Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Quiver Markets Wrap

Published 2024-02-15, 05:34 p/m
Updated 2024-02-15, 05:46 p/m
© Reuters.  Quiver Markets Wrap

Quiver Quantitative - Wall Street experienced a buoyant close on Thursday, with major indexes climbing as disappointing retail sales data fueled investor optimism about potential interest rate cuts by the Federal Reserve. The U.S. Commerce Department reported a 0.8% drop in retail sales for January, a more significant decline than anticipated, primarily due to lower spending at auto dealerships and gasoline stations. This downturn in consumer spending, contrasted with recent concerns over higher-than-expected inflation, led investors to speculate on a possible easing of the Fed's monetary policy in the near future.

The day's trading was also influenced by a mix of corporate news and economic indicators. On the employment front, a Labor Department report indicated initial claims for state unemployment benefits stood at 212,000 for the week ended Feb. 10, slightly below expectations. In corporate news, the technology sector witnessed Cisco Systems (NASDAQ:CSCO) announcing a workforce reduction of 5% and a lowered annual revenue forecast, causing its shares to fall 2.43%. Meanwhile, CBRE Group (NYSE:CBRE) surged 8.5% following an upbeat full-year profit forecast, contributing to gains in the S&P 500 real estate sector (XLRE).

Market Overview: -Major indices rally: Dow (+0.91%), S&P 500 (+0.58%), Nasdaq (+0.30%). -Retail sales surprise: Weaker-than-expected data fuels hopes for Fed rate cuts in May or June. -Sector performance: Real estate (CBRE) leads gains, followed by utilities, materials, and energy. -Cisco (-2.43%) and Deere (-5.2%) decline after job cuts and profit forecast revisions. -Trading volume: Above average at 12.24 billion shares traded.

Key Points: -Weaker retail sales raise bets on Fed pivot, boosting investor sentiment. -S&P 500 earnings outpace expectations, fueling optimism despite inflation concerns. -Regulatory relief lifts Wells Fargo (NYSE:WFC), while CBRE thrives on upbeat forecast and Deere stumbles. -Underperforming sectors rebound amid potential economic slowdown and rotation.

Looking Ahead: -Producer Price Index (PPI) report on Friday for further economic clues. -Assessing impact of potential rate cuts on different sectors and companies. -Observing investor response to upcoming earnings reports and economic releases.

Investor sentiment was further bolstered by the overall earnings performance of S&P 500 companies, with 80.3% surpassing expectations, as per LSEG data. However, not all news was positive, as Deere & Co (DE) reported a cut in its 2024 profit view, leading to a 5.2% decline in its shares. Similarly, West Pharmaceutical Services (WST) tumbled 14.1% after its full-year forecast fell short of estimates. These mixed corporate results reflect the ongoing challenges and uncertainties facing various sectors in the current economic climate.

In summary, Wall Street's positive end was a complex interplay of weaker retail sales raising hopes for a more dovish Fed, mixed corporate earnings, and labor market data. The day's trading demonstrated how macroeconomic data and corporate financial health continue to be pivotal in shaping market sentiment. As investors navigate these varying signals, the focus remains on the Federal Reserve's next moves in response to evolving economic conditions.

This article was originally published on Quiver Quantitative

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.