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Markets Bounce Back Big; CRWD, LULU, RH Beat in Q1

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Markets began this Thursday in the doldrums, following a weaker private sector jobs print from ADP (ADP - Free Report) and even worse Q1 Productivity and Unit Labor Cost revisions — to say nothing of lowered guidance for Microsoft (MSFT - Free Report) in its upcoming fiscal Q4. But a few measures of hope, including rumblings that China may be coming back online to take up long-awaited supply-chain issues, have brought all major indices strongly into the green today.

The Dow crossed back over 33K with a gain of +435 points, +1.33% on the day, while the S&P 500 was even healthier, +1.84%. The Nasdaq took the prize in today’s regular session, growing back over 12K with 322 points to the positive, +2.69% this Thursday. The Russell 2000, the only major index to not really spend any time in the red all day, also performed well: +2.15%.

We also see OPEC+ bringing back 600+ barrels per day online to the global market, which will help supply constraints of its own. And although jobs figures were less than optimum — and may well come to the downside of expectations in Friday morning’s non-farm payroll report — weekly jobless claims stayed historically robust; in fact, Continuing Jobless Claims reached its lowest point since Christmas Week… of 1969.

Cybersecurity major CrowdStrike (CRWD - Free Report) shares are trading down -3.5% after hours, following its fiscal Q1 earnings report released after Thursday’s closing bell. Yet the company beat on the bottom line — 31 cents per share outpaced the 23 cents expected, and more than 3x higher than the year-ago 10 cents per share — as well as the top: $488 million was notably above the $465 million in the Zacks consensus.

CrowdStrike has not missed an earnings estimate in its publicly traded history, going back to 2019. However, today’s positive earnings surprise was by a lower percentage than the trailing four quarters. This may not have much to do with the selling, though: the company still trades at 27x price-to-sales, which is expensive even for a top company in an essential business in high tech.

lululemon (LULU - Free Report) also outperformed expectations on both top and bottom lines Thursday, with $1.48 per share on $1.61 billion in quarterly sales surpassing the $1.43 and $1.55 billion expected, respectively. Comps overall grew +28%, led by +32% in North America. Guidance for the full year has been ratcheted up a bit, and the stock is trading +2% in the late session.

RH (RH - Free Report) has also put out Q1 earnings Thursday afternoon, with $7.78 per share dismantling the Zacks consensus of $5.46 per share. Revenues in the quarter were similarly impressive: $957 million versus expectations of $925 million. Yet shares in late trading have been all over the place ahead of CEO Gary Friedman’s conference call, on which he routinely makes profound statements not only regarding RH as a company but the current market environment for luxury furnishings and beyond.

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