DAILY UPDATE: Rare Disease Day Visibility, Rite Aid Down as Markets Rise Up

Posted on March 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Welcome back to the Gregorian calendar. Along with being a leap day, yesterday was Rare Disease Day—bringing visibility to the 7,000 conditions that each affect fewer than 200,000 people in the US. Combined, around 10% of US residents have one, per the National Institute of Health.

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  • Rite Aid is planning to close 77 stores in 2024 as part of its Chapter 11 bankruptcy.
  • That makes 431 stores that the drugstore chain has decided to close since October.
  • Rite Aid has been shrinking its store count for years, losing ground to rivals Walgreens and CVS.

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Here’s where the major benchmarks ended:

  • The S&P 500 index added 40.81 points (0.8%) to 5,137.08, up 0.95% for the week and its seventh weekly gain in the past eight; the Dow Jones Industrial Average® (DJI) gained 90.99 points (0.2%) to 39,087.38, down 0.1% for the week; the NASDAQ Composite rose 183.02 points (1.1%) to 16,274.94, up 1.7% for the week.
  • The 10-year Treasury note yield fell about 7 basis points to 4.182%.
  • The CBOE Volatility Index® (VIX) dropped 0.29 to 13.11.

Chipmaker strength drove a 4.3% advance in the Philadelphia Semiconductor Index (SOX), which ended at a record high. The NASDAQ-100®(NDX), which includes the NASDAQ’s largest non-financial companies, also ended at a record high. Small-cap shares finished the week strong. The Russell 2000® Index (RUT) rose 1.1% to settle at a 23-month high and notched a 3% gain for the week. 

Banks were among the weakest performers as concerns over regional lenders flared up, underscored by another nosedive in shares of troubled New York Community Bancorp (NYCB).

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BANKS: Down

Posted on February 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Commercial real estate has been on the struggle bus since the pandemic hit in 2020, and now it’s taking regional banks along for the ride.

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Recently, New York Community Bancorp (NYCB) shares took an 11% tumble—on top of a 38% plunge on Wednesday—after the bank said it’s dealing with surging losses from office buildings and multifamily apartment buildings. It’s a sign that commercial real estate (CRE) lenders are reckoning with the fact that they might not get their money back as commercial landlords struggle with high vacancies and interest rates:

  • More than $2.2 trillion in US commercial property loans will come due by 2027, according to the Wall Street Journal.
  • The default risk is worse for regional banks, where CRE loans make up nearly 29% of all assets, versus 6.5% at big national banks.

The KBW Regional Banking Index also dropped 9.2% since Wednesday, the most since Silicon Valley Bank’s collapse last year. (Coincidentally, most of the assets of Signature Bank, which failed shortly after SVB, were bought by NYCB.)

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DAILY UPDATE: Tech Industry Sheds Workers as the Stock Markets Rebound

Posted on February 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

LEAP YEAR: This February month is a Leap Year. It’s stuffed with 29 days for 2024. If we didn’t have leap years, then our seasons would completely flip every ~750 years!

GROUND HOG DAY: A tradition observed in the United States and Canada on February 2nd of every year. It derives from the Pennsylvania Dutch superstition that if a ground hog emerges from its burrow on this day and sees its shadow, it will retreat to its den and winter will go on for six more weeks; if it does not see its shadow, spring will arrive early.

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The tech industry has shed tens of thousands of workers over the last year or so, including thousands this month alone across companies including Unity, Twitch, Amazon, Meta, Microsoft, eBay and Google. It also emerged that PayPal is firing around 2,500 people. 

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 60.54 points (1.3%) to 4,906.19; the Dow Jones Industrial Average (DJI) gained 369.54 points (1.0%) to 38,519.84; the NASDAQ Composite® (COMP) added 197.63 points (1.3%) to 15,361.64.
  • The 10-year Treasury note fell over 10 basis points to 3.86%.
  • The CBOE Volatility Index® (VIX) fell 0.47 to 13.88.

Regional bank shares remained under pressure in the wake of poorly received quarterly results earlier this week from New York Community Bancorp (NYCB), which took over the failed Signature Bank in 2023. The bank’s shares fell another 11% on top of a 38% drop Wednesday while the KBW Regional Banking Index (KRX) sank 2.3% to a two-month low. The bank weakness was offset by strength in several other sectors, including retail and consumer discretionary.

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DAILY UPDATE: Microsoft, Google and IMF Up Yesterday, as UPS and the Stock Markets Collapse Today

Posted on February 1, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Microsoft and Google rode the AI wave to huge quarters. Microsoft posted revenues of ~$62 billion in its fiscal Q2 ending Dec. 31, a year over year increase of 17.6% and ahead of analyst’s expectations. That was its best revenue growth in seven quarters, thanks to the release of new AI-enabled Office products. Meanwhile, Google reported strong results, too: Ad revenue at YouTube skyrocketed to $9.2 billion in Q4 of last year, up from below $8 billion the year before. Alphabet CEO Sundar Pichai said YouTube is “already benefiting from our AI investments and innovation.” Alphabet’s total revenue was up 13% year over year to ~$86 billion.

UPS slashed 12k jobs. The shipping giant said it will require employees to return to the office five days a week this year as it changes how it operates amid a slowdown in demand. Revenue declined in Q4, while annual sales fell 9.3% in 2023. Amazon, its biggest customer, accounted for 11.8% of revenue last year, up from the year before, as revenue from other customers declined due to lower demand and more in-store pickups, executives said. UPS is also dealing with higher labor costs due to the deal it made with the Teamsters union to avoid a strike last summer.

The IMF has the US to thank for raising its global forecast. The International Monetary Fund—the UN’s flagship financial agency—said the global economy will grow 3.1% this year, a slight increase from its projection in October. That’s largely due to the strength of the US economy, which has defied economists’ expectations, growing 3.3% in the fourth quarter of 2023. But the improved outlook was also boosted by economic stimulus in China, which has faced deflation and a real estate crisis, among other issues. Other economies, including India, Brazil, and Russia, also performed better than expected, helping to juice the IMF’s forecast.

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Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) fell 79.32 points (1.6%) to 4,845.65; the Dow Jones Industrial Average® (DJI) lost 317.01 points (0.8%) to 38,150.30; the NASDAQ Composite® (COMP) dropped 345.89 points (2.2%) to 15,164.01, a two-week low.
  • The 10-year Treasury note yield (TNX) decreased nearly 9 basis points to 3.969%.
  • The CBOE Volatility Index® (VIX) jumped 1.03 to 14.34.

Regional banks led Wednesday’s declines after New York Community Bancorp (NYCB), which took over the failed Signature Bank last year, reported a fourth-quarter loss of $193 million, sending its shares down nearly 38%. The KBW Regional Banking Index (KRX) sank 6%. Communications services shares were also among the weakest performers. Energy companies were also under pressure as WTI Crude Oil futures (/CL) shed nearly 3%.

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