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Wall Street Today | Lyft Lifts After Earnings Error, Market Rebounds From CPI

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Moomoo Recap US wrote a column · Feb 14 15:37
Wall Street Today | Lyft Lifts After Earnings Error, Market Rebounds From CPI
RECAP
Stocks rose Wednesday, one day after hotter-than-expected inflation data Tuesday dashed hopes that the Federal Reserve will soon pivot to cutting U.S. interest rates.
The $S&P 500 Index(.SPX.US)$ advanced 47.4 points (1%) to close at 5,000.52, while the $Dow Jones Industrial Average(.DJI.US)$ added 151.52 points (0.4%) to end at 38,424.27.
Meanwhile, the $Nasdaq Composite Index(.IXIC.US)$ gained 203.6 ticks (1.3%) to a 15,859.15 finish.
Among individual stocks, $Lyft Inc(LYFT.US)$ shares rallied 35.1% to a $16.39 52-week high. A typo in Lyft's earnings report sent the stock up more than 60% in after-hours trading Tuesday, and while an executive later corrected the error, shares still ended sharply higher Wednesday.
MACRO
Feds Barr: Fed Needs More Data Before Cuts
Federal Reserve Chair Michael Barr said the FOMC would need more data before lowering interest rates, speaking on Wednesday. He said he supported Powell's remarks to wait longer before lowering.
“As Chair Powell indicated in his most recent press conference, my FOMC colleagues and I are confident we are on a path to 2% inflation, but we need to see continued good data before we can begin reducing the federal funds rate,” Bar said.
Barr also repeated his long-standing view that the US banking sector is safe, despite a shocking revelation from New York Community Bank that their loan book was unhealthy. He said “no signs of liquidity problems across the system.”
“A single bank missing its revenue expectations and increasing its provisioning does not change the fact that the overall banking system is strong,” said Barr, adding that the Fed is monitoring the sector for risks carefully.
Interest Rates Have Bottomed Due to Surging Government Spending, Gundlach Says
That's Jeffrey Gundlach, the DoubleLine CEO speaking to CNBC, on how the next cutting cycle from the Fed may lead to a different experience for the broader economy.
Gundlach is not alone in warning about government spending, which Fed Chair Jerome Powell called unsustainable. The Congressional Budget Office forecasts federal budget deficits will total $20 trillion over the 2025-2034 period, and it's unusual to see big deficit-to-GDP ratios, such as 6% last year, when the economy is expanding.
Gundlach said it's "not implausible" that longer-term interest rates could go into the "high single digits." He noted in the 1980s that real interest rates - adjusted for inflation - reached 10%.
The yield on the 10-year yield $U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ is 4.29%, and the 10-year TIPS rate is right at 2%.
SECTORS
U.S. Crude Oil Stocks Rise by 12 Million Barrels in Week Ended Feb. 9
U.S. crude oil inventories rose sharply last week as refineries reduced their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.
Commercial crude oil stocks excluding the Strategic Petroleum Reserve, rose by 12 million barrels to 439.4 million barrels in the week ended Feb. 9 and were about 2% below the five-year average for the time of year, the EIA said.
Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would rise by 2.8 million barrels.
Wall Street Today | Lyft Lifts After Earnings Error, Market Rebounds From CPI
Crypto Stocks Like Coinbase, Marathon Digital and Riot Platforms Rally as Bitcoin Tops $52,000
Crypto-related stocks like $Coinbase(COIN.US)$, $Marathon Digital(MARA.US)$ and $Riot Platforms(RIOT.US)$ traded sharply higher Wednesday as $Bitcoin(BTC.CC)$ topped $52,000 for the first time in more than two years.
BTC rallied as much as 5.5% to as high as $52,079, sending crypto stocks rising as well.
As Bitcoin passed the $51,000 price point Wednesday, it reclaimed $1 trillion in market capitalization, a level not seen since 2021.
COMPANIES
Cisco Systems -5% After Low Guidance, Cutting 5% of Workforce
$Cisco(CSCO.US)$ reported Q2 2024 adjusted EPS of $0.87 beat estimates of $0.84, but Q3 guidance fell below expectations. The internet provider company also said it would lunch a restructuring plan to cut 5% of it's global workforce.
Lyft +34% On Q4 Net Loss Narrows as Revenue Rises; Shares Soar Premarket
$Lyft Inc(LYFT.US)$ reported a Q4 net loss Tuesday of $26.3 million, narrowing from a $588.1 million loss a year earlier. Analysts polled by Capital IQ expected a net loss of $69.2 million. After posting an error in their earnings margins, Lyft released a correction, that only held back the 34%+ stock gain momentarily.
Instacart -7%, Announces Layoffs and Executive Departures, but Forecast Tops Estimates
$Instacart(Maplebear)(CART.US)$ -known as the delivery platform Instacart - said Tuesday that it was laying off around 250 people, or around 7% of its staff. The announcement came as the company, forecast better-than-expected demand for its first quarter, as it adds more grocers onto its platform and as shoppers hold their ground against inflation.
Uber Stock Rallies 12% Amid First-ever Share-buyback Program for Up to $7 Billion
$Uber Technologies(UBER.US)$'s stock rallied 12% Wednesday after the ride-sharing company announced its first-ever share-buyback program with its board authorizing the repurchase of up to $7 billion worth of stock.
Shopify Stock Bounces Back as Analysts React to Q4 Earnings
$Shopify(SHOP.US)$ reported better-than-expected fourth-quarter earnings this week but issued light guidance for the current period. Here's a look at early reactions from several Shopify analysts.
Barrick Shares Slip as Canadian Miner Expects 2024 Gold Output of 3.9M-4.3M Ounces
$Barrick Gold Corp(ABX.CA)$ shares fell after the Canadian miner, one of the world's biggest producers of gold, forecast output of the precious metal would decline in 2024 to between 3.9 million and 4.3 million troy ounces after slipping 2.1% in 2023 to 4.05 million ounces.
Source: Bloomberg, Dow Jones, CNBC, Reuters
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