The promise of AI continues to lift the mega-cap tech stocks, driving the Nasdaq to an all-time high Friday, exceeding its last record in 2021. The tech-heavy index finished up 1.74% for the week, while the S & P 500 rose nearly 1%. The Dow Jones Industrial Average fell 0.11%. This earnings season is winding down and it’s been a good one. Of the 97% of S & P 500 companies that have reported fourth-quarter earnings results, 73% reported an upside earnings surprise, while 64% reported better-than-expected revenue results, according to data from FactSet. The two portfolio stocks that reported earnings last week also didn’t disappoint. Discount retailer TJX Companies, which runs T.J. Maxx, Marshalls, and HomeGoods, beat on nearly every important metric , prompting us to raise our price target. Enterprise giant Salesforce also finished 2024 on a high note with an earnings beat — plus a surprise dividend. The big economic report of the week was the personal consumption expenditure (PCE) index on Thursday, the Federal Reserve’s preferred inflation gauge, which showed a rise of 0.4% in January, in line with expectations. Matching expectations was good enough for the bulls, as it points to further disinflation at both the headline and core levels. It was a big win for the central bank’s war on inflation, following a hotter-than-expected consumer and producer price index reports earlier in February. In the week ahead, we get earnings results from three more stocks in the portfolio, plus a few key economic reports. 1. All about the jobs. The big watcher this week is the February nonfarm payrolls report, out Friday before the bell. The market is feeling good after the favorable economic data last week. The monthly jobs report, while backward-looking, will provide some more clues on the health of the consumer and the forward path of inflation. Remember, buying power is a result of prices and wages. Higher wages mean the ability to absorb higher prices. Wall Street wants to see tempered wage inflation and low unemployment — a Goldilocks mix that can keep the economy chugging along while inflation continues to come down. As of Friday, economists are expecting 200,000 payroll additions. Annual wage inflation is expected to be tracking at 4.5%, in line with January’s increase. A number below 4.5% but higher than the 2.4% growth for the January PCE index would certainly be welcome as it would put downward pressure on inflation while still allowing the consumer to recoup some buying power. Good for Main Street, good for Wall Street. First, the ADP employment report on Wednesday, for which economists expect 150,000 additions in January. The JOLTS (job openings and labor turnover survey) report, also out Wednesday, should show how tight the labor market is by analyzing the number of job openings, the rate of hiring, and the rate of workers leaving their jobs. The nonfarm payrolls report carries more weight than either of these two reports but expect investors to use them to gauge what’s coming Friday. 2. Manufacturing update. The January factory orders report (a decline of 2.8% expected) and February ISM Services PMI report (52.5% expected) are both out on Tuesday. Factory orders can provide insight into business and consumer sentiment because if there is demand for goods, and that demand is expected to continue, businesses need to place more orders. As a result, growth in factory orders could be taken as a sign that the economy continues to expand. One caveat: The growth shouldn’t be strictly the result of price inflation, as that may mask demand pressure. The services sector has proven to be very resilient. Similar to what we said about the ISM manufacturing report last week, there is always good insight to be gleaned from the “what respondents are saying” section of the ISM service report. It measures the rate of contraction/expansion, measured by the distance from that 50-level benchmark. The further below 50, the faster the contraction; the further above 50, the faster the rate of expansion. 3. Earnings. As we discussed during Friday’s meeting , the question for Foot Locker is whether demand has sustained beyond the holiday season. Investors would like to see that the sneaker and apparel chain is working through its inventory without still needing to be hyper-promotional. An update on the company’s turnaround is welcome. For core holding Costco , sales results aren’t the main watch item given that the best-run retailer in the world provides monthly sales updates. Rather, we’re interested in how foot traffic has been trending. Remember: Costco isn’t about making high-margin sales, it’s about selling club memberships and volume. We suspect the consumer focus on quality value has only intensified in recent months as inflation remains sticky at slightly above the Fed’s 2% target level. We’re also curious to hear about online advertising, which could be another avenue of growth, similar to what we are seeing from Amazon and Walmart . With Broadcom , we’d like to see the strong networking revenue growth — on the back of a massive AI infrastructure refresh cycle — continue from the last quarter. What percentage of the overall business is benefiting directly from AI is a focus for us, as it shows just how big the opportunity is and the future upside. An update on VMware integration, plus commentary on the demand for custom chip solutions (ASICs) will also be of interest. Monday, March 4 Before the bell: Sea Limited (SE) After the bell: GitLab (GTLB), Paymentus Holdings (PAY), Semrush Holdings (SEMR), Eos Energy Enterprises (EOSE), AeroVironment, Inc (AVAV), Science Applications International Corporation (SAIC), Nektar Therapeutics (NKTR), Stitch Fix (SFIX), ThredUp (TDUP) Tuesday, March 5 10 a.m. ET: Factory Orders 10 a.m. ET: ISM Services PMI Before the bell: NIO (NIO), Target Corp. (TGT), Cipher Mining Inc (CIFR), Ferguson plc (FERG) After the bell: CrowdStrike (CRWD), ChargePoint Holdings (CHPT), Ross Stores (ROST), Nuvei Corporation (NVEI), Nordstrom (JWN), ODDITY Tech Ltd. (ODD), Box (BOX) Wednesday, March 6 8:15 a.m. ET: ADP Employment 10 a.m. ET: JOLTS Job Openings 2 p.m. ET: Fed Beige Book Before the bell: Foot Locker (FL) , JD.com (JD), Abercrombie & Fitch Co. (ANF), EVgo (EVGO), Trinity Capital (TRIN), Campbell Soup Co. (CPB), Genius Sports Limited (GENI), THOR Industries (THO), United Natural Foods (UNFI) After the bell: TriplePoint Venture Growth BDC Corp. (TPVG), Victoria’s Secret & Co. (VSCO), Rush Street Interactive (RSI), Inovio Biomedical Corp (INO), Vermilion Energy (VET), Emergent BioSolutions Inc (EBS), Infinera Corp. (INFN), OneSpan (OSPN), Grupo Supervielle S.A. (SUPV), Yext (YEXT) Thursday, March 7 8:30 a.m. ET: Initial Jobless Claims Before the bell: Kroger Co. (KR), Burlington Stores Inc (BURL), Big Lots (BIG), American Eagle Outfitters (AEO), BJ’s Wholesale Club (BJ), Bilibili (BILI), Ciena Corporation (CIEN), Paysafe Group Holdings Limited (PSFE), ABM Industries (ABM) After the bell: Broadcom (AVGO) , Costco Wholesale (COST) , Marvell Technology Group Ltd. (MRVL), MongoDB (MDB), DocuSign (DOCU), Samsara (IOT), Petroleo Brasileiro SA Petrobras (PBR), Gap (GPS), BigBear.ai (BBAI), Runway Growth Finance Corp (RWAY), Profound Medical Corp. (PROF), Evolus (EOLS), Arcturus Therapeutics (ARCT), OppFi (OPFI), Concrete Pumping Holdings (BBCP), Funko (FNKO) Friday, March 8 8:300 a.m. ET: Nonfarm Payrolls Before the bell: Americas CarMart Inc (CRMT), Algonquin Power & Utilities Corp. (AQN), Genesco (GCO) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. 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The promise of AI continues to lift the mega-cap tech stocks, driving the Nasdaq to an all-time high Friday, exceeding its last record in 2021. The tech-heavy index finished up 1.74% for the week, while the S&P 500 rose nearly 1%. The Dow Jones Industrial Average fell 0.11%.
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