February 20, 2025, Stock Market Charlie Recap

Today's trading session was like a rollercoaster ride after yesterday's S&P 500 party hit an all-time high. It decided to take a breather and slipped by 0.4%. The major indices took a nosedive at the start, thanks to some folks trying to cash in and consolidate their winnings. But fear not! In a heroic afternoon comeback, the market showed it wasn't done shopping for bargains, bouncing back from its lows. The S&P 500 flirted with a 1.0% drop before settling on a 0.4% decline. At first, the decliners were throwing a 2-to-1 party over the advancers at the NYSE, but by the end, it was more of a 4-to-3 friendly gathering.

Sector Performance

• Consumer Staples: Walmart (WMT) decided to throw a pity party with its fiscal Q1 and full-year guidance, causing a stampede for the exits. The stock took a nosedive of 6.5% to 97.21, earning the title of "Most Likely to Make Investors Cry" in both the Dow Jones Industrial Average and the S&P 500 consumer staples sector, which itself tripped and fell by 1.0%.

• Consumer Discretionary and Financials: These sectors were feeling a bit under the weather, with declines of 1.1% and 1.6%, respectively. Together, they make up a hefty 25% of the S&P 500's market cap, so it's like having a quarter of your pizza missing.

• Energy: The energy sector strutted its stuff as the top performer, climbing by 1.0%, fueled by oil prices that decided to take a joyride up to $72.49 per barrel (+0.42, +0.6%).

Bond Market and Economic Data

The 10-year Treasury yield took a little nap, settling four basis points lower at 4.50%, while the 2-year yield stayed as still as a statue at 4.27%. Treasuries barely batted an eye at some rather sleepy economic data. Weekly jobless claims climbed higher than expected, and the Philadelphia Fed Survey for February turned out weaker than your grandma's tea.

Year-to-Date Performance

• Dow Jones Industrial Average: +3.8%

• S&P 500: +4.0%

• Nasdaq Composite: +3.4%

• S&P Midcap 400: +1.8%

• Russell 2000: +1.4%

Economic Data Review

• Weekly Initial Claims: 219K (consensus 217K); Prior revised to 214K from 213K. Apparently, more people decided to join the “I Need a Job” club.

• Weekly Continuing Claims: 1.869 million; Prior revised to 1.845 million from 1.850 million. The club is getting bigger!

• February Philadelphia Fed Index: 18.1 (consensus 20.5); Prior 44.3. Looks like someone deflated the balloon.

• January Leading Indicators: -0.3% (consensus 0.0%); Prior revised to 0.1% from -0.1%. The indicators decided to take a backward stroll.

The key takeaway from the jobless claims report is that it covers the period during which the household survey for the employment report is conducted. The continued low level of initial jobless claims suggests economists may expect a solid increase in February nonfarm payrolls. The Philadelphia Fed report highlights a decrease in new order activity, while the prices paid and received indices increased from January. So, we might be hiring more, but the orders are playing hard to get.

Upcoming Economic Events

Looking ahead, Friday's economic schedule includes the flash February S&P Global U.S. Manufacturing PMI and flash February S&P Global U.S. Services PMI readings at 9:45 ET, followed by January Existing Home Sales and the final February University of Michigan Consumer Sentiment survey at 10:00 ET. Grab your popcorn; it's going to be an economic thriller!

Today's News

Walmart (WMT, Financial) took a nosedive of 6.5% after its financial forecast turned out to be as disappointing as a soggy sandwich. Analysts had higher hopes, but alas, Walmart's crystal ball predicted Q1 sales growth with per-share earnings between $0.57 and $0.58, leaving the $0.65 consensus estimate in the dust. Meanwhile, investors are biting their nails over tariffs and the Federal Reserve's interest rate tango.

Alibaba (BABA, Financial) got a boost, jumping 8.7% like a kangaroo on a trampoline after Q3 results that made analysts cheer. Investor Ryan Cohen, the GameStop (GME, Financial) hero, decided to throw about $1 billion into Alibaba, giving the stock a nice little pep talk. Meme-stock traders rejoiced, convinced Alibaba's growth prospects are as bright as a disco ball.

Celsius Holdings (CELH, Financial) slipped 6% after announcing it was buying Alani Nu for a whopping $1.8 billion. This is Celsius's biggest shopping spree yet, and while they were hoping for a high-five, they got a downgrade from TD Cowen instead. The competition is heating up, and Celsius is feeling the burn.

Palantir Technologies (PLTR, Financial) led a parade of enterprise software stocks into the red, dropping about 10% thanks to potential budget cuts by the Department of Defense. Wedbush Securities, ever the optimist, suggested these cuts might actually open new doors for Palantir. Meanwhile, Salesforce (CRM, Financial) and Workday (WDAY, Financial) joined the downturn party, bringing their own sad snacks.

Nu Holdings (NU, Financial) celebrated a Q4 adjusted net income of $610.1 million, but its revenue of $2.99 billion was $180 million shy of expectations, like showing up to a potluck with just a bag of chips. Still, they added 4.5 million new customers, bringing the total to 114.2 million, proving that even if you miss the mark, you can still throw a great party.

MercadoLibre (MELI, Financial) wowed with Q4 results, boasting a GAAP EPS of $12.61 and revenue of $6.06 billion, both exceeding expectations. Their total payment volume and gross merchandise volume grew like a weed in a garden, showcasing the strength of their ecosystem and setting them up for future triumphs.

Texas Roadhouse (TXRH, Financial) served up a tasty surprise, beating profit estimates with Q4 earnings and a 23.3% revenue jump. Comparable restaurant sales sizzled, and new locations sprouted up like mushrooms after rain. Improved margins and heftier guest checks added flavor to their success.

IBM (IBM) continued its winning streak, marking its seventh consecutive session of gains. The stock inched up 0.16%, reflecting a hearty 43.5% rise over the past year, outshining the broader market like a peacock in a flock of pigeons. Analysts are split on IBM, but the technical outlook is as bullish as a rodeo bull.

Rivian Automotive (RIVN, Financial) revved up slightly after reporting record Q4 revenues and narrowing its adjusted EBITDA loss. The electric vehicle maker churned out more vehicles than expected, cruising along with its full-year guidance. Rivian's team-up with Volkswagen and a loan from the Department of Energy are fueling their ambitious growth plans.