US stocks rose on Thursday, staying upbeat ahead of a second day of closely tracked testimony from Federal Reserve Chair Jerome Powell.
Techs took the lead again with more than 1% gain for the Nasdaq Composite (^IXIC), while the S&P 500 (^GSPC) added 0.9%, touching record highs during the session. The Dow Jones Industrial Average (^DJI) gained 0.5%.
Stocks have risen the past two sessions as the market assessed Powell’s questioning by lawmakers on the economy and monetary policy, which has brought no bad news or surprises. The Fed chief stuck to repeating the message that the central bank is in no hurry to ease policy, though he said rate cuts are likely to come this year.
On Thursday, this time before the Senate Banking Committee, the Fed Chair reiterated the central bank’s intentions on rate cuts, provided inflation data continues to show continued cooling.
On the economic data front Thursday, jobless claims released came in unchanged at 217,000 for the week ending March 2. Continuing claims registered just above 1.9 million, about 8,000 higher from its prior print. The crucial non-farms payroll report is due for release Friday morning.
Meanwhile, gold (GC=F) rose for the fifth day, hitting a fresh high above $2,160 as the prospect of a rate cut gave fresh impetus to the record-setting rally.
Among corporates, shares of Victoria’s Secret (VSCO) plunged over 25% after the lingerie maker’s sales guidance fell short of expectations.
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In the penalty box for a long time: Victoria’s Secret
The Amazon (AMZN) bra-buying trade.
Victoria’s Secret (VSCO) truly had a disastrous earnings day last night, not unlike what happened at fellow mall dweller Foot Locker (FL) just a few hours earlier. Shares of the intimate apparel player are crashing almost 30% in the pre-market, and it’s the right move.
Management cited no improvement in sales trends in February from the fourth quarter’s 6% decline.
JP Morgan analyst Matt Boss — who downgraded VSCO today — added the below section into his research note to clients that caught my attention. It appears VSCO is losing further market share to Amazon, a battle the company is unlikely to win. The problem is structural, in my view.
“Worth noting on the intimates industry data, management cited the Sports Bra category outpacing Non-Sport (i.e. Structured Bras), with the broader Intimates total addressable market split 30% Sports Bras vs. 70% Non-Sport (relative to VSCO over-indexing to Non-Sport bras currently). To that end, management noted the overall intimates market down mid-single-digits in 4Q reflected a shift towards Value/Amazon as a result of a challenged consumer, in addition to sportswear players such as Lululemon (LULU) taking share in the Sports Bra category.”
Despite the terrible quarters from VSCO/FL, there are retailers in the mall that are winning.
Take a look below at what Abercrombie & Fitch (ANF) CEO Fran Horowitz told me after another quarter of double-digit sales gains on Wednesday.
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Deutsche Bank gets on board the bitcoin rocket ship
All aboard.
The Deutsche Bank team is out with a note today looking at five reasons why bitcoin prices have a lot more room to run. It’s too early in the day to put you back to sleep by detailing all five reasons, so let me zero in on one: April’s potential bitcoin halving event.
The investment bank is calling attention to the bullish action in bitcoin around prior halving events:
“In the 30 days prior to the November 2012 halving, prices rose by 5%. A more substantial 13% gain was seen ahead of the July 2016 event. Most recently, there was a sizable 27% price increase in the month before the May 2020 halving.”
A helpful timeline chart to see how this has historically played out:
The bitcoin bulls await another halving in April. (Deutsche Bank)
