Can stocks turn it around today? 📈

Stocks fell for the second day in a row on Tuesday, with the small-cap Russ2K taking the brunt of the abuse.

Dow [-1.0%]
S&P 500 [-0.7%]
Nasdaq [-0.9%]
Russell 2K [-1.8%]

Futures are sitting close to flat in early trading. S&P 500 contracts are currently down but less than 0.1%.

The ADP employment report will give investors a taste of what to expect when the March jobs report drops this Friday. Media forecasts estimate 155K private-sector jobs were added last month, more than the 140K added in February. This report could set the tone for the remainder of the trading week.

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📉 Oil Price Surge and Rising Yields Weigh Down Stocks
All major U.S. stock indexes have pulled back this week, driven lower by climbing oil prices and bond yields.

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average witnessed declines amid heightened tensions in the Middle East, following accusations of an Israeli missile strike in Damascus.

This geopolitical event sparked concerns over potential disruptions to oil supply, pushing Brent crude futures up 1.7% to $88.92 a barrel.

Inflation Fears Rekindle 🔥
The escalation contributed to a significant rise in the Bloomberg Commodity Index, reaching a peak since November, buoyed by both oil and a record high in gold prices. This resurgence of inflation concerns has led to reevaluations of the Federal Reserve's anticipated interest rate cuts, with the market speculating fewer cuts or possibly none within the year.

Fed's Outlook 💱
Despite the Fed's March forecast hinting at three rate reductions, the shifting economic landscape and inflationary pressures are challenging these predictions. Futures tied to the federal-funds rate now suggest a recalibration of expectations towards maintaining or minimally adjusting rates.

Bulls vs Bears 💪
U.S. economic growth has shown resilience, with an Atlanta Fed model adjusting its first-quarter growth estimate upwards after stronger-than-expected manufacturing data.

However, persistent inflation and rising long-term interest rates, with the 10- and 30-year Treasury yields hitting their highest since November, underscore the complexities facing the Fed's monetary policy decisions.

Rate Cut Caution ⚠️
Amidst these dynamics, Cleveland Fed President Loretta Mester expressed reluctance to rush into rate cuts, emphasizing the risks of acting prematurely over delayed interventions.

Risky Business 📊
The possibility of enduring high interest rates has dampened risk appetite, evidenced by a 5% drop in Bitcoin and notable declines in shares of companies like Tesla. With most S&P 500 sectors ending the day lower, only the energy sector saw an uplift, benefiting from the oil price surge.

This complex interplay of geopolitical tensions, inflationary pressures, and Fed policy speculation underscores a period of heightened uncertainty and volatility in global financial markets.

LAMF Global Ventures [LGVC] - Last Close: $10.97

This SPAC stock is surging after securing shareholder approval for its proposed merger with Novo Group.

LAMF announced the approval after Tuesday’s close, and shares quickly turned higher n the news.

The combined company will operate as Holdco and will list under the Nasdaq under the ticker symbol NUVO.

LGVC is up 97.4% on just shy of 1 million shares traded.

My Take: The market seems to like the news coming out of LGVCU, but the lack of volume is a little disconcerting. Watch out for a sudden pullback.

Kintara Therapeutics [KTRA] - Last Close: $0.1004

Kintara has entered into a definitive merger deal with TuHURA Biosciences that will bring the private biotech firm to the Nasdaq upon closing.

TuHURA will finance a $31 million subscription in connection with the agreement, extending the combined company’s cash runway to 2025.

KTRA stockholders will receive a CVR entitling them to receive shares of Kintara common stock to be issued upon achievement of the CVR milestone.

Upon closing, the company will change its name to TuHURA Biosciences, and TuHURA shareholders will control up to 97.15% of the combined company.
KTRA is up 117.0% on the news with over 50 million shares traded.

My Take: The KTRA deal is kind of complicated, but it appears that shareholders aren’t getting so great of a deal. After, they’ll only own a small fraction of the combined company. Essentially, this is a play to get in on TuHURA before it officially lists.

ARCA Bio [ABIO] - Last Close: $1.71

In another biotech merger deal, ARCA Bio and Oruka Therapeutics have entered into a merger agreement of their own.

The combined company will focus on advancing Erika’s pipeline of novel biologics to treat chronic skin diseases.

A pre-closing financing round of $275 million is expected to extend the companies’ cash runway through 2027.

The deal is expected to close in Q3, and the board has approved the deal.

Financial details weren’t disclosed in the initial press release.
ABIO is up 104.6% on over 4 million shares traded.

My Take: The ABIO deal is strikingly similar to the KTRA deal. Not sure what’s going on with the micro-cap biotech sector, but I suspect these possibly-cash-strapped biotech firms are teaming up to survive high rates.

Helius Medical Technology [HSDT] - Last Close: $5.66

A new partnership with Lovell Government Services will bring Helius Medical’s Portable Nueromodulation Simulator to federal healthcare systems.

The system, PoNS for short, can provide short-term treatment of gait deficit in adults with symptoms from MS in conjunction with physical therapy.

Helius said the device will be available to the Veteran’s Administration and other federally-backed healthcare programs.

HSDT is up 26.5% on roughly 3.5 million shares traded.

My Take: HSDT could get an earnings boost from breaking into this new market, but it could take a quarter or two to materialize. The stock is also facing stiff resistance at $8 per share.

Gainers
Aesthetic Medical [AIH] >> +40.6%
Vanda [VNDA] >> +26.5%
Next eGO BV [EGOX] >> +25.6%

Decliners
Casa Systems [CASA] >> (80.0%)
View [VIEW] >> (61.8%)
Vicinity Motor [VEV] >> (30.0%)

Paychex [PAYX] ... AM
Allego [ALLG] ... AM
Cal-Maine Foods [CALM] ... PM
Dave & Buster's Entertainment [PLAY] ... PM
BIO-Key International [BKYI] ... PM
C-Bond Systems [CBNT] ... PM

Factory orders [Feb] ... 10:00a
Job openings [Feb] ... 10:00a
Fed Governor Michelle Bowman speaks ... 10:10a
Cleveland Fed President Loretta Mester speaks ... 12:05p
San Francisco Fed President Mary Daly speaks ... 1:30p
U.S. auto sales [Mar] ... TB