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“May you live in interesting times,” goes the ancient curse. We start a new week of stock market challenges sinking again in the pre-market. The ongoing war in Iran is now in its second week with no signs of a peace deal; if anything, it threatens to expand and intensify — with oil prices the initial (non-human) victim.
Both WTI and Brent crude spot oil prices have spiked to over $100 per barrel (/bbl), up from around $55/bbl back in December of last year. WTI oil is currently +13% to $103/bbl, Brent is +12.8%, $104.50/bbl. Oil prices are now up +78% since the start of the year.
The stock market has also been victimized: the Dow is falling another -553 points at this hour, -1.16%. The S&P 500 is -71 points, -1.05%, while the Nasdaq is -281 points, -1.14%, and the small-cap Russell 2000 is down -44 points, -1.77%. Over the past month, major indexes have already fallen between -3.6% (Nasdaq) and -7.6% (Russell 2000).
Good News This Morning: HIMS & Novo Make a Deal
What a difference a month makes! This time, we mean it in a good way: on February 9, weight-loss drug giant Novo NordiskNVO brought a lawsuit against health platform Hims & Hers HIMS for selling knockoff versions of its Ozempic and Wegovy weight-loss drugs. This morning, not only is Novo dropping the lawsuit, but it is partnering with Hims & Hers to sell legitimate versions of these drugs on their platform.
The result is a big +54% jump in HIMS shares (NVO is up +1%), swinging the platform’s stock into positive territory after a dismal -51% start to the trading year. Considering the headwinds we are seeing in the pre-market thus far this morning, this is a most impressive performance.
What to Expect from This Week’s Stock Market
Aside from parsing the destruction in the Middle East, we get two major economic reports on inflation this week: Consumer Price Index (CPI) on Wednesday and Personal Consumption Expenditures (PCE) — delayed, from January — on Friday morning. CPI last reported a +2.4% Inflation Rate last time (among the coolest inflation metrics we’ve seen lately) and +2.5% on core (subtracting volatile food and energy prices). PCE last reported +2.9% year-over-year inflation, +3.0% on core.
Also, even though we’re through Q4 earnings season for all practical purposes, there are several meaningful earnings results expected this week. OracleORCL reports fiscal Q3 results Tuesday and AdobeADBE and Dollar General DG putting out quarterly earnings on Thursday. Both Oracle and Adobe are expected to bring +15% earnings growth, while Dollar General is projected to come in -4% on earnings, but has outperformed on earnings and average of +23% over the past four quarters.
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Ross Stores benefits from strong customer response across both banners, aiding sales. ROST posted 12% year-over-year sales growth, driven by 9% comps increase in Q4.
Magna benefits from diversified offerings, strong bookings, strategic tech partnerships, margin expansion, solid liquidity, and consistent shareholder-friendly capital returns.
Newmont is making a notable progress with its growth projects and remains focused on driving shareholder value. The acquisition of Newcrest will also generate significant synergies. Higher gold prices will also drive margins.
Globus Medical continues to gain from surging demand for its Musculoskeletal Solutions products. Meanwhile, the company is expanding in the overseas markets through the expansion of direct and distributors sales force.
The uptake of Firdapse since its launch has been encouraging. Catalyst’s acquisition of selective rights to Fycompa CIII and Agamree to expand its portfolio beyond Firdapse is a positive.
The Kraft Heinz Company faces ongoing volume weakness, margin pressure and significant Indonesia-related disruptions, intensifying concerns over growth and earnings stability.
Whirlpool’s performance remains pressured by tariff-related cost inflation, elevated promotional activity and a weak housing market, weighing on margins and near-term earnings visibility.
Adobe is facing stiff competition in the AI and GenAI space from the likes of Microsoft -backed OpenAI, as well as a lack of monetization of its AI solutions.
American Eagle remains well placed on the back of cost-reduction efforts and brand progress. In addition, its Powering Profitable Growth plan bodes well.
Broadcom is a leading player in the semiconductor market based on its expanding product portfolio, multiple target markets, accretive acquisitions and strong cash flow.
Strength in the Energy Generation/Storage business, balance sheet strength, and focus on autonomous driving, robotics and artificial intelligence are set to drive Tesla.
AT&T is witnessing early momentum in its core market areas driven by strength in 5G and fiber, as it aims to better harness edge computing capabilities with core business focus.
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