Daily Markets: Can Stocks Keep Their Momentum Going?
Today’s Big Picture
Those Asia-Pacific equity markets that were open finished today lower as Australia’s ASX All Ordinaries declined 0.31% and India’s SENSEX fell 0.73%. Japan’s markets were closed today as the country marks National Day, celebrating what has come to be recognized as Japan’s founding in 660 BC. Equity markets in China, Hong Kong, Taiwan, and South Korea are all closed due to New Year’s celebrations. European markets are up across the board in midday trading and U.S. equity futures are pointing to a flattish open.
We start the week at a slow pace with no major economic data or corporate earnings, but we do have two Fed speakers today. Ahead of Tuesday’s January Consumer Price Index (CPI) and no fresh data since early last week, the probability they will stick with the Fed’s updated playbook is rather high. And with the Kansas City Chiefs winning the Super Bowl, no doubt there will be some looking to see if the Super Bowl indicator holds up. Basically, it's a (completely) unscientific indicator that says if an American Football League team wins the big game, the markets will face some turmoil.
Not to be superstitious coming off the Super Bowl, but as we head into tomorrow’s CPI report, one that is preceded by several inflation data points moving in the wrong direction, the S&P 500, the Nasdaq Composite, and Nasdaq-100 are all back in overbought territory with Relative Strength Readings over 70. Factor in investor sentiment running even higher than last week, flashing “Extreme Greed” per the Fear & Greed Index, and a negative CPI surprise could challenge the near persistent move higher over the last several weeks as it would give the Fed another data point to push back the start of its rate cutting cycle.
Data Download
International Economy
Israeli Prime Minister Benjamin Netanyahu told ABC News that "victory is within reach." More than four months since Hamas terrorists invaded Israel on Oct. 7, Rafah appears to be the Israeli military's next target as it continues its bombardment of the Gaza Strip.
Domestic Economy
Congress approved Turkey’s $23 billion acquisition of as many as 40 Lockheed Martin (LMT) F-16 Block 70 aircraft and 79 upgrade kits to modernize its fleet as well as hundreds of missiles and bombs.
The U.S. Senate on Sunday pushed a $95 billion emergency aid bill for Ukraine and Israel past a critical hurdle, with a bipartisan vote that kept it on track for passage within days. The vote was 67-27 to move forward on the package, which would dedicate $60.1 billion to helping Kyiv in its war against Russian aggression, send $14.1 billion to Israel for its war against Hamas, and fund almost $10 billion in humanitarian assistance for civilians in conflict zones.
Markets
Overall, sectors had a good day except for Energy, which declined 1.54%. This affected the Dow (-0.14%), as Chevron’s (CVX) 1.96% decline coupled with Disney’s (DIS) 1.94% drop, and Amgen’s (AMGN) 1.27% fall helped push the index into negative territory. A reminder that components of the Dow are weighted by their price level, so Amgen’s almost $300 per share price means that one name impacts the Dow more than the combined weight of both Chevron ($151) and Disney ($108). Sector leadership came from Technology (1.35%) which benefitted from gains in the close to $5 trillion combined market cap of Microsoft (MSFT) and Nvidia (NVDA).
The S&P 500 (0.57%), the Nasdaq Composite (1.25%), and the Russell 2000 (1.53%) all ended higher, but fundamentals still matter, as shareholders of Expedia Group (EXPE) found out after that name fell 17.78% following the company’s earnings release and negative outlook announcement. Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: 2.61%
- S&P 500: 5.28%
- Nasdaq Composite: 6.52%
- Russell 2000: -0.84%
- Bitcoin (BTC-USD): 12.35%
- Ether (ETH-USD): 8.41%
Stocks to Watch
Monday.com (MNDY) and Trimble (TRMB) are expected to release quarterly earnings before equities begin trading later this morning. Pre-market breadth is healthy today as 248 names in the S&P 500 have traded hands so far this morning with 139 gainers and 109 decliners. Names garnering interest so far this morning include Arista Networks (ANET), PPG Industries (PPG), and Textron (TXT) while J.M. Smucker (SJM), Molson Coors (TAP), and Global Payments (GPN) are coming under some pressure.
Tesla (TSLA) is temporarily cutting U.S. prices of some of its Model Ys. Prices will be reduced until Feb. 29, with the Model Y rear-wheel drive down $1,000 to $42,990 and the Model Y Long Rage down $1,000 to $47,990, Reuters reported.
Shares of Joby Aviation (JOBY) were gaining in premarket trading after the eVTOL startup announced plans to launch air taxi services in the United Arab Emirates by early 2026. The company signed a definitive agreement with Dubai's Road and Transport Authority, securing exclusive right to operate air taxis in Dubai for six years.
Applied Digital (APLD) shares are under pressure this morning following the company's announcement of a power outage that began on January 18 and escalated to a complete outage by January 19, impacting its revenue from its Ellendale data center hosting facility for the quarter-ending February 29. The company expects the facility to be back online later this month.
Diamondback Energy (FANG) and closely held Endeavor Energy Resources have entered into a definitive merger agreement under which Diamondback and Endeavor will merge in a transaction valued at approximately $26 billion, inclusive of Endeavor's net debt.
IPOs
Medical technology manufacturer Scripps Safe (SCRP), tourism company Amphitrite Digital (AMDI), and real estate player Metros Development (MTRS) are to price their IPOs this week. Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
Arista Networks (ANET), Avis Budget (CAR), Federal Realty (FRT), Lattice Semiconductor (LSCC), Vornado Realty Trust (VNO), and Waste Management (WM) are expected to report quarterly results after equities stop trading today. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Tuesday, February 13
- Japan: Producer Price Index, Machine Tool Orders - January
- Eurozone: ZEW Economic Sentiment Index - February
- US: NFIB Small Business Optimism Index – January
- US: Consumer Price Index – January
Wednesday, February 14
- UK: Inflation Rate - January
- Eurozone: GDP (2nd estimate) – 4Q 2023
- Eurozone: Industrial Production - January
- US: Weekly MBA Mortgage Applications
- US: Weekly EIA Crude Oil Inventories
Thursday, February 15
- Japan: GDP – 4Q 2023
- UK: GDP – 4Q 2023
- US: Weekly Initial & Continuing Jobless Claims
- US: Import/Export Prices – January
- US: Retail Sales – January
- US: Industrial Production & Capacity Utilization – January
- US: NAHB Housing Market Index – February
- US: Weekly EIA Natural Gas Inventories
Friday, February 16
- UK: Retail Sales - January
- US: Producer Price Index – January
- US: Housing Starts & Building Permits – January
- US: University of Michigan Consumer Sentiment Index (Preliminary)
Thought for the Day
“In life, the only two things you can control are your effort and your attitude. Everything else is not up to you” ~ s. menutt
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chris Versace
Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.
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Mark Abssy
Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.
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