US FINANCIAL MARKET

S&P 500 Hits 5,100 Milestone to Extend Winning Run: Markets Wrap – Bloomberg, 2/23/2024

• The advance in stocks moderated on Friday, but the relatively smaller gains were enough to push the market toward another milestone.
• A feat of multiple records in the world’s biggest equity market drove the S&P 500 to the historic 5,100 mark.
• The Nasdaq 100 was little changed. The Dow Jones Industrial Average rose 0.5%.
• Buoyed by the revolutionary artificial-intelligence technology and signs of economic resilience, stocks were also on track for another all-time high.
• After its big post-earnings advance, Nvidia is now set to become the first semiconductor firm with a $2 trillion valuation.
• Treasury 10-year yields fell three basis points to 4.29%.
• Warner Bros. reported fourth quarter revenue and profits that fell short of Wall Street forecasts amid declining TV advertising sales and weakness at its studios business.
• Payments company Block reported results and first-quarter expectations that exceeded analysts’ estimates.
• Booking Holdings gave a disappointing forecast for travel reservations and gross bookings, with the war in Israel and currency fluctuations weighing on results.
• Carvana topped Wall Street’s profit expectations in the final months of 2023 and said it expects improved earnings this quarter as the used-car retailer defies the challenges of high interest rates and inflation.
• Viking Holdings has filed confidentially for an initial public offering, as the travel industry continues to rebound from its pandemic-era slump.
• A lander from Intuitive Machines touched down on the moon on Thursday, making it the first private spacecraft to land on the lunar surface intact.
• Standard Chartered pledged to hand back more money to shareholders as it outlined efforts to improve returns and reduce complexity at the emerging markets-focused lender.
• The Stoxx Europe 600 rose 0.4%.
• West Texas Intermediate crude fell 2.2% to $76.86 a barrel.

Block’s Shares Surge After Results Beat Analysts’ Estimates – Bloomberg, 2/23/2024

• Block shares surged after the payments company reported results and first-quarter expectations that exceeded analysts’ estimates.
• The firm, headed by Jack Dorsey, includes a number of different businesses, such as household names Cash App and Square, and has owned buy now, pay later firm Afterpay for two years.
• Revenue from Cash App rose 31% from a year earlier to $3.91 billion, topping estimates of $3.71 billion.
• Holiday spending fueled Square and Afterpay transactions over Black Friday and Cyber Monday, increasing them by 14% from a year earlier, the firm said at the time.
• Fourth-quarter operating expenses rose 20% to $2.16 billion.
• Block reported full-year adjusted earnings before interest, taxes, depreciation and amortization of $1.79 billion, beating its own guidance of $1.66 billion to $1.68 billion.
• The company said it expects adjusted EBITDA of $570 million to $590 million for the first quarter, higher than analysts’ estimates of $514.5 million.

Warner Bros. Discovery misses estimates for revenue and profit but boosts free cash flow – CNBC, 2/23/2024

• Warner Bros. missed analyst targets for both profit and revenue in the fourth quarter but boosted free cash flow as its streaming service Max ended 2023 profitable for the first time.
• Revenue: $10.28 billion vs. $10.35 billion expected.
• The company reported 97.7 million global direct-to-consumer subscribers, a 2% increase from the previous quarter.
• Warner Bros. reported a 14% decline in linear television advertising revenue excluding changes in foreign exchange and a 4% drop in actual distribution revenue.
• Fourth-quarter adjusted EBITDA was $2.5 billion, down 5% from a year ago, excluding the impact of foreign exchange, as studio revenue lagged as a result of strikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists.
• The company’s flagship subscription streaming service, Max, ended 2023 profitable, with full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $103 million.
• Loss per share: 16 cents vs. 7 cents expected.
• Warner Bros. generated $3.31 billion in free cash flow in the fourth quarter and ended 2023 with $6.16 billion in free cash flow, up 86% from a year prior.
• Warner Bros. paid down $1.2 billion of debt in the quarter and $5.4 billion in debt in 2023.
• It still has $44.2 billion of gross debt remaining.

Intuit’s stock dips despite big earnings beat, revenue in line with analyst estimates – Market Watch, 2/23/2024

• Intuit’s stock dipped in after-hours trading Thursday despite the company posting quarterly revenue that met analysts’ estimates and earnings that surpassed them.
• Revenue climbed 11% to $3.39 billion from $3.04 billion in the year-ago quarter.
• Adjusted earnings were $2.63 a share.
• Analysts surveyed by FactSet had expected on average net income of $2.30 a share on revenue of $3.39 billion.
• Intuit offered fiscal-year sales guidance of $15.9 billion to $16.1 billion, while FactSet analysts are forecasting $16.05 billion.

Booking Holdings Shares Fall on Disappointing Forecast for Travel Reservations – Bloomberg, 2/23/2024

• Booking Holdings shares fell the most in 20 months on Friday after giving a disappointing forecast for travel reservations and gross bookings, with the war in Israel and currency fluctuations weighing on results.
• The company’s revenue grew 18% to $4.78 billion in the fourth quarter, topping the $4.73 billion analysts had projected.
• Room nights booked for the three months ended Dec. 31 grew 9.2%.
• That missed the average analyst expectation for a 9.7% increase.
• Gross travel bookings, which includes taxes and fees, were $31.7 billion, compared with a projection of $31.3 billion.
• Adjusted earnings before interest, taxes, depreciation and amortization came in slightly above estimates, though Booking’s margin on that basis was just shy of predictions.
• The growth of room nights booked — a closely watched measure for the company — will be 4% to 6% in the first quarter, Booking said on a conference call following its earnings report Thursday.
• For the full year, the company expects gross bookings to increase “slightly faster than 7%” as it accounts for the negative impact from exchange rates and the war.
• That compares with an average analyst estimate of 9.9%.

Carvana Surges as Used-Car Retailer’s Profit Tops Estimates – Bloomberg, 2/23/2024

• Carvana topped Wall Street’s profit expectations in the final months of 2023 and said it expects even better earnings this quarter, sending its shares up as the used-car retailer defies the challenges of high interest rates and inflation.
• Revenue was $2.42 billion, slightly below expectations.
• Gross profit per unit was $5,283 last quarter, more than double the total from a year earlier but down slightly from the prior quarter.
• Carvana had said it expected the figure to remain above $5,000 in the fourth quarter but warned of a sequential decline in retail unit sales due to industry and seasonal patterns.
• Retail units sold last quarter fell to 76,090, missing analysts’ estimates.
• The company expects the figure to be “slightly up” in the first three months of 2024 from a year ago.
• Adjusted earnings before interest, taxes, depreciation and amortization were $60 million in the fourth quarter, the company said Thursday in a statement.
• Analysts had expected an average of $58.6 million in estimates compiled by Bloomberg.
• While Carvana said “the macroeconomic and industry environment continues to be uncertain,” it forecast first-quarter adjusted EBITDA “significantly above” $100 million.

• The company has net debt of $5 billion, down more than $1 billion.
• Carvana’s interest payments rose to $632 million, from $486 million a year earlier, costing the retailer $2,000 per vehicle sold last year.

Reddit Files Publicly for IPO After Two Years on Sidelines – Bloomberg, 2/23/2024

• Reddit filed for an initial public offering, confirming its revenue growth and helping to propel a still tenuous resurgence in US listings.
• The San Francisco-based social media company, more than two years after first filing confidentially with the US Securities and Exchange Commission, submitted those plans publicly on Thursday.
• The company has been advised to consider a valuation of at least $5 billion in an IPO and could begin marketing the shares as soon as March, Bloomberg News previously reported.
• The company, which has raised $1.38 billion, was valued at $10 billion after a 2021 financing round, according to data provider PitchBook.
• Reddit, founded in 2005, averaged 73.1 million daily active unique visitors in the fourth quarter, according to the filing.
• The company had net loss of $90.8 million on revenue of $804 million in 2023, compared with a net loss of $158.6 million on revenue of $666.7 million a year earlier, according to the filing.
• The offering is being led by Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America.
• The company plans for its shares to trade on the New York Stock Exchange under the symbol RDDT.

US ECONOMY & POLITICS

Fed’s Waller Urges Patience on Rate Cuts After Jump in Prices – Bloomberg, 2/23/2024

• Federal Reserve Governor Christopher Waller said January’s jump in consumer prices warrants caution in deciding when to start cutting interest rates, though he still expects reductions to begin later this year.
• “The strength of the economy and the recent data we have received on inflation mean it is appropriate to be patient, careful, methodical, deliberative – pick your favorite synonym,” Waller said Thursday in a speech in Minneapolis.
• “Whatever word you pick, they all translate to one idea: What’s the rush?”
• Waller’s comments built on similar messages from other Fed policymakers earlier in the day, with Vice Chair Philip Jefferson calling on the central bank to guard against cutting rates too far in response to falling inflation and Governor Lisa Cook seeking “greater confidence” on price progress.
• Waller said there’s “no great urgency” to ease policy given strength in the economy and labor market.
• “I am going to need to see a couple more months of inflation data to be sure that January was a fluke and that we are still on track to price stability,” Waller said in prepared remarks at the Minneapolis campus of the University of St. Thomas.
• “My conjecture is that, in the absence of a major economic shock, delaying rate cuts by a few months should not have a substantial impact on the real economy in the near term.”
• “And I think I have shown that acting too soon could squander our progress in inflation and risk considerable harm to the economy,” added Waller, who was appointed by former President Donald Trump and whose views are seen by investors as influential.
• The Fed governor said he saw “predominately upside risks” to his expectation that inflation will continue to move toward the central bank’s 2% goal.
• The Fed governor said he plans to pay particular attention to jobs data, wages and compensation, to see if they are moderating in a way that is consistent with the Fed’s 2% inflation target.

EUROPE & WORLD

MercadoLibre Delivers Record Revenue and Net Income in 2023 – YahooFinance, 2/23/2024

• MercadoLibre’s revenue for the fourth quarter was $4.3 billion, a 41.9% increase year-over-year, and an 83.2% increase on an FX neutral basis.
• The company’s strategic focus on technology and innovation has propelled its growth, with unique buyers accelerating to the fastest year-on-year pace since 2020, resulting in almost 85 million for the full year.
• MercadoLibre reported a significant increase in revenue, reaching $14.5 billion for the full year, a 37% year-over-year growth.
• Net income soared to nearly $1 billion, marking a substantial improvement from the previous year.
• Gross Merchandise Volume (GMV) and Total Payment Volume (TPV) saw robust increases of 39.9% and 57.2% year-over-year, respectively.
• Unique active users grew significantly, reaching 218 million by the end of 2023.
• The company’s logistics network, a competitive advantage, shipped a total of 650 million items in 2023, which is 45% more than the previous year.

Ride-hailing giant Grab posts first profitable quarter, announces $500 million share buyback – CNBC, 2/23/2024

• Grab posted its first-ever profitable quarter, raking in $11 million in profit, the Southeast Asian ride-hailing giant said in its fourth-quarter earnings report Thursday.
• Revenue for the quarter hit $653 million, exceeding LSEG analysts’ estimates of $634.86 million.
• Losses for full year 2023 came to $485 million, down 72% from $1.74 billion a year ago.
• During the fourth quarter, total incentives — which include partner and consumer incentives — were further reduced to 7.3% of total value of goods sold, Grab said in its report.
• That’s compared to 8.2% in the same period a year ago “as we continued to improve the health of our marketplace.”
• “We exited [2023 with] mobility exceeding pre-Covid levels. We are seeing a very strong demand in the mobility space,” Grab CFO Peter Oey told CNBC in an exclusive interview on Friday, adding that tourism is “growing very much.”
• “If you look at the deliveries business, we have another record 13% year-over-year growth. We have now more users on our platform also at the same time. So we have really strong momentum,” he said on CNBC’s “Squawk Box Asia.”
• For 2024, Grab expects revenue to come in between $2.70 billion and $2.75 billion, lower than LSEG analysts’ consensus of $2.8 billion.

Standard Chartered Unveils $1 Billion Buyback, Guides for Growth – Wall Street Journal, 2/23/2024

• Standard Chartered unveiled a $1 billion buyback and forecast higher income this year, after it posted a quarterly earnings beat on the back of topline growth, lower impairments and the sale of its aviation finance business.
• Underlying net interest income rose 6% on year to $2.39 billion, slightly lower than an estimate for $2.42 billion.
• The London-based lender, which earns most of its revenue in Asia, on Friday said underlying pretax profit in the fourth quarter rose 63% compared with the same period a year earlier to $1.06 billion, beating a consensus of $957 million, according to estimates compiled by the company.
• Reported pretax profit rose more than ninefold to $1.14 billion.
• Underlying operating income rose 7% on year to $4.02 billion, helped by gains in both net interest income and noninterest income.
• The lender said it would buy back up to $1 billion in shares starting immediately, which it said it expected to reduce its CET1 ratio by about 40 basis points.
• It also guided for net interest income of $10 billion to $10.25 billion on a constant currency basis this year, and said it expects operating income to rise 5%-7% for 2024-2026.
• Standard Chartered added that it plans to return at least $5 billion to shareholders cumulatively from 2024 to 2026.

Allianz Boosts Shareholder Returns After Profit Nearly Doubles – Wall Street Journal, 2/23/2024

• Allianz said fourth-quarter profit nearly doubled after a strong performance in its life-health segment and launched a new share buyback while hiking its dividend payout.
• Allianz’s fourth-quarter property-casualty combined ratio weakened to 94.9% from 94.3% and missed consensus expectations of 93.9%.
• The company said it would now target an operating profit for 2024 at EUR14.8 billion, plus or minus EUR1 billion.
• Operating profit rose 17% to EUR3.77 billion in the quarter, driven by a strong performance at its life-health business, where operating profit rose 29%, and supported by increased profitability in all other business segments, Allianz said.
• Total business volume for the quarter rose 7.8% to EUR39.6 billion.
• The results were slightly below expectations of net profit of EUR2.17 billion, but beat operating profit estimates of EUR3.67 billion, according to an analysts’ consensus provided by the company.
• The German insurer said Friday that net profit in the three months to the end of December was 2.15 billion euros ($2.33 billion) compared with EUR1.1 billion in the same period last year.
• The Munich-based company launched a share-buyback program of up to EUR1 billion and declared a dividend of EUR13.80 a share, up from EUR11.40 a year earlier.

ECB’s Lagarde Says Wage Numbers Encouraging, More Data Needed – Bloomberg, 2/23/2024

• The latest euro-area labor compensation numbers are reassuring, though the European Central Bank will require additional data to be convinced inflation won’t flare up again, according to President Christine Lagarde.
• “The fourth-quarter wage numbers are obviously encouraging numbers,” she told reporters in Ghent, Belgium, on Friday.
• “The Governing Council needs to be more confident that the disinflation process that we are observing will be sustainable and will take us to the 2% medium term target.”
• “There are many sectors and employees that are covered by negotiations that will be completed in the course of the first quarter of 2024,” she said.
• “I think that those numbers will — especially if they continue to be encouraging — will be important for us to assess going forward in order to reach confidence.”
• “The ECB is independent,” she said.
• “We are determined to continue to be data dependent and independent in the assessment that we make and in the policy decision that we approve.”

Netanyahu Presents Blueprint for Postwar Gaza, With Free Rein for Israeli Military – Wall Street Journal, 2/23/2024

• Israeli Prime Minister Benjamin Netanyahu outlined a blueprint for postwar Gaza that calls for it to be administered by local Palestinian officials free of links to militant groups and for Israel to conduct security operations in the strip indefinitely.
• Most of the ideas have been publicly discussed by Netanyahu and other Israeli officials before and, though few new details were provided, the blueprint appears at odds in significant ways with both U.S. plans and those of Arab governments in the region.
• It was presented for the first time to Israel’s security cabinet Thursday night.
• Taken together, Netanyahu’s ideas describe a demilitarized Gaza that would face a continued heavy Israeli security presence even after combat operations end, with a buffer zone off limits to Palestinians along Gaza’s perimeter and Israeli control of the Egypt-Gaza border that would seek to seal off the strip in the south.
• “Israel will maintain operational freedom of action in the entire Gaza strip, without a time limit, for the purpose of preventing the renewal of terrorism and thwarting threats from Gaza,” the document says, adding that Israel intends to continue the war until Hamas and other militant groups are defeated in Gaza.

US Unveils Biggest Sanctions Package on Russia Since War Began – Bloomberg, 2/23/2024

• The US unveiled its biggest one-day sanctions package against Russia since the invasion of Ukraine two years ago, targeting more than 500 people and entities in a fresh bid to squeeze the country’s economy and send a message over the death of dissident Alexey Navalny.
• Sanctioned people and entities included a military drone manufacturer and its top staff, Russia’s Mir payment system, a company that specializes in three-dimensional printed plastics and numerous others.
• The Commerce Department added 90 companies to a list that limits their access to US technology.
• “Russia’s economy and military-industrial base are showing clear signs of weakness in part due to the actions we, along with our partners and allies around the world, have taken to support Ukraine’s brave defense,” Treasury Secretary Janet Yellen said in a statement.

Factmonster – TODAY in HISTORY

• Mexican general Santa Anna began the siege of the Alamo. – 1836
• The Tootsie Roll was introduced by Leo Hirshfield. – 1896
• The first Axis shelling of U.S. soil took place near Santa Barbara, Calif. – 1942
• S. Marines raised the American flag on Iwo Jima. – 1945
• Scottish scientists announced the successful cloning of a sheep, Dolly. – 1997

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