After last week’s stock market rally, when multiple indexes hit all-time highs, some are waiting for the selloff shoe to drop.

But one Wall Street bear is forecasting better weather for the US markets than he previously projected. Morgan Stanley’s Mike Wilson upped his base case 12-month target for the S&P 500 to 5,400 this weekend—a significant jump from his previous expectation of 4,500.

The positive forecast for the index is a departure from Wilson’s previous position that the S&P 500 was due for another drop.

The more rosy forward-looking picture is due to expectations of more positive earnings results from S&P 500 companies, in addition to greater efficiency from companies implementing AI.

“Our 2024 and 2025 earnings growth forecasts (8% and 13%, respectively) assume healthy, mid single-digit top-line growth in addition to margin expansion in both years as positive operating leverage resumes,” Morgan Stanley analysts wrote in their mid-year outlook report for US equities.

Yet the analysts emphasized that their dominant impression of the market’s future is still uncertainty. “Tighter forecasts combined with a wider range of outcomes is a recipe for more volatile prices, in our view,” they wrote.

Morgan Stanley urged investors to prepare for a range of market conditions, due to Fed- and inflation-related economic uncertainties. They pointed to overweighting the industrials sector, arguing the sector has room to grow due to positive earnings and current undervaluations. They also noted that the firm maintains long exposure in consumer staples and utilities, and wrote that large caps will likely continue to beat their small cap competitors. Finally, they gave an underweight rating to broad consumer cyclicals, and a neutral weighting on financials, real estate, and tech.

The bank’s weekend note comes as other analysts shift their price targets to be more bullish. A Deutsche Bank team upgraded their S&P 500 price target to 5,500 on Friday, one of the highest targets on Wall Street.

While nobody holds a crystal ball, consensus has clearly shifted toward optimism about a soft landing, which would have been hard to believe a year ago when we were in the depths of a bear market. Yet Wilson has been wrong before—in 2023, he and other analysts predicted the S&P 500 was about to take a fall, when in fact the index ended up surging.—LB

Nobody is more ready to move past high, persistent inflation than S&P 500 companies—in fact, they aren’t even discussing inflation on earnings calls. Only 219 companies mentioned the word “inflation” during first quarter earnings calls—the lowest number since the second quarter of 2021, according to FactSet data.

• Wix shares skyrocketed nearly 24% after the company announced consensus-beating earnings that saw strong adoption of its AI-powered website builder.
• Norwegian Cruise Lines rose 7.56% after announcing management lifted its full-year outlook on strong customer demand. Shares of competitors Carnival and Royal Caribbean enjoyed a bump on the news as well.
• In the wild world of biotech stocks, Dyne Therapeutics rose 27.82% after announcing strong clinical data for its upcoming myotonic dystrophy drug, while PTC Therapeutics rose 21.23% after the European Commission ruled its Duchenne muscular dystrophy drug translarna should stay on the market.

• JPMorgan shares fell 4.5% as investors realized that they won’t have Jamie Dimon around forever—he told shareholders at a meeting today that his 5-year timetable for leaving the company no longer applies.
• EV doldrums continue, this time for Chinese automaker Li Auto, which fell 12.78% after it announced both lower profits this quarter and lower demand ahead.
• And shocking nobody, shares of GameStop continued to tumble today as the meme stock gave back gains. But fellow memer Faraday Future Intelligent Electric (say that five times fast) popped nearly 75% today, showing the meme stock trade isn’t over just yet.

The headlines about weight loss drugs have been hard to avoid—even if you’ve long ago stopped tracking which celebrities have responded to rumors that their rapid transformations were pharmaceutically induced.

Ozempic, along with its cousins Wegovy and amycretin, have transformed the treatment landscape for diabetes and other conditions—and boosted the value of Danish pharmaceutical manufacturer Novo Nordisk to $100 billion above Denmark’s entire GDP in the process.

But some of the biggest barriers for many looking to try this medication have been cost and access. Drugs like Wegovy and Ozempic are priced at about $1,000 per month without insurance coverage, while even patients with insurance are having trouble getting a prescription.

Enter telehealth platform Hims & Hers. The digital pharmacy announced today that it will begin offering “compounded” versions of these drugs to its customers. Its version of the weight loss shots include the same magic ingredient, GLP-1, but cost only $199 per month—over 80% cheaper than the brand names without insurance. Hims & Hers shares jumped 30% today on the news.

Hims & Hers, which has reached about $1 billion in sales by offering cheaper, off-label versions of popular drugs such as Viagra and hair regrowth medication, is up a staggering 98% year-to-date. It announced its weight loss program in December, but offering GLP-1 prescriptions via its telehealth platform will certainly give that program a shot in the arm.

Shares of Novo Nordisk, the dominant player in the weight-loss drug market, have surged 447% over the past five years as it rolled out some of the first GLP-1 medication brands, but the company has also faced supply constraints due to growing demand. While the brand-name shots are under a patent until 2032, the FDA allows pharmacies to make “compounded” versions of these drugs using the same key ingredient, GLP-1, imitating Ozempic and Wegovy. Yet these compounded drugs, like the one Hims & Hers is offering, are not actually FDA approved—and therefore aren’t held to the same safety standards.

In a press release, Hims & Hers CEO Andrew Dudum said that the platform has “leveraged our size and scale to secure access to one of the highest-quality supplies of compounded GLP-1 injections available today”.

The platform follows Ro, another telehealth pharmacy that offers its own version of weight loss shots. Weight Watchers also bought prescription platform Sequence last year to get into offering GLP-1 medication.—LB

• The president of Iran died in a helicopter crash late Sunday. Investors usually head for the safety of gold in the case of geopolitical upheaval like this, though given Iran’s oil output all eyes are on crude prices in the days ahead.
• Ivan Boesky, the notorious Wall Street titan who inspired fictional charger Gordon Gekko, has died. He ended up going to prison for his role in an infamous insider trading scandal in the 1980s.
• Elon Musk’s $56 billion pay package has apparently inspired other CEOs to give themselves monster salaries, even though his was struck down by shareholders. More executives now make over $50 million, which you may be shocked to find out is far more than the writers of this newsletter make.
• As consumers tighten their budgets, retailers have not been impacted equally. Some, such as PepsiCo and Starbucks, have seen consumers pull back. Other firms, like Delta and Sweetgreen, are still seeing a boom from higher-income spenders.
• The CEO of Grayscale Investments, the biggest digital asset investment company on the market, is stepping down after a decade at the company. His exit comes as the company’s flagship bitcoin fund, which converted from a trust in mid-January, has seen $17 billion in outflows due to its comparatively high fees.
• The upcoming implementation of the shiny new T+1 Rule is already causing anxiety all across Wall Street. The change is going to take place the Tuesday after Memorial Day.

Gold and silver’s little cousin has stepped into the spotlight this year: Copper prices hit a new all-time high on Monday, and the price of the precious metal has surged 25% year to date.

Demand for copper has risen thanks to its role as a key raw material for pretty much every buzzy trend on Wall Street, from AI to electric vehicles to data storage.

Yet the story of copper’s rise isn’t a simple matter of supply and demand. Global superpowers are dueling over stakes in lucrative mining firms, since the resource is crucial to ramping up goals for a clean energy transition. The Biden administration is on the hunt for copper mines to snag a stake in—reportedly in talks with investors to invest $3 billion in beleaguered Zambian mine First Quantum Minerals.

The combination of high demand and stiff competition for supply is a powerful one, according to Jeff Currie, chief strategy officer at the Carlyle Group. He’s been touting the copper trade for weeks now, and recently told Bloomberg’s Odd Lots podcast that copper “is the most compelling trade I have ever seen.”

“You look at the demand story, it's got green CapEx, it's got AI, remember AI can't happen without the energy demand and the constraint on the electricity grid is going to be copper,” he said. “And then you have the military demand. So unprecedented demand growth against unprecedented weakness in supply growth because we have not been investing, it's teed you up for what I would argue is the most bullish commodity.”

The surge in the precious metal’s price this year has begun to raise eyebrows, with some on Wall Street worried that the trade has run too far and that waiting for a pullback might be the smarter move at this point.

But that hasn’t stopped eager investors from chasing the copper rush. The $2.38 billion Global X Copper Miners ETF (COPX) has seen a staggering $76 million in inflows to the fund this year.

Or if you prefer, you could always keep your copper investments in physical bar form—they’re not as flashy as gold bars, but they’ll still do the trick.—MR & LB

Things are quieter than they were last week, but there’s still some earnings announcements to keep an eye out for.

Before the open:

• Autozone
  • Consensus: $36.03 EPS, $4.31 billion in revenue
  • Context: UBS analyst Michael Lasser believes Autozone may suffer the ill effects of mild winter weather this quarter, but a miss now may give investors an opportunity to snag this buy-rated stock for cheap.
• Lowe’s
  • Consensus: $2.93 EPS, $21.10 billion in revenue
  • Context: High mortgage rates mean people are putting more sweat equity into their homes than ever rather than moving — and Lowe’s directly benefits from that trend.
• Macy’s
  • Consensus: $0.14 EPS, $4.85 billion in revenue
  • Context: The once-dominant retailer has continued to fall prey to off-price retailers and e-commerce competitors, though now that its proxy fight has been settled maybe management can refocus on improving the company’s bottom line.

After the close:

• Toll Brothers
  • Consensus: $4.13 EPS, $2.52 billion in revenue
  • Context: A tight housing market benefits stocks like Toll Brothers, which has seen shares rise nearly 30% YTD. The home builder has beaten estimates for four straight quarters, so expectations are high heading into its Q2 earnings report.
• Urban Outfitters
  • Consensus: $0.53 EPS, $1.18 billion in revenue
  • Context: With retail sales flat last month, your favorite seller of faux vintage wall art may be in trouble — though analysts are broadly bullish on the company’s mix of offerings across its Anthropologie, Free People and Nuuly brands.