Stock Indexes Mixed as Profit-Taking Weighs on Tech Stocks

The S&P 500 Index ($SPX) (SPY) this morning is up +0.24%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.44%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.08%.

Stock indexes this morning are mixed.  The S&P 500, Dow Jones Industrials, and Nasdaq 100 all posted new all-time highs. However, profit-taking emerged in technology stocks after this week's sharp rally that dragged the Nasdaq 100 into negative territory.

A decline in global bond yields today is supportive of stocks.  Dovish comments from ECB members knocked yields lower when ECB President Lagarde said the latest Eurozone compensation numbers are “encouraging.” Also, ECB Governing Council member Centeno said the ECB must be ready for an interest rate cut in March, even if not likely, as downside risks to inflation and growth have materialized.

U.S. stocks have carryover support from strength in European equity markets as the Euro Stoxx 50 rose to a new 23-year high today.

The markets are discounting the chances for a -25 bp rate cut at 2% for the March 19-20 FOMC meeting and 23% for the following meeting on April 30-May 1.

Overseas stock markets are mixed.  The Euro Stoxx 50 is up +0.47%.  China’s Shanghai Composite closed up +0.55%.  Japan’s Nikkei Stock Index was closed for a holiday.

Interest Rates

March 10-year T-notes (ZNH24) this morning are up +4 ticks, and the 10-year T-note yield is down -2.7 bp at 4.293%.  March T-note prices recovered from a 2-3/4 month low and moved higher, and the 10-year T-note yield fell back from a 2-3/4 month high of 4.349%. 

T-note prices this morning recovered from overnight losses and are slightly higher.  A rally in European government bonds today sparked short covering in T-notes.  Gains in T-notes are contained on a rally in the S&P 500 to a new record high, which curbed safe-haven demand for T-notes.

European government bond yields today are lower.  The 10-year German bund yield is down -5.6 bp at 2.385%.  The 10-year UK gilt yield is down -4.5 bp at 4.060%.   

U.S. Stock Movers

Recently beaten-down cybersecurity stocks are climbing today on favorable valuations.  Palo Alto Networks (PANW) is up more than +4% to lead gainers in the Nasdaq 100.  Also, Zscaler (ZS) and SentinelOne (S) are up +2%.  In addition, Fortinet (FTNT) is up more than +1%.

Live Nation Entertainment (LYV) is up more than +3% after reporting Q4 revenue of $5.84 billion, well above the consensus of $4.73 billion.   

Carvana (CVNA) is up more than +40% after reporting Q4 gross profit of $402 million, stronger than the consensus of $388.1 million.

Block Inc (SQ) is up more than +17% after raising its 2024 adjusted Ebitda forecast to at least $2.63 billion from a prior forecast of $2.40 billion, above the consensus of $2.41 billion. 

Rocket Cos.  (RKT) is up more than +4% after reporting Q4 adjusted revenue of $885 million, better than the consensus of $770.8 million. 

VICI Properties (VICI) is up more than +2% after reporting Q4 FFO/share of 72 cents, above the consensus of 63 cents. 

Nvidia (NVDA) is up more than +1% at a new record high, adding to Thursday’s +16% surge to lead gainers in the Nasdaq 100 after reporting stellar Q4 earnings results and forecasting strong Q1 earnings. 

Edison International (EIX) is up more than +2% after reporting Q4 core EPS of $1.28, better than the consensus of $1.16.

Warner Bros Discovery (WBD) is down more than -13% to lead losers in the S&P 500 and the Nasdaq 100 after reporting Q4 revenue of $10.28 billion, weaker than the consensus of $10.46 billion. 

Booking Holdings (BKNG) is down more than -8% after forecasting full-year gross bookings to increase “slightly faster than 7%,” weaker than the consensus of 9.9%.

Insulet (PODD) is down more than -5% after forecasting 2024 revenue growth of 12% to 17%, the midpoint weaker than the consensus of 16.6%. 

MercadoLibre (MELI) is down more than -12% after reporting Q4 EPS of $3.25, well below the consensus of $7.17.

EOG Resources (EOG) is down more than -3% after reporting Q4 adjusted EPS of $3.07, below the consensus of $3.11.

Penumbra (PEN) is down more than -4% after forecasting full-year revenue of $1.230 billion-$1.270 billion, the midpoint below the consensus of $1.267 billion.

Airbnb (ABNB) is down more than -2% on signs of insider selling after an SEC filing showed CFO Stephenson sold $1.14 million of shares on Tuesday.

Noble Corp (NE) is down more than -2% after forecasting full-year adjusted Ebitda of $925 million-$1.03 billion, the midpoint below the consensus of $1.1 billion.   

Earnings Reports (2/23/2024)

Frontier Communications Parent (FYBR), Hyatt Hotels Corp (H), Lamar Advertising Co (LAMR), RB Global Inc (RBA), Warner Bros Discovery Inc (WBD).

• Record High Stocks Weigh on the Dollar
• Stock Indexes Climb to Record Highs on a Tech Fueled Rally
• Stock Index Futures Muted as Nvidia-Driven Rally Stalls