Market Highlights
Today's trading session saw a significant uptick, with the S&P 500 and Nasdaq Composite climbing to new all-time highs, marking a 1.0% and 1.5% increase respectively. This week, the S&P 500 has seen a 0.4% rise, while the Nasdaq has balanced out after a slower start. The upward trend was fueled by the previous day's momentum and was further supported by strong performances in mega cap stocks and the semiconductor sector.
- The Vanguard Mega Cap Growth ETF (MGK) enjoyed a 1.4% gain.
- The PHLX Semiconductor Index (SOX) surged by 3.4%, ahead of earnings announcements from key players in the sector.
- Notable stock performances included NVIDIA (+4.5%), Meta Platforms (+3.3%), and Alphabet (+2.0%), all contributing to the market's positive movement.
Market breadth was positive, with advancing issues outnumbering declining ones at both the NYSE and Nasdaq. The information technology and communication services sectors led the gains, up 1.9% and 1.8% respectively, while financials and real estate sectors experienced minor setbacks.
Economic Insights
Federal Reserve Chair Powell's recent comments to the Senate Banking Committee, which aligned with expectations for potential rate cuts later this year, provided some market relief. Similar expectations are set for the European Central Bank, adding to the positive market sentiment.
- Today's economic data suggests a "soft landing" scenario for the economy, with the 10-year note yield adjusting slightly after the release of several key reports.
- Initial jobless claims remained steady, indicating a stable labor market.
- Q4 productivity growth was confirmed at 3.2%, with a slight adjustment in unit labor costs, highlighting efficient labor use.
- The January trade deficit widened, reflecting a slight increase in global trade activity, particularly in autos and capital goods.
- Consumer credit saw a significant jump in January, driven by lower mortgage rates and increased demand for nonrevolving credit.
Looking Ahead
Tomorrow's economic calendar is packed with key data releases, including February's Nonfarm Payrolls and updates on unemployment rates, average hourly earnings, and the average workweek. Additionally, international markets showed mixed results, with slight gains in Europe and declines in Asian markets. Commodity prices varied, with minor adjustments in crude oil, natural gas, and metals.
- Key economic indicators to watch include Nonfarm Payrolls and the Unemployment Rate.
- European and Asian market trends provide insight into global economic conditions.
- Commodity prices offer a glimpse into broader economic trends, with updates on crude oil, natural gas, gold, silver, and copper.
Overall, today's market performance and economic data paint a picture of cautious optimism, with investors closely monitoring upcoming economic indicators and global market trends.
Today's News
Wall Street on Thursday ended at a new record high a day ahead of a closely-watched nonfarm payrolls report, helped by a rise in chip names and a post-earnings jump in supermarket chain Kroger (KR, Financial). Sentiment was also boosted after Federal Reserve chair Jerome Powell in his second day of testimony at Capitol Hill said that interest rate cuts could likely begin this year. Across the Atlantic, the European Central Bank kept its key policy rates unchanged, but revised down its inflation projections. The tech-heavy Nasdaq Composite (COMP:IND) gained 1.51% to close at 16,273.38 points, while the benchmark S&P 500 (SP500) added 1.03% to settle at a new closing peak of 5,157.35 points. Both indexes earlier hit all-time intraday records in the session. The blue-chip Dow (DJI) advanced 0.34% to conclude at 38,791.35 points. Of the 11 S&P sectors, nine ended in the green.
Marvell Technology (MRVL, Financial) shares fell 12% in extended-trading on Thursday after the specialty semiconductor company issued first-quarter guidance that missed expectations. Looking ahead, Marvell expects to generate revenue of $1.15B plus or minus 5% in the first-quarter. Analysts were expecting sales of $1.37B. Marvell also expects adjusted gross margins to be within a range of 62% to 63%, while adjusted earnings are forecast to be between $0.18 and $0.28 per share. "In the first quarter of fiscal 2025, we expect continued sequential growth in our data center revenue with initial shipments of our cloud optimized silicon programs for AI complementing our electro-optics franchise," said Matt Murphy, Marvell's Chairman and CEO. "While we are forecasting soft demand impacting consumer, carrier infrastructure, and enterprise networking in the near term, we expect revenue declines in these end markets to be behind us after the first quarter, and project a recovery in the second.
Broadcom (AVGO, Financial) shares fell 2.9% in extended-hours trading on Thursday after the semiconductor giant offered up sales guidance for fiscal 2024 that fell short of expectations. Looking to the fiscal year, Broadcom reaffirmed its previous sales guidance of $50B, below the $50.2B that analysts were anticipating. It also reaffirmed its previous guidance of $30B in EBITDA. For quarter ending Feb. 4, Broadcom earned $10.99 per share, excluding one-time items, as revenue rose 34.2% year-over-year to $11.96B. Excluding the contribution from VMware, revenue rose 11% year-over-year. "Strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment," said Hock Tan, President and CEO of Broadcom. A consensus of analysts expected the company to earn $10.42 per share on $11.72B in revenue. The company's board of directors also declared a quarterly dividend of $5.25 per share, payable to.
DocuSign (DOCU, Financial) press release: Q4 Non-GAAP EPS of $0.76 beats by $0.11. Revenue of $712.39M (+8.0% Y/Y) beats by $13.01M. Billings were $833.1 million, an increase of 13% year-over-year. Net cash provided by operating activities was $270.7 million compared to $137.1 million in the same period last year. Free cash flow was $248.6 million compared to $113.0 million in the same period last year. Cash, cash equivalents, restricted cash and investments were $1.2 billion at the end of the quarter. During the quarter, the company repaid $689.9 million principal amount of our 2024 convertible senior notes. Q1 Outlook: Total Revenue: $704M-708M vs. consensus of $700.09M. Subscription revenue: $686M-690M. Billings: $685M-695M. Non-GAAP gross margin: 81-82%. Non-GAAP operating margin: 27-28%. FY25 Guidance: Total Revenue: $2,915M-2,927M vs. consensus of $2.75B Subscription revenue: $2,843M-2,855M. Billings: $2,970M-3,024M. Non-GAAP gross margin: 81-82%. Non-GAAP operating margin: 26.5-28% Shares +12.02%.
MongoDB (MDB, Financial) press release: Q4 Non-GAAP EPS of $0.86 beats by $0.38. Revenue of $458M (+26.8% Y/Y) beats by $22.44M. Continued Strong Customer Growth with Over 47,800 Customers as of January 31, 2024 MongoDB Atlas Revenue up 34% Year-over-Year; 68% of Total Q4 Revenue. Q1 Outlook: Revenue $436.0 million to $440.0 million vs. consensus of $449.08M; Non-GAAP Income from Operations $22.0 million to $25.0 million; Non-GAAP Net Income per Share $0.34 to $0.39 vs. consensus of $0.61. 2025 Outlook: Revenue $1.90 billion to $1.93 billion vs. consensus of $2.03B; Non-GAAP Income from Operations $186.0 million to $201.0 million; Non-GAAP Net Income per Share $2.27 to $2.49 vs. consensus of $3.22. Shares -10.0%.
