Early Look

Monday, February 24, 2025

US stock futures are rising after equities sank and bond prices rallied on Friday following signs of weakness in the U.S. economy as attention turns to one of the busiest weeks of earnings season as the quarter winds down and key inflation data later this week (GDP/PCE). The S&P 500 recorded its worst session of the year on Friday, falling 1.7%. Stocks tumbled sharply on Friday as the Russell 200 broke below its 200-dma moving average support and posted its biggest one-day % drop since Dec. 18th, falling -2.94%, while for the week, the S&P 500 fell -1.66%, the Nasdaq declined -2.51%, and the Dow fell -2.51%. The S&P and Dow Jones Industrials posted their biggest 1-day drop since 12/18 today at -1.71% and -1.79% respectively while the Nasdaq Composite posted its biggest 1-day loss since 1/27 at -2.2%. @charliebilello noted “the Nasdaq 100 has closed above its 200-day moving average for 489 consecutive trading days, the 2nd longest uptrend in history.” Note fourth-quarter earnings season is in its final stretch. Some 425 of the companies in the S&P 500 have reported, with 76% of them beating Wall Street expectations, according to LSEG. Analysts now see aggregate fourth-quarter S&P 500 earnings growth of 15.7% year-on-year, a significant improvement over the 7.8% annual growth prediction as on Jan. 1, per LSEG.

In Asian markets, The Nikkei Index was closed for holiday, the Shanghai Index fell -6 points to 3,373, and the Hang Seng Index dropped -136 points to 23,341. In Europe, the German DAX is up 222 points to 22,509, while the FTSE 100 is up 12 points to 8,672. The euro and German stocks rallied on Monday as investors welcomed Germany’s election result that put centrist parties on track to form a coalition, although optimism was tempered by potentially tricky negotiations over economic policy. Friedrich Merz was set to become Germany’s next chancellor after his opposition conservatives won the national election on Sunday. The euro rose to a one-month high of $1.0528 before dipping to last trade 0.11% higher at $1.0471.

• The Dow Jones Industrial Average fell -748.63 points, or 1.69%, to 43,428.02.
• The Nasdaq Composite collapsed -438.36 points, or 2.20%, to 19,524.01.
• The Russell 2000 Index tumbled -66.39 points, or 2.94% to 2,195.35.

• 10:30 AM ET                Dallas Fed Manufacturing Business Index for February
• 1:00 PM ET US Treasury to sell $69B in 2-year notes

• Earnings After the Close: ADUS AESI AIV APLE BOOM BRDG BWXT BYON CHGG CIVI CLF CLNE CTRA EVER FANG FARO GSHD HIMS HLX HSTM HVT INN KBT KWR MAX MODG MYGN NVTS O OKE PLOW PRA PRIM PSA RIOT SBAC SIBN TEM TREX UCTT VNOM VRE VVX ZD ZM

• The European Union said it estimates that the first wave of Donald Trump’s steel and aluminum tariffs will hit as much as €28 billion ($29.3 billion) of the bloc’s exports in what would be a massive escalation in the US president’s trade war – Bloomberg.

• Domino’s Pizza (DPZ) Q4 EPS $4.89, vs. est. $4.90; Q4 revs $1.44B vs. est. $1.47B; Q4 comp store sales up 0.4% vs. est. 1.63% and Q4 international comp sales up 2.7%; raises quarterly dividend 15% to $1.74 per share; Gross margin for the quarter ended December 29 was 39.2%, in line with the preceding three-month period.
• Nike (NKE) was upgraded to Buy from Hold at Jefferies saying they see the sportswear company being positioned for a strong recovery over the next two years.
• Target Hospitality Corp. (TH), one of North America’s largest providers of vertically integrated modular accommodations and value-added hospitality services, received notice that the U.S. government intends to terminate the existing Pecos Children’s Center services agreement with Target’s nonprofit partner, effective immediately, or on or about Feb 21, 2025.
• Wingstop (WING) upgraded to Buy from Neutral at Guggenheim.

• Newmont (NEM) downgraded to Neutral from Overweight at JPMorgan.
• Westlake Chemical (WLK) Q4 EPS $0.06 vs. est. $1.08; Q4 sales $2.84B vs. est. $2.97B; Q4 Operating income $66M, -9.6% y/y, and EBITDA $416M, +6.7% y/y vs. est. $524.5M.

• Equitable Holdings (EQH) announced that it has commenced a cash tender offer to purchase up to 46M units representing assignments of beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (AB) at a price of $38.50 per Unit, net to the seller in cash, for an aggregate purchase price of up to approximately $1.8B, less any applicable tax withholding, representing a 7.8% premium over AB Holding’s closing price per Unit on the New York Stock Exchange on February 21.
• NMI Holdings (NMIH) upgraded to Outperform from Market Perform at Keefe Bruyette.

• Summit Therapeutics (SMMT) said it is collaborating with Pfizer (PFE) to study its experimental drug ivonescimab in combination with several of Pfizer’s targeted cancer therapies called antibody drug conjugates (ADCs) across different types of tumors; SMMT will provide ivonescimab for the studies, which PFE will conduct.

• Disney’s (DIS) “Captain America: Brave New World” soared on opening weekend but crashed in its second go-around finishing no. 1 at the box office in week 2 but only with $28.2 million in ticket sales, according to studio estimates Sunday after a debut of $100 million over four days and $88 million over three days in week 1.
• Microsoft Corp. (MSFT) has begun canceling leases for a substantial amount of datacenter capacity in the US, a move that may reflect concerns about whether it’s building more AI computing than it will need over the long term, TD Cowen said https://tinyurl.com/2ranr4ry
• Microsoft (MSFT) said it created a “new state of matter” that represents a major advance for quantum computing, but physicists who have reviewed the work say they aren’t convinced – WSJ.
• Twilio (TWLO) was upgraded to overweight from equal-weight at Morgan Stanley, saying the software firm’s execution should help with growth and margin re-acceleration.