ECONOMIC SILUET: Watch these strong tech names, the VanEck Semis ETF and these gambling stocks in tomorrow’s trading

THU, MAR 16, 2023

The goal of this newsletter is to get you ahead of the next day of investing and trading. It's your first look at tomorrow and last look at today powered by the team of people who direct CNBC TV's stock market coverage.

Tomorrow's Top CNBC Stories Tonight

Office REITs stumble

Office REITs were among the hard-hit areas of the real estate sector today after analysts at Wells Fargo cut a number of their price targets. The note cited a multitude of headwinds faced by the group, including the Fed's rate hikes, overall employment picture, and return-to-office trends. S&P 500 constituent Boston Properties fell more than 2%. Cousins Properties, Douglas Emmett, Highwoods Properties, Hudson Pacific Properties, Paramount Group and SL Green all hit 52-week lows.

Progressive shines in this ETF

Progressive finished the day up almost 6%, leading the iShares U.S. Insurance ETF (IAK) to its best day since October. It follows the insurer's February results and a double-upgrade to overweight from Wells Fargo. Analysts there note stronger growth at the company, which they say will drive the stock's performance. Amid global credit concerns, Wells Fargo says a shift to more defensive, value names could also benefit Progressive.

More room to run for Cadence Design Systems?

Cadence Design Systems reached an all-time high today and is up 30% year to date. Analysts appear to think there's more room to run, with 81% of the firms tracked by FactSet giving it a buy rating. It's still trading at a slight discount to its average analyst price target.

Chips surge this week

On that note, it's become an upbeat week for the VanEck Semiconductor ETF (SMH) overall, with every constituent now tracking for weekly gains. Intel is up 10%, which would be its best week since January 2021. AMD and Nvidia are also up double digits and extending strong year-to-date gains, with Nvidia up 75% and AMD up 49% so far in 2023.

Temporary relief for industrials, materials

Today was a reprieve for industrials and materials stocks, but many key names are still deep in negative territory over recent intervals. In the past month, United Rentals is off by 14%, Caterpillar is down 11%, and Cummins is down nearly 9%. There have also been sharp declines in miners and metal players, like Albemarle, Steel Dynamics, Freeport-McMoRan and Nucor – all off 14% or more in four weeks. United Airlines is off by 14% this week alone (its worst week in just over a year), followed by declines in Alaska Air, Delta and American.

Tech on pace for a strong week

Jason Gewirtz noted the turnaround in mega-cap tech last night. Those rebounds continued today, with Alphabet and Microsoft heading for their best week since November. Amazon is tracking for its best since January. Apple has lagged its rivals a bit this week, but it's still poised for a weekly gain. Apple and Microsoft are roughly 13% from their recent highs, while Alphabet and Amazon remain more than 30% off their recent highs.

Ethan Kraft | CNBC Stocks & Markets Editor
@ethan_kraft

Beyond the banking crisis: As Jim Cramer says, 'There's always a bull market somewhere.'

Did you know the Nasdaq Composite is up 5.2% this week?
Did you know the S&P 500 is up 2.56% this week?
Did you know the Dow Jones Industrial Average is up 1% this week?
Did you know the Russell 2000, which has financials as its top sector, is flat this week?

Tech plays

It's clear tech has been a big leader this week. Here's a breakdown of the pillars of technology.
The Invesco QQQ ETF (QQQ), which tracks the Nasdaq-100 index, is up 6.33% this week.
Out of the Nasdaq 100, AMD, Seagen, Illumina, Meta, CrowdStrike and Nvidia are all up more than 11% in four days.
The S&P Software and Services industry is up 6% this week. Inside that industry is Microsoft, which is up 11.11% in four days. Salesforce is up 8% in four days. Adobe is up 7.3% in four days.
The First Trust Cloud Computing ETF (SKYY), which tracks cloud computing stocks, is up 6% in four days. It's led by Fastly, which is up 20% in four days. DocuSign is up 18.4% in four days. Smartsheet is up 16.7% in four days, and Asana is up 16% in four days.
The VanEck Semiconductor ETF (SMH) is up 5.84% in four days. My friend and colleague Ethan Kraft has more on that above.
This week, retail investors have been heavily trading the ProShares UltraPro QQQ ETF (TQQQ) and ProShares UltraPro Short QQQ ETF (SQQQ), according to the Nasdaq. The TQQQ is triple the Nasdaq-100, and the SQQQ is triple the inverse of the Nasdaq-100. A note of caution, if you're into those products they're super volatile and you can't be in for a long term as the costs will crush you. We do not endorse triple-levered ETFs, but it does show how active trading is right now.

Citi's big call for the next 12 months

CNBC Pro has a nice story up late this afternoon about Citigroup's 10 picks for the next 12 months.
The biggest names include Walmart, Prologis, T-Mobile, Comerica and Fortinet.
Regional bank Comerica is down 29% in 2023, and it's off 51% from the 52-week high.
Walmart is down 2.5% so far in 2023, and it's 14% off the 52-week high from April of last year.
T-Mobile is up 1% in 2023, and it's 8% off from the 52-week high set in November 2022.
Prologis is up 6.5% in 2023, and it's off 31% from the 52-week high.
Fortinet is up 26.5% in 2023, and it's off 13.5% from the 52-week high.
Read the rest of the article here.

The first weekend of March Madness

Contessa Brewer will do some reporting on the gambling companies heading into this first big college basketball weekend of the 2023 tournament.
If this week's performance was a game, the gambling stocks would have been knocked out already.
Sportradar is down nearly 9% in four days.
Caesars Entertainment is down 5.5% in four days.
Las Vegas Sands is down 3% in four days.
PENN Entertainment is down 2.4% in four days.
MGM Resorts is down 1.7% so far this week.
DraftKings is the biggest winner: Flat so far this week.

Soda and beer

Anheuser-Busch was up 2.3% today and is now 4% from a high.
Molson was down 1% today, and it is 14% from a high.
Boston Beer is down 2.46% in a week. Shares are 25% from a high.
Coca-Cola is 10% from a high. It's up 1.8% in four days.
Pepsi is 5% from a high. It's up 2.6% in four days.

Coinbase

As crypto creeps back up this week, check out Coinbase.
The stock is up 27% in four days, and it's up 5% today. Shares are down 61% in a year.

JUST Capital and CNBC

Brandon Gomez will run CNBC's viewers and users through some new and key facts tomorrow regarding the JUST Capital 100.
But I can tell you know that so far year to date about 60% of the 100 are in positive territory.
Performance leaders include Nvidia up 75% so far in 2023.
Salesforce is up 23.6% in 2023.
Apple is up 20% in 2023.