Today’s Market Movement
In the Asia-Pacific region, most equity markets finished the day moderately higher despite Hong Kong’s Hang Seng declining 0.10% and India’s SENSEX ending the day essentially flat, down a mere 0.02%. Japan’s markets were closed today as the country celebrated Emperor Naruhito’s 64th birthday. Major European markets are higher in midday trading and U.S. equity futures are pointing to a mixed open.
As we close out a light week from an economic data perspective, what we did get points to a still strong employment picture, with declining Initial and Continuing unemployment claims, a bump in Existing Home Sales to 4 million in January, and a PMI composite that while ticking slightly lower remains above 50 indicating expansion. The market seemed to find an uplift in the earnings figures from Nvidia. The question now is whether the promise of AI can continue to fuel this current rally.
However, the market’s response to Alphabet’s Google decision to temporarily shut down the image generation capabilities of their Gemini platform following claims of inaccurate historical images may dampen the spirits a bit.
Earnings Season Boost
Despite any AI-related hesitation, the current earnings cycle has served as a boost to investors. The majority of companies have been providing upside surprises. However, there has not been a significant broadening in market participation as evidenced by the YTD 6.77% return of the market cap weighted SPDR S&P 500 ETF Trust compared to the 2.39% result of the Invesco S&P 500 Equal Weight ETF. This may partly be attributed to the influence of mega-capitalization companies and investors’ lack of focus on the rest of the market.
Global Economic Indicators
Today’s market-moving international economic data includes final German GDP figures for Q4 of 2023, which remained unchanged at -0.30%, a figure indicating that the country has joined the UK and Japan in a state of recession. Germany also released various Ifo Institute survey results for February, with the Current Assessment at 86.9, the Business Climate at 85.5, and Expectations at 84.1. From the U.S., there are no significant economic metrics being reported today, although Baker Hughes Oil & Gas rig counts are slated to be released at 1:00 PM.
Market Performance
Technology had an unusually strong day, posting a 3.27% gain on the back of Nvidia earnings, which singlehandedly accounted for almost one third of that sector’s results. Consumer Discretionary grew 1.94%, boosted by gains in Amazon, which accounted for 51% of the sector’s gains. Broad market indexes had a robust day, with even small caps via the Russell 2000 posting a 0.96% gain. The Dow rose 1.18%, the S&P 500 gained 2.11%, and the Nasdaq Composite closed 2.96% higher.
Despite all the euphoria, there was still some pain to be had as shares of Etsy fell 8.44% after the company posted disappointing earnings. Additionally, Newmont Mining was bid 7.60% lower as the company disclosed a $3.15 billion loss, doubling from the previous year’s $1.49 billion loss.
Year-to-Date Stats
- Dow Jones Industrial Average: 3.66%
- S&P 500: 6.65%
- Nasdaq Composite: 6.86%
- Russell 2000: -0.65%
- Bitcoin (BTC-USD): 22.17%
- Ether (ETH-USD): 29.38%
Companies to Watch
Bloomin’ Brands, Gray Television, Lamar Advertising, Scripps, and Warner Brothers Discover are expected to release quarterly earnings before equities begin trading later this morning. Pre-market breadth is healthy today as 259 names in the S&P 500 have traded hands so far this morning with 113 gainers and 146 decliners. Names coming under pressure include Booking Holdings, Copart Inc, both lower after earnings misses, while Live Nation Entertainment is seeing its shares bid up ahead of the open.
Intuit announced earnings last night with EPS of $2.63, handily
Financial Giants Clash in Earnings Race and IPO Buzz Featuring Reddit’s S-1 Filing
Intuit Inc (INTU) has defied expectations with robust quarterly earnings of $2.75, surpassing the consensus of $2.31 on revenues of $3.39 billion, marking an impressive 11% YoY growth and meeting analyst estimates. The small business and self-employed group revenue soared by an outstanding 18% YoY, while Quickbooks also experienced substantial growth with revenues rising by 19%. The management attributed this growth to a combination of “customer expansion and higher prices.” However, the firm’s guidance fell short of expectations, with a forecasted EPS of $16.17 – $16.47, against the analyst forecast of $9.70. CEO Sasan Goodarzi expressed optimism, stating, “We have great momentum innovating across our products, and we’re well on our way to becoming the trusted assistant that our customers use to fuel their financial success.”
Block, Inc (SQ) reported quarterly earnings of $0.45, demonstrating a remarkable 109% YoY increase; however, this figure fell short of the $0.58 estimate. Despite this, the company reported revenues of $5.77 billion, outshining the $5.70 billion estimate. The company offered a strong EBITDA guidance of $580 million, exceeding the expectations of $515 million. The shareholder letter emphasized the company’s Cash App and its ambition “to become one of the top providers of banking services to households across the United States earning up to $150,000 per year,” aiming to capture a market share that represents “approximately 80% of consumers and 50% of household income.”
Meanwhile, Reddit, the enigmatic social media platform, has filed its Form S-1, a strategic move indicating its intent to offer shares to the public. The leading syndicate underwriters include Goldman Sachs (GS), JP Morgan (JPM), Morgan Stanley (MS), and Bank of America (BAC).
IPOs
For those intrigued by the upcoming IPO calendar, exploring Nasdaq’s Latest & Upcoming IPOs page provides a deeper look into these financial opportunities.
After Today’s Market Close
As the curtain falls on another trading week, no companies are expected to report quarterly results after the equities market closes today. Those anticipating upcoming quarterly earnings reports are encouraged to consult Nasdaq’s Earnings Calendar for further updates.
On the Horizon
Monday, February 26
- US: New Home Sales – January
Tuesday, February 27
- Japan: Inflation Rate – January
- Germany: GfK Consumer Confidence – March
- US: Durable Orders – January
- US: S&P Case Shiller Home Price Index – February
- US: Consumer Confidence – February
Wednesday, February 28
- Eurozone: Economic Sentiment & Consumer Confidence – February
- US: Weekly MBA Mortgage Applications
- US: GDP (Second Estimate) – 4Q 2023
- US: Weekly EIA Crude Oil Inventories
Thursday, February 29
- Japan: Retail Sales, Housing Starts – January
- Germany: Retail Sales, Inflation Rate – January
- UK: Bank of England Consumer Credit – January
- US: Weekly Initial & Continuing Jobless Claims
- US: Personal Income & Spending, PCE Price Index – January
- US: Pending Home Sales – January
- US: Weekly EIA Natural Gas Inventories
Friday, Mach 1
- Japan: Jibun Bank Manufacturing PMI (Final) – January
- China NBS Manufacturing & Non-Manufacturing PMI – February
- China: Caixin Manufacturing PMI – January
- Eurozone: HCOB Manufacturing PMI (Final) – February
- UK: S&P Global Manufacturing PMI (Final) – February
- US: S&P Global Manufacturing PMI (Final) – February
- US: ISM Manufacturing Index – February
Thought for the Day
“Avoid working directly under somebody you don’t admire and don’t want to be like.” ~Charlie Munger
Disclosures
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
