What happened in the markets: 19 Feb - 23 Feb 2024
The stock markets in the United States, Europe, and Japan reached all-time highs this week following Nvidia's exceptional quarterly earnings report and robust guidance released after the market closed on Wednesday. The company's artificial intelligence chips experienced "insatiable demand," causing its stock to surge by over 16% and briefly surpass a $2 trillion valuation. This success also contributed to a broader market upswing. Despite initial concerns about potential Federal Reserve rate cuts, the outstanding performance of Nvidia and other major tech companies has shifted attention away from Fed worries. Consequently, all three major market indices posted gains for the week: the S&P 500 rose by 1.6%, the tech-heavy Nasdaq Composite gained 1.4%, and the Dow Jones increased by 1.3%.
Last week at a glance
Nvidia Beats Earnings & Hits $2 Trillion Market Cap
Nvidia CEO Jensen Huang saw his net wealth increase by $10 billion to $69.2 billion on Thursday after a remarkable post-earnings rally that propelled the company's stock to a record high of $785.38, with a brief breach of $800 before the bell on Friday. The rally, driven by Nvidia's surpassing of expectations with its results and the widespread adoption of its generative AI technology, has put the company on the cusp of a $2 trillion valuation milestone. This historic performance has turned heads on Wall Street and has cemented Nvidia's position as a leader in the AI industry.
New Player In Payments
On Presidents' Day, despite traders having time off from the stock market, significant merger deals took place, turning it into Merger Monday. Capital One (COF) agreed to acquire Discover Financial Services (DFS) in a $35.3 billion stock-based deal. This merger will create a new financial giant that can better compete with Visa (V) and Mastercard (MA). Additionally, the combined entity will become the largest U.S. credit card issuer by loan volume and the sixth-largest U.S. bank by assets, likely attracting increased regulatory scrutiny. Investors are optimistic that the deal will result in profitable interest charges, especially as credit card debt and delinquency rates continue to rise among millennials and signal financial stress, respectively, in the wake of the pandemic.
Top movers & shakers🎢
Block (SQ) - surged by 16% following the payments company's unexpected quarterly profit and strong guidance for the first quarter and full year.
Booking Holdings (BKNG) - experienced a 10% decline as the online travel-booking company's weaker-than-expected guidance for the current quarter overshadowed its stronger-than-expected numbers for the previous quarter.
Carvana (CVNA) - skyrocketed by 32% after the used-car market posted an annual profit and issued a robust first-quarter guidance.
DraftKings (DKNG) - rose by 1.1% after
Barclays (BCS) - upgraded the sports-betting platform to "overweight" from "equal weight," citing significant growth potential in the U.S. digital-gaming market.
EOG Resources (EOG) - fell by 3.9% after the energy producer's fourth-quarter results met expectations, but its guidance for the current quarter and full year disappointed.
Live Nation Entertainment (LYV) - gained 2% following the entertainment company's higher-than-expected fourth-quarter revenue of $5.84 billion.
The week ahead: 26 Feb - 1 March 2024
The upcoming week's economic calendar features upcoming data on new home sales, durable orders, and construction prices. Analysts anticipate that bond yields may rise if inflation expectations rebound after the higher-than-anticipated CPI and PPI reports for January. The highlight for inflation observers could be the unveiling of the core PCE number on February 29, which is regarded as the Federal Reserve's preferred inflation measure and could impact interest rate expectations.
Earnings
Monday, February 26 - Workday (WDAY), Li Auto (LI), Domino's Pizza (DPZ), and Zoom Video (ZM).
Tuesday, February 27 - Lowe's (LOW), American Tower (AMT), AutoZone (AZO), and eBay (EBAY).
Wednesday, February 28 - Salesforce (CRM), Royal Bank of Canada (RY), Baidu (BIDU), HP (HPQ), and Snowflake (SNOW).
Thursday, February 29 - Anheuser-Busch InBev (BUD), Toronto-Dominion Bank (TD), Dell Technologies (DELL), and Autodesk (ADSK).
Friday, March 1 - Plug Power (PLUG) and fuboTV (FUBO).
Sources:
https://seekingalpha.com/article/4673144-wall-street-breakfast-what-moved-markets
https://seekingalpha.com/article/4673204-wall-street-breakfast-week-ahead
https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update
https://www.schwab.com/learn/story/schwab-market-update
*Disclaimer: This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
