We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Markets Head South on 50 bps Rhetoric from Fed Members
Read MoreHide Full Article
Following a challenging start to today’s market activity, indices fought back to losses within a half of 1% by mid-day, with the small-cap Russell 2000 ascending into the green for a time today. Then, following comments from renowned Fed hawk James Bullard, in which he “wouldn’t rule out” a 50 bps interest hike at the Fed’s next meeting, all four major market indices headed for session lows. The Dow closed -431 points, -1.26%, the S&P 500 -1.38%, Nasdaq -214 points or -1.78% and the Russell -0.96%.
St Louis Fed President Bullard was the second Fed member in as many days to bandy about a 50 bps interest rate increase at the next Federal Open Market Committee (FOMC) meeting on the 21st and 22nd of next month. Cleveland President Loretta Mester yesterday mentioned she would have voted for a 50 bps hike at the February 1st meeting. A 50 bps increase would take the Fed funds range to between 5.00-5.25% — the highest level since September 2007, where it had been for more than a year. It should be noted, however, that neither Bullard nor Mester are currently voting Fed members.
Today’s sell-off brings us to flat levels for the week. Remember, just yesterday we were running hotter on strong consumer data, but today we saw a Producer Price Index (PPI) for last month that was much hotter, as well. So again it looks as if the inflation alarm clock has gone off for market participants, although we do appear to be trading within a range at present. Although this is the worst trading day in almost exactly a month, we’re mostly seeing a dialing back of overall risk appetite. Nobody likes a losing day, but it looks more simply like yesterday’s bull fever has broken for now — not the end of the world.
After today’s closing bell, Applied Materials (AMAT - Free Report) is out with fiscal Q1 earnings results: earnings of $2.03 per share outperformed the Zacks consensus buy a solid dime on $6.74 billion in quarterly sales, ahead of the $6.69 billion expected. Current quarter revenue guidance has been raised to $6.4 billion; analysts had been expecting $6.12 billion. The company did announce a one-time charge in the coming quarter of $250 million, likely based on a cybersecurity event at one of its major business clients. Shares are +1% in after-hours trading, +19% year to date.
DoorDash (DASH - Free Report) surged higher in late trading following its Q4 earnings report this afternoon: a bigger-than-expected loss to -$1.65 per share was hit by an impairment charge (probably due to its investment in Flick), but was offset by revenues reaching $1.82 billion in the quarter, above the $1.77 billion anticipated. Full-year adjusted EBITDA guided higher, and the stock initially was +13% on the news; it has since retreated back to +4.5%.
DraftKings (DKNG - Free Report) shares are also up nicely after releasing its Q4 earnings after the closing bell: bottom line of -53 cents outperformed the -63 cents expected, on a big revenue beat, to $855 billion from $797.5 billion in the Zacks consensus. Strong customer retention in the quarter, along with increased revenue guidance for full-year 2023, have helped shares drive +6.7% in today’s after-market.
Image: Bigstock
Markets Head South on 50 bps Rhetoric from Fed Members
Following a challenging start to today’s market activity, indices fought back to losses within a half of 1% by mid-day, with the small-cap Russell 2000 ascending into the green for a time today. Then, following comments from renowned Fed hawk James Bullard, in which he “wouldn’t rule out” a 50 bps interest hike at the Fed’s next meeting, all four major market indices headed for session lows. The Dow closed -431 points, -1.26%, the S&P 500 -1.38%, Nasdaq -214 points or -1.78% and the Russell -0.96%.
St Louis Fed President Bullard was the second Fed member in as many days to bandy about a 50 bps interest rate increase at the next Federal Open Market Committee (FOMC) meeting on the 21st and 22nd of next month. Cleveland President Loretta Mester yesterday mentioned she would have voted for a 50 bps hike at the February 1st meeting. A 50 bps increase would take the Fed funds range to between 5.00-5.25% — the highest level since September 2007, where it had been for more than a year. It should be noted, however, that neither Bullard nor Mester are currently voting Fed members.
Today’s sell-off brings us to flat levels for the week. Remember, just yesterday we were running hotter on strong consumer data, but today we saw a Producer Price Index (PPI) for last month that was much hotter, as well. So again it looks as if the inflation alarm clock has gone off for market participants, although we do appear to be trading within a range at present. Although this is the worst trading day in almost exactly a month, we’re mostly seeing a dialing back of overall risk appetite. Nobody likes a losing day, but it looks more simply like yesterday’s bull fever has broken for now — not the end of the world.
After today’s closing bell, Applied Materials (AMAT - Free Report) is out with fiscal Q1 earnings results: earnings of $2.03 per share outperformed the Zacks consensus buy a solid dime on $6.74 billion in quarterly sales, ahead of the $6.69 billion expected. Current quarter revenue guidance has been raised to $6.4 billion; analysts had been expecting $6.12 billion. The company did announce a one-time charge in the coming quarter of $250 million, likely based on a cybersecurity event at one of its major business clients. Shares are +1% in after-hours trading, +19% year to date.
DoorDash (DASH - Free Report) surged higher in late trading following its Q4 earnings report this afternoon: a bigger-than-expected loss to -$1.65 per share was hit by an impairment charge (probably due to its investment in Flick), but was offset by revenues reaching $1.82 billion in the quarter, above the $1.77 billion anticipated. Full-year adjusted EBITDA guided higher, and the stock initially was +13% on the news; it has since retreated back to +4.5%.
DraftKings (DKNG - Free Report) shares are also up nicely after releasing its Q4 earnings after the closing bell: bottom line of -53 cents outperformed the -63 cents expected, on a big revenue beat, to $855 billion from $797.5 billion in the Zacks consensus. Strong customer retention in the quarter, along with increased revenue guidance for full-year 2023, have helped shares drive +6.7% in today’s after-market.
Questions or comments about this article and/or its author? Click here>>