November 23, 2024

Stock futures rise Wednesday to start a new month of trading: Live updates

New Month #NewMonth

Stocks open lower to begin a new trading month

U.S. equities fell on Wednesday, the first day of March.

The Dow Jones Industrial Average dipped 64 points, or 0.2%. The S&P 500 fell 0.2%, and the Nasdaq Composite hovered under the flatline.

Wall Street analysts remain positive on Rivian after mixed earnings

The outlook for Rivian Automotive remains positive even after the electric vehicle startup reported mixed fourth-quarter earnings, and issued a lackluster production outlook, according to Wall Street analysts.

Rivian shares dropped more than 8% in premarket trading Wednesday after the firm posted a revenue miss in its latest quarter, according to consensus estimates from Refinitiv. It also reported a smaller-than-expected loss.

Meanwhile, Rivian’s 2023 vehicle production guidance of 50,000 vehicles was below the estimates of several Wall Street analysts.

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Rivian shares 1-day

Even so, analysts on Wall Street maintained a buy rating on the stock, according to consensus estimates on Refinitiv. Their average price target of $37.05 suggests Rivian shares can surge more than 90% from Tuesday’s close.

Still, for Goldman Sachs’ Mark Delaney, the results warranted a neutral rating for the stock, saying lower operating expenditures and strong demand offset the slower production figures. He has a 12-month price target of $18 on the stock. Rivian shares closed Tuesday at $19.30.

“While we continue to expect the company to have improved traction long-term, we would look for more visibility on an improved production ramp and timeline to profitability to be more positive on the stock and maintain our Neutral rating,” Delaney wrote to clients on Wednesday.

Meanwhile, Bank of America’s John Murphy maintained a buy rating on the stock, saying Rivian is “still in right place/time with right product/strategy.” He has a $50 price objective, implying shares could soar more than 150% from Tuesday’s close.

“[The] company is one of the most viable among the start-up EV automakers and also a relative competitive threat to incumbent OEMs (and possibly to other automotive-related verticals),” Murphy wrote Wednesday.

— Sarah Min

Futures turn negative as bond yields rise higher

U.S. equity futures fell into the red as bond yields continued to climb higher.

The benchmark 10-year Treasury yield was up by 3 basis points at 3.947%, after it climbed as high as 3.983% on Tuesday, reaching levels last seen in the first half of November.

The yield on the 2-year Treasury was last trading at 4.839% after rising by just over 4 basis points. The 1-year yield climbed more than 3 basis points to over 5%.

— Tanaya Macheel

Stocks making the biggest moves premarket

Here are the companies making headlines before the bell on Wednesday:

  • Rivian — Shares of the electric vehicle maker tumbled more than 9% after the company posted mixed fourth-quarter results and an underwhelming production outlook.
  • Sarepta Therapeutics — The biotech stock soared by 17% after Morgan Stanley upgraded Sarepta shares to overweight from equal weight.
  • Novavax — Shares dropped 25.4% in early morning trading after the vaccine developer said that “substantial doubt exists regarding our ability to operate as a going concern” through the next year. 
  • Click here to read more companies making moves before the open.

    — Pia Singh

    Kohl’s sinks after reporting fourth-quarter lossStock Chart IconStock chart icon

    Kohl’s fell after reporting fourth-quarter results

    Kohl’s reported a loss of $2.49 per share on $5.78 billion of revenue. Analysts surveyed by Refinitiv had expected positive earnings of 98 cents per share on $5.99 billion of revenue. CEO Tom Kingsbury said in a press release that sales were pressured by the “ongoing inflationary environment.”

    The company also said it expected sales to decline between 2% and 4% in 2023.

    — Jesse Pound

    Mortgage demand from homebuyers drops to a 28-year low

    Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up.

    Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.

    Mortgage rates have moved 50 basis points higher in just the past month. Last February, rates were in the 4% range.

    For more, read the full story here.

    — Diana Olick, Tanaya Macheel

    Morgan Stanley upgrades Sarepta

    Morgan Stanley said Sarepta Therapeutics could rally more than 50% on the approval of a key drug.

    “On SRPT’s 4Q earnings call, [management] highlighted recent commentary following the mid-cycle review of SRP-9001 suggesting that the FDA is comfortable with the surrogate endpoint and acknowledged no safety-related issues … The risk/benefit skews positive given the manageable safety profile,” Morgan Stanley said.

    — Hakyung Kim

    March market history

    March is typically a strong month for the market, according to The Stock Trader’s Almanac. The Dow Jones Industrial average and S&P 500 gained, on average, 0.9% and 1.1% respectively for the month, making it the fifth-best month for the U.S. stock market.

    It’s been quite a volatile month in recent years with the Dow dropping 13.7% in 2020 as Covid emerged and gaining 6.6% in 2021. Last year, the Dow gained 2.3% on the month.

    There tends to be late-month weakness that eats away at some of the month’s early gains, according to The Stock Trader’s Almanac, as investors take profits into the end of the first quarter.

    — John Melloy

    UBS upgrades Procter & Gamble

    Procter & Gamble could see big gains ahead, according to UBS.

    “P&G has been the worst performing stock across our [home and personal care] coverage universe YTD, which is partially due to the unwind in the group but also concerns around the ability for P&G to deliver outsized EPS  growth/positive  revisions  looking ahead,” UBS said in a note. “We view  concerns  on  the  latter  as misplaced and believe an earnings inflection is on the horizon looking out to FY24.”

    — Hakyung Kim

    China economic data helping to boost markets

    Strong data out of China boosted hopes the country’s economy was returning to growth after loosening up Covid lockdown rules. China’s official manufacturing purchasing managers’ index rose to 52.6 in February, a second-straight month of expansion and the fastest pace since April 2012.

    Hong Kong’s Hang Seng index soared more than 4% in response to the data and U.S. futures were boosted overnight.

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    Dow Jones futures – 1-day

    Rebecca Patterson is looking to defensives, T-bills for near-term market insurance

    Rebecca Patterson, known for her earlier leadership at Bridgewater, is preparing for a near-term market downturn.

    In order for the Federal Reserve to ease its interest rate-hiking campaign, Patterson said there needs to be a lot more economic weakness and inflation will likely need to be brought down to the Fed’s target level or below—both of those scenarios having “low probabilities.” 

    “I do think we’re looking at equity market downside later this year and I would be watching that interplay between the consumer, companies and the labor market, and, of course, the Fed and those borrowing costs,” Patterson, the former Chief Investment Strategist at Bridgewater Associates, said Tuesday on CNBC’s “Fast Money.”

    The strategist added that the consumer is growing cautious, which she said could bode poorly for companies–increasing the risk of layoffs and hit on earnings–if they start spending less. 

    For near-term insurance, Patterson said she is investing in the six-month U.S. Treasury bill and is starting to invest modestly in defensive stocks. She noted that six-month Treasury yields rose to 5.14% on Tuesday, reaching its highest return rate since 2007.

    Patterson published an op-ed on CNBC.com Tuesday about the three drivers she sees as potentially shaping the future of the U.S. economy.

    — Pia Singh

    How the major indexes performed in February

    Tuesday’s closed marked the end of February’s trading month. Here’s how the three major indexes performed in the month:

    That marks a turn from January’s rally as investors tried to shake off 2022’s downturn. February’s slide pushed the Dow below where it started the year, while the S&P 500 and Nasdaq Composite are still holding on to some of what each gained in January.

    — Alex Harring

    Stocks making the biggest moves after hours

    These are the stocks making the biggest moves after the bell:

  • First Solar — The solar stock gained 3.6%. The company reported a fourth-quarter loss of 7 cents per share compared with a 17 cent per-share loss forecasted by analysts, according to FactSet. Revenue came in line with expectations at $1 billion. The company issued full-year guidance that was ahead of expectations on per-share earnings and revenue.
  • AMC Entertainment – Shares of the meme-stock darling slipped less than 1%. The company posted a wider-than-expected loss of 26 cents per share for the fourth quarter, compared to the 21 cent per-share loss forecasted by analysts polled by Refinitiv. AMC also reported fourth-quarter revenue of $991 million, while analysts anticipated $978 million in revenue.
  • Novavax — The biotechnology company tumbled 24% after the company raised doubts about its ability to stay in business. The company lost $2.28 per share, much larger than the $1.01 per-share loss expected by analysts polled by FactSet. Revenue also came in below expectations at $357.4 million compared with $383.1 million anticipated.
  • See the full list here.

    — Alex Harring

    Stock futures open down

    The three major futures indexes opened in the red.

    Nasdaq 100 futures led the way down, dropping 0.3%. Futures tied to the S&P 500 and Dow slid 0.2% and 0.1%, respectively.

    — Alex Harring

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