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18/01/24 Briefing


Wall Street ended higher on Thursday as robust job data encouraged investors to reassess their expectations for a March interest rate cut by the Federal Reserve. The upbeat sentiment was further buoyed by encouraging fourth-quarter 2023 earnings results. All three major stock indexes ended in positive territory.

The Dow Jones Industrial Average (DJI) rose 0.5%, or 201.94 points, to close at 37,468.61. Notably, 24 components of the 30-stock index ended in positive territory, while six were in red.The tech-heavy Nasdaq Composite finished at 15,055.65, rising 1.4%.

The S&P 500 gained 0.9% to end at 4,780.94. Six out of 11 broad sectors of the benchmark ended in positive territory, while five were in the negative zone. The Technology Select Sector SPDR (XLK), the Industrials Select Sector SPDR (XLI) and the Communication Services Select Sector SPDR (XLC) gained 2%, 1.4% and 1.2%, respectively, while the Real Estate Select Sector SPDR (XLRE) declined 0.7%.

The fear-gauge CBOE Volatility Index (VIX) decreased 4.5% to 14.1. A total of 11.8 billion shares were traded on Thursday, higher than the last 20-session average of 11.5 billion. The S&P 500 posted 30 new 52-week highs and seven new lows, and the Nasdaq Composite recorded 56 new highs and 180 new lows.

Jobless Claims Hit September 2022 Low

The Labor Department said on Thursday that initial jobless claims fell to 187,000, decreasing 16,000 for the week ending Jan 13. This is the lowest level for initial claims since Sep 24, 2022. The previous week's level was revised up by 1,000 from 202,000 to 203,000. The four-week moving average decreased to 203,250, marking a fall of 4,750 from the previous week. The prior week's average was revised up by 250 to 208,000.

Continuing claims came in at 1,806,000 for the week ending Jan 6, decreasing 26,000 from the previous week’s revised level. The prior week's numbers were revised down by 2,000 from 1,834,000 to 1,832,000. The four-week moving average was 1,848,000, a decrease of 13,750 from the previous week's revised average. Last week's average was revised down by 500 from 1,862,250 to 1,861,750.

This unexpected improvement data has portrayed a positive economic outlook, which could potentially impact the Federal Reserve’s decision on whether to reduce interest rates in March. The CME FedWatch Tool indicates a 55.7% probability, down from 70% in the previous week, that the central bank will implement a rate cut at its March meeting.

Strong Q4 Earnings

Fastenal Company FAST reported fourth-quarter fiscal 2023 adjusted earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.45 per share. The maker of industrial and construction fasteners generated total revenues of $1.76 billion, outpacing the Zacks Consensus Estimate of $1.75 billion.

M&T Bank Corporation MTB reported fourth-quarter fiscal 2023 adjusted earnings of $2.81 per share, missing the Zacks Consensus Estimate of $3.67 per share. The bank retailer generated total revenues of $2.3 billion, beating the Zacks Consensus Estimate of $2.27 billion.

First Horizon Corporation FHN reported fourth-quarter fiscal 2023 adjusted earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.31 per share. The bank retailer generated total revenues of $800 million, outpacing the Zacks Consensus Estimate of $784.2 million.

Consequently, shares of Fastenal, M&T Bank and First Horizon rose 7.2%, 1.5% and 5.1%, respectively. First Horizon carries a Zacks Rank #2 (Buy).

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