Spotlight On Economic Data After Nvidia-Fueled Rally

Summary:

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The economic calendar in the week ahead includes fresh data on new home sales, durable orders, and construction prices. Analysts think bond yields could push higher if inflation expectations return following the higher-than-expected CPI and PPI reports for January. The marquee event for inflation watchers could be the release of the core PCE core number on February 29. The release is considered the Federal Reserve’s favored inflation gauge and could move the meter with interest rate expectations. In the tech sector, analysts expect another dramatic week for semiconductor stocks after Nvidia’s (NASDAQ:NVDA) earnings report sent the Santa Clara-based company’s shares up more than 20% and led to strong rallies for AMD (AMD), Super Micro (SMCI), Arm (ARM), Marvell Technology (MRVL), and Micron (MU) to name just a few. The earnings calendar includes key releases from Li Auto (LI), Lowe’s (LOW), eBay (EBAY), and Anheuser-Busch InBev (BUD).

Earnings spotlight: Monday, February 26 – Workday (WDAY), Li Auto (LI), Domino’s Pizza (DPZ), and Zoom Video (ZM). See the full earnings calendar.

Earnings spotlight: Tuesday, February 27 – Lowe’s (LOW), American Tower (AMT), AutoZone (AZO), and eBay (EBAY). See the full earnings calendar.

Earnings spotlight: Wednesday, February 28 – Salesforce (CRM), Royal Bank of Canada (RY), Baidu (BIDU), HP (HPQ), and Snowflake (SNOW). See the full earnings calendar.

Earnings spotlight: Thursday, February 29 – Anheuser-Busch InBev (BUD), Toronto-Dominion Bank (TD), Dell Technologies (DELL) and Autodesk (ADSK). See the full earnings calendar.

Earnings spotlight: Friday, March 1 – Plug Power (PLUG) and fuboTV (FUBO). See the full earnings calendar.

Volatility watch: Options trading volume is elevated on Qurate Retail (QRTEA) and Iovance Biotherapeutics (IOVA). Short interest is high on Virgin Galactic (SPCE) ahead of the space tourism company’s earnings report. The most overbought stocks per their 14-day relative strength index include Intercorp Financial (IFS), RayzeBio (RYZB), and Vincerx (VINC). The most oversold stocks per their 14-day Relative Strength Index include SSR Mining (SSRM), Avis Budget (CAR), and Dropbox (DBX). Kroger (KR) and Albertsons Companies (ACI) could also be active with the FTC and several states threatening to sue over the planned merger.

Data reports: Key reports expected out on March 1 include the monthly Macau gross gaming revenue report, updates from Chinese automakers on monthly deliveries, firearm background check data, and discount broker DARTs reports.

IPO watch: The IPO quiet period expires on Amer Sports (NYSE:AS) to free up analysts to post ratings. At the time of publication, Amer Sports (AS) traded about 15% above its IPO pricing level. The Finland-based company owns iconic sports and outdoor brands that include Arc’teryx, Salomon, Wilson, Atomic, Louisville Slugger, and Peak Performance. Other companies that have their IPO quiet periods expiring during the week include Alto Neuroscience (ANRO) and Fractyl Health (GUTS). The IPO world will also have its focus on the upcoming Reddit (RDDT) IPO. In a user-friendly move, Reddit is reserving a large block of shares for the social media site’s most active redditors at the initial offering price. Ahead the IPO, Reddit expanded its partnership with Google (GOOG) to make it easier to discover and access the communities and conversations people are looking for on Reddit. The company said the enhanced collaboration provides Google with an efficient and structured way to access the vast corpus of existing content on Reddit and enables Google to use the Reddit Data API to improve its products and services.

Index watching: Amazon (AMZN) will join the Dow Jones Industrial Index to replace Walgreens Boots Alliance (WBA). The Dow 30 shift was prompted by Walmart’s (WMT) decision to fire off a 3-to-1 stock split, which will reduce the retail giant’s weighting in the index. Amazon joins the Dow on the same day that the Walmart stock split is executed. “Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA,” stated S&P Dow Jones Indices on the move. Following the Dow switch, Amazon’s weight in the Dow will rank 17th out of the 30 stocks in the index, while Walmart’s weighting will drop to 26th from 17th. UnitedHealth Group (UNH) will remain the most heavily weighted stock in the index. In addition to the DJIA drama, the Dow Jones Transportation Average will see Uber Technologies (UBER) replace JetBlue Airways (JBLU) to give the ride-sharing sector increased exposure.

U.S. auto watch: The automobile sector did not get through the earnings season in great shape, as production outlooks from electric vehicle makers continued to disappoint. Rivian Automotive (RIVN) fell over 20% and hit a new all-time low after its report, while Lucid Group (LCID) spun more than 10% lower after another pullback on production and profitability expectations. Tesla (TSLA) has recovered a bit from its earnings jolt, but is still down more than 20% in 2024. Meanwhile, Detroit automakers Ford Motor (F), General Motors (GM), and Stellantis (STLA) have recorded gentle gains, while Mercedes-Benz (OTCPK:MBGAF) broke higher after it pushed back a key electrification target by a full five years. In the week ahead, some automakers will report U.S. sales tallies for February. J.D. Power forecast total new-vehicle sales for the month to rise 1.4% year-over-year to 1,214,600 units. The seasonally adjusted annualized rate for total new-vehicle sales is expected to be 15.4M units, up 0.4M units from February 2023. Retail inventory levels are expected to finish around 1.7 million units, a 3.6% increase from January 2024 and a 44.7% increase from February 2023. Notably, the average new-vehicle retail transaction price is declining due to rising manufacturer incentives, falling retailer profit margins and increased availability of lower-priced vehicles. Per J.D. Power, transaction prices in February are trending towards $44,045, which is about 4.2% lower than a year ago. Across the Pacific, Chinese electric vehicle makers NIO (NIO), Li Auto (LI), and XPeng (XPEV) will report on deliveries for February. The timing of the Chinese New Year may impact the comparisons to a year ago.

Event schedule: The four-day MWC Barcelona Conference will run during the week. Keynote speakers include Accenture (ACN) CEO Julie Sweet, China Mobile Chairman Yang Jie, and Dell Technologies (DELL) CEO Michael Dell. MWC is described as one of the industry’s largest and most influential connectivity event. Presentations during the event have jolted share prices of participating companies on occasion in the past. Notable events to watch also include Apple’s (AAPL) annual shareholder meeting, Oculis Holding’s (OCS) in-person R&D Day in New York City, BWX Technologies’ (BWXT) Investor Day, Rayonier’s (NYSE:RYN) Investor Day, and Louisiana-Pacific’s (NYSE:LPX) Investor Day. The conference schedule includes the Wolfe Research March Madness Software Conference, Citi Annual Fintech Conference, Susquehanna 13th Annual Technology Conference, and Baird Vehicle Technology and Mobility Conference.