Daily Markets: Will Data Dependency Dampen AI Euphoria?

Federal Reserve - Shutterstock photo
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Today’s Big Picture

Asia-Pacific equity markets finished the day lower, except for South Korea’s KOSPI, which gained 1.04% in a mixed day led by Industrial Services and Energy Mineral names. Japan’s Nikkei and Australia’s ASX All Ordinaries both came close to flat, down 0.08% and 0.06%, respectively, while India’s SENSEX fell 1.06%. China’s markets resumed their slump as the Shanghai Composite declined 1.91% and Hong Kong’s Hang Seng closed 1.51% lower. Taiwan’s markets are closed as the country observes Peace Memorial Day, otherwise known as 228 Memorial Day, which commemorates a 1947 anti-government uprising that was swiftly and brutally quashed by authorities. European markets are mixed in midday trading and U.S. equity futures are pointing to a lower open.

Coming off last week’s market strength, investors are taking a more cautious tone ahead of tomorrow’s January PCE Price Index data and Friday’s February Manufacturing PMI reports. The growing concern is the data will reinforce a slow path to the Fed’s 2% inflation target even though the economy continues to grow above trend. As that data is digested, the market will start contemplating potential revisions to the Fed’s Economic Projections, which in December called for GDP of 1.4% in 2024 with core PCE Inflation at 2.4%. Recent data suggests the Fed will need to revise that GDP forecast higher and potentially do the same for its core PCE inflation figure as well. Should tomorrow and Friday’s data reinforce that thought, it stands to reason market expectations for the start of rate cuts may slip further. Per the CME FedWatch Tool, the current thinking is the first rate cut will be in June, but we would point out that thinking is only by a modest margin.

Data Download

International Economy

The economic sentiment indicator in the Euro Area declined to 95.4 in February, down from January's revised figure of 96.1 and falling short of market expectations of 96.7. Sentiment remained subdued as businesses grappled with still-high inflation, rising borrowing costs, and weak external demand. The consumer confidence indicator in the Euro Area rose by 0.6 points from the previous month to -15.5 in February, in line with preliminary estimates. The consumer inflation expectations index in the Euro Area increased by 3.5 points to 15.5 in February, the highest level since March 2023.

Domestic Economy

In addition to the usual Wednesday weekly data that includes the latest figures for the MBA Mortgage Applications Index and crude oil inventory figures, today brings the second look at 4Q 2023 GDP. Compared to the original +4.9% YoY estimate, the market expects this second look to come in at +3.3% YoY. While this is a slower pace compared to the original figure, it is still a quicker pace compared to 1H 2023.


Energy (-0.43%) and Healthcare (-0.24%) were the only sectors that declined yesterday but aside from Communication Services (0.81%) and Utilities (1.89%) the remaining sectors managed returns between 0.01% (Consumer Staples) and 0.37% (Materials). Declines in UnitedHealth Group (UNH) and Amgen (AMGN) helped push the Dow lower as it fell 0.25%. The S&P 500 gained 0.15%, the Nasdaq Composite added 0.37% and the Russell 2000 had a relatively strong day, up 1.34%. Helping drive the Utilities sector was the 16.92% return produced by shares of Constellation Energy (CEG) after the company crushed earnings and went on to provide strong guidance as well as a 25% dividend increase.

Here’s how the major market indicators stack up year-to-date:

  • Dow Jones Industrial Average: 3.40%
  • S&P 500: 6.46%
  • Nasdaq Composite: 6.82%
  • Russell 2000: 1.43%
  • Bitcoin (BTC-USD): 35.76%
  • Ether (ETH-USD): 41.16%

Stocks to Watch

Advance Auto (AAP), Baidu (BIDU), Clear Secure (YOU), Dycom (DY), Integra (IART), Patterson Companies (PDCO), Payoneer (PAYO), Squarespace (SQSP), Stericycle (SRCL), Steve Madden (SHOO), TJX Companies (TJX), and Warby Parker (WRBY) are expected to release quarterly earnings before equities begin trading later this morning.

Pre-market breadth is healthy today as 263 names in the S&P 500 have traded hands so far this morning with 61 gainers and 202 decliners. While there are considerably more names trending lower, there doesn’t seem to be any major blowups this morning, evidenced by the roughly 2% indicated drop in Applied Materials (AMAT), KeyCorp (KEY), and Align Technology (ALGN) which are leading that group. Names catching a bid this morning include Universal Health Services (UHS), First Solar (FSLR), and eBay (EBAY), which are on track to open 7%, 6%, and 4% higher.

Apple (AAPL) will wind down its team working on electric cars, ending its effort to challenge Tesla (TSLA) and others. The company has other automotive-related projects, including its infotainment CarPlay software, which Apple says is installed on 80% of new vehicles. With that off the table, Apple can concentrate on applying AI to its current products, including the iPhone and iPad, and avoid falling behind its tech peers.

Workers at unionized Starbucks (SBUX) cafes will receive the pay hikes that their nonunion coworkers first collected in May 2022. The wage increases are a sign of good faith from Starbucks toward Workers United, an affiliate of the Service Employees International Union that has organized more than 300 company-owned Starbucks locations.

December quarter revenue at Beyond Meat (BYND) surpassed expectations, and the company guided 2024 revenue to $315-$345 million compared to the $344.43 million consensus. What caught investor attention was the company’s gross margin guidance for the coming year, which is expected to be in the mid to high teens range for 2024 with the second half of the year higher compared to the first half. As part of that outlook, Beyond Meat also announced plans to increase product prices and "steeply reduce" costs this year.

Agilent Technologies (A) delivered a better-than-expected earnings report last night but its revenue outlook for the current quarter of $1.56-$1.59 billion fell short of the $1.62 billion consensus. However, the company maintained its FY2024 revenue outlook of $6.71 to $6.81 billion, which bookends the $6.77 billion consensus.

Shares of Lemonade (LMND) were hard hit in aftermarket trading last night after the insurance company issued downside guidance for the current quarter and 2024 while doubling its growth budget. For 2024 the company sees revenue reaching $505-4510 million with adjusted EBITA in the range of -$160 to -$155 million.

For its December quarter, Bumble (BMBL) reported mixed results even though total paying customers reached 4.0 million in the quarter, up 16.4% YoY. Total Average Revenue per Paying User, however, fell to $22.64 from $23.01. For the current quarter, Bumble’s revenue growth forecast points to $1.136-$1.168 billion compared to the $1.19 billion consensus. Alongside the quarter’s results, the company announced to reduce its global workforce “by approximately 350 roles to better align its operating model with future strategic priorities and to drive stronger operating leverage.”


Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

AMC Entertainment (AMC), (AI), DoubleVerify (DV), Duolingo (DUOL), HP (HPQ), Monster Beverage (MNST), Nutanix (NTNX), Okta (OKTA), Salesforce (CRM), Snowflake (SNOW), and WW (WW) are expected to report quarterly results after equities stop trading today. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Thursday, February 29

  • Japan: Retail Sales, Housing Starts – January
  • Germany: Retail Sales, Inflation Rate – January
  • UK: Bank of England Consumer Credit - January
  • US: Weekly Initial & Continuing Jobless Claims
  • US: Personal Income & Spending, PCE Price Index – January
  • US: Pending Home Sales – January
  • US: Weekly EIA Natural Gas Inventories

Friday, Mach 1

  • Japan: Jibun Bank Manufacturing PMI (Final) - January
  • China NBS Manufacturing & Non-Manufacturing PMI - February
  • China: Caixin Manufacturing PMI – January
  • Eurozone: HCOB Manufacturing PMI (Final) – February
  • UK: S&P Global Manufacturing PMI (Final) - February
  • US: S&P Global Manufacturing PMI (Final) – February
  • US: ISM Manufacturing Index – February

Thought for the Day

“It never ceases to amaze me: we all love ourselves more than other people, but care more about their opinion than our own.” – Marcus Aurelius


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

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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