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Pullback in Treasury yields from overnight highs has also been supportive of the stock market thus far.
The 2-yr note yield, at 4.86% overnight, fell to 4.79%. The 10-yr note yield, at 3.96% overnight, fell to 3.90%.
Market breadth reflects the strong positive bias behind today’s gains. Advancers lead decliners by a nearly 5-to-1 margin at the NYSE and a nearly 3-to-1 margin at the Nasdaq.
Dow +328.52 at 33145.35, Nasdaq +147.89 at 11542.83, S&P +41.84 at 4011.88
Leadership from the mega cap space has become more integral to index level gains. The Vanguard Mega Cap Growth ETF (MGK) is up 1.4% versus a 1.2% gain in the Invesco S&P 500 Equal Weight ETF (RSP) and a 1.2% gain in the S&P 500.
Notably, the 2-yr Treasury note yield rose noticeably in the last half hour, currently up four basis points to 4.82%.
The 2 year impacting:
The main indices struggling to regain upward momentum, having fallen back to new session lows.
Market breadth skews less positive compared to earlier in the session. Shortly after the open, advancers led decliners by a nearly 5-to-1 margin at the NYSE and a nearly 3-to-1 margin at the Nasdaq. Now, advancers lead decliner by a roughly 3-to-1 margin at the NYSE and a 2-to-1 margin at the Nasdaq.
Many mega cap stocks have fallen from early highs as the market deteriorated. Tesla (TSLA 205.25, +8.38, +4.3%) and NVIDIA (NVDA 236.35, +3.47, +1.5%) are notable exceptions after Cathie Wood made positive comments about the companies on CNBC earlier.
Gold futures settled $7.80 higher (+0.4%) to $1,824.90/oz
The move was a rebounding from Friday’s 2023 lows, ‘funded’ by declines in the dollar falling on yields falling.
The U.S. Dollar Index #DXY down about -0.5% at $104.70.
Dow 32,889.09 72.17 0.22%
S&P 500 3,982.24 12.20 0.31%
Nasdaq 11,466.98 72.04 0.63%
VIX 20.95 -0.72 -3.32%
Gold 1,824.20 7.10 0.39%
Oil 75.74 -0.58 -0.76%Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note.
Japan’s Nikkei: +0.1%,
Hong Kong’s Hang Seng: -0.8%,
China’s Shanghai Composite: +0.7%,
India’s Sensex: -0.6%,
South Korea’s Kospi: +0.4%,
Australia’s ASX All Ordinaries: +0.5%.Japan’s January Industrial Production -4.6% m/m (expected -2.6%; last 0.3%) and January Retail Sales 6.3% yr/yr (expected 4.0%; last 3.8%). January Housing Starts 6.6% yr/yr (expected 1.0%; last -1.7%) and Construction Orders -14.0% yr/yr (last 8.5%). January BoJ Core CPI 3.1% yr/yr, as expected (last 3.1%)
Australia’s Q4 Current Account surplus AUD14.10 bln (expected surplus of AUD6.50 bln; last deficit of AUD2.30 bln). January Private Sector Credit 0.4% m/m (expected 0.3%; last 0.3%) and January Retail Sales 1.9% m/m (expected 1.5%; last -3.9%)
New Zealand’s February ANZ Business Confidence -43.3 (last -52.0)
Japan’s industrial production declined at the fastest pace in eight months in the January reading.
Bank of Japan Deputy Governor Wakatabe said that the inflation target has not been achieved yet.Japan’s Lower House passed a record JPY114.4 trln annual budget.
Australia will reportedly resume exporting cotton to China.
Hong Kong will lift its mask mandate tomorrow.
Major European indices trade on a mostly higher note.
STOXX Europe 600: +0.1%,
Germany’s DAX: +0.3%,
U.K.’s FTSE 100: -0.4%,
France’s CAC 40: +0.3%,
Italy’s FTSE MIB: +0.7%,
Spain’s IBEX 35: +1.2%.Germany’s January Import Price Index -1.2% m/m (expected -1.5%; last -1.6%); 6.6% yr/yr (last 12.6%)
France’s Q4 GDP 0.1% qtr/qtr, as expected (last 0.1%); 0.5% yr/yr (last 1.0%). January Consumer Spending 1.5% m/m (expected 0.4%; last -1.6%). February CPI 0.9% m/m (expected 0.7%; last 0.4%); 6.2% yr/yr (expected 6.1%; last 6.0%). January PPI 2.7% m/m (last 1.2%)
Italy’s December Industrial Sales 0.7% m/m (last 0.9%); 14.9% yr/yr (last 11.4%). January non-EU trade deficit EUR1.36 bln (last surplus of EUR4.08 bln)
Spain’s February CPI 1.0% m/m (expected 0.0%; last -0.2%); 6.1% yr/yr (expected 5.9%; last 5.9%)
France and Spain reported hotter than expected flash CPI readings for February, keeping the inflation conversation at the forefront.
European Central Bank policymaker Vujcic said that rates are about to enter restrictive territory and that it is correct to expect a 50-bps rate hike in March while ECB Chief Economist Lane also said that there is a solid case for a 50-bps hike in March.
Target (TGT 169.50, +2.69, +1.6%): beats by $0.49, beats on revs; guides Q1 EPS below consensus; guides FY24 EPS below consensus; Q4 comps +0.7% ahead of guidance; Q4 Operating income margin 3.7%, ahead of guidance
Zoom Video (ZM 78.65, +4.93, +6.7%): beats by $0.40, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus
Norwegian Cruise Line (NCLH 15.50, -1.00, -6.1%): misses by $0.20, beats on revs; guides Q1 EPS below consensus; guides FY23 EPS below consensus
Workday (WDAY 179.84, -5.09, -2.8%): beats by $0.09, reports revs in-line; maintains FY24 subscription revenue midpoint and increases FY24 non-GAAP operating margin; announces co-CEO appointment
Occidental Petro (OXY 58.57, -0.39, -0.7%): misses by $0.22, reports revs in-line; also announces $3 bln share repurchase authorization and 38% dividend increase
Universal Health (UHS 137.13, -8.71, -6.0%): beats by $0.05, beats on revs; guides FY23 EPS below consensus, revs above consensusAdvance Auto (AAP 146.35, +5.72, +4.1%): beats by $0.46, beats on revs; guides FY23 revs above consensus
AutoZone (AZO 2550.00, -22.25, -0.9%): beats by $2.73, beats on revs
J.M. Smucker (SJM 149.00, +0.94, +0.6%): beats by $0.08, reports revs in-line; guides FY23 EPS in-line, revs above consensusArconic (ARNC 21.43, -0.70, -3.2%): downgraded to Sell from Neutral at Goldman
DISH Network (DISH 11.59, -0.61, -5.0%): downgraded to Underperform from Buy at BofA Securities
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