GIDDYUP! Economy Roaring, S&P & Dow Set New Highs, Rate Cuts on Hold – Feb 2 Market Recap
Indices
- Dow 38,654, +545 or +1.43%.
- Nasdaq 15,628, +173 or +1.12%.
- MSCI EAFE 2223.18, +0.44 or +0.01%.
- S&P 4,958 +128 or +2.65%.
- USD10Y 4.033%, -12.7bp or -3.05%.
- WTI Crude $72.28/bbl, -$5.85 or -7.49%.
GIDDYUP! Economy Roaring, S&P and Dow Set New Highs, Rate Cuts on Hold.
What a week it was! Earnings at Meta (META) and Amazon (AMZN) had the street jumping for joy and pushed the S&P 500 to a new all- time record close on Friday. Other Magnificent Seven names, Microsoft (MSFT), Alphabet (GOOG), and Apple (APPL) all reported decent quarters but not without some warts. Mid-week the markets took a break and consolidated when, as expected, the Fed kept rates unchanged. The markets sold off on Fed Chair Jerome Powell’s remarks casting doubt on the prospects of a March rate cut due to the strength of the economy. On Friday, as if on cue, Non-Farm Payrolls exploded for the second consecutive month and average hourly wages followed suit. Fed watchers now only give a 17% probability of a rate cut in March and a 68.5% probability of a cut in May.
Next Week
It is a light week for economic data with only the January Services data on Monday and Initial Jobless Claims on Thursday forthcoming. On the earnings front we’ll get some insight into the Industrial sector with both Caterpillar (CAT) and Ford Motor (F) reporting. Consumer favorites McDonald’s (MCD), Chipotle Mexican Grill (CMG), Pepsi (PEP), and Walt Disney (DIS) will round out the earnings calendar for the week.
Economic Calendar
- Monday – January Final U.S. S&P and ISM Services Indices. Earnings: McDonald’s (MCD) and Caterpillar (CAT).
- Tuesday – N/A. Earnings: Chipotle Mexican Grill (CMG) and Ford Motor (F).
- Wednesday – N/A. Earnings: Walt Disney (DIS).
- Thursday – Initial Jobless Claims. Earnings: N/A.
- Friday – N/A. Earnings: Pepsi Co (PEP).
If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
Feb 2 Daily Trading Recap…
Monday – Dow +224 to 38,333, Nasdaq +172 to 15,628, S&P +37 to 4,927, USD10Y -6.9bp to 4.091%.
- Consumer Discretionary, Technology, and Communication Services led the S&P Sectors.
Tuesday – Dow +133 to 38,467, Nasdaq -118 to 15,509, S&P -3 to 4,925, USD10Y -3.2bp to 4.059%.
- Six of eleven S&P sectors traded higher today, led by Financials, Energy and Consumer Staples.
- December JOLTS registered 9 million job openings, beating expectations of 8.8 million and last month’s 8.9 million print.
- January Consumer Confidence came in just shy of expectations at 114.8 vs 115 expected and significantly higher than last month’s 108 figure.
- Earnings: Alphabet (GOOG) beat earnings but missed on revenues and traded down 6% in the extended session. Microsoft (MSFT) beat both earnings and revenue expectations but guided the current quarter revenues slightly lower than street expectations; MSFT traded down 2% in after-hours trading. General Motors (GM) beat their revenue and earnings expectations and guided 2024 higher; GM traded up +8%. Starbucks (SBUX) missed both earnings and revenue expectations and guided 2024 lower due to the domestic boycott and problems in China. United Parcel Service (UPS) beat earnings expectations, missed on revenues, and announced 12,000 layoffs.
Wednesday – Dow -317 to 38,150, Nasdaq -345 to 15,164, S&P -79 to 4,845, USD10Y -9.2bp to 3.967%.
- All eleven S&P sectors traded down today, led lower by Communication Services, Technology, and Energy.
- January ADP Private Payrolls posted a large miss at 107,000 vs 150,000 expected and vs last month’s 158,000 print.
- The FOMC left rates unchanged as expected but Fed Chair Powell in his news conference cast significant doubt on a March rate cut, sending the disappointed markets trading lower. Powell did add that he expected rate cuts to begin at some point this year.
- Earnings: Mastercard (MA) beat its earnings and revenue expectations and traded up +0.91%. Qualcomm (QCOM) beat their earnings and revenue expectations as well.
Thursday – Dow +369 to 38,519, Nasdaq +197 to 15,361, S&P +60 to 4,906, USD10Y -10.4bp to 3.863%.
- Ten of eleven S&P sectors traded higher today, led by Consumer Discretionary, Consumer Staples, and Utilities.
- Jobless claims were 224,000, vs 213,000 forecast and vs. last week’s slightly revised higher print of 215,000 (originally 214,000).
- January U.S. Manufacturing showed a marked improvement with the S&P PMI reporting an expansionary number of 50.7 vs 50.1 expected and 50.3 last month. The ISM Manufacturing Index was in expansion territory but still showed a big jump at 49.1 vs expectations of 47.2 and last month’s 47.4 print.
- U.S. Q4 Productivity was much better than expected at 3.3% vs 2.5% expected.
- Earnings: Amazon (AMZN) blew out their earnings numbers and handily beat their revenue estimates as well; AMZN traded up +7.11% in the extended session. Apple (AAPL) beat their metrics but traded down -2.92% after hours on slowing Chinese sales. META (META) blew out their numbers, declared their first dividend and traded up +15.21% post close. Clorox (CLX) beat their revenue numbers and traded up +7.10% after the close.
Friday – Dow +134 to 38,654, Nasdaq +267 to 15,628, S&P +52 to 4,958, USD10Y +17.0bp to 4.033%.
- Six of eleven S&P sectors traded higher, led by Communication Services, Consumer Discretionary, and Technology.
- January Non-Farm Payrolls exploded with 353,000 jobs created vs 185,000 expected and vs December’s 333,000 print.
- January Unemployment was unchanged month-over-month at 3.7% vs 3.8% expected.
- January U.S. Hourly Wages grew by +0.6% far outstripping expectations of +0.3% and higher than last month’s +0.4% rise.
- Earnings: Chevron (CVX) beat earnings on fewer revenues and declared an +8% increase in their quarterly dividend; CVX traded up +2.94%. Exxon Mobile (XOM) similarly beat earnings, missed their revenue expectations and declared a 95c quarterly dividend; XOM traded down -0.41%.
If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
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