Traders Market Weekly: A Wonderful Life for Central Bankers

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    Kohl’s (KSS 26.00, -2.04, -7.3%): misses by $3.46, misses on revs; guides FY24 EPS below consensus, revs below consensus
    Lowe’s Companies, Inc. (LOW 206.00, +0.25, +0.1%): beats by $0.07, misses on revs, comparable sales decreased 1.5%; guides FY24 EPS in-line, revs below consensus
    Ross Stores, Inc. (ROST 108.12, -2.42, -2.2%): beats by $0.08, beats on revs; guides Q1 EPS below consensus; guides FY24 EPS below consensus
    Sarepta Therapeutics, Inc. (SRPT 143.65, +21.52, +17.6%): misses by $0.06, beats on revs; upgraded to Overweight from Equal-Weight at Morgan Stanley


    Reata Pharmaceuticals, Inc. (RETA 86.48, +55.31, +177.4%): Announces FDA Approval of SKYCLARYS™ (Omavaloxolone), the First and Only Drug Indicated for Patients with Friedreich’s Ataxia

    • This reply was modified 1 year, 1 month ago by TradersCom.

    S&P 500 futures are down 12 points and are trading 0.3% below fair value.
    Nasdaq 100 futures are down 33 points and are trading 0.2% below fair value.
    Dow Jones Industrial Average futures are down 80 points and are trading 0.1% below fair value.


    Dow 32598.48 -58.13 (-0.18%)
    Nasdaq 11371.85 -83.69 (-0.73%)
    SP 500 3947.56 -22.59 (-0.57%)

    10-yr Note -28/32 3.99

    NYSE Adv 1286 Dec 1655 Vol 962 mln
    Nasdaq Adv 1986 Dec 2507 Vol 4.8 bln


    Strong: Energy, Materials, Industrials
    Weak: Real Estate, Utilities, Consumer Staples, Consumer Discretionary, Information Technology

    Most of the S&P 500 sectors registered losses with the interest rate sensitive real estate (-1.5%) and utilities (-1.7%) sectors suffering the steepest declines.

    On the flip side, the energy (+1.9%), materials (+0.7%), and industrials (+0.4%) sectors were the lone standouts in positive territory, having been enthused somewhat by China reporting stronger-than-expected Manufacturing PMI and Non-Manufacturing readings for February.


    Rising market rates were a big headwind for stocks today.

    The 10-yr note yield reached 4.00% earlier and settled up eight basis points at 3.99%.
    The 2-yr note yield rose ten basis points to 4.90%. These moves were mostly in response to the ISM Manufacturing Index this morning and comments from Fed officials.

    ISM Manufacturing Index edged higher to 47.7% from 47.4% in January. A reading below 50% is indicative of a general contraction in manufacturing activity. The sticking point is that the Prices Index rose to 51.3% from 44.5%, marking the first price increase in four months. This price data followed a higher-than-expected February CPI reading for Germany.

    Minneapolis Fed President Kashkari (2023 FOMC voter) saying he is leaning toward raising rates further and pushing up his own policy path forecast and Atlanta Fed President Bostic (2024 FOMC voter) saying he thinks the Fed should get to 5.00-5.25% and hold there well into 2024, according to CNBC.


    Negative reactions to disappointing earnings and/or guidance from:

    Lowe’s (LOW 194.31, -11.44, -5.6%),
    Rivian (RIVN 15.76, -3.54, -18.3%),
    Kohl’s (KSS 27.51, -0.53, -1.9%),
    Agilent Technologies (A 137.51, -4.46, -3.1%) acted as another headwind for stocks today.


    Weekly MBA Mortgage Applications Index -5.7%; Prior -13.3%
    February IHS Markit Manufacturing PMI – Final 47.3; Prior 47.8
    February ISM Manufacturing Index 47.7% (consensus 47.8%); Prior 47.4%
    January Construction Spending -0.1% (consensus 0.3%); Prior was revised to -0.7% from -0.4%


    Gold futures settled $8.70 higher (+0.5%) to $1,845.40/oz, continuing to rebound nicely with a third straight positive session.

    U.S. Dollar Index is down about -0.3% to $104.52.


    Energy complex futures settled the session higher.

    WTI crude oil futures rose 0.9% to $77.69/bbl and natural gas futures rose 2.8% to $2.95/mmbtu.
    The S&P 500 energy sector (+1.8%) sits atop the leaderboard by a wide margin.

    CBOE Volatility Index is up 1.6% or 0.33 to 21.03.


    U.S. Treasuries started March with a midweek retreat that was paced by shorter tenors.

    The Treasury complex faced pressure from the start after overnight action was headlined by the release of China’s Manufacturing PMI (actual 52.6; expected 50.5), which hit its best level since 2012. The report overshadowed contractionary readings from Japan (actual 47.7; expected 47.4) and the eurozone (actual 48.5, as expected) while the February ISM Manufacturing Index for the U.S. improved (actual 47.7%; consensus 47.8%; prior 47.4%) but remained in contractionary territory.

    Treasuries began widening their losses shortly after the start, accelerating to fresh lows after today’s second batch of data, which included the ISM Manufacturing Index.

    In addition, the market responded to hawkish comments from Minneapolis Fed President Kashkari, who is a voter on the FOMC this year, and said that wage growth is too high, and that inflation must be cooled.

    The Treasury complex reached lows around 11:00 ET while the next hour saw a rebound that was paced by the long bond while shorter tenors resisted, remaining closer to their lows.

    Today’s selling lifted the 10-yr yield to its highest level since early November while the 30-yr yield touched its highest level since December 30 (3.984%) but finished a bit below that mark.

    2-yr: +10 bps to 4.90%
    3-yr: +11 bps to 4.62%
    5-yr: +10 bps to 4.26%
    10-yr: +8 bps to 3.99%
    30-yr: +2 bps to 3.95%



    American Eagle (AEO) beats by $0.07, beats on revs; guides FY24 revs in-line; reinstates dividend… AEO up 7.5%

    Avid Tech (AVID) beats by $0.09, reports revs in-line; guides Q1 revs below consensus; guides FY23 revs in-line… AVID down 16.0%

    Box (BOX) beats by $0.03, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY24 EPS in-line, revs below consensus… BOX down 8.9%

    Funko (FNKO) misses by $0.24, beats on revs; guides Q1 EPS and revs below consensus; guides FY23 revs in-line; Steve Nave has been appointed CFO and COO, effective immediately… FNKO down 24.9%
    Okta (OKTA) beats by $0.21, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY24 EPS above consensus, revs in-line… OKTA up 13.1%

    Plug Power (PLUG) misses on revs; reaffirms FY23 revs above consensus; reaffirms long-term revenue and gross margin targets… PLUG down 2.9%

    Salesforce (CRM) beats by $0.32, beats on revs; guides Q1 EPS and revs above consensus; guides FY24 EPS and revs above consensus; share repurchase program increased to $20 bln… CRM up 16.2%

    Snowflake (SNOW) beats by $0.09, beats on revs, product revenue increased 54% yr/yr; provides guidance for Q1 and FY24; authorizes $2.0 bln stock buyback program… SNOW down 6.9%

    Splunk (SPLK) beats by $0.89, beats on revs; guides Q1 revs below consensus; guides FY24 revs below consensus… SPLK down 2.6%

    The Aaron’s Company (AAN) beats by $0.08, reports revs in-line; guides FY23 EPS below consensus, revs below consensus; increases quarterly cash dividend to $0.125/share from $0.1125/share… AAN down 8.0%

    Veeva Systems (VEEV) beats by $0.12, beats on revs; guides Q1 revs below consensus; guides FY24 revs below consensus… VEEV up 4.4%


    Fair Value for Thursday, March 2:

    S&P 500: 3,956
    Nasdaq 100: 11,958
    DJIA: 32,693


    US is speaking with allies about imposing new sanctions on China if they provides military to Russia for Ukraine war, according to Reuters


    FBI released NICS background checks data; February 2023 Total NICS Background Checks were 2,565,607 up 0.4% yr/yr

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