HomeMarket News New York Stock Exchange Final Trades Roundup

New York Stock Exchange Final Trades Roundup

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Ranked as erstwhile bargain, Leidos Holdings, Inc. (NYSE: LDOS) caught the eye of Steve Weiss from Short Hills Capital Partners on CNBC’s β€œHalftime Report Final Trades.” Weiss advocated for the acquisition of the stock, underscoring its favorable price point.

Leidos reported robust fourth-quarter financial data on Feb 13, exhibiting a noteworthy year-over-year revenue ascent of 8% to $3.98 billion for FY23, outshining the estimated $3.80 billion. The company also trumped projections with an adjusted earnings per share (EPS) of $1.99, concurrently reporting a 9% upswing year-over-year, as opposed to the consensually forecasted $1.74, based on data from Benzinga Pro.

On the same program, Jim Lebenthal of Cerity Partners pinned his faith on General Motors Company (NYSE: GM) by nominating it as his final trade. However, GM encountered a setback as it reportedly issued a stop sale order for all 2024 Chevrolet Colorado and GMC Canyon midsize trucks due to software quality-related issues.

Anastasia Amoroso, representing iCapital, aired her recommendation for Amplify Cybersecurity ETF (NYSE: HACK), which encountered a 5% descent on Wednesday.

On this edition of β€œHalftime Report Final Trades,” Joe Terranova of Virtus Investment Partners opted for CME Group Inc. (NASDAQ: CME). CME Group unveiled strong fourth-quarter financials on Feb. 14, reporting adjusted earnings of $2.37 per share, surpassing the market’s estimate of $2.28 per share. The company secured $1.44 billion in sales, besting market expectations of $1.43 billion.

See also  The Impact of Inflation Data on Market Dynamics and the Future of Interest Rate Cuts

Amidst the hustle and bustle of Wall Street, attention was riveted on two significant inflation indicators: the Consumer Price Index (CPI) and the Producer Price Index (PPI).

Prior to this week's unveiling of consumer and wholesale inflation data, the consensus was leaning towards an impending rate cut by the central bank in June.

However, the Federal Reserve now finds itself at a crossroads. As I communicated to my Growth Investor subscribers in their recent Weekly Update, Fed Chair Jerome Powell faces an uphill battle in convincing fellow Fed officials to endorse interest rate reductions in June.

Both the CPI and PPI reports play a pivotal role in shaping the Fed's stance on rate cuts. In this installment of Market 360, we'll delve into the implications of these reports and their resonance on the likelihood and extent of rate cuts this year. Moreover, we'll explore strategies to optimize your portfolio amidst these developments.

Diving into the Latest Inflation Figures Consumer Price Index (CPI)

Wednesday kickstarted with the release of the Consumer Price Index (CPI) data for March – and it came in scorching hot.

The headline CPI surged by 0.4% in March and showed a 3.5% increase over the last 12 months. This matches the prior month's monthly surge but surpasses the 3.2% annual figure from February, surpassing economists' predictions of a 0.3% monthly rise and a 3.4% annual increase.

Core CPI, excluding food and energy, mirrored this trend by elevating 0.4% in March and registering a 3.8% uptick over the past 12 months, outstripping the projected 0.3% monthly rise and 3.7% yearly pace.

Further exploration reveals...

Energy costs dragged on headline inflation, climbing by 1.1% last month post a 2.3% rise in February. Additionally, energy prices have ascended by 2.1% over the preceding 12 months. Gasoline prices underwent a 1.7% increase in March following a 3.8% surge in February. Food expenditures notched a 0.1% uptick in March and have shown a 2.2% increase over the past year.

As I've underscored in previous analysis of CPI reports, the stubbornly high shelter costs are a concern. Despite the hope for a decline, these costs continue to exert pressure on CPI, contributing to over half of the uptick. Shelter expenses rose by 0.4% in March and escalated by 5.7% in the past 12 months.

Wall Street displayed displeasure, with major indices tumbling on Wednesday. The S&P 500 concluded the day down by 0.95%, the Dow plummeted by approximately 1.1%, and the NASDAQ witnessed an 0.8% drop.

Producer Price Index (PPI)

Thursday saw the Labor Department rolling out the Producer Price Index (PPI) for March.

The PPI discloses the expenditures incurred by producers pre-consumer engagement, acting as an indicator for inflation trends. Following Wednesday's lackluster CPI data, market observers were eager for signs of optimism in the PPI report.

Delving into the specifics...

March saw the PPI increasing by 0.2%, sliding from the 0.6% rise in February and falling short of the anticipated 0.3% boost. The headline PPI recorded a 2.1% elevation in March on a year-over-year basis, signaling the largest surge in nearly a year, albeit slightly lower than the projected 2.2% rise. The services sector bears the accountability for last month's surge, with service prices climbing by 0.3%.

The silver lining was observed in wholesale goods prices, which witnessed a 0.1% decline in March. This implies that wholesale prices have witnessed declines in five of the last six months.

Two significant factors contributing to wholesale deflation include a robust dollar reducing the imported goods and commodities cost and deflation in China.

Despite the influx of Chinese deflation, from solar panels to electric vehicles, the prevalent scenario suggests persistently high wholesale prices.

Implications for Fed and Investors

Given the elevated inflation readings, the pertinent query now is: Will the Fed proceed with rate cuts this year?

Prior to this week's disappointing inflation indicators, numerous traders anticipated the likelihood of the Fed opting for two rate cuts this year, down from previous projections of three cuts.

Escalating rates render the scenario challenging for Powell to rally support for a rate cut at the June Federal Open Market Committee (FOMC) meeting. Consequently, the prevailing sentiment leans towards the initial cut happening in July. Delaying it further may thrust the Fed into the limelight of the presidential election - a circumstance it seeks to Dodge.

Personally, a synchronized rate cut by the Fed, the European Central Bank, and the Bank of England in June would be preferable. Nevertheless, fret not. The beacon for profitability lies in inherently superior stocks – irrespective of the Fed's decisions.

Capitalizing on Any Market Setting

The investor community responded unfavorably to the inflation revelations. In the week’s span, the S&P 500 cascaded by 1.6%, the Dow slumped by 2.4%, and the NASDAQ moderated by 0.5%.

However, post this data deluge, Wall Street is poised to pivot towards the first-quarter earnings season, officially mooting on Friday.

While the inflation statistics and ensuing market downturn were disheartening, this retreat could well emerge as an opportunity for entry. As relayed to my Growth Investor subscribers, this may transpire as an unparalleled buying window for the year.

A cardinal mantra asserts that markets are supremely efficient for four months annually – notably during earnings season. The current earnings discourse is anticipated to be robust, potentially unleashing a series of positive earnings results that could propel our fundamentally superior stocks skyward.

The stocks on our Growth Investor Buy Lists embody this ethos perfectly – showcasing 138.6% average annual earnings growth, 17.6% average sales growth, and newfound traction from positive analyst revisions in recent months.

Just yesterday, I alluded to my Growth Investor subscribers about the imminent disruptive wave poised to reshape the world – fueled by a petite Maryland-headquartered entity...

Anticipations posited it as the next wherein NVIDIA Corporation (NVDA) found its genesis – a stock that accrued close to 2,000% returns at Growth Investor.

However, bear in mind that this narrative steers clear of the conventional AI, 5G, and Bitcoin realm...

Discover the crux of this avant-garde technology – and its potential portfolio reverberations – here.

(Existing member of Growth Investor? Click here to access the exclusive members-only site now.)

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA)

Following these trades, certain market movements were observed:

  • Leidos shares appreciated by 0.4% closing at $123.95 on Wednesday.
  • General Motors shares displayed a 1.2% rise to $39.49 during Wednesday’s session.
  • The Amplify Cybersecurity ETF saw a 5% decline on Wednesday.
  • CME Group shares surged by 1.9% concluding at $215.00.

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