The Nasdaq put the extra Leap Year day to good use, jumping 6.1% — including just one weekly slip and a pair of record highs — in February. The S&P 500 climbed 5.2% and the Dow industrials ended the month with a 2.2% gain. It was the fourth straight monthly advance for all three indexes, lifting the Nasdaq more than 25% since Oct. 31, the S&P 500 almost 22% and the Dow more than 18%.
Earnings season cools as the stock market heads into March. It's a big week for artificial intelligence, with both Broadcom and MongoDB due to report. It's also a big week for retailers, as Target, Macy's and a host of others deliver results. The market is likely to closely follow the month-end jobs data, which could ultimately determine the Fed's rate cut strategy in the months ahead.
Stocks To Watch: Five Stocks Setting Up
Buying opportunities are limited with so many stocks extended in the current stock market rally. But there have been a variety of interesting setups, including Shockwave Medical, Confluent, Embraer, Tidewater and ServiceNow. Shockwave and Confluent have been consolidating after gapping decisively above their 200-day lines on earnings. Brazilian jet maker Embraer has already flashed some early buy signals as it nears an official breakout. Oil services firm Tidewater is flirting with early entries on earnings and rising crude prices. ServiceNow, one of the first stocks to break out in the current rally, is now consolidating around key levels.
Econ Calendar: Jobs To Set The Rate Cut Tone
The coming week's economic reports will go a long way in setting the tone — and the rate-cut projections — for the Fed's upcoming March 20 meeting. Jobs data starts to roll in on Wednesday. The ADP employment report is expected to show a 150,000 rise in private-sector payrolls. The official numbers come out Friday in the February jobs report. Economists expect an overall 200,000 employment gain, with private payrolls rising 175,000. The jobless rate is seen holding at 3.7%. However, January's stunning 353,000 gain may have been overstated by seasonal adjustment issues. We could see a big downward revision or perhaps that strength will be offset by weakness in February data.
Why The Federal Reserve Is Getting Nervous About The AI Stock Rally
Semiconductors: No. 2 AI Chipmaker To Report
As investors swoon over Nvidia, Broadcom has quietly advanced just beyond the limelight. Often mentioned as the No. 2 play in artificial intelligence chips, the manufacturing giant helps clients including Alphabet, Microsoft and Meta Platforms design the application-specific chips for their AI efforts. The company is likely to generate revenue of $8 billion to $9 billion this year from AI, according to JPMorgan. Its revenue will be of key interest when Broadcom reports its fiscal Q1 results late Thursday. Analysts expect steady, single-digit EPS growth, but a 32% jump in revenue. AVGO shares are up 25% since the start of the year.
Software Earnings: AI, Cloud Developer Report
Hot AI stock MongoDB reports earnings on Thursday. Analysts polled by FactSet are projecting a 21% year-over-year sales increase to $437 million for the company's January-ending quarter. The database software player's earnings are seen decreasing 19% to 46 cents per share on an adjusted basis. MDB gained 107% last year and is ahead 9% this year. Elsewhere, cloud-based file-sharing company Box will report January-quarter earnings on Tuesday. Analysts polled by FactSet expect the company will post a 3% earnings increase to 38 cents per share on an adjusted basis.
Another Big Stock Market Week For Retail Earnings
Target is on track, if analysts are correct, to continue its string of earnings wins on a modest 1% rise in revenue. Its shares have advanced in 14 of the past 16 weeks, as it digs out of its deep, yearlong consolidation. Ross Stores and Costco have sprinted to new highs. Estimates point to steady-as-she-goes performances from both. Abercrombie & Fitch is skyrocketing, shares up 314% from a June 2023 breakout. Analysts see another round of triple-digit earnings gains over a 20% rise in revenue. Macy's, Foot Locker, Dollar Tree, American Eagle and Burlington Stores also report.
Specialty Vehicles: A Read On Big-Ticket Spending
Nothing points to high-end spending better than motor homes and firetrucks. One is for consumers, the other for municipalities. Investors will get a read on both when Thor Industries and REV Group report on Wednesday. For Thor, analysts call for a 34% earnings increase, its first in six quarters. The Street's earnings target for REV is a slowdown to 25% growth. Revenue is seen declining for both. And outlook will be key. Both stocks are moderately extended from February breakouts.
Earnings Briefs
Monday
AeroVironment reports Q3 results late Monday. FactSet analysts expect the drone maker to report flat adjusted earnings at 33 cents per share on 24% revenue growth, to $170.6 million. AVAV shares are climbing the right side of a 13-week base.
Tuesday
CrowdStrike reports Q4 earnings Tuesday. Expectations are high amid the run-up in CRWD stock. Analysts project EPS of 82 cents, up 74%. The cybersecurity firm's revenue is expected to climb 32% to $839 million. Annual recurring revenue, a financial metric tied to subscription services growth, is expected to rise 33% to $3.395 billion.
Thursday
Ciena reports fiscal Q1 earnings before the stock market opens on Thursday. Ciena's fiber-optic gear is built into telecom networks and internet data centers. Analysts expect adjusted profit to fall 26% to 47 cents per share. Revenue is expected to fall 3% to $1.02 billion.
Samsara reports fourth-quarter earnings Thursday. Analysts expect the company to swing to a 3-cent adjusted profit vs. a 2-cent loss a year earlier. Revenue is expected to climb 38% to $258.3 million. Samsara provides sensors and cloud-based software to manage vehicle fleets and industrial operations. The stock is basing.
