (ZNZ24) today are down -7 ticks. The 10-year T-note yield is up +1.2 bp to 4.408%. Dec T-notes today are moderately lower due to carryover pressure from weakness in European government bonds. Also, an easing of Ukraine-Russian tensions has curbed some safe-haven demand for T-notes after Reuters reported that Russian President Putin was willing to talk to US President-elect Trump about a cease-fire deal in Ukraine. In addition, supply pressures are weighing on T-notes as the Treasury will auction $16 billion of 20-year T-bonds this afternoon. T-notes recovered from their worst levels today’s stock slump sparked some short-covering in T-notes.

European government bond yields today are moving higher. The 10-year German bund yield is up +0.8 bp to 2.346%. The 10-year UK gilt yield is up +3.2 bp to 4.474%.

Eurozone Q3 negotiated pay rose +5.4% y/y, the largest increase since the euro was introduced in 1999.

UK Oct CPI rose +2.3% y/y, stronger than expectations of +2.2% y/y. UK Oct core CPI rose +3.3% y/y, stronger than expectations of +3.1% y/y.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 18% for a -50 bp rate cut at the same meeting.

US Stock Movers

Target is down more than -20% to lead losers in the S&P 500 and lead retailers lower after reporting Q3 comparable sales rose +0.3%, well below the consensus of +1.48%, and cut its 2025 adjusted EPS forecast to $8.30-$8.90 from a previous estimate of $9.00-$9.70, weaker than the consensus of $9.57. Also, Dollar General is down more than -4%, and Dollar Tree is down more than -3%. In addition, Costco Wholesale Is down more than -1%, and TJX Cos and Ross Stores are down at least -0.40%.

Qualcomm is down more than -5% to lead chip stocks lower after Susquehanna Financial cut its price target on the stock to $210 from $230. Also, Broadcom and GlobalFoundries are down more than -2%. In addition, Nvidia , ON Semiconductor , Advanced Micro Devices , Intel , ASML Holding NV , Microchip Technology , and Texas Instruments are down more than -1%.

Fabrinet is down more than -9% after B Riley Securities downgraded the stock to sell from neutral with a price target of $178.

XP Inc is down more than -5% after reporting Q3 revenue below expectations, and CFO Mansur said that equity markets will face more difficulties next year due to the macroeconomic situation.

Powell Industries is down more than -13% after reporting Q4 revenue of $275.1 million, weaker than the consensus of $284.3 million.

Palantir Technologies is down more than -2% after Jeffries said the company has an “unsustainable” multiple as it maintained its underperform rating on the stock with a price target of $28.

JPMorgan Chase is down more than -1% after Oppenheimer downgraded the stock to perform from outperform.

Keysight Technologies is up more than +5% to lead gainers in the S&P 500 after reporting Q4 revenue of $1.29 billion, better than the consensus of $1.26 billion, and forecast Q1 revenue of $1.27 billion-$1.29 billion, stronger than the consensus of $1.24 billion.

Health insurance stocks are climbing today after RBC Capital Markets said the nomination of Mehmet Oz to lead the Centers for Medicare and Medicaid Services is a positive for the sector. As a result, Humana is up more than +3%, and UnitedHealth Group is up more than +2% to lead gainers in the Dow Jones Industrials. Also, Molina Healthcare is up more than +2%, and Centene and CVS Health are up more than +1%.

Williams-Sonoma is up more than +27% after reporting Q3 adjusted EPS of $1.96, stronger than the consensus of $1.76.

Wix.com is up more than +13% after boosting its full-year revenue forecast to $.176 billion from a previous forecast of $1.75 billion-$1.76 billion.

Flex Ltd is up more than +8% after S&P Dow Jones Indices said the stock will replace Azenta in the S&P MidCap 400 effective November 27.

Newell Brands is up more than +3% after Barclays upgraded the stock to overweight from equal weight with a price target of $10.

AppLovin is up more than +2% after Piper Sandler initiated coverage on the stock with a recommendation of overweight and a price target of $400.

Earnings Reports (11/20/2024)

NVIDIA Corp (NVDA), Palo Alto Networks Inc (PANW), Snowflake Inc (SNOW), Target Corp (TGT), TJX Cos Inc/The (TJX), Williams-Sonoma Inc (WSM).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

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