Alexandra Canal
Stock market today: Stocks slip ahead of key inflation data, bitcoin soars past $60,000
Updated
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US stocks retreated on Wednesday as caution prevailed ahead of a crucial inflation report that will guide expectations for interest rate cuts.
The Dow Jones Industrial Average (^DJI) fell less than 0.1% while the S&P 500 (^GSPC) about 0.2%. The Nasdaq Composite (^IXIC) sagged almost 0.6%.
Stocks have struggled in February's final days as fresh economic data helped bring a market boosted by AI euphoria back to the reality of higher-for-longer interest rates. Investors have spent this week counting down to the PCE inflation reading on Thursday, seen as key in determining how quickly the Federal Reserve will start making rate cuts.
In the meantime, a report on fourth quarter GDP showed the economy grew at a slightly slower pace than initally thought in the final three months of 2023. The second estimate of fourth quarter GDP came in at 3.2% on Tuesday, down from the initial reading of 3.3%.
In other asset markets, bitcoin (BTC-USD) continued its roaring rally, breaking above $63,000 on Wednesday to come within striking distance of a fresh all-time high. The arrival of spot bitcoin ETFs has helped the cryptocurrency reach levels not seen since late 2021.
Among big movers, shares of Beyond Meat (BYND) soared more than 30% after the plant-based meat company laid out its turnaround plan, triggering a short squeeze.
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Paramount says streaming losses peaked in 2022 as linear ad revenue plunges
Paramount Global (PARA) reported fourth quarter results on Wednesday that came in mixed as the company revealed full-year streaming losses peaked in 2022 while linear TV revenue continued to plummet.
Paramount, like other media companies, has struggled amid a tough ad environment. Big Tech companies have seen their businesses rebound while smaller players have not.
Linear ad revenue slumped 15% year over year in the quarter, steeper than the 12% drop expected by analysts and also worse than the 14% year-over-year slump seen in the third quarter.
The company said the drop reflects continued softness in the global advertising market and a 5-percentage-point impact from lower political advertising. Advertising revenue in the quarter was also impacted by the Hollywood strikes.
In one bright spot, Paramount reported a Q4 direct-to-consumer (DTC) loss of $490 million, narrower than analyst expectations of $534 million and the $575 million loss seen in the year-earlier period. The company reported a $238 million loss in the third quarter.
"We now expect to reach domestic Paramount+ profitability in 2025," Paramount CEO Bob Bakish said in the earnings release.
- Josh Schafer
Stock rally takes a break ahead of inflation print
Stocks were lower on Wednesday ahead of a highly anticipated inflation update due out before the opening bell on Thursday.
The Dow Jones Industrial Average (^DJI) fell less than 0.1% while the S&P 500 (^GSPC) about 0.2%. The Nasdaq Composite (^IXIC) sagged almost 0.6%.
It was not, however, a quiet day for cryptocurrencies. Bitcoin (BTC-USD) surged above $63,000 per coin for the first time since 2021, sending crypto-related stocks rallying. MicroStrategy (MSTR) popped about 10% amid the rally and is now up almost 100% in the last month.
- Josh Schafer
A look at Leap Day returns
Tomorrow is Feb. 29, a day that only comes once every four years.
While there isn't a true financial significance to Leap Day, we took a look back to see how the S&P 500 (^GSPC) has performed on the rare trading day. Our analysis shows it has been a positive day for the S&P 500 65% of the time.
- Josh Schafer
The Russell 2000 is benefiting from theme trades
One of Wall Street's favorite calls to start this year was to buy small caps as many projected a broadening in the market rally.
This trade largely flopped in January, as a few large tech stocks continued to drive the major indexes higher while small caps lagged.
But in the last month, the themes that have dominated the broader market — artificial intelligence, weight-loss drugs and cryptocurrency— have helped small caps catch up to the other major indexes.
We've been flagging major moves in stocks like Super Micro Computer (SMCI), Viking Therapeutics (VKTX), and Microstrategy (MSTR) as investors search for other ways to play these themes. All three of those stocks are up significantly in the last month, headlined by Viking Therapeutics' more than 350% move.
All three of those stocks are also top 10 contributors to the total value of the BlackRock iShares Russell 2000 index (IWM), which closely mirrors the Russell 2000. This could help explain how small caps have participated in the recent momentum trade in markets.
- Josh Schafer
Bitcoin led the Yahoo Finance trending tickers page on Wednesday as the largest digital asset hit its highest level since 2021, at one point surpassing $63,000. Ethereum moved higher by less than 2% to just less than $3,300 per coin.
Beyond Meat (BYND) soared more than 40% after the company reported better-than-expected revenue for the fourth quarter and announced plans to cut operating costs. The company's stock had also been massively shorted headed into the print.
UnitedHealth Group (UNH) stock fell about 4% on Wednesday following a Wall Street Journal report that the US Department of Justice has launched an antitrust investigation into the company.
- Ines Ferré
First Solar stock jumps on earnings beat, strong demand
The solar industry has struggled this past year amid a pileup of panels and higher interest rates. Yet one outlier has been First Solar (FSLR), the largest US solar module manufacturer.
Shares of the Tempe, Ariz.-based company ticked higher on Wednesday after posting better-than-expected quarterly earnings and upbeat guidance.
"Despite industry macro challenges, such as global oversupply and pricing volatility, we continue to see strong mid- to long-term demand, especially in the United States," First Solar CEO Mark Widmar said during the company's earnings call.
First Solar has been a major beneficiary of the Inflation Reduction Act, which allows domestic solar manufacturers to sell tax credits to other firms. Last year the company agreed to sell $687 million in tax credits to fintech company Fiserv (FI).
Wall Street analysts are bullish on the stock, with 25 Buy and seven Hold recommendations.
Still, First Solar shares have been dragged down 12% year to date amid an overall slump in solar-related stocks.
Read more here.
- Josh Schafer
Coinbase outage spooks bitcoin rally
Amid a rally in bitcoin (BTC-USD) that saw the world's largest digital currency reach over $63,000 per coin, a popular crypto exchange had a malfunction.
On Wednesday afternoon, some users on Coinbase (COIN), which offers crypto trading, weren't able to see how much money was in their account or make transactions.
"We are aware that some users may see a zero balance across their Coinbase accounts and may experience errors in buying or selling. Our team is investigating this issue and will provide an update shortly. Your assets are safe," the company said in a statement.
Coinbase CEO Brian Armstrong wrote on X: "We are dealing with a LARGE surge of traffic - apologies for any issues you encounter. The team is working to remediate."
The news appeared to impact the bitcoin rally as the digital asset tumbled amid reports of the outages.
This is absolutely insane:
The Coinbase, $COIN, crash just erased $100 BILLION of market cap in #Bitcoin in 15 minutes.
Between 12:15 PM ET and 12:30 PM ET, Bitcoin fell from $64,000 to $59,000.
This was a near 9% swing in 15 minutes right as many Coinbase users began showing… pic.twitter.com/fUcRusrddX— The Kobeissi Letter (@KobeissiLetter) February 28, 2024
- Brian Sozzi
A not so snoozy eBay stock?
I was prepared to write something entirely different on eBay (EBAY) than what I will end up saying below.
I was going to say could there be any more of a least exciting tech stock than eBay right now? Here we have GenAI sending Nvidia’s (NVDA) stock price to the moon, and eBay execs are discussing stronger sales of auto parts on its earnings call last night. What a snoozefest!
Active buyers on the platform fell 2% year on year in the most recent quarter. They fell 9% year over year in the prior year's fourth quarter! Gross merchandise volume didn’t even grow in the final quarter of last year.
But when all is said and done, stock prices do things for a variety of reasons. And eBay apparently did enough to get some folks on the Street chattering about the stock as a sort of value play in an overheated tech market.
The company increased its stock buyback authorization by $2 billion. Non-GAAP operating margins of 26.7% also came in at the high end of the company’s guidance amid a focus on cost cutting.
Sexy company? Nope. Sexy stock? Not exactly by most measures. But an intriguing earnings day that will likely get value investors kicking the tires on eBay in the near term.
- Josh Schafer
Stocks slide as crypto rallies
US stocks were lower on Wednesday.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) were down nearly 0.2%. The Nasdaq Composite (^IXIC) sagged almost 0.4%.
But that didn't halt a rally in crypto-related stocks as bitcoin (BTC-USD) briefly reached above $63,000. Ebang International Holdings (EBON) and MicroStrategy (MSTR) led the crypto stock rally during afternoon trade.
Source: Yahoo Finance - Brian Sozzi
Salesforce is on the earnings clock
Two AI/cloud plays report earnings after the close today: Salesforce (CRM) and Snowflake (SNOW).
I am most interested in Salesforce's numbers and earnings call commentary, however.
There is a sense of "what's next" swirling around Salesforce after it boosted profit margins a lot in 2023 amid a cost-cutting drive. The company also unveiled a host of new AI tools last year, setting the stage for a further profit unlock in 2024.
But to my point above, Salesforce shares are "only" up 7% in the past month compared to a 16% pop for Snowflake.
Morgan Stanley analyst Keith Weiss had a dose of smart insight into sentiment on Salesforce right now:
"With Salesforce performing just inline with large cap software intra-quarter, maintaining its valuation discount to the peer-set despite an easier bookings comparison, stable-to-improving [demand] checks, and price increases rolling through the model, we view Salesforce's upcoming FQ4 earnings as a likely positive catalyst for shares. While we acknowledge Salesforce has become increasingly embraced as an overweight name amongst the investing community since our upgrade in December, we still find a healthy amount of debate around the potential for (and timing of) a sustainable re-acceleration in revenue growth in our investor conversations, leading us to believe potential upside to FQ4 & FY25 (CY24) estimates is not yet in the price ahead of earnings."
Catch up on what Salesforce has been up to ahead of earnings — I just chatted with co-founder and CEO Marc Benioff at the World Economic Forum a few weeks ago.
- Josh Schafer
What to make of a 'slightly' revised down GDP number
The second estimate for fourth quarter gross domestic product (GDP) showed the US economy grew at a 3.2% annualized rate in the final three months of 2023, down from the initial 3.3% reading.
Goldman Sachs' economics team led by Jan Hatzius noted that the GDP was "revised down slightly" but under the surface actually showed promising signs.
"Consumption, capex, and residential investment were all revised higher," Goldman's team wrote. "The downward revision [in GDP] mainly reflected lower inventory investment, which other things equal implies faster GDP growth in Q1."
Oxford Economics chief US economist Ryan Sweet agreed. He described the "small" downward revision as "not troubling."
"Mixed details do not warrant an immediate change to the baseline forecast for the economy to keep growing above its potential," Sweet wrote in a note to clients on Wednesday.
- Josh Schafer
Bitcoin surges above $61,000
Perhaps the top story for markets on Wednesday isn't a stock. Once again, cryptocurrency has taken center stage as the world's largest digital coin is now selling for more than $61,000 per coin for the first time since 2021.
Yahoo Finance's David Hollerith reports:
The price of the digital asset is now up almost 19% on the week and 43% so far this year, due largely to excitement sparked by a series of spot bitcoin exchange-traded funds that started trading in January.
Bitcoin was up more than 6% above $60,500 at last check, touching its highest point since November 2021. The current rally is testing whether the price can be pushed closer to its all-time high of $68,789. That apex came six months before a spectacular crash in 2022.
"Ultimately, what we're seeing is crypto is kind of rising from the ashes of the 2022 market," said Ryan Rasmussen, a senior crypto research analyst for Bitwise Asset Management.
"Our assumption is that the price of bitcoin is going to achieve $125,000 by the end of 2025," Benchmark's Mark Palmer added on Yahoo Finance Live.
Investors are bidding other cryptocurrencies and related stocks higher too. Year to date, the second-largest cryptocurrency, ether (ETH), has outperformed bitcoin by more than 4% while the total market value for all crypto assets is up roughly 36% to $2.24 trillion, according to Coinmarketcap.
- Josh Schafer
Stocks open lower
US stocks retreated on Wednesday, coming off a mixed close as caution prevailed ahead of a crucial inflation report that will guide expectations for interest rate cuts.
The Dow Jones Industrial Average (^DJI) and the Nasdaq Composite (^IXIC) were down more than 0.5%, while the S&P 500 (^GSPC) sagged 0.3%.
Stocks have struggled in February's final days as fresh economic data helped bring a market boosted by AI euphoria back to the reality of higher-for-longer interest rates. Investors have spent this week counting down to the PCE inflation reading on Thursday, seen as key in determining how quickly the Federal Reserve will start making rate cuts.
- Brian Sozzi
We are still drilling down into Macy's big week
In my mind, when you are a legacy retailer like Macy's (M) that communicates to investors the closure of 150 stores by 2026, it's not a one-day story.
Rather this is a story that will unfold every single day inside the company and in the impacted communities until the process is done. It will be discussed at every single investment conference a Macy's executive speaks at between now and 2026. It will be discussed on the next umpteen earnings calls for the company.
So if you own stock in Macy's, this is something that warrants deeper digging and staying on top of the situation (reading local news publications is helpful on this front). It's a major moment for the company that could have implications on whether it's in business 20 years from today.
A few further thoughts after digging of my own last night:
The size of Macy's: After Macy's closes these 150 stores, the company will have about 350 locations open in the US. That barely quantifies as a national retailer, let alone one that could compete effectively with Amazon (AMZN). The company is ceding a ton of market share to rivals such as discounter Target (TGT), which has almost 2,000 stores in the US. Kohl's (KSS) has 1,100 stores in 49 states.
Citi's Paul Lejuez put context around the competitive dynamic in a new note this morning: "With Macy's putting over $2 billion in sales up for grabs over the next three years from its store closing plan, we believe this is most likely to benefit the off-price group (TJX Companies (TJX) in particular) that tends to pick up market share (sales) when department stores close stores."
The losers: What happens when 150 Macy's stores vanish? The retailers that sell products at these stores lose a key outlet to offer merchandise. Lejuez highlighted a few potential losers, all of which are publicly traded: "Those brands that sell into Macy's (SHOO, PVH, RL, CRI, LEVI, COLM, VFC, CPRI) are likely to feel some sales pressure as a result of Macy's store-closing decision. Typically, sales put up for grabs by a department store do not end up getting picked up by other department stores."
Yahoo Finance senior reporter Brooke DiPalma caught up with Macy's new CEO Tony Spring to discuss the store closures, among other topics. More on that here.
- Brian Sozzi
Beyond Meat's stock price goes into the beyond
To the beyond!
We are witnessing a wild 55% move higher in Beyond Meat (BYND) shares this morning (was up 100% initially last night) after earnings last night. The company's ticker page is the hottest on Yahoo Finance as of this writing.
The plant-based meat company is shaking up its operations (bye-bye jerky products), which may have gotten a few excited about a potential turn for this long-struggling business.
Anytime you see an outsized move like this in a stock, it’s good practice to ask: Is there something else going on here?
In the case of Beyond Meat, as you can see on its Yahoo Finance statistics page, it has a massive, massive short position. So, any small dose of perceived good news could be met with the type of fierce short-covering rally we have today.
Using the premarket price, the stock is still down 95% from its 2019 record high.
Before you go, I just talked to Beyond Meat's founder and CEO, Ethan Brown, late last week — catch up on the company's newest initiatives here.
