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Markets in Motion: Equities Poised for Rebound Amidst Nvidia and Fed Focus

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Insights into the Trading Day

Across the Asia-Pacific region, stock markets wrapped up the day on a mixed note, with India’s SENSEX and China’s Shanghai Composite in the green, while indices in Japan, Australia, Taiwan, Hong Kong, and South Korea faced losses. Conversely, European markets are showing modest gains at midday, hinting at a positive opening for U.S. equities.

Today, equities are brushing off initial losses from Adobe and Ulta Beauty, eyeing a redemption from yesterday’s setbacks. Although the Russell 2000 is the lone index trailing, the broader market is on course for another week of gains. Investors, especially keeping a close watch on the small-cap index, should gear up for Nvidia’s upcoming GTC developer conference headlined by CEO Jensen Huang on February 18.

The day following Nvidia’s conference, the Federal Reserve will conclude its policy meeting. While no policy shift is anticipated, market sentiment will be swayed by Fed Chair Powell’s remarks and updated economic projections. Considering the recent inflation figures for February, it is likely that the Fed will adhere to its cautious approach, signaling a potential rate adjustment in the latter half of 2024. This could necessitate a moderate adjustment in GDP and earnings forecasts for the year.

Data Dive

Global Economic Landscape

As we wrap up the week, international economic updates outside the U.S. remain subdued. Brace yourselves for a data-packed Monday with fresh insights on Industrial Production, Retail Sales in China, and a pulse on Eurozone inflation.

Domestic Economic Indicators

Today’s economic agenda includes the release of February Import and Export Price data at 8:30 AM ET, followed by the Industrial Production figures at 9:15 AM ET. Subsequently, the University of Michigan will unveil the preliminary March Consumer Sentiment data at 10 AM ET, with expectations largely mirroring the February readings.

Market Movers

In a market scenario dominated by tech giants, the Technology sector held its ground with a marginal increase of 0.02%, while Energy led the sectoral gains at 1.03%. Notably, Microsoft and Apple spearheaded the positive trend despite challenges faced by chip manufacturers. Conversely, Real Estate took the steepest dive by 1.41%, closely trailed by Utilities with a 0.80% decline. The Dow, S&P 500, and Nasdaq Composite mirrored this downward trajectory, culminating in a 0.25% to 0.29% decline, while the Russell 2000 highlighted broader market sentiments with a 1.96% drop.

Lennar witnessed a 7.64% drop, despite meeting or surpassing expectations. However, concerns surrounding the company’s guidance triggered a sell-off not only in Lennar but also in Pultegroup, D.R Horton, Home Depot, and Lowe’s. Providing a snapshot of the year-to-date market performance:

  • Dow Jones Industrial Average: 3.23%
  • S&P 500: 7.98%
  • Nasdaq Composite: 7.44%
  • Russell 2000: 0.20%
  • Bitcoin (BTC-USD): 70.21%
  • Ether (ETH-USD): 69.04%

Stocks to Keep on Your Radar

Watch out for earnings releases from Buckle and Jabil before trading commences today. The pre-market scenario indicates a robust breadth with 147 gainers and 93 decliners out of the 250 S&P 500 constituents trading actively. Adobe and Ulta Beauty lead the decliners list, while Intuitive Surgical, Micron Technology, and Verisign shine as the top gainers this morning.

Adobe impressed the market with its February quarter results surpassing expectations. The company reported a quarter revenue increase of 12% YoY in the Digital Media segment, reaching $3.82 billion, while the Digital Experience segment witnessed a 10% YoY revenue rise to $1.29 billion. Notably, Digital Experience subscription revenue climbed 12% YoY to $1.16 billion. Adobe also unveiled a new stock repurchase authorization of up to $25 billion valid until March 14, 2028.

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