Thursday Recap
US equities closed sharply higher on Thursday, with the Dow up 1.26%, the S&P 500 gaining 1.70%, the Nasdaq rising 2.51%, and the Russell 2000 climbing 2.10%. The S&P 500 set a new record close, while the Nasdaq remains around 3.5% below its July all-time high. The rally was driven by continued optimism around a soft economic landing and easing recession fears following the Fed’s 50 basis point rate cut on Wednesday. While initial reaction focused on hawkish comments from Powell, the Street shifted attention to the more dovish dot plot, which signaled 100 bp of rate cuts expected in both 2024 and 2025 and a neutral policy rate by 2026. Investors rotated into big tech and cyclical stocks, moving out of defensives.
On the economic front, initial jobless claims came in lower than expected, falling to the lowest level since May, while continuing claims also dropped, hitting their lowest point since June. The Philly Fed manufacturing index missed expectations but turned positive, with an improving employment index. Existing home sales met consensus but dipped month-over-month in August. In international news, the Bank of England left its policy unchanged, while the Bank of Japan is expected to hold steady tonight amid market volatility.
At the sector level Technology and Discretionary shares were the biggest gainers, both up >2% in the day’s trading. Staples, Real Estate and Utilities lagged along with Healthcare as the tone was decidedly (and unsurprisingly) risk on. Read on for stock level highlights by sector.
Information Technology
- Mobileye (MBLY-US) surged 15.0% after Intel (INTC-US) announced it has no plans to sell its majority stake in the company, alleviating concerns following earlier reports.
- DoorDash (DASH-US) rose 3.6% after being upgraded to buy from neutral at BTIG, with analysts noting ongoing strength and positive execution in the rideshare delivery space.
Consumer Discretionary
- Darden Restaurants (DRI-US) jumped 8.3% despite missing fiscal Q1 EPS and revenue estimates, thanks to its reaffirmed FY25 guidance and the announcement of a partnership with Uber (UBER-US) for on-demand delivery at Olive Garden starting in late 2024.
- Skechers (SKX-US) dropped 9.6% after management at the Wells Fargo Consumer Conference noted greater-than-expected consumer discretionary pressures in China.
- Five Below (FIVE-US) fell 2.2% after JPMorgan downgraded the stock to underweight, citing consistent declines in comp ticket over the last ten quarters and customers adhering to stricter budgets.
Health Care (HC)
- Progyny (PGNY-US) plunged 32.7% after disclosing that a significant client, responsible for about 13% of its revenue, opted to terminate its service agreement effective January 2025.
- Edgewise Therapeutics (EWTX-US) skyrocketed 54.7% after announcing positive data from Phase 1 and Phase 2 trials of EDG-7500 for hypertrophic cardiomyopathy (HCM), with analysts praising the efficacy and safety data.
Industrials
- Terex (TEX-US) fell 3.6% after cutting its FY24 revenue guidance by 5% at the midpoint and lowering EPS guidance by 18%, citing faster-than-expected channel adjustments and weaker demand trends.
- Builders FirstSource (BLDR-US) rose 3.8% after announcing CEO and CFO transitions, with CFO Peter Jackson named the next President and CEO.
Materials
- Steelcase (SCS-US) dropped 5.7% after missing FQ2 revenue estimates and providing weaker-than-expected guidance for the upcoming quarter, citing ongoing challenges in international markets, particularly in China.
Financials
- FactSet Research Systems (FDS-US) gained 5.1% after reporting a beat on FQ4 EPS, although revenue came in light. Organic growth exceeded expectations, and the company announced a $300M buyback.
- KKR & Co. (KKR-US) rose 2.8% after announcing a new corporate structure for Axel Springer, which will separate its media business from its classified businesses, including Politico and Business Insider.
Eco Data Releases | Friday September 20th, 2024
S&P 500 Constituent Earnings Announcements | Friday September 20th, 2024
Data sourced from FactSet Data Systems
