‘Time looks to be running out on the laggards,’ BTIG says

Investors looking for a broadening of the rally are running out of time, according to BTIG.

While mega-cap tech stocks have continued to surge higher this year, the majority of the market has continued to fall behind, according to BTIG’s Jonathan Krinsky in a Wednesday note. Krinsky said a failure by the laggards this week to make a sustainable bounce could mean the recent stock rally is also near its top.

Broadly speaking, mega-cap tech stocks are all higher this year. Nvidia, for example, has already surged 23% in January. Even Apple, which contended with several notable downgrades this month, is up by 1%.

Compare that with the SPDR S&P Regional Banking ETF, which is down 0.3% this year, or the Ark Innovation ETF, which is off by 11%, Krinsky noted. The VanEck Oil Services ETF is down by 3%, and the iShares U.S. Real Estate ETF is lower by nearly 5%. The small-cap Russell 2000 is off by 3%.

“Whenever markets have divergences, they resolve in one of two ways. Either the reason for the divergence (i.e. the laggards) play catch-up, or the leaders succumb down to the laggards,” Krinsky wrote.

“Time looks to be running out on the laggards here, and if the average stock starts to roll over when the super extended leadership names decide to reverse, that’s when things get a bit dicey for the broad indices,” Krinsky continued. “We think we are nearing that point here.”

— Sarah Min

U.S. GDP grows at much faster-than-expected pace

The U.S. economy expanded by 3.3% in the fourth quarter, easily surpassing expectations. Economists polled by Dow Jones had forecast the economy grew by 2% in the fourth quarter.

The report also included encouraging data on the inflation front. The price index for personal consumption expenditures rose 2.7% on an annualized basis, down from 5.9% a year prior. Core PCE increased by 3.2%, down from 5.1%.

The report comes as investors look ahead to possible Federal Reserve rate cuts later this year.

— Fred Imbert

Stocks making the biggest moves before the bell: IBM, Tesla and more

These are the stocks moving the most in premarket trading:

Read the full list of stocks moving here.

— Lisa Kailai Han

Southwest gains on earnings beat

Southwest added more than 1% before the bell following a better-than-expected financial report for the fourth quarter.

The value-focused airline earned 37 cents per share, excluding items, and $6.82-billion in revenue. Analysts expected just 12 cents per share and $6.75 billion, according to LSEG.

Southwest said it has taken the Boeing 737 Max 7 out of its fleet plans amid regulatory delays.

Shares have jumped almost 8% in 2024, making up some ground after slipping for the prior four years.

— Alex Harring

American advances as earnings positively surprise

American Airlines popped more than 4% in Thursday premarket trading on the heels of a strong quarterly print.

The Texas-based airline said it earned 29 cents per share excluding items on revenue of $13.06 billion in the fourth quarter. That’s ahead of Wall Street forecasts, with analysts anticipating 10 cents per share and $13.02 billion in revenue, per LSEG.

American has risen more than 1% this year, adding to 2023’s gain of 8%.

— Alex Harring

Blackstone rises on back of earnings report

Blackstone advanced more than 3% in Thursday’s premarket after per-share earnings came in better than expected in the fourth quarter.

The investment company posted $1.11 per share, exceeding the consensus estimate of 95 cents from analysts polled by LSEG. But revenue slightly missed the Street’s prediction, coming in at $2.54 billion while analysts forecasted $2.57 billion.

Blackstone has dropped nearly 8% so far in the new year, relinquishing some gains after climbing 76.5% in 2023.

— Alex Harring

Humana tumbles on weak guidance

Humana slid more than 14% before the bell on Thursday after the health insurance provider offered weak expectations for full-year earnings.

The company told investors to anticipate approximately $16, excluding items, earned per share in the full 2024 year. That’s well below the consensus estimate of $29.10 from analysts surveyed by LSEG.

Humana’s guidance overshadowed fourth-quarter revenue, which exceeded the Street’s expectations.

Shares have slipped more than 12% in 2024, deepening losses after dropping more than 10% in 2023.

— Alex Harring

Alaska Air rises after earnings

Shares of Alaska Air rose about 1% in the premarket after the airline posted its fourth-quarter results.

The company earned 30 cents per share, excluding items. That exceeded an LSEG estimate of 18 cents per share. Revenue came in line with expectations at $2.55 billion.

This is Alaska Air’s first quarterly report since a door plug blew out during an Alaska flight. The company said the grounding of 737 Max 9 jets from Boeing will cost the company $150 million.

— Fred Imbert

Shares of Tesla suppliers and EVs in Asia drop after Tesla’s earnings miss

Shares of electric vehicle makers and Tesla suppliers in Asia tumbled after Tesla missed fourth-quarter revenue and profit estimates on Thursday.

EV makers Nio, Xpeng and Li Auto were among the largest losers on the Hang Seng index, with Nio plunging over 7%. Shares of Xpeng and Li Auto lost 6.05% and 4.47% in early trading.

Separately, Tesla suppliers also fell after the automaker’s results, with South Korean display manufacturer LG Display slipping over 4%. LG Display is known to supply the car displays for Tesla’s Model 3.

Companies along Tesla’s battery supply chain registered slightly smaller losses, with LG Energy Solution, Samsung SDI and Panasonic Holdings all down about 2%.

— Lim Hui Jie

South Korea economy grows 1.4% in 2023, Q4 beats estimates

Samsung Electronics Co. 8GB Double-Data-Rate (DDR) 4 memory modules.

SeongJoon Cho | Bloomberg | Getty Images

South Korea’s economy grew at a faster-than-expected pace in the last quarter of 2023, according to an advance estimate from the Bank of Korea.

Gross domestic product grew 2.2% in the fourth quarter compared with a year ago, more than a Reuters poll estimate of 2.1%.

During the year, data showed South Korea’s GDP rose 1.4%.

Data showed exports grew 2.6% in the fourth quarter from the previous three-month period, as shipments of semiconductors increased.

The main Kospi index has lost about 7% since the beginning of the year.

— Shreyashi Sanyal

Market hypothetical: If Boeing was unchanged in 2024, the Dow Industrials would be 308 points higher

The Dow Jones Industrial Average would stand 308 points higher than its current level around 37,806 if shares in Boeing were only unchanged in 2024 rather than down more than 17% in the wake of safety issues surrounding the 737 Max 9.

That’s because the Dow is weighted according to share price rather than a company’s market value — as is the S&P 500. Boeing closed out 2023 at $260.66 and ended Wednesday at about $214 a share. Every $1 change in the price of any stock in the Dow is worth about 6.6 points.

Similarly, if UnitedHealth Group were unchanged in January, the Dow Industrials would be another 87 points higher. UNH earnings earlier this month showed higher medical costs, which RBC Capital said were above what management had previously forecast due to the popularity of RSV vaccines.

The effect of UNH and Boeing combined, and all other prices being equal, would leave the Dow trading today at more than 38,200.

— Scott Schnipper

Boeing shares fall after FAA halts 737 Max production expansion

Shares of Boeing slid nearly 4% after the Federal Aviation Administration paused the company’s 737 Max production expansion, but cleared a path to bring Boeing’s Max 9 back into service.

On Wednesday, the FAA said it approved inspection instructions for the Max 9. The regulatory agency grounded the airplanes after a panel blew out of an aircraft on Jan. 5.

Boeing shares have had a rocky start to the year, off nearly 18% in January.

Read more about the FAA’s announcement here.

— Leslie Josephs, Darla Mercado

West Texas crude touches 4-week high, gains almost 5% in 2024

West Texas Intermediate crude oil futures for delivery in March gained about 1% Wednesday to $75.09 a barrel, the highest since Dec. 26, 2023, and bringing the year-to-date gain to 4.8%.

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March WTI futures in past month.

February gasoline futures were little changed at $2.2095 a gallon after rising as high as $2.2457, the most since Nov. 30, 2023, and are similarly higher this year by 4.9%.

Other notable commodity price moves pushed the price of March lumber futures to their highest since July 19, 2023, and tin contracts on the London Metal Exchange to their highest since Aug. 11, 2023.

— Scott Schnipper, Gina Francolla

Dow futures rise, boosted by IBM earnings

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