Key Takeaways
- Stocks Declined As Markets Await Key Earnings And Economic Reports Next Week
- Walmart Fell Despite Beating Earnings Due To Disappointing Forward Guidance
- Investors Eye Nvidia Earnings Amid Growing AI Spending Uncertainty
Stocks were down on Thursday with the S&P 500 and Nasdaq Composite both falling just under 0.5%. The Russell 2000 and Dow Jones Industrial Average both fell 1%. Seven of eleven sectors in the S&P closed lower with financials turning in the worst performance, dropping 1.5%. The best performing sector was energy, which gained nearly 1%.
Shares of Walmart were one of the worst performing stocks. While the retail giant turned in an earnings report that beat on both the top and bottom lines, the company offered a disappointing outlook for the year. We’re still a couple of weeks away from other big name retail earnings like Target and Best Buy, but next week we’ll hear from Home Depot and Lowe’s, among a number of other companies and one in particular.
Some other stocks of note from Thursday included JP Morgan and Goldman Sachs. Both companies saw their stocks fall around 4%, though there really wasn’t any news that served as a catalyst for the selling. Shares of Palantir were also down and have fallen 15% in the last two days. Part of that is likely a result of talk that spending on defense will be reduced by the Trump Administration.
This week has really felt like a week where stocks have been treading water in search of something to either latch on to or something to pull them under. The economic calendar has been light and despite a number of companies reporting earnings, there have been few big names. That will change next week.
As I mentioned, both Home Depot and Lowe’s report next week, but the company everyone will be watching will be Nvidia, who reports Wednesday after the close. So far this earnings cycle, we’ve heard a lot about spending on Artificial Intelligence (AI), but not much on how that spending will pay off. That’s resulted in the companies doing the spending, seeing their stocks take a hit after reporting. However, if all these companies are spending, I would expect Nvidia to be the beneficiary and therefore, I think there is a lot of weight riding on their report. I’ll have more on this as we get closer to them reporting.
In addition to Nvidia earnings, the economic calendar will also heat up. Aside from housing data and the Durable Goods report, the all-important Personal Consumption Expenditures (PCE) report comes out next Friday. This report will likely be under intense scrutiny as investors try to make heads or tails out of where inflation is headed. The Federal Reserve Open Market Committee doesn’t meet until March 19th and it is expected rates will be left unchanged at that meeting. Still, in light of the recent stronger than expected Consumer Price Index, markets might have a slightly elevated level of sensitivity when this report is released.
For today, I’m expecting a continuation of what we’ve been seeing this week. It is option expiration and that can bring with it some volatility, but with volumes being light all week, I’m not looking for much to happen. The one caveat to that could be an unexpected announcement out of Washington on any number of issues, but I think that is something markets will contend with for the foreseeable future. As always, I would stick with your investing plans and long-term objectives.
Read the full article here
