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Markets caught a bid today, breaking a near-term cycle of selling off, particularly on the blue-chip Dow index. The Dow rallied +511 points today, +1.58% — its single-best trading day since June. The S&P 500, celebrating its best trading session since August, rose +1.20%. The Nasdaq wasn’t far behind — +146 points, +1.16%, with the small-cap Russell 2000 rounding out the day +0.65%.
The last time all four indices were up for the month was back on October 17th — two weeks ago tomorrow. Another strong day Tuesday, and we may finish the month in the green, after all. Then again, since mid-July highs, on the Nasdaq and S&P — and to a lesser degree, the Dow — we’ve seen lower highs and lower lows through the course of trading cycles. This would suggest we do not rally into the end of the year like many analysts are looking for, and instead continue to roll off these highs for a mixed overall trading year.
This would be good news for the Fed, whose steady but firm interest rate increases going back to March 2022 has done a solid job curbing what threatened to turn into runaway inflation. Currently we see bond yields on the 2-year and 10-year holding firm at historically high levels: 5.042% on the 2-year and 4.886% on the 10-year. The yield-curve inversion threatens to flatten out but has yet to get there; this is often cited as an event that precedes economic recessions.
The Federal Open Market Committee (FOMC) reconvenes tomorrow and releases its latest Fed funds rate — currently 5.25-5.50%, 525 basis points (bps) higher than a year and a half ago. Varied economic reports made it somewhat difficult to predict whether another hike of 25 bps — which would bring us to our highest rates since 2001 — would be forthcoming; currently, a majority of economist believe the FOMC will err on the side of caution and stand pat Wednesday. This may generate some trading relief, which traders may have gotten out ahead of in today’s session.
Zacks Rank #1 (Strong Buy)-rated Pinterest (PINS - Free Report) outpaced expectations on both top and bottom lines after today’s closing bell, posting earnings of 28 cents per share on $763 million in revenues — bettering consensus estimates of 21 cents per share and $743.3 million estimated, respectively. Monthly Active Users (MAU) garnered 9 million more than expectations to 482 million in the quarter, and full-year revenue guidance was bumped slightly higher. Shares are up +11% on the news.
Contrast this with Zacks Rank #5 (Strong Sell)-rated V.F. Corp. (VFC - Free Report) — parent to North Face, Timberland and Vans brands, among others — which missed by two cents on its bottom line to 63 cents per share in its fiscal Q2 this afternoon. Revenues came in slightly higher — $3.03 billion versus $3.00 billion anticipated — but a dividend cut, along with outside pressure to cut operating costs from two activist investor firms, have caused a -5% sell-off in VFC shares during after-market trading.
Lattice Semiconductor (LSCC - Free Report) shares are getting hit hard this afternoon, -14%, after beating Q3 earnings by a penny to 53 cents per share on $192.17 million in sales, slightly above the $192.03 million in the Zacks consensus. Next-quarter revenues guidance of between $166-186 million — notably below the $195.80 million our analysts were expecting — are the main cause for the Oregon-based chip designer’s slide at this hour. The company had carried a Zacks Ranks #3 (Hold) into the earnings report.
Image: Bigstock
Dow Gains 500+ Points; PINS Beats & Raises
Markets caught a bid today, breaking a near-term cycle of selling off, particularly on the blue-chip Dow index. The Dow rallied +511 points today, +1.58% — its single-best trading day since June. The S&P 500, celebrating its best trading session since August, rose +1.20%. The Nasdaq wasn’t far behind — +146 points, +1.16%, with the small-cap Russell 2000 rounding out the day +0.65%.
The last time all four indices were up for the month was back on October 17th — two weeks ago tomorrow. Another strong day Tuesday, and we may finish the month in the green, after all. Then again, since mid-July highs, on the Nasdaq and S&P — and to a lesser degree, the Dow — we’ve seen lower highs and lower lows through the course of trading cycles. This would suggest we do not rally into the end of the year like many analysts are looking for, and instead continue to roll off these highs for a mixed overall trading year.
This would be good news for the Fed, whose steady but firm interest rate increases going back to March 2022 has done a solid job curbing what threatened to turn into runaway inflation. Currently we see bond yields on the 2-year and 10-year holding firm at historically high levels: 5.042% on the 2-year and 4.886% on the 10-year. The yield-curve inversion threatens to flatten out but has yet to get there; this is often cited as an event that precedes economic recessions.
The Federal Open Market Committee (FOMC) reconvenes tomorrow and releases its latest Fed funds rate — currently 5.25-5.50%, 525 basis points (bps) higher than a year and a half ago. Varied economic reports made it somewhat difficult to predict whether another hike of 25 bps — which would bring us to our highest rates since 2001 — would be forthcoming; currently, a majority of economist believe the FOMC will err on the side of caution and stand pat Wednesday. This may generate some trading relief, which traders may have gotten out ahead of in today’s session.
Zacks Rank #1 (Strong Buy)-rated Pinterest (PINS - Free Report) outpaced expectations on both top and bottom lines after today’s closing bell, posting earnings of 28 cents per share on $763 million in revenues — bettering consensus estimates of 21 cents per share and $743.3 million estimated, respectively. Monthly Active Users (MAU) garnered 9 million more than expectations to 482 million in the quarter, and full-year revenue guidance was bumped slightly higher. Shares are up +11% on the news.
Contrast this with Zacks Rank #5 (Strong Sell)-rated V.F. Corp. (VFC - Free Report) — parent to North Face, Timberland and Vans brands, among others — which missed by two cents on its bottom line to 63 cents per share in its fiscal Q2 this afternoon. Revenues came in slightly higher — $3.03 billion versus $3.00 billion anticipated — but a dividend cut, along with outside pressure to cut operating costs from two activist investor firms, have caused a -5% sell-off in VFC shares during after-market trading.
Lattice Semiconductor (LSCC - Free Report) shares are getting hit hard this afternoon, -14%, after beating Q3 earnings by a penny to 53 cents per share on $192.17 million in sales, slightly above the $192.03 million in the Zacks consensus. Next-quarter revenues guidance of between $166-186 million — notably below the $195.80 million our analysts were expecting — are the main cause for the Oregon-based chip designer’s slide at this hour. The company had carried a Zacks Ranks #3 (Hold) into the earnings report.
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