The Stock Market At Close – Tuesday, February 28
The Toronto Market:
February, 2023 is one month that will go down as the month when concerns about interest rates hikes in the struggle to contain inflation in the US dominated the Canadian stock market outlook. In fact, possibly more so than by our own Central Bank, the Bank of Canada. The Bank of Canada is due to make an interest rate decision on March 8, while Canadian and U.S. employment data is due two days later.
The TSX composite index ended down 38.94 points, or 0.2%, to close at 20,221.19.
Today is the last day of the month and the TSX lost 2.6% this month.. On the last day of last month the TSX closed up 195.27 points to close at 20,767.38 gaining 7.1% in January.
Oil was up today but the energy sector in the TSX was down today by 1%. The financials sector lost 0.4%. Shares of Bank of Nova Scotia tumbled 5.7% and Bank of Montreal ended 1.2% lower after the two banks reported stockpiling rainy-day funds along with a fall in their first-quarter profits.
The US Markets:
Concerns over interest rate hikes by the Feds remained the single dominant factor for the stock markets during the month of February 2023. It was by all measures a weak month for the markets and possibly for most investors. After a strong performance in January, U.S. stocks closed out February subdued. Each of the three major indexes ended with monthly declines, as investors continue to assess whether interest rates will remain high for an extended period of time. For the month, the S&P 500 fell 2.61%, the Dow slid 4.19% and the Nasdaq shed 1.11%.
Today, Dow Jones index dropped by 232.39 points, or 0.71%, to close at 32,656.7. The S&P 500 dropped 12.09 points, or 0.30%, to close at 3,970.15. The Nasdaq Composite dropped 11.44 points, or 0.1%, to close at 11,455.54.
Some traders have started to factor in the chances of a 50 basis-point interest rate hike in March, although estimates of the odds remain low at about 23%, according to Fed fund futures, which suggest rates peaking at 5.4% by September, up from the current 4.57%.
In company news, Target Corp gained 1.01% after the big-box retailer reported a surprise rise in holiday-quarter sales. The company cautioned on 2023 earnings due to an uncertain U.S. economy. Meta Platforms gained 3.19% today while the Norwegian Cruise Line cratered 10.18%. Tesla Inc. will build a new assembly plant in northern Mexico, the country’s president announced today.
Volume on the U.S. exchanges today was 11.63 billion shares, compared with the 11.46 billion average for recent market sessions. It is not good for the market when declines are accompanied by higher volumes. Declining issues outnumbered gainers on the NYSE by a 1.13-to-1 ratio while on the Nasdaq, the ratio was 1.03-to-1 ratio in favour of gainers.
Treasury Yield:
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.3 basis points at 4.816%.
.
Stocks In The News/ Stocks To Watch:
Meta Platforms rose 3.19% after the Facebook parent said it was creating a new top-level product group focused on generative artificial intelligence. Norwegian Cruise Line Holdings Ltd plunged 10.18% after the cruise operator’s full-year profit forecast fell short of estimates. It attributes the squeeze to soaring fuel and labor costs.
Goldman Sachs (GS) declined by a whopping 3.80% on a volume of 4.9M shares traded. The Chief Executive of the company, David Solomon, earlier today said the bank is considering “strategic alternatives” for its consumer business. On January 17 the stock declined 9% on heavy volume of 14.48 million shares.
Li Auto (LI) fourth-quarter revenue surged, driven by ‘Record Vehicle deliveries” in December. Reuters reported that Tesla’s China sales slowed as price-cut boost started to wane. Li Auto has an average rating of Buy and Price Targets ranging from $23 to $58, according to analysts polled by Capital IQ.
JP Morgan raised Viper Energy Partners (VNOM) Price Target to $37 from $34, maintained Overweight Rating for the company. Viper Energy Partners has an average Outperform rating and a Price Target range of $34 to $43, according to analysts polled by Capital IQ.
Regular Market Day Features
Beginner Investor’s (Canadian stocks) Watchlist:
Scotia Bank and Bank of Montreal reported first quarter results today and the stocks of the two banks suffered declines.
.
The Canadian Vanguard Chinese Stocks Watchlist:
Pinduoduo (PDD) and Baidu (BIDU) remain two stocks to keep eyes on.
.
EV, Energy and Resource Stocks Watchlist at Today’s Market:
According to reports by Reuters from Mexico city, Tesla is planning to build a new plant worth over $5bln in Mexico. The statement was backed by foreign ministry officials in Mexico city.
As an aside and not directly related to stock markets but on the humanity side of things. The reader may wish to read this retweet – Congo supplies over 70% of the world’s cobalt via mining. Cobalt is used in lithium-ion rechargeable batteries used in smartphones, tablets & electric cars.
. IMPORTANT NOTICE:
