On March 8th, 2023, U.S. stocks opened cautiously higher after Tuesday’s sell-off induced by Fed Chair Powell’s remarks.[0] The Nasdaq 100 (NDX) and the Dow Jones Industrial Average (DJIA) were up 0.1% and 0.08% while the S&P 500 (SPX) declined by 0.02%, respectively, at 9:30 a.m.[1] EST.[1]
The mixed results came after new numbers on the job market led investors to believe that higher rate hikes are more likely.[2] February’s private payroll numbers were more robust than anticipated, further emphasizing the economy’s robustness.[2] Powell reiterated his warning to legislators that the central bank might raise interest rates higher than was previously thought.[3]
United Natural Foods Inc (UNFI) plunged more than -28% in premarket trading Wednesday after the grocery wholesaler reported fiscal second-quarter profit that missed by a wide margin, as “rapidly accelerating inflation” took a bite out of results.[4] The company reported Q2 adjusted EPS of 78 cents, well below the consensus of $1.43, and cut its full-year adjusted EPS forecast to $3.05-$3.90 from a prior estimate of $4.85-$5.15, weaker than the consensus of $4.97.[5] US Foods Holding Corp (USFD) and Sysco (SYY) both closed down more than -3% and -1% on the news.[5]
The February jobs report was more robust than anticipated, leading investors to think that a higher interest rate increase is probable at the upcoming 2023 Federal Open Market Committee (FOMC) gathering set for March 21-22.[6] The markets are forecasting that the Federal Open Market Committee (FOMC) will increase the interest rate by 0.50% in[1] The market’s anticipated terminal interest rate is now estimated to be in the range of 5.50% to 5.75%.[1]
Other news included Tesla (TSLA) closing down more than -3% after Berenberg downgraded the stock to hold from outperform.[7] Crowdstrike Holdings Inc (NASDAQ:CRWD) gained more than 3% after the cybersecurity firm reported better-than-expected quarterly results, and Shoals Technology (SHLS) gapped down 8.6% in heavy volume after the solar company announced a 24.5 million-share secondary offering of common stock at 24.[8]
0. “U.S. stocks open higher as investors weigh data showing rise in weekly jobless claims” MarketWatch, 9 Mar. 2023, https://www.marketwatch.com/story/u-s-stocks-open-higher-as-investors-weigh-data-showing-rise-in-weekly-jobless-claims-c0e8685e
1. “Stock Market News Today – Indices Finish Mixed as Investors Weigh Economic Data” TipRanks, 8 Mar. 2023, https://www.tipranks.com/news/stock-market-news-today-futures-inch-higher-after-digesting-powells-hawkish-tone
2. “Dow opens 100 points higher as Wall Street braces for Friday’s jobs report: Live updates” CNBC, 9 Mar. 2023, https://www.cnbc.com/2023/03/08/stock-market-today-live-updates.html
3. “Dow Industrial Average moves back to negative on the year” ForexLive, 7 Mar. 2023, https://www.forexlive.com/technical-analysis/dow-industrial-average-moves-back-to-negative-on-the-year-20230307
4. “Dow ends slightly lower, stocks finish mixed as higher Fed rate risk, upcoming jobs data worry Wall Street” MarketWatch, 8 Mar. 2023, https://www.marketwatch.com/story/u-s-stock-futures-unable-to-rebound-from-latest-sell-off-as-more-powell-talk-looms-8c9714e9
5. “Stocks Mixed As Powell Softens His Tone” Barchart, 8 Mar. 2023, https://www.barchart.com/story/news/14905134/stocks-mixed-as-powell-softens-his-tone
6. “Stock Market News Today: Stocks Open in the Green after Rise in Jobless Claims” TipRanks, 9 Mar. 2023, https://www.tipranks.com/news/stock-market-news-today-futures-under-pressure-following-powells-double-down
7. “Markets Today: Stock Indexes Slightly Higher as Bond Yields Fall” Barchart, 8 Mar. 2023, https://www.barchart.com/story/news/14882609/markets-today-stock-indexes-slightly-higher-as-bond-yields-fall
8. “Stock market today: Dow slips on Fed fears after fresh signs of tight labor market By Investing.com” Investing.com, 8 Mar. 2023, https://www.investing.com/news/stock-market-news/stock-market-today-dow-slips-on-fed-fears-after-fresh-signs-of-tight-labor-market-3025453