Stock market today: US stocks look to bounce back from inflation hit | February 14, 2024

Market Overview

• Futures are recovering slightly after a significant sell-off on Tuesday due to a hotter-than-expected January CPI report.
• The broader market experienced a mixed start, with the Dow and S&P 500 opening higher, while the NASDAQ showed fractional gains.
• Analysts are monitoring the 10-year Treasury note yield, US dollar index, and historical market trends to assess potential impacts on stock performance.
• The market experienced a slight recovery after a significant selloff the previous day.

Lyft

• Lyft shares initially surged 60% in extended trading after reporting better-than-expected earnings but later corrected to a 21% gain due to a clarification on adjusted earnings margin.
• Lyft's recent earnings report revealed a clerical error where the company initially stated a 500 basis point expansion in profit margins before correcting it to 50 basis points during the earnings call.
• Wedbush Securities Managing Director and Senior Equity Analyst, Dan Ives, criticized Lyft's credibility due to the error and compared it to a "Ted Striker airplane moment."
• Lyft is facing challenges in competing with Uber, which has been gaining market share and profitability.
• Lyft CEO David Richer has been in his role for less than a year, and investors are expecting to see significant progress in the company's turnaround strategy by the end of 2024.

Airbnb

• Airbnb reported narrower-than-expected losses and beat revenue expectations but suggested potential moderation in demand going forward.
• Airbnb reported mixed fourth-quarter results, suggesting a potential moderation in the number of nights and experiences booked.
• Airbnb's average daily rate (ADR) is a key metric that investors are monitoring, as it indicates the health of the company's business.
• Airbnb experienced 18% year-over-year growth in Q4 supply, adding nearly 1.2 million active listings, with the majority being exclusive to Airbnb.
• Airbnb is introducing tools to help hosts drive value and increase conversion, but ADRs remain sticky.
• The one-time tax charge included in Airbnb's recent earnings does not indicate the health of the business, which is still generating strong free cash flow.
• Airbnb has a low share of corporate travel compared to hotels, but it could benefit from corporate retreats and partnerships with companies.

Arm

• Arm is seeing strong momentum and tailwinds in AI demand, particularly in flat hyperscalers.
• Arm's revenue model and market share capture potential are seen as adequate to monetize AI demand.
• Arm's compute architecture is efficient and lower power, giving it an advantage over x86 in the shift towards heterogeneous compute and generative AI.
• KeyBank Capital Markets has an overweight rating on Arm with a price target of $120.

Generative AI

• AMD, Nvidia, Broadcom, Marvell, and Micron are seen as favorite AI plays due to their exposure to generative AI.
• Generative AI spending is expected to remain strong for the next several years, despite supply constraints and potential price declines as the technology advances.

Stocks

• Stocks are higher today after a deep selloff on Tuesday.
• Shares of Generac are moving to the downside on the company's quarterly results, missing estimates and issuing downbeat guidance.
• Upstart shares are falling as the company missed expectations for Q4 and warned about the current credit environment.
• Zillow shares are moving higher despite issuing softer Q1 guidance, as the online real estate giant beat on the top and bottom line.
• Bitcoin is hovering just under $552,000 after briefly crossing that level earlier today.
• Robinhood shares are moving to the upside after posting a surprise beat on profit, with transaction-based revenue climbing higher driven primarily by crypto trading.

Bitcoin

• Bitcoin enthusiasts are looking to the upcoming Bitcoin halving in April as a potential catalyst for inflows into Coinbase.
• Bitcoin ETFs have been a positive catalyst for Bitcoin, driving net inflows and institutional volumes through Coinbase.
• The upcoming Bitcoin halving could lead to increased demand for Bitcoin, potentially driving up its price.
• The approval of an Ethereum ETF could further boost the cryptocurrency market.

Federal Reserve

• Recent hotter-than-expected inflation data surprised markets and led to a selloff in stocks.
• The Federal Reserve is in a difficult position as many components of inflation are not particularly economically or interest rate sensitive.
• Retail sales data may show downside risk due to weaker prices for goods and a decline in unit auto sales.

Nvidia

• Nvidia, a leading AI company, is expected to report its fourth-quarter earnings on February 21st, with investors focusing on its artificial intelligence segment.
• Nvidia is a leading provider of graphics processing units (GPUs) used in training and running generative AI models.
• Meta (formerly Facebook)