Traders work on the floor of the New York Stock Exchange (NYSE) on January 29, 2024 in New York City.
The S&P 500 closed at a new record high, as all three major indexes ended Thursday's trading session in positive territory, after clawing back the steep losses suffered earlier in the week. This marks the 11th record high that the 500-stock benchmark has cinched so far this year.
The broad stock index climbed 0.58%, settling at 5,029.73, while the Nasdaq Composite added 0.30% to close at 15,906.17. The Dow Jones Industrial Average traded 348.85 points higher, or 0.91%, to end at 38,773.12.
Tesla and Meta Platforms outperformed, rising 6% and 2%, respectively. Shares of Wells Fargo rose 7% after the Office of the Comptroller of the Currency ended a key penalty for the bank.
Investors have spent the week assessing where things stand in the U.S. economy, but a slew of indicators have given mixed signals so far.
Fresh data from Thursday morning revealed that retail sales dropped 0.8% in January. That's much more than the 0.3% decline expected by economists, according to Dow Jones. This raised some concern about the strength of the U.S. consumer under the weight of sticky inflation and high interest rates, and sent Treasury yields down.
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Earnings season has continued to paint a muddled picture of corporate America. Tripadvisor jumped 9% after beating estimates on the top and bottom lines. On the other hand, Cisco shares were down 2% after the tech company announced layoffs and a weak sales outlook. Deere stock dropped 5% after the agricultural machinery manufacturer lowered guidance for its full-year profits.
Money Report
Stocks seesawed this week after a hotter-than-expected inflation print sent the market reeling on Tuesday, with the Dow posting its biggest one-day loss since March 2023. The 30-stock index is now 0.26% higher for the week, while the S&P 500 is set to close the week with a 0.06% gain. The Nasdaq, however, is on pace to lose 0.53%.
"Not surprising with a moderately hotter CPI, we had an outsized reaction, and I think we likely will try to spend the rest of the week clawing some of that back. Yesterday was a good example of that, and today feels like the same kind of grind higher," Art Hogan, chief market strategist at B. Riley Wealth Management told CNBC in an interview. "We're constructive on this market heading forward."
S&P 500 notches a new record closing high
All three stock major indexes ended the day higher, with the S&P 500 cinching a new record high.
The broad market index rose 0.58% to end at 5,029.73. The Dow Jones Industrial Average added 348.85 points, or 0.91%, to finish at 38,773.12. The Nasdaq Composite gained 0.30% to close at 15,906.17.
— Lisa Kailai Han
UBS shares its highest-conviction U.S. equity themes for the next 6 to 24 months
In a Thursday note, UBS highlighted its highest-conviction thematic equity themes — and their related stock beneficiaries — over the next six to 24 months.
"Tactical US equity themes capture opportunities that cannot be expressed through size, sector, and style allocations," strategist Nadia Lovell wrote. "Our thematic lists reflect groups of stocks that are positioned to benefit from a common set of drivers, such as macroeconomic forces, policy changes, geopolitical events, temporary mispricings (valuations), or timely factors."
Here are the seven themes UBS selected:
- Housing recovery — stock beneficiaries include D.R. Horton, Home Depot and Intercontinental Exchange
- Select semis — stock beneficiaries include Intel, Micron and Qorvo
- Diabetes and obesity — stock beneficiaries include Dexcom, Eli Lilly and Medtronic
- Investing in self-help — stock beneficiaries include FedEx, Goldman Sachs and Humana
- Made in America — stock beneficiaries include Boeing, Salesforce and Honeywell
- Pricing power standouts — stock beneficiaries include Apple, Broadcom and Danaher
- Time for quality — stock beneficiaries include AbbVie, Accenture and Exxon Mobil
— Lisa Kailai Han
'There's plenty of liquidity in the system,' RBC Capital's Gerard Cassidy says
Regional banks are more stable than investors expect even after New York Community Bancorp's problems renewed concerns about the industry, according to RBC Capital's Gerard Cassidy.
In fact, Cassidy expects worries about liquidity problems, which led to several institutions including Silicon Valley Bank (SVB) and Signature Bank going under last year, are overblown. He said regional banks are more stable after bringing their deposit levels back to what they were before the regional banking crisis last March.
"There's plenty of liquidity in the system," Cassidy told CNBC's "Squawk on the Street."
"What's interesting is that the deposit flows from all the smaller banks, there was outflows around March of 2023. And we're almost back now, with the smaller banks, at deposit levels where we were before March Madness hit," Cassidy said. "So, there really isn't a liquidity problem today."
— Sarah Min
Commodities remain attractive going forward for their diversification benefits, UBS says
Commodities will remain an attractive buy for investors, according to UBS.
"We remain positive on commodities over the medium term and expect the asset class to deliver strong diversification benefits for traditional bond/equity portfolios," wrote UBS' Dominic Schnider.
But with price movements less linear going forward, the strategist recommended a three-pronged approach. First, investors should dynamically adapt their exposure to the asset class. Investors should also rotate across sectors and enhance portfolio collateral, he added.
— Lisa Kailai Han
Oil brushes off weak demand forecast, rallies on weaker dollar
Oil prices rallied Thursday on a weakening dollar after shaking off earlier losses fom a weak demand forecast for 2024.
The West Texas Intermediate contract for March gained $1.46, or 1.91%, to $78.10 a barrel. The Brent contract for April traded at $82.83 a barrel, adding $1.23 or 1.51% a barrel.
Oil prices were finding support from a weakening dollar after January U.S. retail sales fell more than expected, said Phil Flynn, analyst with the Price Futures Group.
Futures declined about 1% earlier in the trading session after the Paris-based International Energy Agency forecast demand would grow by 1.2 million barrels per day this year, down nearly 50% from growth of 2.3 million bpd in 2023.
— Spencer Kimball
JPMorgan says upside for equity allocations looks limited from here
Upside for stock allocations could be limited from this point forward, according to JPMorgan.
It could be "constrained by the fact that investors' equity allocation globally is approaching the post-Lehman high seen in early 2015," wrote analyst Nikolaos Panigirtzoglou. "At the same time, we recognize that a further increase in equity allocations from current levels to the previous 2007 cycle peak is not necessarily an unreasonable assumption given the current backdrop of higher interest rates."
However, the analyst noted that portfolios currently have a relatively lower share of bonds. This means that the stock market would have to rally at least double digits to reach 2007's equity allocation highs.
— Lisa Kailai Han
54 S&P 500 stocks hit new 52-week highs
54 stocks in the S&P 500 hit new 52-week highs during Thursday's trading session.
Here are a few of the names that hit this milestone:
— Lisa Kailai Han, Christopher Hayes
Stocks making the biggest moves midday
These are some of the companies moving the most during midday trading:
- Cisco Systems — The tech company's shares dropped 4.4% after it posted declining fiscal second-quarter revenue.
- Twilio — The cloud communications stock shed 14% after issuing disappointing first-quarter guidance.
- Super Micro Computer — The technology name added 8.5% after Bank of America said shares could rise to $1,040, a Wall Street high.
Read the full list of stocks on the move here.
— Samantha Subin
Investors shouldn't pay too much mind to this morning's retail sales print, strategist says
January's softer-than-expected retail sales data sent stocks sliding on Thursday, dampening an equities rebound.
But Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC that investors shouldn't put too much consideration on a singular data point.
"I always think it's important not to look at any one piece of data, especially retail sales for the month of January, which has a lot of weather and seasonality in it," he told CNBC. "There might have been pull forward and some weather effects."
— Lisa Kailai Han
Wells Fargo shares pop as regulator ends 2016 consent order
The Office of the Comptroller of the Currency ended an consent order that Wells Fargo had been operating under since 2016. Wells Fargo shares rose as much as 6% on the news.
Following a fake accounts scandal, the bank had operated under several different consent orders, but six have ended since 2019. In a press release, CEO Charlie Scharf said the closing of the order is "an important sign of our progress."
The consent orders impacted how Wells Fargo was allowed offer and sell products to consumers. Its termination should give the bank more operating flexibility.
—Christina Cheddar Berk
Tech hurts S&P 500 this week
The S&P 500 is headed for losses this week, dragged down by technology names.
The information technology sector has lost around 2% this week, making it the worst performer of the 11 that comprise the broad index. The S&P 500 as a whole is down 0.5% on the week.
Akamai Technologies has the led sector down this week, dropping more than 11% in a post-earnings selloff. Arista Networks was the next biggest loser in the sector, falling nearly 6%.
On the other hand, energy, financials and materials stocks helped curb losses for the S&P 500 this week, with each sector up more than 1%.
— Alex Harring
Shipping costs may have peaked for Europe but show no signs of easing for the U.S., says Bank of America
Red Sea shipping disruptions, geopolitically induced spikes in costs and low water levels in the Panama Canal have all thrown a wrench in global supply chains. These obstacles may also "lead to renewed inflation pressures, especially in destination countries, and give rise to downside risks for trade volumes," according to Bank of America economist Antonio Gabriel.
On the upside, it seems that shipping costs in Europe have come down in recent weeks. On the other hand, shipping costs have climbed in routes bound for the U.S., almost tripling relative to their December levels.
"Therefore, risks seem to have marginally tilted away from Europe into the US, even if Europe remains most exposed to the shock in absolute terms," Gabriel said.
The economist added that the fallout from these disruptions could be mitigated by the latest movements in energy prices. However, producers may also be forced to absorb more losses, since their pricing power to pass costs onto consumers has weakened in the last year.
— Lisa Kailai Han
Housing demand continues to outstrip supply despite market headwinds, UBS says
Lofty mortgage rates and elevated home prices have been no match for the strength of demand in the U.S. housing market. And according to UBS, this trend should continue, at least over the next few years.
"Demand continues to outstrip supply due to the largest generation in US history — millennials — moving into prime homebuying age. We believe this should support the housing market though the end of the decade," wrote strategist Nadia Lovell.
What's more, it's unlikely that the U.S. housing supply will pick up anytime soon.
"The dearth of available supply shows little signs of abating as public homebuilders continue to exhibit solid capital discipline and the majority of current homeowners are locked into mortgage rates that are well below current levels," Lovell said.
As the Federal Reserve cuts rates and mortgages fall this year, Lovell expects these to translate to headwinds that will improve affordability and unlock previously inaccessible supply.
— Lisa Kailai Han
Investors should continue buying the dip as S&P 500 earnings will remain robust moving forward, Citi's Scott Chronert says
Citi Research head of U.S. equity strategy Scott Chronert says the firm will continue to stress buying the dip in stocks moving forward, and added that he forecasts S&P 500 earnings will remain strong moving forward.
"[W]e're using a year end 5100 target, we're not that far away at this point, our mantra has been buy pullbacks," Chronert told CNBC's "Squawk Box" on Thursday.
Chronert added he thinks that the equity market has already experienced a mild earnings recession, which sets up further S&P 500 results to remain strong heading for the remainder of 2024.
— Brian Evans
S&P 500 opens little changed on Thursday
Stocks hovered near the flatline to start off Thursday's trading session.
The S&P 500 nudged 0.1% higher, while the Nasdaq Composite also added 0.1%. The Dow Jones Industrial Average gained just 20 points, or less than 0.1%.
— Lisa Kailai Han
Shake Shack shares surge in premarket trading
Shake Shack shares surged 16% in premarket trading after the hamburger chain beat fourth-quarter expectations on the top and bottom lines.
Shake Shack posted adjusted fourth-quarter earnings of 2 cents per share on revenue of $286.24 million. Analysts polled by LSEG had expected per-share earnings of 1 cent on revenue of $280.3 million.
— Sarah Min
Stocks making the biggest moves premarket
Check out some of the companies making headlines in premarket trading.
Twilio -- Shares dropped nearly 11% after the consumer engagement company issued lower-than-expected revenue guidance for the current quarter. Twilio also reporter total active consumers for the fourth-quarter that were below Wall Street estimates.
Cisco — Shares dropped 4.4% after the tech company posted a yearly decline in revenue during the fiscal second quarter. Cisco also issued lighter-than-expected guidance for the fiscal third quarter and announced a downsizing plan that would lead to a 5% reduction in jobs.
Coinbase — Shares jumped 8% after JPMorgan upgraded the cryptocurrency exchange platform to neutral from underweight, citing rising cryptocurrency prices. On Wednesday, Bitcoin regained a $1 trillion market cap as it reached a more than two-year high. On Thursday, Bitcoin was last higher by more than 1%.
Read the full list here.
— Brian Evans
Retail sales fall more than expected in January
Retail sales dropped 0.8% in January from the prior month, the U.S. government said Thursday, in a sign pointing to slowing U.S. economic activity. Economists polled by Dow Jones expected a decline of 0.3%.
— Fred Imbert
Deere shares drop in the premarket
Shares dropped 4% in premarket trading after the manufacturer of agricultural machinery lowered its full-year net income guidance. However, it posted a beat in its first-quarter results.
Deere said it expects net income will be weaker than it previously expected. In its full year ending October, Deere expects net income of $7.50 billion to $7.75 billion, lower than prior guidance it issued between $7.75 billion and $8.25 billion.
"Moving forward, we expect fleet replenishment to moderate as agricultural fundamentals normalize from record levels in 2022 and 2023," CEO John C. May said in a statement.
Otherwise, Deere exceeded first-quarter expectations on the top and bottom lines. It reported earnings of $6.23 per share on revenue of $10.47 billion. Analysts polled by LSEG had expected per-share earnings of $5.21 on revenue of $10.34 billion.
— Sarah Min
Tech leads fourth-quarter earnings growth, says UBS
Around 82% of the S&P 500's market cap has posted fourth-quarter earnings, according to UBS. On average, the firm reports that earnings are beating consensus estimates by 7.1%,.
Tech companies are the top outperformers, per strategist Jonathan Golub. Looking both reported results and consensus estimates for companies that haven't yet announced results, he found that the tech sector has announced earnings per share growth of 40.3%.
By comparison, the following best-performing group is financials, with 11.1% earnings. growth
Energy and materials stocks are underperforming. Earnings per share growth has declined 21.2% for the sector.
— Hakyung Kim
Few parallels between 'Magnificent 7' outperformance and late '90s tech bubble, HSBC says
On the surface, the similarities may seem striking between the recent outperformance of the "Magnificent 7" tech stocks and the tech craze of the late 1990s.
"Prior to the tech bubble burst in 2000, share prices of tech stocks grew fivefold over a three-year period (the Mag 7 have more than doubled since January 2023 and are up fourfold since prior to the pandemic)," wrote HSBC strategist Nicole Inui.
But that, she says, is where the similarities end.
"Valuation premiums for tech in the late 1990s were much higher with the sector trading on average more than 40x earnings during the year 2000 compared to 27x today. And the quality of the companies were vastly different," she added.
Inui also sees the market broadening in 2024, with opportunities emerging in sectors such as tech, industrials and consumer discretionary and staples.
— Lisa Kailai Han
Stellantis shares rise on strong earnings
Chrysler and Jeep parent Stellantis reported better-than-expected full-year adjusted earnings per share of €6.42, beating a StreetAccount estimate of €5.82 per share. The company also approved a €3 billion buyback program.
U.S.-listed shares popped 3.5% in the premarket.
— Fred Imbert
Rakuten shares spike more than 15% after it posts smaller annual loss
Shares of Rakuten Group jumped more than 15% on Thursday after the Japanese technology conglomerate posted a smaller loss for 2023 compared with a year earlier.
Rakuten's earnings report released late on Wednesday showed an operating loss of 212.86 billion yen for 2023, compared with 371.61 billion yen in 2022.
The company also recorded a smaller attributable loss of 339.47 billion yen, compared with 2022's 377.21 billion yen.
Profit and revenue for its fintech and internet service business segments rose in 2023, while its mobile segment losses fell by almost 30% in 2023.
— Lim Hui Jie, Shreyashi Sanyal
Japan’s fourth-quarter GDP shows surprise contraction
Japan's economy shrank unexpectedly during the last quarter of 2023, according to government data.
Provisional gross domestic product contracted 0.4% in the fourth quarter compared with a year ago, after a revised 3.3% slump in the July-September period.
The reading was also much lower than a Reuters poll forecast of 1.4% growth.
Japan also contracted 0.1% quarter-over-quarter, after shrinking a revised 0.8% in the third quarter from the second.
For more, please read the full story.
— Shreyashi Sanyal, Clement Tan
Singapore's economy clocks slower-than-expected fourth-quarter growth
Singapore's economy grew 2.2% year on year in the fourth quarter of 2023, official data on Thursday showed, falling short of both the advance estimates of a 2.8% growth and Reuters' expectations of a 2.5% expansion.
On the whole, the Singapore economy grew 1.1% in 2023, slower than the 3.8% expansion in 2022. The growth in 2023 was largely driven by information and communications and transportation and storage sectors.
—Lee Ying Shan
Berkshire Hathaway trims its Apple holdings
Warren Buffett's Berkshire Hathaway trimmed several holdings during the fourth quarter, including Apple and HP, according to a securities filing published Wednesday.
Berkshire also requested that Securities and Exchange Commission keep at least one of its holdings under wrap. The firm made a similar request in its third quarter filing.
See the list of Berkshire's top holdings on CNBC Pro.
— Jesse Pound, Yun Li
Cisco, Twilio headline post-earnings stock moves
Even if index futures were calm on Wednesday, earnings reports were driving big after hours moves in individual stocks.
Cisco — Shares of the tech company fell more than 5% after announcing layoffs in its quarterly update.
Tripadvisor —The travel stock popped 7% after fourth quarter results beat Wall Street estimates on the top and bottom lines, according to LSEG.
Twilio — The tech stock sank 11%. Twilio's revenue guidance for the fourth quarter was softer than expected, according to LSEG.
— Jesse Pound, Darla Mercado
Futures open little changed
Stock futures were effectively flat shortly after 6 pm in New York. Nasdaq 100 futures slipped but were still down less than 0.1%.
— Jesse Pound
