Daily Markets: Wall Street Watches Mobile World Congress for AI Updates

Today’s Big Picture

Asia-Pacific equity markets finished the day mixed. China’s efforts to stabilize their markets continue to come up short as the Shanghai Composite fell 0.93%, and Hong Kong’s Hang Seng declined 0.54% while India’s SENSEX dropped 0.48% and South Korea’s KOSPI closed 0.77% lower in a broad decline led by Energy Minerals, and Retail Trade names. Australia’s ASX All Ordinaries added 0.11%, Taiwan’s TAIEX rose 0.31% and Japan’s Nikkei closed 0.35% higher as that market continues to extend gains into record territory. European markets are mixed in midday trading and U.S. equity futures are pointing to a mixed open.

Amid a lackluster economic calendar today, the artificial intelligence (AI) driven surge in related stocks following Nvidia’s (NVDA) blowout earnings and guidance last week looks to continue following a wave of AI announcements at Mobile World Congress 2024. Billed as the event where mobile technology transforms industry, it will serve as a showcase for new products and services. Keynotes from Dell Technologies (DELL), Microsoft (MSFT), Accenture (ACN), China Mobile, and Deutsche Telecom (DTEGY) will hint at what’s to come in the near future.

With one eye on that event and as we wait for the start of February economic data in the coming days, investors will be watching Washington for signs that Congress will be able to avert a potential government shutdown late this week.

Data Download

International Economy

We have a thin docket for international economic data, but that will change as the week progresses with the highlight being the February Manufacturing PMI for China, Japan, the Eurozone, and the UK later this week.

Domestic Economy

AT 10 AM ET, the data for January New Home Sales will be published and the market expects a figure of 0.68 million, up from 0.664 million in December. Shortly thereafter at 10:30 AM ET, the February Dallas Fed Manufacturing Index will be published, and investors will be sizing up that figure compared to January’s -27.4 reading. There are no Fed speakers during market hours today, but Kansas City Fed President Jeffrey Schmid is speaking at 6:40 PM ET.

Over the weekend, Speaker Mike Johnson unveiled his plan to avert a partial government shutdown this week, telling Republicans on a conference call that the House would vote on four separate appropriations bills and may need a stopgap funding bill to buy lawmakers more time.

Markets

Friday saw markets with a slight post-Nvidia earnings hangover as the remaining names of the Magnificent Seven (or what passes for it these days) came under some pressure. This led to Technology, Communication Services, and Consumer Discretionary ending the day down 0.23%, 0.25%, and 0.45%, respectively. Energy took the biggest hit, down 0.66% but the remaining sectors rallied enough to put broad market indexes higher, except for the Nasdaq Composite (-0.28%). The S&P 500 squeaked into positive territory, up 0.03%, the Russell 2000 added 0.14%, and the Dow closed 0.16% higher.

While it was a mixed day overall, shareholders of Booking Holdings (BKNG) and Warner Brothers (WBD) saw declines of 10.15% and 9.94%, respectively. Warner Brothers Discovery fell on news of a poor quarter and while Booking Holdings managed to deliver a beat/beat quarter, and initiate a dividend, some traders had concerns over a projection of travel in 2024 returning to more normal levels. Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 3.83%
• S&P 500: 6.69%
• Nasdaq Composite: 6.56%
• Russell 2000: -0.51%
• Bitcoin (BTC-USD): 21.08%
• Ether (ETH-USD): 27.41%

Stocks to Watch

Clear Channel (CCO), Domino’s Pizza (DPZ), Fresh Del Monte (FDP), Freshpet (FRPT), Itron (ITRI), Pilgrim’s Pride (PPC), and Surgery Partners (SGRY) are expected to release quarterly earnings before equities begin trading later this morning.

Pre-market breadth is healthy today as 267 names in the S&P 500 have traded hands so far this morning with 141 gainers and 126 decliners. Huntington Bancshares (HBAN) and Eversource Energy (ES) are coming under pressure this morning while Domino’s Pizza (DPZ) and the “B” shares of Berkshire Hathaway (BRK.B) are catching a strong bid this morning. While not a comeback, shares of Palo Alto (PANW) are poised to open almost 2% higher after last week’s sharp drop.

ServiceNow (NOW) and NVIDIA announced that they are broadening their relationship with the introduction of Now Assist for Telecommunications Service Management. This solution is built on the Now Platform and uses NVIDIA AI to help boost agent productivity, speed time to resolution, and enhance customer experiences.

Qualcomm (QCOM) announced over 75 new large language models optimized for the Snapdragon platform. The company has also confirmed that some of these models will be powering generative AI capabilities across next-generation smartphones, PCs, IoT, XR devices, and software-defined vehicles.

Alphabet’s (GOOGL) Google announced a new set of features for phones, cars, and wearables that uses the company’s Gemini AI to craft messages, AI-generated captions for images, summarizing texts through AI for Android Auto, along with access to passes on Wear OS.

Walt Disney (DIS) and Reliance Industries (RELI) have signed a binding pact to merge their media operations in India.

Reports indicate KKR & Co. (KKR) is nearing a deal worth about $4 billion to buy the end-user computer software unit that Broadcom (AVGO) inherited as part of its $61 billion acquisition of software maker VMware Inc. in 2023.

Bloomberg reports Ford Motor (F) has halted shipments of its F-150 Lightning plug-in pickup for an undisclosed quality issue just weeks after cutting production of the battery-powered model due to slowing sales.

IPOs

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

AES (AES), Heico (HEI), Hims & Hers (HIMS), iRobot (IRBT), The Aaron’s Company (AAN), Trex (TREX), Workday (WDAY), and Zoom Video (ZM) 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 27

• Japan: Inflation Rate – January
• Germany: GfK Consumer Confidence – March
• US: Durable Orders – January
• US: S&P Case Shiller Home Price Index – February
• US: Consumer Confidence – February

Wednesday, February 28

• Eurozone: Economic Sentiment & Consumer Confidence - February
• US: Weekly MBA Mortgage Applications
• US: GDP (Second Estimate) – 4Q 2023
• US: Weekly EIA Crude Oil Inventories

Thursday, February 29

• Japan: Retail Sales, Housing Starts – January
• Germany: Retail Sales, Inflation Rate – January
• UK: Bank of England Consumer Credit - January
• US: Weekly Initial & Continuing Jobless Claims
• US: Personal Income & Spending, PCE Price Index – January
• US: Pending Home Sales – January
• US: Weekly EIA Natural Gas Inventories

Friday, Mach 1

• Japan: Jibun Bank Manufacturing PMI (Final) - January
• China NBS Manufacturing & Non-Manufacturing PMI - February
• China: Caixin Manufacturing PMI – January
• Eurozone: HCOB Manufacturing PMI (Final) – February
• UK: S&P Global Manufacturing PMI (Final) - February
• US: S&P Global Manufacturing PMI (Final) – February
• US: ISM Manufacturing Index – February

Thought for the Day

“Begin at once to live, and count each separate day as a separate life.” - Seneca

Disclosures

• Fresh Del Monte (FDP) is a constituent of the Foxberry Tematica Research Sustainable Future of Food Index
• Nvidia (NVDA), Qualcomm (QCOM), Broadcom (AVGO) are constituents of the Tematica BITA Digital Infrastructure & Connectivity Index
• Microsoft (MSFT) is a constituent of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks Economy Earnings Central Banks Artificial Intelligence