Early Look

Monday, February 26, 2024

Futures	Up/Down	%	Last
Dow	-31.00	0.08%	39,158
S&P 500	-0.25	0.01%	5,101
Nasdaq	9.50	0.05%	18,000

 

 

U.S. futures are mixed/to little changed as we kick off the new trading week. Stocks finished higher last Friday, now rising 15 of the last 17 weeks as upside momentum since the end of October 2023 has led to recent new all-time highs for the S&P 500, Dow Jones Industrials, and Nasdaq 100, boosted by technology shares behind the ongoing “AI” stock boom (NVDA, AMD, GOOGL, MSFT, AVGO, TSM, ARM, SMCI). We are also ending the end of Q4 earnings with @charliebilello noting “with 92% of companies reported, S&P 500 Q4 GAAP earnings per share are up 15% over the prior year, the 4th straight quarter of positive YoY growth and highest growth rate since Q4 2021.” Attention turns back to inflation data this week with GDP mid-week and the PCE/Core PCE inflation readings (the Fed’s preferred measure) late week which could determine the next big move for major averages currently holding near highs. Markets briefly cared about “hotter” CPI and PPI data two weeks ago, pushing stocks lower to snap the 5-week win streaks for the S&P and Nasdaq, but better results last week from NVDA boosted sentiment/stocks, erasing market concerns for the time. In Asian markets, The Nikkei Index gained 135 points to 39,223, the Shanghai Index fell -27 points to 2,977, and the Hang Seng Index dipped -91 points to 16,634. In Europe, the German DAX is up a few points to 17,424, while the FTSE 100 is down -24 points to 7,942.

 

• The Dow Jones Industrial Average rose 62.42 points, or 0.16%, to 39,131.52.
• The Nasdaq Composite slipped -44.80 points, or 0.28%, to 15,996.82.
• The Russell 2000 Index gained 2.85 points, or 0.14% to 2,016.69.

• 10:30 AM ET                Dallas Fed Manufacturing for February
• 1:00 PM ET                   US Treasury to sell $60B in 2-year notes.
• 1:00 PM ET                   US Treasury to sell $61B in 5-year notes.

• Earnings After the Close: ACHR ADTN AES CARG DORM DRQ EVBG EVER FATE FDP FSK HEI HIMS HLX HSII IRBT OKE PEG PLOW PUBM PWSC RLJ SBAC SIBN SKYT SOI STAA TMDX TREX U VTS WDAY ZM

• JP Morgan Global High Yield and Leveraged Conference, 2/26-2/28, in Miami, FL
• JP Morgan Global Emerging Markets Corp Conference, 2/26-2/28, in Miami, FL
• NAHB Internation Builders Show, 2/26-2/28 in Las Vegas, NV

 

 

Macro	Up/Down	Last
Nymex	-0.31	76.18
Brent	-0.28	81.34
Gold	-8.90	2,040.50
EUR/USD	0.0032	1.0850
JPY/USD	0.16	150.66
10-Year Note	-0.012	4.248%

 

• Domino’s Pizza (DPZ) Q4 EPS $4.48 vs. est. $4.38; Q4 revs $1.4B vs. est. $1.42B; Q4 U.S. same store sales growth of 2.8% vs est. 2.2%; lifts dividend by 25% to $1.51 and approves additional $1B share repurchase program; said a revamp of its loyalty program and its delivery partnership with Uber Eats boosted sales.
• Fresh Del Monte (FDP) Q4 EPS loss (-$2.22) or adj EPS loss (-$0.25) missed ests. of $0.31 and revs fell -3% y/y to $1.01B vs. $1.04B last year; raises quarterly dividend to 25c per share; banana sales dropped 6% to $379.6 million and fresh and value-added product sales inched up 1% to $582.8 million.

• Chesapeake (CHK) and Cheniere (LNG) should benefit from tightened supply according to Barron’s this weekend. Article notes oil and oil stocks have been stuck in a tight price range this year, fluctuating by a few percentage points in either direction week by week, but says there is still a bull case for natural gas. Chesapeake (CHK) is one that still seems to have an embedded advantage and LNG is also well-positioned.
• Alcoa (AA) made a $2.2 billion all-stock buyout proposal for its Australian joint venture partner Alumina to give them greater upstream exposure and simplify its operations; under the proposed deal, Alumina shareholders would receive 0.02854 shares of Alcoa common stock for each share held, giving them a 31% stake in the combined company. This would imply a value of A$1.15 per Alumina share, based on Alcoa’s closing price.
• Intuitive Machines (LUNR) shares declined pre-mkt after the space exploration firm said its Odysseus moon lander had tipped over and was resting on its side. The company, which became the first private company to land on the moon and the first from the U.S. since 1972, said that all but one of its six NASA science and technology payloads were facing upwards and receptive to communications.

• Berkshire Hathaway (BRK/B) reports Q4 operating earnings $8.48B vs. $6.63B last year; said $2.2B was used to repurchase Berkshire shares during Q4, bringing the total for the year to $9.2B.
• Freddie Mac (FMCC) and Fannie Mae (FNMA) both upgraded to Outperform from Market Perform at KBW Inc. saying while the longer-term outlook for government-sponsored enterprise privatization remains uncertain, the shares are positioned to outperform given the likelihood of a closely contested presidential election.
• MicroStrategy’s (MSTR) suffered a hack on its “X” account that tricked some people into handing over funds to the attacker, according to crypto security analysts. On Monday in Asia, the attacker placed a now-deleted post on the company’s X page that purported to promote a new coin backed by company. Users who clicked were directed to another website in what’s known as a phishing exploit. http://tinyurl.com/2daw52vp

• KKR & Co. (KKR) is nearing a deal worth about $4 billion to buy a software business from Broadcom Inc. (AVGO), according to reports this weekend citing people with knowledge of the matter. http://tinyurl.com/yzaueyj2
• Walt Disney Co. (DIS) and Reliance Industries Ltd. have signed a binding pact to merge their media operations in India, according to people familiar with the matter, as the US entertainment giant recasts its strategy amid intense competition in the world’s most-populous country – Bloomberg.
• Motorola Solutions (MSI) files mixed securities shelf.
• Clear Channel Outdoor (CCO) Q4 revenue $632.11M vs. est. $610.14M; sees Q1 revs $465M-$490M vs. est. $461.5M; said initiated a sale process for Latin America businesses.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.