Market Review: February 22, 2024

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Closing Recap

Thursday, February 22, 2024





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U.S. stocks soared on the open, especially technology related stocks after the earnings beat/raise results from “AI” poster child and semiconductor chip giant Nvidia (NVDA) overnight, and extended gains throughout the day hitting new all-time highs for the S&P 500 Index and Dow Jones Industrial Average. Record highs also occurred in Europe with the Stoxx 600 as well as Japan’s Nikkei 225 topping 39K in a global stock market rally. Yesterday, stock markets were weaker (for a few hours at least) after minutes of the Jan. 30-31 FOMC meeting showed participants were mostly united about delaying rate cuts — though there’s no hint any rate hike is on the table. WSJ’s Nick Timiraos tweeted yesterday that “Minutes show unease over premature cuts; only 2 officials pointed to the risks associated with maintaining an overly restrictive stance for too long; most participants noted the risks of moving too quickly to ease the stance of policy.” But the fear of less-than-expected rate cuts has been far overshadowed by the FOMO in tech related stocks, with investors chasing stocks all day, especially in technology sector as the Nasdaq 100 rose 3%, and the Nasdaq topped 16,000, ending near highs.


Trader sentiment has turned bullish according to the latest Charles Schwab Trader Sentiment Survey, a quarterly study that explores the outlooks, expectations, and perspectives of traders at Charles Schwab. More than half of respondents (53%) report a bullish outlook on the U.S. stock market — the highest level since the survey began in 2021 and a significant increase from the 32% who were bullish in the fourth quarter of last year. Additionally, 49% of traders believe it’s a good time to invest in equities, up from 41% last quarter. Traders’ outlook for the economy has also become more optimistic. Nearly half (48%) of traders think the U.S. will likely avoid a recession in 2024, up from 23% last quarter.


In a story that was important but went under the radar given the NVDA results. U.S. cyber watchdog agency CISA says it is working with AT&T to understand the cause of outage that disrupted calls and text messages as well as emergency services in major cities on Thursday. Eric Goldstein, CISA’s executive assistant director for cybersecurity, said that the agency "is aware of the reports and we are working closely with AT&T to understand the cause of the outage and its impacts, and stand ready to offer any assistance needed." (fears of cyber security attack).


So How big has NVDA become? Chipmaker Nvidia’s latest jump in share price now gives it a market capitalization that now surpasses the size of the Canadian economy. Seasonally adjusted real GDP for Canada, a Group of Seven economy, was C$2.349 trillion, or the equivalent of $1.74 trillion, as of 3Q. Data for 4Q data is scheduled for release next week. In Thursday morning trading, Nvidia’s market capitalization rose $238 billion to $1.925 trillion (only behind AAPL and MSFT).

Economic Data

  • Weekly Jobless Claims fell to 201K in latest week from 213K prior and consensus 218K; the 4-week moving average fell to 215,250 Feb 17 week from 218,750 prior week; continued claims fell to 1.862M from 1.889M prior week and the US insured unemployment rate fell to 1.2% from 1.3% prior week.
  • S&P Global February flash composite PMI at 51.4 (vs 52.0 in January); U.S. S&P Global February flash services PMI at 51.3 (vs 52.5 in January) and S&P Global February flash manufacturing PMI at 51.5, 17-month high (vs 50.7 in January).
  • Jan Existing Home Sales rose 3.1% to 4.00M unit rate above consensus 3.97M and vs Dec 3.88M (prev 3.78M); Jan inventory of homes for sale 1.01M units, 3.0 months’ worth and the national median home price for existing homes $379,100, +5.1% from Jan 2023.

Commodities, Currencies & Treasuries

  • U.S. crude oil futures settle at $78.61/bbl, up 70 cents, 0.90% while Brent crude futures settle at $83.67/bbl, up 64 cents, 0.77%.  Gold prices fell -$3.60 to settle at $2,030.70 an ounce despite a small dip in the dollar index and Treasury yields. Economic data had a small impact early on the dollar/yields, but in the end just all about tech stocks. Treasury yields hold near 12-week highs, hitting 4.35% before paring gains.





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10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Consumer Products: COTY was upgraded to Outperform at TD Cowen and raise tgt to $16 from $13 as expects continued momentum in fragrance (~55% mix), innovation in Consumer Beauty & global growth including China/Brazil.
  • In Online retail: ETSY reported 4Q results that beat expectations on the top- and bottom-lines, but a subdued forward outlook following a soft January and incremental advertising/platform investments led to a disappointing outlook (noted January GMS was down ~mid-single-digits, but trends are expected to improve); Wayfair (W) shares rose as reported a narrower quarterly loss and a rise in active customers.
  • In Food & Beverages: KDP mixed Q4 as EPS beat by a penny, but sales of $3.87B missed the $3.91B estimate saying higher prices hurt demand for soda, impacting volume sales.
  • Restaurants: BROS Q4 EPS beats comp store sales growth well above expectations (Q4 EPS $0.04 above consensus of $0.02 on system SSS growth of 5.0% and company owned SSS growth of 4.6% vs. est. 2.5% and 1.4%, respectively); CAKE Q4 EPS of $0.80 was above $0.73 consensus and comp sales growth of 2.5% at The Cheesecake Factory versus 2.1% consensus and its 2.5% estimate, unit-level margin of 15.1% was above consensus of 14.8% and Q4’s menu pricing was 7.3%; JACK maintained all aspects of its full-year ’24 financial guidance (i.e. EPS of $6.25–6.50), despite softer SSS trends in 1Q23 and 2Q-to-date; Bernstein downgraded WEN from Outperform to Market-Perform based on its lowered expectations on same-store sales and unit growth, as well as a lack of clear catalysts for multiple expansion in the near term (note JP Morgan downgraded earlier this week as well).

Leisure, Gaming & Lodging:

  • In Cruise Lines: RCL boosted its FY24 adjusted EPS view to $9.90-$10.10 from $9.50-$9.70 (est. $9.77) – less than three weeks since they issued their previous guidance along with their Q4 earnings (CCL NCLH rise in sympathy).
  • In Electric vehicles: RIVN shares fall after reported an in-line DecQ top line at $1.32B and delivered ~14k vehicles versus 17.5k produced but announced that it predicts vehicle deliveries in Q1 2024 to be about 10%-15% lower than in Q4 2023 and that it is laying off 10% of its salaried workers. LCID introduced FY24 Annual Production Guidance of ~9,000 vehicles, which was significantly below consensus of ~23,000 vehicles and delivered 6,001 vehicles in FY23, while Q4 revs fell -39% y/y to $157M missing the $180M estimate.
  • In Food Delivery/Ride hailing: DASH upgraded from Equal Weight to Overweight at Morgan Stanley and raise tgt to $145 and a $175 Bull Case as sees leading growth and profit execution driving better than expected FCF. DASH’s core restaurant/grocery growth runway remains long, addressing ~ $2.6trn of offline spend.
  • In Casinos/Gaming: CHDN reported stronger than expected 4Q rev/EBITDA of $561m/$219m or +3.3%/+5.8% higher than consensus estimates where ~75% of the beat was from its ‘core’ HRM segment according to Susquehanna. BALY reported EBITDA of ~$161M, beating expectations of $154M by 5% and while revenue missed across its three segments (-2% overall vs. consensus), posted impressive margin control as per JMP Securities.


  • In Energy sector: earnings from APA which showed moderating capex/oil growth in current macro, SM sticks with mid-single digit oil growth for 2024, VTLE posts with good inventory update and MRO which reported a miss on 4Q23 EBITDAX/FCF (~4%/17% below Street) despite in-line volumes driven by higher opex and little capex surprises.
  • In Solar: RUN Q4 installs came in below estimates and guidance mid-point, but net subscriber value $13,445/customer grew better than expectations; Storage demand remains robust, with RUN guiding to ~+60% y/y growth in 2024 in MwH installed, led by >80% attach rates in California. NOVA tumbles after reporting Q4 EPS reported ($1.53) vs est. ($0.18) on revs $194.182Mm vs est. $223.4Mm


  • In Banks/Brokers: RILY shares jumped after the company said an internal review had found that it was not involved with, or knowledge of any of the alleged misconduct concerning Prophecy Asset Management.
  • In Insurance: GHSD shares fell as operating EPS of $0.28 missed consensus of $0.33, driven lower by lower-than-expected renewal royalty fees, lower renewal commission for the corporate channel and worse agency fees.

Biotech & Pharma:

  • AMLX shares rose after sales of its ALS drug, Relyvrio, beat expectations ($108.4M vs. ests as high as $106M) and compared to $21.9M a year ago; said results from a closely followed Phase 3 study of its treatment for ALS could come before the start of the second quarter — earlier than previously expected.
  • ARCT said it got orphan medicinal product designation from European Commission for ARCT-032 and remains on track to share interim phase 1b data in H1 2024.
  • BPMC said RIGL agreed to buy the U.S. rights to the lung-cancer drug Gavreto for an initial purchase price of $15M while Blueprint is also eligible to receive up to $97.5 million in commercial milestone payments and up to $5 million in regulatory milestone payments.
  • GILD was downgraded from Buy to Hold at Truist w/ $82 tgt as views GILD/RCUS re-strategizing to focus on chemo combos in lung and other large markets as smart, nimble, and cost-efficient, but recognize it will take time.
  • IMCR announces clinical trial collaboration and supply agreement with BMY to evaluate IMC-F106C (PRAME HLA-A02) in combination with nivolumab in its registrational Phase 3 first-line advanced cutaneous melanoma trial.
  • MRNA ported a surprise Q4 profit and sales ahead of expectations with EPS of $0.55 above the loss est. (-$0.99) on sales 42.81B vs. est. $2.5B; reiterated its previously guided outlook for $4B in sales across 2024.
  • NVAX said it has agreed to pay back international vaccine group Gavi at least $475M in cash or vaccines by the end of 2028, settling a dispute.
  • OCUL announced a shakeup of its senior management team and a $325 million private placement.

Materials, Metals & Mining

  • In Metals & Mining: NEM shares fall in gold miners after Q4 results missed, the co said intends to divest six non-core assets and reduced its quarterly dividend to 25 cents a share from 40 cents a share.
  • In Agriculture chemicals: NTR reported adj. Q4 EPS of $0.37 missing $0.68 consensus and adj EBITDA of $1.1B was below est. $1.12b, primarily on lower Nitrogen and Phosphate results and discontinued providing full-year EBITDA guidance for wholesale segments. MOSQ4 EPS of $0.71 missed $0.86 consensus while EBITDA of $646M was modestly above our consensus of $596M as stronger Potash and Corporate offset lower Phosphate and Fertilizantes results.


  • In Semis: all about NVDA, handily exceeding estimates as upside was driven by accelerator and networking revenue gain as reported strong JanQ at $22.1B and guided AprQ better to $24B (cons. $21.4B). Some key takeaways included AprQ DC estimated up ~12% q/q with G/H200 ramps but China rev remaining soft, Gaming seasonally down but new RTX/GenAI could offset, and gross margins guided to 77% with F25E at mid-70s. SMCI announced a proposed offering of $1.5B of Convertible Senior Notes due 2029, following pop in shares. AMD, ARM, AVGO, SMCI, and other chip names surged on NVDA results as the SOX index touched fresh all-time highs above 4,660.
  • In Telecom: Mobile users in the US reported increased trouble connecting starting in the early hours of Thursday morning, according to service-tracking website Downdetector. AT&T (T), VZ and TMUS were among carriers where Downdetector reported a spike in complaints beginning at about 3:30 a.m. New York time.
  • In PC Sector: Lenovo (LNVGY) reported stronger-than-expected earnings, with revenue returning to growth after five quarters of declines; Oct-Dec revs rose 3% from the same period a year prior to $15.72B above ests $15.25B; profit dropped 23% to $337M, but topped views.
  • In EDA sector: SNPS traded to all-time highs after it forecast Q2 revenue $1.56B-$1.59B above consensus $1.55B and better profit saying they anticipate a surge in demand for its software to design complex and artificial intelligence-compatible chips (shares of rival CDNS moved high in sympathy).


  • NVDA handily exceeding estimates as upside was driven by accelerator and networking revenue gain as reported strong JanQ at $22.1B and guided AprQ better to $24B (cons. $21.4B). Some key takeaways included AprQ DC estimated up ~12% q/q with G/H200 ramps but China rev remaining soft, Gaming seasonally down but new RTX/GenAI could offset, and gross margins guided to 77% with F25E at mid-70s.
  • SMCI announced a proposed offering of $1.5B of Convertible Senior Notes due 2029, following pop in shares. SMCI shares hit late day high above +35% topping $1,000 (after hit lows of $692.50 just 2 days ago; after hitting $1,077.87 record highs the day prior on 2/16) – market volatility incredible in the AI chip space.
  • AMD, ARM, AVGO, SMCI, and other chip names surged on NVDA results as the SOX index touched fresh all-time highs.


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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