Stocks Fluctuate Before Feb ISM Manufacturing Report

Rich Asplund - Barchart - Fri Mar 1, 8:58AM CST

The S&P 500 Index ($SPX) (SPY) this morning is up +0.12%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.35%.

Stock indexes this morning are mixed, with the Nasdaq 100 posting a new record high. The markets are awaiting reports later this morning on Feb ISM manufacturing and University of Michigan U.S. Feb consumer sentiment.

Corporate news today is mixed. NetApp is up more than +22% after reporting stronger-than-expected Q3 adjusted EPS and boosted its full-year adjusted EPS estimate. Also, Dell Technologies is up more than +27% after reporting Q4 adjusted EPS well above consensus. On the negative side, New York Community Bancorp is down more than -30% after identifying “material weaknesses” in how it tracks loan risks. Also, Zscaler is down more than -9% after reporting Q2 calculated billings below consensus.

U.S. stocks have carryover support from strength in other global bourses after the Euro Stoxx 50 rose to a 23-year high today and the Nikkei Stock Index climbed to a new record high.

The markets are discounting the chances for a -25 bp rate cut at 2% for the March 19-20 FOMC meeting and 25% for the following meeting on April 30-May 1.

Overseas stock markets today are higher. The Euro Stoxx 50 is up +0.21%. China’s Shanghai Composite closed up +0.39%. Japan’s Nikkei Stock Index closed up +1.90%.

Interest Rates

June 10-year T-notes (ZNM24) this morning are down -5 ticks, and the 10-year T-note yield is up +3.2 bp to 4.282%. T-note prices this morning are under pressure from carryover weakness in European government bonds after Eurozone Feb CPI rose more than expected. Also, an increase in inflation expectations undercut T-notes after the 10-year breakeven inflation rate rose to a 1-week high today at 2.341%.

European government bond yields today are higher. The 10-year German bund yield is up +4.1 bp at 2.452%. The 10-year UK gilt yield is up +4.6 bp to 4.170%.

ECB Governing Council member Holzmann warned against cutting interest rates too early after today's news showed Eurozone price growth slowed less than expected in February.

Eurozone Feb CPI eased to +2.6% y/y from +2.8% y/y in Jan, stronger than expectations of +2.5% y/y. Feb core CPI eased to +3.1% y/y from +3.3% y/y in Jan, the slowest pace of increase in almost two years.

The Eurozone Jan unemployment rate fell -0.1 to a record low of 6.4%, right on expectations.

The Eurozone Feb S&P manufacturing PMI was revised upward by +0.4 to 46.5 from the previously reported 46.1.

U.S. Stock Movers

NetApp (NTAP) is up more than +22% to lead gainers in the S&P 500 after reporting Q3 adjusted EPS of $1.94, stronger than the consensus of $1.68 and boosted its full-year adjusted EPS estimate to $6.40-$6.50 from a previous estimate of $6.05-$6.25.

Dell Technologies (DELL) is up more than +27% after reporting Q4 adjusted EPS of $2.20, well above the consensus of $1.72.

Cooper Cos (COO) is up more than +6% after reporting Q1 net sales of $931.6 million, better than the consensus of $915.9 million.

Autodesk (ADSK) is up more than +4% to lead gainers in the Nasdaq 100 after reporting Q4 net revenue of $1.47 billion, stronger than the consensus of $1.43 billion.

Eli Lilly (LLY) is up more than +2% after Bank of America raised its price target for the stock to $1,000 from $800, citing upside for its diabetes and obesity programs.

Everbridge (EVBG) is up more than +24% after Thoma Bravo boosted its acquisition price for the company to $35 a share.

Caret Holdings (ROOT) is up more than +2% after Jeffries upgraded the stock to buy from hold with a price target of $40.

Casino operators with exposure to Macau are under pressure today after Macau’s Feb casino revenue rose +79.1% y/y, weaker than expectations of +92% y/y. As a result, Las Vegas Sands (LVS) is down more than -4% to lead losers in the S&P 500. Also, Wynn Resorts Ltd (WYNN) is down more than -3%, and Caesars Entertainment (CZR) is down more than -1%.

Xcel Energy (XEL) is down more than -4%, adding to Thursday’s -8% plunge on concern it may be held liable for damages from the Smokehouse Creek wildfire in Texas after a law firm representing property owners affected by the fore said the origin of the fire may have started near the service territory of its subsidiary Southwestern Public Service Company.

Zscaler (ZS) is down more than -9% to lead losers in the Nasdaq 100 after reporting Q2 calculated billings rose +27% y/y, below the consensus of +30% y/y.

Keurig Dr Pepper (KDP) is down more than -3% after JAB Holding said it was offering 87 million shares of KDP stock for $29.10-$29.25 each.

New York City Community Bancorp (NYCB) is down more than -30% after replacing its CEO and saying it identified material weaknesses in its internal controls related to internal loan reviews.

Veeva Systems (VEEV) is down more than -2% after forecasting Q1 revenue of $640 million-$643 million, below the consensus of $645.1 million.

Earnings Reports (3/1/2024)

ACELYRIN Inc (SLRN), Allovir Inc (ALVR), Amneal Pharmaceuticals Inc (AMRX), AnaptysBio Inc (ANAB), Cardlytics Inc (CDLX), Cartesian Therapeutics Inc (RNAC), ClearPoint Neuro Inc (CLPT), Desktop Metal Inc (DM), Disc Medicine Inc (IRON), Dyne Therapeutics Inc (DYN), Eagle Bulk Shipping Inc (EGLE), EchoStar Corp (SATS), Enviva Inc (EVA), EyePoint Pharmaceuticals Inc (EYPT), Forum Energy Technologies Inc (FET), fuboTV Inc (FUBO), ImmunityBio Inc (IBRX), inTEST Corp (INTT), Lexicon Pharmaceuticals Inc (LXRX), Lightwave Logic Inc (LWLG), Longboard Pharmaceuticals Inc (LBPH), Mammoth Energy Services Inc (TUSK), Neumora Therapeutics Inc (NMRA), Omega Therapeutics Inc (OMGA), Plug Power Inc (PLUG),

PMV Pharmaceuticals Inc (PMVP), Preformed Line Products Co (PLPC), RadNet Inc (RDNT), Saul Centers Inc (BFS), SIGA Technologies Inc (SIGA), Silvercrest Asset Management G (SAMG), Velo3D Inc (VLD), Vuzix Corp (VUZI), Workhorse Group Inc (WKHS).

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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.