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Market indices couldn’t hold onto their gains established in early morning trading to start the new week, after a three-day Easter holiday weekend that maybe gave some market participants time to re-think the broadening out of this rally we’ve seen since late October of last year. Sometimes a pause refreshes, but sometimes a pause gives us time to reason out current valuations across a wide spectrum of industries in a rally that has seen the Nasdaq and S&P 500 go up by double digits from the start of the year.
The blue-chip Dow index closed down -240 points, -0.61%, while the S&P pulled back further from its record high reached just last week, -0.20% for today’s session. The Nasdaq actually managed to close in the green, albeit moderately, +0.11%, while the small-cap Russell 2000 — which had been doing a strong job of catching up to its larger-cap index brethren of late — dropped a full percentage point in today’s normal trading.
Trading activity has been quite typical considering our current stage in the rally: we’ve seen some rebalancing into bonds, where yields have continued to creep back up. The 10-year yield is back to +4.32% while the 2-year, still inverted and climbing back to its two-week high, is +4.76%. We haven’t seen a full -2% pullback in the markets, which would also be fairly typical considering the broad run-up (the S&P just completed its best quarter in 5 years), but a softer start to a new quarter feels rather sane.
Even though we won’t see Q1 earnings season really take off for another week and a half, we did get earnings results from PVH (PVH - Free Report) after the close today, and results were not met well by traders active in the after market: -15% following beats on both top and bottom lines. Earnings of $3.72 per share on $2.49 billion in quarterly sales outpaced the $3.51 per share and $2.41 billion in the Zacks consensus. Even full-year earnings estimates saw their top range increase from $10.48 to $11.00 per share.
However, PVH missed revenue estimates for the full year, now expecting to fall between -6% and -7%, whereas analysts had projected -1%. For another thing, PVH — the parent company of Tommy Hilfiger, Calvin Klein and more — had seen stock gains of +57% over the past year. We may have seen a “sell the news” event for PVH this afternoon regardless, but the fact that revenues for the full year appear weaker than originally thought is taking its toll on shares currently. Questions or comments about this article and/or author? Click here>>
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Markets Pull Back to Start a Fresh Quarter
Monday, April 1st, 2024
Market indices couldn’t hold onto their gains established in early morning trading to start the new week, after a three-day Easter holiday weekend that maybe gave some market participants time to re-think the broadening out of this rally we’ve seen since late October of last year. Sometimes a pause refreshes, but sometimes a pause gives us time to reason out current valuations across a wide spectrum of industries in a rally that has seen the Nasdaq and S&P 500 go up by double digits from the start of the year.
The blue-chip Dow index closed down -240 points, -0.61%, while the S&P pulled back further from its record high reached just last week, -0.20% for today’s session. The Nasdaq actually managed to close in the green, albeit moderately, +0.11%, while the small-cap Russell 2000 — which had been doing a strong job of catching up to its larger-cap index brethren of late — dropped a full percentage point in today’s normal trading.
Trading activity has been quite typical considering our current stage in the rally: we’ve seen some rebalancing into bonds, where yields have continued to creep back up. The 10-year yield is back to +4.32% while the 2-year, still inverted and climbing back to its two-week high, is +4.76%. We haven’t seen a full -2% pullback in the markets, which would also be fairly typical considering the broad run-up (the S&P just completed its best quarter in 5 years), but a softer start to a new quarter feels rather sane.
Even though we won’t see Q1 earnings season really take off for another week and a half, we did get earnings results from PVH (PVH - Free Report) after the close today, and results were not met well by traders active in the after market: -15% following beats on both top and bottom lines. Earnings of $3.72 per share on $2.49 billion in quarterly sales outpaced the $3.51 per share and $2.41 billion in the Zacks consensus. Even full-year earnings estimates saw their top range increase from $10.48 to $11.00 per share.
However, PVH missed revenue estimates for the full year, now expecting to fall between -6% and -7%, whereas analysts had projected -1%. For another thing, PVH — the parent company of Tommy Hilfiger, Calvin Klein and more — had seen stock gains of +57% over the past year. We may have seen a “sell the news” event for PVH this afternoon regardless, but the fact that revenues for the full year appear weaker than originally thought is taking its toll on shares currently.
Questions or comments about this article and/or author? Click here>>