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Yield Hits 1.6%, Markets Sell; Q4 Earnings for CRM, ETSY & BYND

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A big sell-off across market indexes Thursday brought us the worst trading day of the month, killing a four-day Dow winning streak and helping the Nasdaq down 5% on the week so far. The Dow had been down nearly 670 points at its intraday low, so things could have definitely been worse. All S&P 500 sectors were lower for the day, and the Russell 2000 dropped 3.7% on the day.

The 10-year bond rate came sharply into focus today when the economic bellwether briefly topped 1.6% at its high, finishing at 1.52% at the close. Over just the past four weeks, we’ve seen the 10-year swoop up 50 basis points, which is notably rapid. This goes along with economic data we’ve seen gain traction of late, including Manufacturing, Housing and Auto Sales. This morning, Durable Goods more than tripled expectations to +3.4% for the month of January.

And all this is before the federal stimulus relief is passed — with or without a new $15 minimum wage — which will make America awash in dollars. The idea is to give direct assistance to households and small businesses struggling through the year-long pandemic crisis, and will likely provide a swift kick in growth and sales acceleration. Of course, the Fed is holding steady on rates until the labor force bounces back reliably; until then, we may finally be seeing ever-elusive inflation creeping into the economy.

After the market closed the day for regular trading, three remarkable earnings reports hit the tape. salesforce.com CRM beat estimates of 75 cents per share with a post of $1.04, also far better than the 66 cents posted in the year-ago quarter. Revenues grew 20% year over year to $5.82 billion, also better than the $5.68 billion in the Zacks consensus. The company has never missed an earnings expectation in its publicly-traded existence, though shares are down 3.7% in late trading.

Etsy ETSY shares are flying +10% following its Q4 earnings report, which blew expectations out of the water: $1.08 per share was a big beat over the 60 cents estimated, and more than 4x higher than the year-ago 25 cents per share reported. Revenues of $617 million topped the Zacks consensus by $100 million, up 129% year over year. Gross Merchandise Sales (GMS) rose 418% to $3.6 billion in the quarter. The company expects 115-125% GMS in the coming quarter, as well.

Beyond Meat BYND missed bottom-line expectations when the company reported -34 cents per share, compared to the Zacks consensus -15 cents. Sales were basically in-line with estimates: $101.9 million versus $101.5 million our analysts were looking for. However, shares swung from a 5% sell-off following the release to +6%, on reports that two agreements — one with McDonald’s (MCD) and one with Yum! Brands (YUM) — will bring the plant-based “meat” producer to a vast marketplace.

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