Wall Street Breakfast: What Moved Markets

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Stocks rose on Friday, with the S&P 500 and Nasdaq Composite closing at fresh record highs, as tech stocks rallied on continued enthusiasm for artificial intelligence-related names including Nvidia, NetApp and Advanced Micro Devices. Declining Treasury yields also provided a boost, as disappointing factory data and a decline in consumer sentiment solidified expectations for interest rate cuts from the Federal Reserve by this summer. Market participants slightly increased their rate cut expectations following the economic data. According to the CME FedWatch tool, the odds of a 25 basis point rate cut at the Fed’s May meeting is now at nearly 26%, compared to 18% the previous day. Stocks gained even as troubled New York Community Bancorp plunged 25% after disclosing material weaknesses in internal controls related to its loan review, potentially a sign of a wider real estate shakeout ahead. For the week, the Nasdaq jumped 1.7% and the S&P advanced 0.9%, with both indexes notching their seventh positive week out of the past eight; the Dow Jones index lagged with a 0.1% weekly loss. Read Seeking Alpha’s Catalyst Watch for a preview of next week’s major events.

After spending billions of dollars on Project Titan, Apple (AAPL) reportedly canceled work on its electric vehicle initiative and shifted some of the employees to work on generative artificial intelligence. It comes amid rising costs and competition that has worried many automakers, as detailed in Wall Street Breakfast: Winning The Race. The iCar was initially rumored to be fully autonomous, but eventually downshifted dramatically to Level 2+ from Level 4, which SA analyst Arne Verheyde said was a massive setback given the “already highly saturated market.” In other tech news, the Mobile World Congress took place this week in Barcelona, with Samsung (OTCPK:SSNLF) taking one of the spotlights with its Galaxy Ring. (322 comments)

As Russia’s invasion of Ukraine entered the third year, European Commission President Ursula von der Leyen said the region should prepare for the risks of a wider war and consider using windfall profits from frozen Russian assets to buy weapons for Ukraine. “We need to move fast,” she warned, while U.S. Treasury Secretary Janet Yellen called on the G7 coalition to unlock $285B in frozen Russian assets to support Kyiv. Elsewhere, Germany asserted that European countries would not send troops to Ukraine after French President Emmanuel Macron previously said the option had not been “ruled out.” In response, Kremlin spokesman Dmitry Peskov warned that sending troops would lead to a direct confrontation. (20 comments)

Beyond Meat (BYND) ripped 73.5% higher AH on Wednesday after reporting better-than-expected Q4 earnings, as strong international sales more than made up for weak U.S. demand. CEO Ethan Brown noted that in 2024, the firm plans to “steeply reduce” operating costs and cash use, while employing pricing actions and right-sizing of its production footprint to support margin expansion. The plan also included “a core platform renovation in Beyond IV,” and certain non-cash charges related to inventory and assets that are no longer consistent with its path to profitability. While BYND traded in double digits for the first time this year, short interest on the stock was close to 40%, which likely contributed to the big swing. (67 comments)

Bitcoin (BTC-USD) went on a roll this week, surging toward its all-time high and racking up its biggest monthly gain since December 2020. The latest bull run, which saw bitcoin top $60K and its market cap jump to a staggering $1.2T, was fueled by several factors, including the spot bitcoin ETF boom that opened the door for mainstream investors and an upcoming halving event. Meanwhile, U.S. stocks ended higher on Thursday, helping the Nasdaq (COMP.IND) post a new record close. Market participants were undeterred by the hotter PCE inflation data – the Fed’s preferred inflation gauge – which met expectations and showed little progress in the central bank’s fight to push inflation down to its 2% goal. (115 comments)

Congressional leaders struck a last-minute deal to avert a partial government shutdown, reaching an agreement on six of the 12 funding bills that had been stalled for months. One set of federal agencies, including the Departments of Commerce, Energy, and Justice, will be temporarily funded through Mar. 8, and the rest, including the Departments of Defense and Homeland Security, through Mar. 22. “We are in agreement that Congress must work in a bipartisan manner to fund our government,” U.S. Senate and House leaders said in a joint statement. Elsewhere, Mitch McConnell said he would step down in November after 17 years in the job, setting up another leadership contest during the presidential election season. (9 comments)