{"id":24650,"date":"2025-03-06T09:29:22","date_gmt":"2025-03-06T15:29:22","guid":{"rendered":"https:\/\/www.eoption.com\/mid-morning-look-march-06-2025\/"},"modified":"2025-03-06T09:29:22","modified_gmt":"2025-03-06T15:29:22","slug":"mid-morning-look-march-06-2025","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-march-06-2025\/","title":{"rendered":"Mid-Morning Look: March 06, 2025"},"content":{"rendered":"\n
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Mid-Morning Look<\/span><\/b><\/p>\n

Thursday, March 06, 2025<\/span><\/b><\/p>\n\n\n\n\n\n\n\n
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Index<\/span><\/p>\n<\/td>\n

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Up\/Down<\/span><\/p>\n<\/td>\n

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%<\/span><\/p>\n<\/td>\n

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Last<\/span><\/p>\n<\/td>\n<\/tr>\n

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DJ Industrials<\/span><\/b><\/p>\n<\/td>\n

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-297.60<\/span><\/p>\n<\/td>\n

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0.68%<\/span><\/p>\n<\/td>\n

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42,711<\/span><\/p>\n<\/td>\n<\/tr>\n

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S&P 500<\/span><\/b><\/p>\n<\/td>\n

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-51.66<\/span><\/p>\n<\/td>\n

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0.91%<\/span><\/p>\n<\/td>\n

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5,789<\/span><\/p>\n<\/td>\n<\/tr>\n

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Nasdaq<\/span><\/b><\/p>\n<\/td>\n

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-176.42<\/span><\/p>\n<\/td>\n

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0.94%<\/span><\/p>\n<\/td>\n

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18,378<\/span><\/p>\n<\/td>\n<\/tr>\n

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Russell 2000<\/span><\/b><\/p>\n<\/td>\n

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-21.91<\/span><\/p>\n<\/td>\n

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1.04%<\/span><\/p>\n<\/td>\n

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2,078<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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U.S. stocks erase yesterday’s rebound as recession fears, stagflation worries start to take hold following a slew of recent economic data reports showing slowing of US<\/span> growth, as noted by ISM<\/span> Manufacturing, softer ADP<\/span> private payrolls, and sharply lowered Q1 GDP revisions over the last week to -2.8% as of Monday from +2.3% on 2\/19. Tariff confusion along with the economic concerns are putting more pressure on stocks again this morning. Treasury prices have advanced over the last 5 weeks, sending yields lower, while the US dollar has tumbled over 4% against the euro just this month! That move lower is helping interest rate sensitive names (housing stocks). However, markets have seen broad aggressive selling since the S&P 500 hit all-time highs just 2-weeks ago as the Nasdaq is now down -10% from its all-time high (correction territory), while the Smallcap Russell 2000 falls as much as 15% from its highest levels (bearish territory around 20%). The Philadelphia Semi Index (SOX<\/span>) was down -4% to start day around 4,500 to lowest levels since September as MRVL<\/span> slides -19% after results, dragging down sector (SOX<\/span> has since pared losses). The US dollar (DXY<\/span>) remains in a downdraft, amid changes in Europe\/tariff fears. US<\/span> Commerce Secretary Lutnick says on CNBC<\/span> this morning “Hopefully by April 2nd, Mexico and Canada will have done enough on fentanyl that this part of the conversation is over, and it will just be about reciprocal tariffs.” The S&P 500 (SPX<\/span>) fell to lows roughly 20-points above its 200-dma of 5,725 this morning, having bounced since…will it hold?<\/p>\n

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In Central Bank News, the European Central Bank (ECB<\/span>), as expected, cut interest rates on deposit facility to 2.50% vs 2.75%, cuts the benchmark refinancing rate to 2.65% vs 2.90% and cut the interest rate on marginal lending facility to 2.90% vs 3.15% noting inflation has continued to develop broadly as staff expected, and latest projections closely align with previous inflation outlook. The ECB now forecasts headline inflation averaging 2.3% in 2025, 1.9% in 2026 and 2.0% in 2027 and ex energy and food, staff project an average of 2.2% in 2025, 2.0% in 2026 and 1.9% in 2027. Also in Europe, German government bonds fall again, extending their worst daily drop since 1990 and pushing 10-year yields up another 6 bps to 2.85% after jumping 30-bps on Wednesday after Germany’s next government agreed to create a 500-billion-euro infrastructure fund and overhaul borrowing rules. <\/p>\n

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Economic Data<\/p>\n

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  • U.S. Q4 non-farm productivity revised to +1.5% above consensus +1.2% and vs. prior +1.2% while U.S. Q4 non-farm unit labor costs revised to +2.2%, below consensus +3.0% and prior +3.0%<\/li>\n<\/ul>\n<\/div>\n
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    • Weekly Jobless Claims fell to 221,000 in the latest week from 242,000 prior and vs. consensus 235,000; the 4-week moving average edged higher to 224,250 from 224,000 prior; continued claims climbed to 1.897M from 1.855M prior week (prev 1.862M).<\/li>\n
    • January trade deficit fell to (-$131.4B) from Decembers (-$98.1B) and slightly more than the (-$127.4B) consensus; Jan goods deficit $156.77B, services surplus $25.39B; January exports +1.2% vs Dec -2.6%, imports +10.0% vs Dec +3.6% and U.S. Jan exports $269.82B vs Dec $266.52B, imports $401.20B vs Dec $364.58B.<\/li>\n
    • U.S. employers announced 172,017 layoffs for February, up 245% from January and the highest monthly count since July 2020, Challenger, Gray & Christmas reported. Challenger put the total of announced federal job cuts at 62,242.<\/li>\n
    • U.S. Jan wholesale sales fell -1.3% vs Dec +1.4%; Jan wholesale inventories revised to +0.8% (consensus +0.7%) from +0.7%; Jan stock\/sales ratio 1.33 months’ worth vs Dec 1.30 months.<\/li>\n<\/ul>\n

       <\/span><\/p>\n

       <\/span><\/p>\n\n\n\n\n\n\n\n\n\n
      \n

      Macro<\/span><\/p>\n<\/td>\n

      		\n

      Up\/Down<\/span><\/p>\n<\/td>\n

      		\n

      Last<\/span><\/p>\n<\/td>\n<\/tr>\n

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      WTI Crude<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -0.25<\/span><\/p>\n<\/td>\n

      		\n

      66.06<\/span><\/p>\n<\/td>\n<\/tr>\n

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      Brent<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -0.29<\/span><\/p>\n<\/td>\n

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      69.01<\/span><\/p>\n<\/td>\n<\/tr>\n

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      Gold<\/span><\/b><\/p>\n<\/td>\n

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      -7.00<\/span><\/p>\n<\/td>\n

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      2,919.00<\/span><\/p>\n<\/td>\n<\/tr>\n

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      EUR\/USD<\/span><\/b><\/p>\n<\/td>\n

      		\n

      0.0035<\/span><\/p>\n<\/td>\n

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      1.0825<\/span><\/p>\n<\/td>\n<\/tr>\n

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      JPY\/USD<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -0.76<\/span><\/p>\n<\/td>\n

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      148.14<\/span><\/p>\n<\/td>\n<\/tr>\n

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      10-Year Note<\/span><\/b><\/p>\n<\/td>\n

      		\n

      0.069<\/span><\/p>\n<\/td>\n

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      4.336%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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      Sector Movers Today<\/p>\n

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      • The Philadelphia Semiconductor Index (SOX<\/span><\/b>) fell over 4.1% this morning to lows below 4,500, the worst levels since September led by the MRVL<\/span><\/b> results and continued selling pressure on AI related winners in 2024, as NVDA<\/span>, AVGO<\/span>, ARM<\/span><\/b>, and others extended recent declines early on. MRVL<\/span><\/b> reported solid FQ4 results and FQ1 guidance, though shares declined; MRVL reported Q4 Data Center revs of $1.37B were in line but still grew meaningfully +24% q\/q and 78% y\/y. Keybanc noted MRVL addressed concerns it had lost share at AWS on Trainium.<\/li>\n<\/ul>\n<\/div>\n
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        • In Homebuilders: Seaport Global upgraded the homebuilding sector under coverage, raising its ratings on KBH<\/span>, LEN<\/span>, TRI<\/span>, MHO<\/span>, DHI<\/span><\/b>, to Buy from Neutral and upgraded MTH<\/span>, TMHC<\/span>, PHM<\/span><\/b> to Neutral from Sell noting since the firms downgrade in September, the Homebuilders fell 30% absolute (34% vs S&P), consistent with past cycles Early cycle under-performance, underpinning its relative Positive sector call now, as Later cycle sectors absorb equivalent downside, yet lack equivalent upside convexity, when the market inflects.<\/li>\n
        • In Department Stores\/Off price retail: JD<\/span><\/b> reported Q4 2024 revenues rose 13.4% y\/y to $47.5B, and full-year revenues of $158.8B, up 6.83% Y\/y; retail revenue rose 14.73% to $42.1B and Logistics grew 10.37% to $7.13B; BURL <\/span><\/b>shares jumped on Q4 beat as EPS $4.13 tops consensus $3.77 on slightly better revs $3.27B (est. $3.24B) and Q4 comparable store sales growth was 6% vs. guidance of 0% to 2%, guides year EPS below views; Macy’s (M<\/span>) <\/b>forecast annual sales and profit below Wall Street’s expectations, with sales $21B-$21.4B vs. est. $21.81B and EPS of $2.05-$2.25 vs. est. $2.31 (follows recent cautious guides from WMT<\/span><\/b> and TGT<\/span><\/b>). <\/li>\n
        • In Life Sciences: On Wednesday, March 5, Judge Angel Kelley of the U.S. District Court for the District of Massachusetts issued a nationwide preliminary injunction blocking the Trump administration from significantly reducing the National Institutes of Health (NIH<\/span>)’s indirect cost support for researchers that have received\/will receive NIH grant monies. A preliminary injunction requires a determination that a plaintiff’s case is likely to succeed on the merits. Canaccord notes this preliminary (and a finalized) injunction against cuts of NIH indirect cost support benefits companies with NIH exposure including TXG<\/span>, ILMN<\/span>, PACB<\/span>, AKYA<\/span><\/b> and QTRX<\/span><\/b><\/li>\n<\/ul>\n

           <\/span><\/p>\n

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          Stock GAINERS<\/p>\n

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          • BABA<\/span><\/b> +1%; after unveiling its latest open-sourced AI model. The platform marked a big leap over the previous version, using just a fraction of the data DeepSeek’s R1 employs.<\/li>\n<\/ul>\n<\/div>\n
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            • BJ <\/span><\/b>+10%; reported Q4 adj EPS $0.93 topping consensus of $0.88, while revs dipped -1.5% y\/y to $5.28B, just above ests $5.27B while membership fees $117.0M, +7.9% y\/y; also guided a mostly in-line full-year outlook for comp-club sales growth of 2% to 3.5% (est. +2.9%).<\/li>\n
            • BURL<\/span><\/b> +11%; shares jumped on Q4 beat as EPS $4.13 tops consensus $3.77 on slightly better revs $3.27B (est. $3.24B) and Q4 comparable store sales growth was 6% vs. guidance of 0% to 2%, guides year EPS below views<\/li>\n
            • DHI<\/span><\/b> +2%; along with gains in other housing stocks after a positive Seaport Global sector upgrade and after 5-week decline in Treasury\/mortgage rates.<\/li>\n
            • JD<\/span><\/b> +2%; reported Q4 2024 revenues rose 13.4% y\/y to $47.5B, and full-year revenues of $158.8B, up 6.83% Y\/y; retail revenue rose 14.73% to $42.1B and Logistics grew 10.37% to $7.13B.<\/li>\n
            • TREE<\/span><\/b> +21%; delivered a strong Q4 EBITDA beat roughly 50% above consensus with metrics above the high end of management’s guidance range; all three of TREE’s reportable segments returned to Y\/Y growth for the first time since Q221 according to KBW Inc.<\/li>\n
            • VEEV<\/span><\/b> +8%; as Q4 revenue outperformed (+14% y\/y normalized), which flowed through to margins (43%) and earnings (+26% y\/y), FY26 guidance +11% revenue and EPS growth exceeded consensus (+11%\/5%) and Subscription growth guide (+14%, ~85% of revenue) was solid.<\/li>\n
            • ZS<\/span><\/b> +4%; reported strong Q2 results with outperformance across the board while the Q2 beat flowed into higher FY\/25 guidance as 2H assumptions remain largely unchanged. Calculated billings of $743M rose 18% Y\/Y, beating Street estimates by $23M, fueled by 25% Y\/Y growth in unscheduled billings.<\/li>\n<\/ul>\n

               <\/span><\/p>\n

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              Stock LAGGARDS<\/p>\n

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              • HIMS<\/span><\/b> -6%; after a U.S. federal judge has denied an injunction that would have allowed compounding pharmacies to keep making copies of LLY’s<\/b> popular weight-loss drug Zepbound in the U.S.; HIMS sells compounded versions of Novo Nordisk’s Wegovy and Ozempic, chemically known as semaglutide.<\/li>\n<\/ul>\n<\/div>\n
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                • MDB<\/span><\/b> -20%; shares tumbled after slightly better Q4 top\/bottom line results were overshadowed by softer guidance as sees annual adjusted EPS $2.44-$2.62, below consensus of $3.35 and revs $2.24B-$2.28B below ests $2.33B after quantifying a significantly larger revenue benefit over the last 12 months.<\/li>\n
                • MEI <\/span><\/b>-28%; shares tumbled on weaker Q3 results as adj EPS loss of ($0.21) was worse than the est. ($0.12), adj EBITDA $11.4Mm vs est. $20.07Mm on revs $239.9Mm vs est. $265.52Mm; guides Q4 sales $240-255Mm vs est. $293.52Mm and pre-tax income ($1Mm) to $3Mm vs est. $9.287Mm.<\/li>\n
                • MRVL<\/span><\/b> -16%; solid FQ4 results and FQ1 guidance, though shares declined; MRVL reported Q4 Data Center revs of $1.37B were in line but still grew meaningfully +24% q\/q and 78% y\/y. Keybanc noted MRVL addressed concerns it had lost share at AWS on Trainium.<\/li>\n
                • SNBR<\/span><\/b> -10%; named Linda Findley as its new CEO, starting April 7 (following roles as CEO of Blue Apron and COO of Etsy), posted mixed Q4 results with EPS loss (-$0.21) vs. est. loss (-$0.23); Q4 revs $377M vs. est. $389.75M; said guidance was suspended pending MS. Findley’s onboarding.<\/li>\n
                • VSCO<\/span><\/b> -5%; reported a top and bottom line beat for Q4 but guided Q1 net sales $1.30B-$1.33B below expectations of $1.39B saying it factored in unseasonal weather across much of the U.S.; mgmt cited weakening trends in late-Jan.\/early-Feb. and guided Q1 and FY25 sales\/EPS.<\/li>\n<\/ul>\n<\/div>\n

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