slightbourne@noblecapitalmarkets.com, Author at Channelchek

Oil Prices Surge Amid Hopes for Rate Cuts and Inflation Data

Posted on July 12, 2024July 12, 2024 by slightbourne@noblecapitalmarkets.com

In a surprising turn of events, oil prices have climbed for the second consecutive session, with Brent crude settling above $85 per barrel. This uptick comes as hopes for U.S. interest rate cuts were fueled by an unexpected slowdown in inflation. The market’s reaction to these economic indicators highlights the intricate connections between macroeconomic factors and commodity prices.

The latest data from the U.S. Bureau of Labor Statistics revealed a decline in consumer prices for June. This unexpected drop has boosted expectations that the Federal Reserve might cut interest rates sooner than anticipated. Following the release of the inflation data, traders saw an 89% chance of a rate cut in September, up from 73% the day before. Slowing inflation and potential rate cuts are expected to spur more economic activity. Analysts from Growmark Energy have noted that such measures could bolster economic growth, subsequently increasing demand for oil.

Federal Reserve Chair Jerome Powell acknowledged the recent improvements in price pressures but stressed to lawmakers that more data is needed to justify interest rate cuts. His cautious approach underscores the Fed’s commitment to data-driven policy decisions. The possibility of rate cuts also impacted the U.S. dollar index, causing it to drop. A weaker dollar generally supports oil prices by making dollar-denominated commodities cheaper for buyers using other currencies. Gary Cunningham, director of market research at Tradition Energy, emphasized this point, noting that a softer dollar could enhance oil demand.

The rise in oil prices also reflects broader market dynamics. On Wednesday, U.S. data showed a draw in crude stocks and strong demand for gasoline and jet fuel, ending a three-day losing streak for oil prices. Additionally, front-month U.S. crude futures recorded their steepest premium to the next-month contract since April. This market structure, known as backwardation, indicates supply tightness. When market participants are willing to pay a premium for earlier delivery dates, it often signals that current supply isn’t meeting demand.

While current market conditions suggest strong demand, future demand forecasts from major industry players show significant divergence. The International Energy Agency (IEA) recently predicted global oil demand growth to slow to under a million barrels per day (bpd) this year and next, mainly due to reduced consumption in China. In contrast, the Organization of the Petroleum Exporting Countries (OPEC) maintained a more optimistic outlook, forecasting world oil demand growth at 2.25 million bpd this year and 1.85 million bpd next year. This discrepancy between the IEA and OPEC forecasts is partly due to differing views on the pace of the global transition to cleaner fuels.

Alex Hodes, an analyst at StoneX, noted that the divergence in demand forecasts is unusually wide, attributing it to varying opinions on how quickly the world will shift to cleaner energy sources. This uncertainty adds another layer of complexity to market predictions and planning.

The interplay between inflation data, interest rate expectations, and oil demand forecasts creates a nuanced picture for the future of oil prices. If the Federal Reserve proceeds with rate cuts, increased economic activity could boost oil demand. However, the ongoing transition to clean energy and geopolitical factors will continue to play crucial roles. For now, market participants and analysts will closely monitor economic indicators and policy decisions. The recent rise in oil prices highlights the market’s sensitivity to macroeconomic trends and the importance of timely and accurate data in shaping market expectations.

These recent movements in oil prices underscore the complex interdependencies between economic data, policy decisions, and market dynamics. As inflation shows signs of cooling and hopes for rate cuts grow, the oil market is poised for potentially significant shifts. Understanding these trends is crucial for stakeholders across the industry as they navigate the evolving landscape of global energy markets.

Unicycive Therapeutics (UNCY) – Patient Survey Data From Pivotal Trial Shows Patients Prefer OLC

Posted on July 11, 2024July 11, 2024 by slightbourne@noblecapitalmarkets.com

Thursday, July 11, 2024

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Pivotal Trial Included A Patient Satisfaction Survey. In late June, Unicycive released safety, efficacy, and dosing data from its Pivotal trial for OCL. As discussed on our Research Note on June 26, over 90% of the patients were able to reach target serum phosphate levels. The trial included a pre-specified patient survey asking about ease of use, satisfaction, and overall preference that shows patients prefer OLC over their current phosphate binders. We see this as an important point that could make it the best treatment in a $1 billion drug category.

We Consider Patient Preference To Be A Strong Point. OLC was developed as an improved formulation of Fosrenol (lanthanum citrate) that would require fewer and smaller pills. This was intended to improve compliance and maintain phosphate levels in the proper range. The Pivotal study for the NDA application showed sufficient safety, tolerability, and effective dose levels, with a pre-specified patient survey to collect post-treatment opinions.

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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

AZZ Inc (AZZ) – Fiscal Year 2025 Starts Off Strong

Posted on July 11, 2024July 11, 2024 by slightbourne@noblecapitalmarkets.com

Thursday, July 11, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

First quarter financial results. For the fiscal year (FY) 2025, AZZ reported adjusted first quarter net income of $44.0 million or $1.46 per share compared to $33.4 million or $1.14 per share during the prior year period and our estimate of $38.9 million or $1.32 per share. The consensus EPS estimate was $1.30. Adjusted EBITDA increased 10.2% to $94.1 million representing 22.8% of sales versus 21.8% of sales during the first quarter of FY 2024. Sales of $413.2 million exceeded our $402.6 million estimate and a 24.8% gross margin as a percentage of first quarter sales exceeded our estimate of 24.1%. AZZ reiterated its prior fiscal year guidance with sales expected to be in the range of $1.525 billion to $1.625 billion, adjusted EBITDA in the range of $310 million to $360 million, and adjusted diluted EPS in the range of $4.50 to $5.00.

Balance sheet continues to strengthen. During the first quarter, AZZ generated operating cash flow of $71.9 million and the company further reduced debt by $25 million and is on track to achieve or exceed its goal of reducing debt by $60 million to $90 million during the fiscal year. At quarter end, the company’s net leverage was 2.8x trailing twelve months EBITDA. Cash and cash equivalents amounted to $10.5 million. During the quarter, AZZ returned capital to common shareholders in the form of cash dividend payments totaling $4.3 million.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Inflation Declines in June for First Time Since 2020 as Consumer Prices Ease

Posted on July 11, 2024July 11, 2024 by slightbourne@noblecapitalmarkets.com

In a significant turn of events, the latest data from the Bureau of Labor Statistics (BLS) revealed that inflation cooled in June, marking the first monthly decline since 2020. The Consumer Price Index (CPI) fell by 0.1% compared to the previous month, with a year-over-year increase of just 3%, down from May’s 3.3% annual rise. This data beat economists’ expectations of a 0.1% monthly increase and a 3.1% annual gain.

The June CPI report is notable for being the first instance since May 2020 that the monthly headline CPI turned negative. Additionally, the 3% annual gain represents the slowest rate of increase since March 2021.

When excluding volatile food and gas prices, the “core” CPI showed a modest increase of 0.1% from the previous month and a 3.3% rise over the past year. These figures also came in below expectations, as economists had anticipated a 0.2% monthly increase and a 3.4% annual gain. This marks the smallest month-over-month increase in core prices since August 2021.

In response to the report, markets opened on a positive note. The yield on the 10-year Treasury note fell by approximately 10 basis points, trading around 4.2%.

Despite the positive signs, inflation remains above the Federal Reserve’s 2% annual target. However, recent economic data suggests that the central bank might consider rate cuts sooner rather than later. Following the release of the June inflation data, market analysts estimated an 89% likelihood that the Federal Reserve would begin cutting rates at its September meeting, up from 75% the previous day, according to CME Group data.

The broader economic context includes a robust labor market report from the BLS, which indicated that 206,000 nonfarm payroll jobs were added in June, surpassing the forecast of 190,000 jobs. However, the unemployment rate edged up to 4.1%, its highest level in nearly three years.

The Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) price index, showed a year-over-year increase of 2.6% in May, the smallest annual gain in over three years, aligning with expectations.

Ryan Sweet, Chief US Economist at Oxford Economics, noted that while the drop in CPI between May and June bolsters the argument for rate cuts, it should be interpreted cautiously. He emphasized that this single-month decline does not necessarily indicate a lasting trend.

Seema Shah, Chief Global Strategist at Principal Asset Management, echoed this sentiment, suggesting that while the current figures set the stage for a potential rate cut in September, a cut in July remains unlikely. Shah pointed out that such a premature move could raise concerns about the Fed’s insider knowledge on the economy, and more evidence is needed to confirm a sustained downward trajectory in inflation.

In the breakdown of the CPI components, the shelter index, a significant contributor to core inflation, showed signs of easing. It increased by 5.2% on an annual basis, down from May’s rate, and rose by 0.2% month-over-month. This was the smallest increase in rent and owners’ equivalent rent indexes since August 2021. Additionally, lodging away from home decreased by 2% in June.

Energy prices continued their downward trend, with the index dropping 2% from May to June, primarily driven by a notable 3.8% decline in gas prices. On an annual basis, energy prices were up 1%.

Food prices, however, remained a sticky point for inflation, increasing by 2.2% over the past year and 0.2% from May to June. The index for food at home rose by 0.1% month-over-month, while food away from home saw a 0.4% increase.

Other categories such as motor vehicle insurance, household furnishings and operations, medical care, and personal care saw price increases. Conversely, airline fares, used cars and trucks, and communication costs decreased over the month.

As inflation shows signs of cooling, the economic outlook suggests potential shifts in Federal Reserve policy, with market participants keenly watching upcoming data to gauge the next steps in monetary policy.

Honeywell’s $1.81 Billion LNG Play: A Strategic Move in the Energy Transition

Posted on July 11, 2024July 11, 2024 by slightbourne@noblecapitalmarkets.com

In a bold move that underscores its commitment to the energy transition, Honeywell International Inc. (NYSE: HON) announced on Wednesday its agreement to acquire Air Products’ (NYSE: APD) liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in cash. This acquisition, Honeywell’s fourth in 2024, signals the industrial giant’s aggressive push into the burgeoning LNG market and its determination to position itself as a key player in the global energy landscape.

The deal comes at a time when LNG demand is surging, particularly in power generation and data center applications. According to the Energy Information Administration, U.S. LNG exports are projected to reach 12.2 billion cubic feet per day in 2024 and 14.3 billion cubic feet per day in 2025, up from a record 11.9 billion cubic feet per day in 2023. This growth trajectory presents a significant opportunity for Honeywell to capitalize on the increasing global appetite for cleaner energy sources.

By acquiring Air Products’ LNG unit, Honeywell gains access to cutting-edge technologies such as heat exchangers and cryogenic equipment, which complement its existing LNG pretreatment business. The addition of Air Products’ coil-wound heat exchangers, known for their efficient liquefaction capabilities and minimal space requirements, will enhance Honeywell’s competitive edge in both onshore and offshore LNG applications.

From an investor’s perspective, this acquisition aligns perfectly with Honeywell’s strategic focus on three “mega trends” identified by CEO Vimal Kapur: automation, the future of aviation, and energy transition. The LNG business acquisition squarely addresses the energy transition pillar, potentially opening up new revenue streams and market opportunities for the company.

Financially, the deal is expected to be accretive to Honeywell’s adjusted earnings per share in the first full year of ownership. Analyst Sheila Kahyaoglu from Jefferies estimates that the transaction could boost adjusted earnings by approximately 1% in 2025. Moreover, Honeywell anticipates growth opportunities in aftermarket services and digitalization through its Forge platform, which could further enhance the deal’s long-term value proposition.

The acquisition also demonstrates Honeywell’s commitment to growth through strategic M&A activity. With this latest deal, the company is on track to deploy around $15 billion in acquisitions in 2024 alone, a clear indication of its aggressive growth strategy and confidence in its ability to integrate and leverage new technologies and market positions.

For investors, Honeywell’s move into the LNG space offers exposure to a critical segment of the energy transition. As countries worldwide seek to reduce their carbon footprint while ensuring energy security, LNG is increasingly seen as a crucial “bridge fuel” in the shift from coal to renewables. Honeywell’s enhanced capabilities in LNG technology position it to benefit from this global trend.

However, investors should also consider the potential risks. The LNG market can be volatile, subject to geopolitical tensions and fluctuations in global energy demand. Additionally, the success of the acquisition will depend on Honeywell’s ability to effectively integrate Air Products’ LNG business and leverage its technologies across its existing customer base.

Honeywell’s $1.81 billion acquisition of Air Products’ LNG business represents a strategic bet on the future of energy. This move positions the company as a more comprehensive player in the LNG value chain, potentially opening up new revenue streams and market opportunities. For investors seeking exposure to the energy transition trend through a diversified industrial giant, this deal enhances Honeywell’s appeal. The company’s ability to integrate this acquisition effectively and leverage its new technologies across its existing customer base will be crucial to realizing the full value of this investment. As Honeywell continues to align itself with key technological and market trends, investors should closely monitor how this strategic move contributes to the company’s long-term growth trajectory and its role in shaping the evolving global energy landscape.

GeoVax Labs (GOVX) – Looking Forward To Continued Progress In 2H24

Posted on July 10, 2024July 10, 2024 by slightbourne@noblecapitalmarkets.com

Wednesday, July 10, 2024

GeoVax Labs, Inc. is a clinical-stage biotechnology company developing novel therapies and vaccines for solid tumor cancers and many of the world’s most threatening infectious diseases. The company’s lead program in oncology is a novel oncolytic solid tumor gene-directed therapy, Gedeptin®, presently in a multicenter Phase 1/2 clinical trial for advanced head and neck cancers. GeoVax’s lead infectious disease candidate is GEO-CM04S1, a next-generation COVID-19 vaccine targeting high-risk immunocompromised patient populations. Currently in three Phase 2 clinical trials, GEO-CM04S1 is being evaluated as a primary vaccine for immunocompromised patients such as those suffering from hematologic cancers and other patient populations for whom the current authorized COVID-19 vaccines are insufficient, and as a booster vaccine in patients with chronic lymphocytic leukemia (CLL). In addition, GEO-CM04S1 is in a Phase 2 clinical trial evaluating the vaccine as a more robust, durable COVID-19 booster among healthy patients who previously received the mRNA vaccines. GeoVax has a leadership team who have driven significant value creation across multiple life science companies over the past several decades.

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

GeoVax Reached Important Milestones For Both Platforms During 1H2024. The first half of 2024 has been a transformational period for GeoVax. A Phase 2 trial testing CM04S1 as a booster vaccine for COVID-19 reported initial data in February, then received a BARDA grant to conduct a large Phase 2b in June. The Gedeptin gene therapy program in head and neck cancer reported interim Phase 1/2 data showing successful proof-of-concept. Both programs are moving forward with additional milestones in 2H24.

BARDA Grant Allocates $367 Million For A Phase 2b Trial. In June, GeoVax announced that it has received a grant from BARDA to conduct a Phase 2b trial testing CM04S1 as a booster vaccine to protect healthy patients from COVID-19. As discussed in our Research Note on June 28, the grant terms include payments to GeoVax for clinical supplies and regulatory costs of $24.3 million (which could be increased to $45 million). The balance will be payable to Allucent, the CRO that will conduct the trial.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Euroseas (ESEA) – Increasing Estimates Based on Higher Charter Rates

Posted on July 10, 2024July 10, 2024 by slightbourne@noblecapitalmarkets.com

Wednesday, July 10, 2024

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA. Euroseas operates in the container shipping market. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

M/V Joanna charter. Euroseas Ltd. executed a new time charter contract for its 1,732 twenty-foot equivalent (teu) feeder containership, M/V Joanna, for a minimum period of 23 months to a maximum period of 25 months at an average gross daily rate of $16,500. The rate is higher than its current charter rate of $13,500 per day which ends in August. The charter for M/V Joanna will commence at the end of October 2024. The charter is expected to contribute EBITDA of ~$6.4 million during the minimum contracted period and increases the company’s remaining 2024 and 2025 charter coverage to 92% and 40%, respectively.

M/V Pepi Star charter. The company executed a time charter contract for the M/V Pepi Star, an 1,800 teu feeder containership currently under construction, for a minimum period of 23 to a maximum period of 25 months at a gross daily rate of $24,250. The time charter contract rate is higher than what we had previously forecast. The new charter will commence in mid-July upon delivery of the vessel from the shipyard. The charter is expected to contribute EBITDA in the amount of ~$12.3 million during the minimum contracted period.

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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

CoreCivic, Inc. (CXW) – Updated Model

Posted on July 10, 2024July 10, 2024 by slightbourne@noblecapitalmarkets.com

Wednesday, July 10, 2024

CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Model Updates. We updated our model to reflect the upcoming loss of the South Texas contract in mid-August. While a significant loss, we believe the ongoing increase in ICE detainees elsewhere could help soften the South Texas blow and we remain hopeful additional state and local contracts could be signed.

Details. As a reminder, South Texas generates approximately $40 million in quarterly revenue and generates approximately $0.10 per share in quarterly EPS. We assumed half of a quarter impact for 3Q24 and a full quarter impact in 4Q24. We kept the majority of the rest of the model consistent, although there may be some cost savings initiatives CoreCivic is able to put in place. We held our 2Q24 estimates the same.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Tesla’s Energy Business: The Next Big Growth Driver?

Posted on July 10, 2024July 10, 2024 by slightbourne@noblecapitalmarkets.com

As Tesla continues to dominate headlines with its electric vehicles and ambitious plans for autonomous driving, a less-discussed segment of the company is quietly becoming a potential game-changer. Tesla’s energy business, particularly its energy storage division, is showing signs of becoming a major contributor to the company’s bottom line and future growth prospects.

In a recent production and delivery report, Tesla revealed that it had deployed a record-breaking 9.4 GWh (gigawatt hours) of battery energy storage in the second quarter of 2024. This figure represents more than double the amount deployed in the first quarter, signaling explosive growth in this sector.

Tesla’s energy storage solutions range from residential Powerwall units to utility-scale Megapack installations. A single Powerwall can store enough energy to power a small home for a day, while a Megapack installation boasts the capacity to provide electricity to 3,600 homes for an hour. This scalability allows Tesla to cater to a wide range of customers, from individual homeowners to large utility companies and municipalities.

The financial performance of Tesla’s energy business is equally impressive. In the first quarter of 2024, the segment generated $1.6 billion in revenue and $403 million in gross profit. What’s particularly noteworthy is the gross margin of 24.6%, significantly higher than Tesla’s overall gross margin of 17.4% for the same period. This robust profitability comes at a crucial time for Tesla, as its automotive business faces margin pressure due to recent price cuts aimed at stimulating demand.

Wall Street is taking notice of this shift. Adam Jonas, an analyst at Morgan Stanley, dubbed the Q2 energy deployment figures a “show stealer” and valued Tesla Energy at $36 per Tesla share, or approximately $130 billion. This valuation suggests that the energy business could be a substantial component of Tesla’s market capitalization in the future.

The growth potential for Tesla’s energy storage business is closely tied to broader technological and infrastructure trends. The increasing adoption of artificial intelligence and the subsequent need for more data centers are expected to drive a “multigenerational increase in energy demand,” according to Jonas. This surge in electricity needs, coupled with the ongoing transition to renewable energy sources, positions Tesla’s energy storage solutions as a critical component of future power grids.

Moreover, the Inflation Reduction Act in the United States is likely to accelerate investments in grid infrastructure, potentially creating more opportunities for Tesla’s energy products. As utilities and businesses look to modernize and stabilize the power grid, Tesla’s Megapack installations could play a crucial role in load balancing and ensuring reliable power supply.

While much of the investor focus has been on Tesla’s automotive innovations, including the anticipated launch of a lower-priced electric vehicle and the reveal of its robotaxi concept, the energy business could provide a significant upside surprise in upcoming earnings reports. This diversification of revenue streams may also help to stabilize Tesla’s financial performance, reducing its reliance on the cyclical automotive market.

It’s worth noting that Tesla’s energy business isn’t limited to storage solutions. The company also produces solar roof tiles and conventional solar panels, although these products have received less attention in recent years. As the energy storage business continues to grow, it may create synergies with Tesla’s solar products, offering customers comprehensive energy solutions.

As we approach Tesla’s Q2 earnings report in July 2024, investors and analysts will be keenly watching the performance of the energy storage segment. If the strong deployment figures translate into substantial revenue and profit growth, it could mark a turning point in how the market perceives Tesla – not just as an automaker, but as a diversified energy and technology company.

In conclusion, Tesla’s energy storage business is emerging as a powerful growth driver for the company. With its impressive profit margins, scalable solutions, and alignment with global energy trends, this segment could play a crucial role in Tesla’s future success and valuation. As the world continues its transition to sustainable energy, Tesla appears well-positioned to capitalize on the growing demand for advanced energy storage solutions.

Take a moment to take a look at Noble Capital Markets Research Analyst Mark Reichman’s coverage list for more emerging growth energy companies.

Pershing Square USA Launches Highly Anticipated IPO Roadshow

Posted on July 10, 2024July 10, 2024 by slightbourne@noblecapitalmarkets.com

In a move that has captured the attention of Wall Street and investors alike, Pershing Square USA, Ltd. (PSUS) has announced the launch of its initial public offering (IPO) roadshow. This development marks a significant milestone for the closed-end investment management company, which is set to make its debut on the New York Stock Exchange under the ticker symbol “PSUS”.

The IPO, expected to be priced at $50.00 per share, is generating considerable buzz in financial circles. PSUS, which will be advised by the renowned Pershing Square Capital Management, L.P. following the IPO, is poised to offer investors a unique opportunity to tap into the expertise of one of Wall Street’s most prominent investment firms.

Pershing Square Capital Management, led by billionaire investor Bill Ackman, has a track record of high-profile investments and activist campaigns. The launch of PSUS as a publicly traded entity represents a new chapter for the firm, potentially offering retail investors access to strategies previously available only to institutional and high-net-worth individuals.

The IPO is backed by an impressive lineup of underwriters, including global financial powerhouses such as Citigroup, UBS Investment Bank, BofA Securities, and Jefferies acting as global coordinators and bookrunners. This strong support from major financial institutions underscores the significance of the offering and the confidence in PSUS’s potential.

Additionally, the inclusion of a diverse group of co-managers, including several minority-owned firms, reflects a commitment to broadening participation in significant Wall Street transactions. This approach aligns with growing industry efforts to promote diversity and inclusion in financial markets.

While the exact size of the offering has not been disclosed, the involvement of numerous heavyweight financial institutions suggests that it could be substantial. The proceeds from the IPO will be used to fund PSUS’s investment activities, in line with its stated objective and policies.

Investors and market watchers will be keenly observing how PSUS performs post-IPO, particularly given the current economic climate characterized by high inflation and rising interest rates. The success of this offering could signal continued appetite for innovative investment vehicles, even in challenging market conditions.

It’s important to note that the IPO is subject to market conditions and regulatory approval. The SEC is currently reviewing the registration statement, and the offering will only proceed once this process is complete. Potential investors are advised to carefully review the prospectus, which contains detailed information about the company’s strategy, risks, and financial position.

The launch of PSUS on the public markets could have broader implications for the investment management industry. If successful, it may inspire other prominent hedge funds and investment firms to consider similar structures, potentially democratizing access to sophisticated investment strategies.

However, investors should approach with caution. While the Pershing Square name carries significant weight in investment circles, past performance does not guarantee future results. The closed-end structure of PSUS also means that its shares could trade at a premium or discount to its net asset value, adding another layer of complexity for investors to consider.

As the roadshow begins, all eyes will be on PSUS and the reception it receives from institutional investors. The success of this IPO could set the tone for similar offerings in the future and potentially reshape how retail investors access alternative investment strategies.

The Pershing Square USA IPO represents a significant event in the financial world, offering both opportunities and challenges for investors. As always, potential participants are encouraged to conduct thorough due diligence and consider their individual financial situations before making any investment decisions.

Fed Chair Powell Signals Potential Rate Cuts as Inflation Eases

Posted on July 9, 2024July 9, 2024 by slightbourne@noblecapitalmarkets.com

In a significant shift of tone, Federal Reserve Chair Jerome Powell hinted at the possibility of interest rate cuts in the near future, contingent on continued positive economic data. Speaking before the Senate Banking Committee on Tuesday, Powell’s remarks reflect growing confidence within the central bank that inflation is moving towards its 2% target, potentially paving the way for a more accommodative monetary policy.

Powell’s testimony comes at a crucial juncture for the U.S. economy. After a period of aggressive rate hikes aimed at combating soaring inflation, the Fed now finds itself in a delicate balancing act. On one hand, it must ensure that inflation continues its downward trajectory. On the other, it must be wary of keeping rates too high for too long, which could risk stifling economic growth and employment.

“After a lack of progress toward our 2% inflation objective in the early part of this year, the most recent monthly readings have shown modest further progress,” Powell stated. He added that “more good data would strengthen our confidence that inflation is moving sustainably toward 2%.” This cautious optimism marks a notable shift from the Fed’s previous stance and suggests that the central bank is increasingly open to the idea of rate cuts.

The timing of Powell’s comments is particularly significant, coming just days before the release of crucial economic data. The Consumer Price Index (CPI) for June is set to be published on Thursday, providing the latest snapshot of inflationary pressures in the economy. Many analysts anticipate another weak reading, following May’s flat CPI, which could further bolster the case for monetary easing.

Powell’s testimony also addressed the state of the labor market. The most recent jobs report showed the addition of 206,000 jobs in June, indicating a still-robust employment situation. However, the rising unemployment rate, now at 4.1%, suggests a gradual cooling of the job market. Powell characterized this as a “still low level” but noted the importance of striking a balance between inflation control and maintaining economic vitality.

“In light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” Powell cautioned. He emphasized that keeping policy too tight for an extended period “could unduly weaken economic activity and employment.”

These remarks have significant implications for market expectations. Investors are now pricing in a roughly 70% probability of a rate cut by September, a substantial increase from previous projections. At the Fed’s June meeting, the median projection among officials was for just a single quarter-point rate cut by the end of the year. However, recent weaker-than-expected inflation data has shifted these expectations.

Powell’s comments also touch on broader economic conditions. He described the current period of economic growth as remaining “solid” with “robust” private demand and improved overall supply conditions. Additionally, he noted a “pickup in residential investment,” suggesting potential easing in the housing market, which has been a significant contributor to inflationary pressures.

The Fed Chair’s testimony comes against the backdrop of an approaching presidential election in November, adding a political dimension to the central bank’s decisions. The timing and extent of any rate cuts are likely to become talking points in the election campaign, highlighting the delicate position the Fed occupies at the intersection of economics and politics.

As the Fed navigates this complex economic landscape, Powell’s words signal a cautious but increasingly optimistic outlook. The central bank appears ready to pivot towards a more accommodative stance, provided incoming data continues to support such a move. With crucial inflation figures due later this week and the next Fed meeting scheduled for July 30-31, all eyes will be on economic indicators and subsequent Fed communications for further clues about the future direction of monetary policy.

The coming months promise to be a critical period for the U.S. economy, as the Federal Reserve seeks to engineer a soft landing – bringing inflation under control without triggering a recession. Powell’s latest comments suggest that this challenging goal may be within reach, but the path forward remains fraught with potential pitfalls and uncertainties.

Schwazze (SHWZ) – A Move to the OTC Expert Market

Posted on July 9, 2024July 9, 2024 by slightbourne@noblecapitalmarkets.com

Tuesday, July 09, 2024

Schwazze (OTCQX:SHWZ, NEO:SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

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A Move. We had an opportunity to speak with management regarding the announcement that the OTC Market Group will move trading of SHWZ shares to the OTC Expert Market from OTC QX as a result of the Company’s delinquent 10-Q filing for the period ending March 31, 2024. We believe the move to be temporary and does not have an impact on the long-term investment potential of SHWZ shares.

Why? As we noted previously, Schwazze has been caught up in the BF Borgers case. Schwazze replaced Borgers as the Company’s accountant in April, before the SEC case against Borgers was announced. The Company’s new accountant Baker Tilly is re-auditing Schwazze’s 2023 financial statements, but the review will take longer than the OTC Market Group’s 45 day late filing grace period. We are hopeful the review will be completed in the August/September time frame.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

PDS Biotechnology (PDSB) – Midyear Review: Has PDS Turned The Corner?

Posted on July 9, 2024July 9, 2024 by slightbourne@noblecapitalmarkets.com

Tuesday, July 09, 2024

PDS Biotech is a clinical-stage immunotherapy company developing a growing pipeline of molecularly targeted cancer and infectious disease immunotherapies based on the Company’s proprietary Versamune® and Infectimune™ T-cell activating technology platforms. Our Versamune®-based products have demonstrated the potential to overcome the limitations of current immunotherapy by inducing in vivo, large quantities of high-quality, highly potent polyfunctional tumor specific CD4+ helper and CD8+ killer T-cells. PDS Biotech has developed multiple therapies, based on combinations of Versamune® and disease-specific antigens, designed to train the immune system to better recognize diseased cells and effectively attack and destroy them. The Company’s pipeline products address various cancers including HPV16-associated cancers (anal, cervical, head and neck, penile, vaginal, vulvar) and breast, colon, lung, prostate and ovarian cancers.

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

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Amended Phase 3 Clinical Trial Will Test Two Drugs. During 2Q24, the design of the Phase 3 trial testing Versamune HPV with Keytruda added a second treatment arm to test Versamune, PDS01ADC, and Keytruda against the active control arm of Keytruda alone. We believe this new trial design answers several questions that have caused PDSB to stagnate over the past year. A meeting with the FDA to ensure alignment on the trial design is expected during July 2024.

Thoughtful Consideration Has Led To Improved Trial Design. There are several points from the Phase 2 trial data that lead us to believe that adding the third arm to Phase 3 study improves its design. We believe the Triple-combination could have more rapid enrollment, produce data for product approvals, and support extensive use as a first-line therapy.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).