Daily Markets: Stocks Seek Relief, But Geopolitical Unknowns Remain

The big picture today

Asian markets closed today’s trade mixed, with India’s Sensex down 0.12% while South Korea’s KOSPI gained 0.47%, Taiwan’s TAIEX closed up 0. 48% and Hong Kong’s Hang Seng and China’s Shanghai Composite closed ahead 0.60% and 0.93% on the day. Japanese markets are closed today to celebrate the Emperor’s birthday. By midday, European stock indices are up across the board and US futures are pointing to a positive market open later this morning.

After the last few days in which Russian President Vladimir Putin sent troops into breakaway regions of Ukraine, resulting in a ‘first tranche’ of sanctions from the US, UK and the EU, stock markets seem to have reacted with relief and are now waiting to see what the next step will be. To potentially complicate matters, the meeting scheduled for this week between US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov in Geneva has been canceled. French Foreign Minister Jean-Yves Le Drian also announced that his meeting with Lavrov, scheduled for Friday, would no longer take place. This morning Ukrainian authorities declared a nationwide state of emergency even as Putin said Moscow was ready for dialogue. Adding to the geopolitical tension, China has voiced its opposition to sanctions against Russia and criticized the United States for inflaming the Ukraine crisis. Our advice is to buckle up, despite what appears to be a global relief rally today, given the uncertain path of what lies ahead, chances are we haven’t seen the latest volatility yet. of the market.

Data download

International economy

The European Central Bank reported an annual January CPI for the eurozone of 5.1%, both meeting expectations and matching the previously released figure. Energy, services, food, alcohol and tobacco, and non-energy related industrial goods continue to drive the continued rise in inflation in the region. Given yesterday’s sanctions against Russia, which included halting the certification process for the Nord Stream 2 natural gas supply line, we expect energy prices to continue to drive short-term inflation.

Domestical economy

We have an extremely light US economic calendar today, with the only report being the weekly MBA Mortgage Demand Index. Yesterday’s manufacturing PMI (57.5) and services PMI (56.7) both exceeded estimates and topped previously reported figures, a sign that even though covid is still with us, authorities are, for the most part, removed from the economically crippling response of the past two years.

Markets

Following the announcement of Russia’s decision to recognize the independence of the Ukrainian regions of Donetsk and Luhansk and to send “peacekeeping” troops to the oblasts, the United States, the United Kingdom and the EU announced sanctions against Russia, and Germany halted the approval process for the Nord Stream 2 gas pipeline. From Russia. Heightened geopolitical tensions led the S&P 500 to fall 1% yesterday, the Nasdaq Composite lost 1.2%, the Dow Jones Industrial Average fell 1.4% and the Russell 2000 closed down 1, 5%. Following the 9% drop Home Depot stocks after the company released its latest quarterly results and issued a cautious outlook for 2022, the consumer discretionary sector was the worst performer of the day.

As we walk through the remaining trading days in February, here’s how the major market indicators compare on a year-over-year basis.

  • Dow Jones Industrial Average: -7.5%
  • S&P 500: -9.7%
  • Russell 2000: -11.8%
  • Nasdaq compound: -14.5%
  • Bitcoin (USD-BTC): -17.2%
  • Ethereum (ETH-USD): -28.2%

Stocks to Watch

Prior to the start of trading, Bausch Health (BHC), EVO Payments (EVOP), Jack in the Box (JACK), Lowe’s (LOW), Molson Coors Brewing (TAP), Monday.com (MNDY), Overstock.com (OSTK ), Physicians Realty Trust (DOC), TJX Companies (TJX), Tupperware (TUP) and Wolverine Worldwide (WWW) will be among the companies to release their latest quarterly results.

Cybersecurity actions Palo Alto Networks (PANW) surged in spare parts trading last night after January quarter results beat revenue and EPS expectations. Billings for the period increased 32% year-on-year to $1.6 billion, with remaining performance obligations increasing 36% year-on-year to $6.3 billion. For the current quarter, the company expects revenue between $1.345 billion and $1.365 billion, with billings between $1.59 billion and $1.61 billion.

Teladoc (TDOC) reported a lower-than-expected profit loss for its December quarter, while revenue for the period rose 44.6% year-on-year to $554.2 million versus consensus of $546.5 million dollars. Average revenue per paid member in the US increased to $2.49 in the quarter from $1.63 in 4Q 2020 and $2.40 in 3Q 2021. However, the company issued a lower guidance for 2022 with EPS of ($1.60)-($1.40) vs ($1.62) consensus with revenue in the range of $2.55-2.65 billion vs. consensus of $2.57 billion. For 2022, the company forecasts total visits between 18.5 and 20.0 million with $4.3 to $4.5 million in the current quarter, compared to $4.4 million in Q4 2021.

Reports suggest Activision (ATVI) may delay a Call of Duty game that had been slated for next year, the first time the franchise will be without an annual mainline release in nearly two decades.

Cerner (CERN) reported mixed results for the December quarter with EPS beating consensus forecasts, but even after a 4.1% year-over-year increase to $1.45 billion, revenue for the quarter was below consensus of $1.49 billion. January 19, Oracle (ORCL) launched a cash tender offer to acquire all of the issued and outstanding shares of CERN.

This week AT&T (T) is expected to shut down its 3G networks as part of its spectrum reallocation plan for 4G and 5G networks. T-Mobile (TMUS) should do the same in the third quarter and Verizon (VZ) will do so by the end of the year.

IPOs

No IPO offerings are scheduled for this week. Readers interested in learning more about the timing of upcoming IPOs should visit Nasdaq’s Most Recent and Upcoming IPOs page.

After today’s market close

Akami (AKAM), Allbirds (BIRD), Bandwidth (BAND), Booking Holdings (BKNG), eBay (EBAY), fuboTV (FUBO), IMAX (IMAX), Insulet (PODD), NetApp (NTAP), The RealReal ( REAL) and Universal Display (OLED) will be among the companies releasing their latest quarterly results. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

Thursday February 24

  • United States: GDP for the 4th quarter of 2021 – Second estimate
  • United States: Chicago Fed National Activity Index – January
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: sales of new homes – January
  • United States: EIA Weekly Natural Gas Inventories
  • United States: EIA Weekly Crude Oil Inventories

Friday February 25

  • Japan: Tokyo CPI – February
  • Germany: 4Q 2021 GDP
  • Germany: Import Price Index – January
  • France: IPP – January
  • Euro zone: Survey on the business climate, enterprises and consumers – February
  • United States: Sustainable orders – January
  • United States: personal income and expenditure – January
  • United States: PCE price index – January
  • United States: pending home sales – January
  • United States: University of Michigan consumer sentiment index (final) – February

Thought of the day

“A big fire burns inside me, but no one stops to warm up, and passers-by see only a wisp of smoke.” ~Van Gogh

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Larry Noble

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