📊 DJIA Worst Day In >1YR

Author

Ticker Tea
April 05, 2024

Happy Friday 🚀

A wild day in the markets yesterday with all major indices erasing their initial gains and ending in negative territory (all > -1%). The Dow Jones had its worst day in over a year.

The market turmoil was a result of (1) traders bracing for today’s job report (2) escalating geopolitical tension and (3) numerous Fed speeches, one of which (Neel Kashkari) indicated there may be zero cuts this year 😲.

  1. Today’s job report is expected to present a strong picture for the labor market. The street is estimating employers added 200k jobs last month, which would indicate a slowdown from February’s 275k.

  2. Israel is expecting an imminent attack from Iran. As a result, Israel Israel scrambled navigational signals over the Tel Aviv metro area on Thursday as the country prepared for a potential attack on the economic center.

  3. Minneapolis Fed President Kashkari said he’s questioning the need to cut rates if the economy looks to be solid despite high interest rates. A few other soundbites from yesterday:

    1. Mester Wants ‘Couple More Months Data’ Before First Cut

    2. Goolsbee Sees Inflation Still on Track To 2% Goal

    3. Barkin Says Fed Has Time to Gain Clarity Before Cutting

    4. Harker Says Inflation Still Too High

    5. Dudley Says Fed’s Long-Term Rate Outlook Too Low

A few equity headlines from yesterday 👇

  • Lamb Weston Holdings (LW) plummeted over 19% due to Q3 net sales missing expectations and a reduced full-year net sales forecast. (chart)

  • Levi Strauss & Co (LEVI) soared over 12% following Q1 earnings beat and increased full-year adjusted EPS outlook. (chart)

  • Defense stocks like L3Harris Technologies (LHX), RTX Corp (RTX), and Lockheed Martin (LMT) gained on Middle East tension-induced rally. (chart)

  • Paramount Global (PARA) fell over 8% amid skepticism over a potential merger with Skydance Media. (chart)

  • AbbVie (ABBV) dropped over 5% after lowering its full-year EPS forecast. (chart)

  • Advanced Micro Devices led Nasdaq 100 losers with an over 8% drop, while other chip stocks like Nvidia (NVDA), Micron Technology (MU), Marvell Technology (MRVL), Broadcom (AVGO), Lam Research (LRCX), ASML Holding NV (ASML), and Qualcomm (QCOM) also declined over 2% on hawkish Fed remarks.

  • Alphabet (GOOGL) decreased over 2% after reports of considering charges for new AI-driven "premium" features. (chart)

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» The S&P 500 fell 1.2% as escalating Middle East tensions and a surge in oil prices to $90 a barrel spurred a flight to safety, favoring bonds over stocks. Federal Reserve's caution on rate cuts amidst potential geopolitical conflicts and upcoming jobs report adds to market unease. (link)

» Fed officials, including Mester and Kashkari, provide varied perspectives on potential interest rate cuts, with some advocating caution amid uncertain inflation trends, while others suggest awaiting more data and clarity on inflation before deciding. (link)

» Glass, Lewis & Co. recommends Goldman Sachs ($GS) investors vote against the executive pay plan, citing a significant gap between CEO David Solomon's 24% pay raise and a corresponding earnings decline, raising concerns over accountability and shareholder interests amidst internal challenges and strategic shifts. (link)

» Alphabet ($GOOGL) is mulling over a bid for HubSpot ($HUBS) to strengthen its digital marketing and cloud computing capabilities, potentially filling strategic gaps in customer relationship management against rivals like Microsoft ($MSFT) and Salesforce ($CRM) despite expected antitrust hurdles. (link)

» Elon Musk is boosting compensation for Tesla's ($TSLA) AI engineering team to fend off OpenAI's recruitment drive in the midst of a fierce talent battle in the AI sector, aiming to retain key specialists and sustain Tesla's progress in AI and autonomy despite governance worries across Musk's ventures. (link)

» Ford Motor ($F) postpones the launch of its electric SUV and F-Series pickup to 2027 and 2026 respectively, awaiting a more mature EV market amidst concerns over high costs and inadequate charging infrastructure. The company is diversifying its strategy by planning hybrid versions of all models by 2030 and introducing budget-friendly electric vehicles. (link)

» Retailers like Peloton ($PTON), Saks, Express ($EXPR), and Bath & Body Works ($BBWI) have been delaying payments to vendors, a practice often linked to financial distress, according to Creditsafe data. This pattern of late payments, similar to precursors seen in bankruptcies like Bed Bath & Beyond (BYON), raises concerns about these companies' financial stability and cash flow management. (link)

» The Dow Jones Industrial Average plummeted by 530.16 points, its largest decline since March 2023, amid soaring oil prices and investor anxiety over Federal Reserve interest rate cuts. Geopolitical tensions and cautious remarks from Fed officials intensified volatility, causing significant drops in the Dow, S&P 500, and Nasdaq. (link)

Major ($10bn+) earnings releases scheduled the next five business days 👇 Click here for a comprehensive list of upcoming earnings releases

Results from yesterday’s economic releases & today’s schedule below 👇 Click here for full schedule & live updates of Wall Street estimates.

 

“The trouble is, you think you have time.”
Jack Kornfield

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