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Starbucks has best. day. ever.

The market loves the CEO switcheroo

8/13/24 3:20PM

If you’re planning a management coup, this is about as good a market reaction as you could hope for.

Shares of Starbucks soared 24.5% on Tuesday, their best single-day gain since the shares went public in June 1992. The stock price careened higher after the Wall Street Journal broke the story that the company is replacing Laxman Narasimhan, CEO for about 16 months, with Chipotle CEO Brian Niccol in September.

The rise added roughly $20 billion to Starbucks’ market cap in a single session.

For sheer drama, the only session that could rival Tuesday occurred on July 1, 1999, when then-CEO Howard Schultz introduced a half-baked idea to expand the company’s costly and distracting foray into internet retailing, resulting in a cataclysmic collapse of 28%, which remains its worst day ever. The lede of the the Wall Street Journal’s story the next day: “Earth to Howard Schultz: Return from cyberspace. Your coffee needs you.”

But even after the surge in Starbucks shares on Tuesday, the stock still has been a clear money-loser for investors in recent years. Over the last five years it’s down roughly 1%, while the S&P 500 was up about 85% and the S&P 500 restaurants subdivision up 25% over the same period.

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28m

Intel cuts expense forecast, sees best gain in weeks

Intel shares jumped after the partially nationalized US chip giant snipped its forecast for operating expenses this year to $16.8 billion from $17 billion after finalizing the divestiture of 51% of its stake in its Altera programmable chip unit to private equity firm Silver Lake.

Shortly after 12 p.m. ET the stock was up 4%, Intel’s best gain since August 22, when the Trump administration announced the extraordinary step of having the federal government take a 10% ownership stake in the private chip company.

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Seagate, Western Digital romp as hard drive makers dominate S&P 500 leaderboard

Hard drive makers Seagate Technology Holdings and Western Digital surged Monday, putting them comfortably in the top two spots of this year’s top performers in the S&P 500.

Shortly after 10:30 a.m. ET, they were looking at gains of roughly 145% and 130%, respectively, for the year.

Not much news on the day, though Bank of America analysts have boosted the price target for Seagate to $215 from $170 while upwardly revising their outlook for hard disk drive demand this year, per The Fly.

Positive background music on the US and China’s trade relationship, important to IT hardware makers, is also likely helping, along with a general upswing in the AI data center trade.

Data storage is so hot right now

Positive background music on the US and China’s trade relationship, important to IT hardware makers, is also likely helping, along with a general upswing in the AI data center trade.

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International investors want to own US assets — and have nothing to do with the US dollar

Looking at ETF flows, Deutsche Bank’s George Saravelos found that 80% of recent foreign inflows into US stocks and 50% of inflows into US bonds have been on a hedged basis.

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Nio climbs ahead of new SUV launch as Chinese EV giants recommit to paying suppliers faster

Shares of Chinese EV maker Nio climbed in Monday morning trading as investors cheered news that its ES8 SUV — priced to compete with Tesla’s Model Y — will begin deliveries this weekend.

Nio may also be seeing a boost from the recommitment by several Chinese EV giants on Monday to pay their suppliers within 60 days. That effort could help tame some of the brutal price wars between automakers in the country, which the Chinese government has struggled to contain.

The move is seen as a boost to the stability of the Chinese auto industry, and Nio rivals Li Auto and BYD also climbed.

At the end of 2023, Nio took nearly 300 days to pay its suppliers, according to Bloomberg reporting. In June, Nio and 16 other Chinese automakers agreed to the 60-day payment window, though a government report in August found that only three had set up payment systems.