Many investors had high hopes going into 2024. The market’s robust first-quarter rally still managed to surprise them. Resilient corporate profits, enthusiasm around AI and hopes that the Fed will cut rates have given investors plenty of reasons to keep on buying and keep buying they have in the run-in to Easter.
Everything from stocks to bitcoin to gold have marched to new records in the first quarter, and with one trading session to go before the holidays, the S&P 500 is up more than 10% in the first quarter, set for its best start to the year since 2019. Any weakness in the stock market hasn’t lasted more than a few sessions, with investors buying the dip and sending the index to 21 all-time closing highs.
At current levels, the blue-chip Dow is around 1% shy of the 40,000-point mark, which it has never breached. The Philadelphia Semiconductor Index, or the SOX, as it is typically known, has also inched higher, even in the face of a soft week for sector superstar Nvidia (NVDA:NASAQ), with Marvell Technology (MRVL:NASDAQ) among the top gainers, up nearly 9% this week.
Optimism about the Fed cutting borrowing costs later in the year also added to gains. Traders see a 70% chance the Fed will begin its easing cycle in June, according to the CME FedWatch tool.
The PCE, or Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, is due on Good Friday, when the US stock market will be closed. An upside surprise to inflation could potentially dampen market enthusiasm around early rate cuts, although the reverse is also true.
KRISPY KREME
Krispy Kreme (DNUT:NASDAQ) served up a sweet update that sent shares in the doughnut company up 30% to $15.77 this week. The beloved sweet treat brand revealed (26 Mar) it is expanding its partnership with McDonald’s (MCD:NYSE) to all of the burger chain’s US restaurants by the end of 2026.
This follows a successful test at 160 McDonald’s restaurants in Kentucky where ‘consumer excitement and demand exceeded expectations’, according to Krispy Kreme. The phased rollout of the programme will begin in the second half of this year, with nationwide availability at participating restaurants expected by the end of 2026.
As part of the agreement, Krispy Kreme won’t supply its melt-in-your-mouth doughnuts to any other quick service restaurant in the US besides the ‘Golden Arches’. Guided by CEO Josh Charlesworth, the doughnuts-to-coffeehouse concern’s successful ‘hub and spoke’ model lets it make and distribute its treats efficiently with production hubs, which are either stores or doughnut factories, distributing its freshly-made doughnuts daily to retailers, grocers and gas stations.
The McDonald’s tie-up represents a tasty opportunity for Krispy Kreme to expand its reach, whereas the addition of Krispy Kreme doughnuts will only enhance McDonald’s breakfast and bakery offerings.
BOEING
It has been a turbulent week for Boeing (BA:NYSE) after the aircraft maker overhauled senior leadership that included the departure of chief executive Dave Calhoun. The sweeping changes come as Boeing faces its biggest crisis in recent years on concerns over safety following two 737 Max 8 plane crashes and January’s mid-air panel blow-off during an Alaska Airlines flight.
Calhoun intends to step down at the end of 2024 while independent chair Larry Kellner will not stand for re-election at the company’s annual general meeting after serving the board for 13 years. The board has elected Steve Mollenkopf to succeed Kellner who will lead the search for the company’s next CEO. Mollenkopf is the former chief executive of wireless systems maker Qualcomm (QCOM:NASDAQ).
Commercial airplanes president Stan Deal will retire from the company and Stephanie Pope has been appointed in his place. Despite the upheavals Boeing shares are up slightly over the last week, but sit 24% below where they started the year.
TRUMP MEDIA & TECHNOLOGY (TRUTH SOCIAL)
Presidential nominee and one-time occupant of the White House Donald Trump's popularity with a cohort of Americans has undoubtedly been a factor in a strong start for the parent company of his Truth Social platform Trump Media & Technology (DJT:NASDAQ).
The company merged with special purpose vehicle Digital World Acquisition Corp. (DWAC) in a deal approved by shareholders last week. Prior to the merger, DWAC had been on the public market since 2021.
According to an SEC filing, Trump Media lost $49 million in the first nine months of 2023 and brought in a modest $3.4 million in revenue. The former president is subject to a six-month lock up period so will not be able to cash on his 60% stake in the short term (a stake worth more than $5 billion at the current market value). At $66.22 as we write the shares are up more than 30% since the ticker changed to DJT on 26 March.
