US futures rise as nerves settle after Iran attack

Live3 updates

• Mon, April 15, 2024 at 3:58 AM MST

  Salesforce could be deal-hunting

  Several reports have surfaced that Salesforce (CRM) is nearing a deal to buy data management company Informatica (INFA) for $11 billion or so — hence both tickers are tops on the Yahoo Finance ‘Trending Ticker‘ page this morning.

  Salesforce shares are down on the news as the vibe on the Street is that it’s unclear if the business would be an amazing fit (it has lower margins than Salesforce, for one).

  The Street has also liked a Salesforce more focused on growing profit margins the past year after dealing with a surprise activist investor attack (in part because of a string of dilutive acquisitions). This would be Salesforce’s first big deal since buying Slack in 2021 for $28 billion.

  Informatica’s stock is lower as Salesforce may not offer a premium for the company, per reports.

  Knowing Salesforce co-founder and CEO Marc Benioff, I am surprised a bit by the potential return to deal-making. He has told me several times in recent months Salesforce remains focused on growing profit margins — in fact the company disbanded its M&A team last year!

  Nonetheless, Benioff loves doing big deals and the company has the cash to do them. So, why not.

• 

  Mon, April 15, 2024 at 3:49 AM MST

  Eyes on Nvidia and Intel

  Citigroup is opening “upside catalyst watches” on shares of Nvidia (NVDA) and Intel (INTC) after both have tanked in the past month.

  On Nvidia:

  “Recent supply chain discussions indicate demand visibility has extended into the first half of 2025 with calendar year 2024/2025 GPU [chip] unit outlook well aligned with our 4.3 million/5.2 million base case model. We expect supply chain commentary from key foundry/memory suppliers during earnings and Computex Taiwan on June 2nd where Nvidia CEO Jensen Huang will deliver a keynote which could be positive catalysts for the stock.”

  On Intel:

  “Intel stock is down ~29% year to date and we believe the stock is experiencing negative sentiment due to the foundry businesses losses. Given the positive March notebook data of a 44% month on month increase, we believe there is upside to consensus estimates and expect the stock to trade higher as Intel derives roughly 31% of revenue from notebook CPUs.”

  Further analysis: I took a slightly contrarian view on Nvidia’s stock price action in the Sunday Morning Brief newsletter. More on this one here.

• 

  Mon, April 15, 2024 at 3:43 AM MST

  Keep connecting the dots on the Iran/Israel conflict

  While markets are handling the weekend news of Iran’s strike on Israel in stride, it’s important to keep on connecting the dots on these geopolitical risks.

  Specifically as it pertains to oil, which Citi thinks could now hit $100 a barrel.

  I liked the dot-connecting the Deutsche Bank team did on the oil front this morning:

  “Most directly, the effects of higher oil prices will be felt globally, and this is coming at a time when there’s already concern about sticky inflation in several countries. That’s something that could create a dilemma for central banks, as we also found out after Russia’s invasion of Ukraine in 2022. On the one hand, there is the risk that a geopolitical shock hurts growth, bringing forward the timing of rate cuts. Indeed, markets were clearly pricing that risk on Friday, with the chance of a Fed rate cut by June moving up from 24% to 30%, although that’s since moved back to 24% this morning. But then again, if higher oil prices lead to more inflation and there are second round effects on other prices, then that could mean monetary policy has to stay in restrictive territory for longer. So the potential effects can work both ways.”