Stocks Fall Back Ahead of Fed Chair Powell and Feb Payroll Report

The S&P 500 Index ($SPX) (SPY) this morning is down -0.10%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.22%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.16%.

Stock indexes this morning are moderately lower as they consolidate last Friday’s gains when the S&P 500 and Nasdaq 100 posted new record highs.  The markets are awaiting Fed Chair Powell’s semiannual monetary policy testimony to a House committee on Wednesday and a Senate panel on Thursday for clues to the path of Fed policy.  Powell is expected to maintain his hawkish stance and signal the Fed is in no hurry to cut interest rates.  Also, Friday’s monthly U.S. payroll report will garner attention as it shows the labor market's strength and if wage pressures are contained. 

Bitcoin (^BTCUSD) is up more than +4% at a 2-1/4 year high on a jump in institutional demand for Bitcoin and speculation ahead of the upcoming halving event in April.  According to BitMEX Research, the new spot Bitcoin ETFs have recorded $7.35 billion in inflows since their launch in January.

U.S. stocks have carryover support from strength in other global bourses after the Euro Stoxx 50 rose to a 23-year high today and the Nikkei Stock Index climbed to a new record high.

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 today are higher.  The Euro Stoxx 50 is up +0.37%.  China’s Shanghai Composite closed up +0.41%.  Japan’s Nikkei Stock Index closed up +0.21%.

Interest Rates

June 10-year T-notes (ZNM24) this morning are down -10 ticks, and the 10-year T-note yield is up +4.9 bp at 4.229%.  Jun T-notes are under pressure this morning on negative carryover from weakness in European government bonds.  T-notes are also weighed down by supply pressures, with more than $30 billion of corporate debt expected to be issued this week. 

European government bond yields today are mixed.  The 10-year German bund yield is up +0.7 bp to 2.421%.  The 10-year UK gilt yield is up +1.7 bp to 4.131%.

The Eurozone Mar Sentix investor confidence index rose +2.4 to an 11-month high of -10.5, stronger than expectations of -10.6.

U.S. Stock Movers

Tesla (TSLA) is down more than -4% to lead losers in the S&P 500 after the China Passenger Car Association reported the company’s China Feb shipments fell -15.5% m/m to 60,365 units.

Apple (AAPL) is down more than -2% to lead losers in the Dow Jones Industrials after the European Union fined it 1.8 billion euros ($2 billion) over an investigation that it shut down rivals on its own platforms.

Workday (WDAY) is down more than -5% to lead losers in the Nasdaq 100 on signs of insider selling after an SEC filing showed Co-President Robinson sold $916,920 of shares last Thursday.

Paramount Global (PARA) is down more than -4% after Bloomberg Intelligence said the company’s TV struggles are worsening with ads in freefall and that the new sports bundle called “Spulu” could intensify consumer cord-cutting. 

International Game Technology Plc (IGT) is down more than -2% after Stifel downgraded the stock to hold from buy.

FleetCor Technologies (FLT) is up more than +5% after Baird upgraded the stock to outperform from neutral with a price target of $330. 

DoorDash (DASH) is up more than +4% to lead gainers in the Nasdaq 100 after RBC Capital Markets upgraded the stock to outperform from neutral with a price target of $175.

Packaging Corp of America (PKG) is up more than +3% after Bank of America Global Research upgraded the stock to buy from neutral.

International Paper (IP) is up more than +3% after Bank of America Global Research upgraded the stock to buy from neutral with a price target of $42.

Nvidia (NVDA) is up more than +3% after overtaking Saudi Aramco to become the world’s third-most-valuable public company after Apple and Microsoft. 

Super Micro Computer  (SMCI) is up more than +20% after Dow Jones Indices announced late last Friday that it will replace Whirlpool in the S&P 500 before the open on Monday, March 18.

Deckers Outdoor (DECK) is up more than +3% after Dow Jones Indices announced late last Friday that it will replace Zions Bancorp in the S&P 500 before the open on Monday, March 18.

Macy’s (M) is up more than +16% after Arkhouse Management and Brigade Capital boosted their offer for Macy’s by 14% after the company rebuffed a previous proposal. 

Lyft (LYFT) is up more than +5% after RBC Capital Markets upgraded the stock to outperform from neutral with a price target of $23. 

Earnings Reports (3/4/2024)

AeroVironment Inc (AVAV), Akoya Biosciences Inc (AKYA), Capstar Financial Holdings Inc (CSTR), Cara Therapeutics Inc (CARA), Commercial Vehicle Group Inc (CVGI), ContextLogic Inc (WISH), Crawford & Co (CRD/A), Crescent Energy Co (CRGY), DZS Inc (DZSI), Eos Energy Enterprises Inc (EOSE), Gitlab Inc (GTLB), Hibbett Inc (HIBB), INNOVATE Corp (VATE), Liberty Media Corp-Liberty Liv (LLYVA), Northwest Pipe Co (NWPX), Sagimet Biosciences Inc (SGMT), SEMrush Holdings Inc (SEMR), Southland Holdings Inc (SLND), Stitch Fix Inc (SFIX), ThredUp Inc (TDUP), Viant Technology Inc (DSP), Vicarious Surgical Inc (RBOT).

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