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29/02/24 Briefing


U.S. stocks ended sharply lower on Wednesday as investors analyzed Q4 GDP data and awaited crucial inflation data that could impact the Federal Reserve's interest rate strategies. Investors also evaluated the recent Q4 releases. All three major indexes ended in negative territory.

The Dow Jones Industrial Average (DJI) fell 0.1%, or 23.39 points, to close at 38,949.02. Notably, 12 components of the 30-stock index ended in negative territory, while 18 were in green.The tech-heavy Nasdaq slid 0.6% or 87.56 points to finish at 15,947.74.The S&P 500 slipped 0.2% to end at 5,069.76. Four out of the 11 broad sectors of the benchmark ended in negative territory, while seven were in the positive zone. The Communication Services Select Sector SPDR (XLC), the Healthcare Select Sector SPDR (XLV) and the Technology Select Sector SPDR (XLK) gained 0.7%, 0.5% and 0.5%, respectively. The Real Estate Select Sector SPDR (XLRE) advanced 1.3%.The fear gauge CBOE Volatility Index (VIX) increased 3.1% to 13.84. Decliners outnumbered advancers on the NYSE by a 1.21-to-1 ratio. On the Nasdaq, a 1.72-to-1 ratio favored declining issues. The S&P 500 posted 67 new 52-week highs and one new low, and the Nasdaq Composite recorded 173 new highs and 95 new lows.

Q4 GDP Release

Investors have assessed the latest update from the Bureau of Economic Analysis. There has been a revision in the GDP growth rate for the fourth quarter of 2023, indicating an expansion of 3.2%. Although this growth is positive, it falls short of the initially reported 3.3% and lags 4.9% growth seen in the third quarter.Investors are eagerly anticipating Thursday's release of the personal consumption expenditures (PCE) data, which is a measure of inflation preferred by the Federal Reserve. This forthcoming report on inflation holds importance as policymakers at banks consider potential adjustments to interest rates this year.Based on data from the CME FedWatch tool, market indicators now suggest a 100% probability that the Federal Reserve will maintain its current interest rates at its upcoming March policy meeting. This marks a shift from one month ago when there was only a 52% chance of interest rates remaining unchanged.

Solid Q4 Earnings

NRG Energy, Inc. NRG reported fourth-quarter 2023 adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of $0.09 per share. The power company generated total revenues of $6.81 billion, missing the Zacks Consensus Estimate of $7.76 billion.First Solar, Inc. FSLR reported fourth-quarter 2023 adjusted earnings of $3.25 per share, beating the Zacks Consensus Estimate of $3.19 per share. The solar company generated total revenues of $1.16 billion, missing the Zacks Consensus Estimate of $1.31 billion.The ODP Corporation ODP reported fourth-quarter 2023 adjusted earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.76 per share. The office supply retailer generated total revenues of $1.81 billion, missing the Zacks Consensus Estimate of $1.84 billion.Consequently, shares of NRG Energy, First Solar and The ODP Corporation rose 1.2%, 2.9% and 3.7%, respectively. Each of these companies carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

For the week ended Feb 23, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.2 million barrels from the previous week.

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