open_in_newOriginal article
Weak Corporate Earnings Results Weigh on Stocks

Weak Corporate Earnings Results Weigh on Stocks

  • 21.03.2025 23:12
  • theglobeandmail.com
  • Keywords: Geopolitical Risks, Market Volatility

Stocks dropped as weak corporate earnings and geopolitical tensions weighed on markets. Companies including FedEx, Nike, and Micron faced declines amid economic concerns and tariff impacts.

SMCI ProductsFDXsentiment_dissatisfiedNKEsentiment_dissatisfiedMUsentiment_dissatisfiedMARsentiment_dissatisfiedCUKsentiment_dissatisfiedHLTsentiment_dissatisfiedHSTsentiment_dissatisfiedDALsentiment_dissatisfiedNCLHsentiment_dissatisfiedBKNGsentiment_dissatisfiedLENsentiment_dissatisfiedALNYsentiment_satisfiedTSLAsentiment_satisfiedHSYsentiment_satisfiedTAPsentiment_satisfiedCPBsentiment_satisfiedGISsentiment_satisfiedKHCsentiment_satisfiedLMTsentiment_satisfiedSMCIsentiment_satisfied

Estimated market influence

FedEx

FedEx

Negativesentiment_dissatisfied
Analyst rating: Buy

Cut profit outlook due to cost pressures and weaker demand.

Nike

Nike

Negativesentiment_dissatisfied
Analyst rating: Buy

Tariffs and geopolitical issues affecting earnings.

Micron Technology

Micron Technology

Negativesentiment_dissatisfied
Analyst rating: Buy

Forecasted Q3 gross margin below consensus.

Marriott International

Marriott International

Negativesentiment_dissatisfied
Analyst rating: Neutral

Economic concerns weighing on travel stocks.

Carnival

Carnival

Negativesentiment_dissatisfied
Analyst rating: Buy

Same as above.

Hilton Worldwide Holdings

Hilton Worldwide Holdings

Negativesentiment_dissatisfied
Analyst rating: Neutral

Same as above.

Host Hotels & Resorts

Host Hotels & Resorts

Negativesentiment_dissatisfied
Analyst rating: Buy

Same as above.

Delta Air Lines

Delta Air Lines

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Same as above.

Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings

Negativesentiment_dissatisfied
Analyst rating: N/A

Same as above.

United Airline Holdings

Negativesentiment_dissatisfied
Analyst rating: N/A

Same as above.

Booking Holdings

Booking Holdings

Negativesentiment_dissatisfied
Analyst rating: Buy

Same as above.

Lennar Corp

Lennar Corp

Negativesentiment_dissatisfied
Analyst rating: Buy

Q1 home sales gross margins down y/y and weaker Q2 forecast.

Valmont Industries

Negativesentiment_dissatisfied
Analyst rating: N/A

Downgraded by William Blair & Co.

Alnylam Pharmaceuticals

Alnylam Pharmaceuticals

Positivesentiment_satisfied
Analyst rating: Buy

Expanded approval for heart drug.

Tesla

Tesla

Positivesentiment_satisfied
Analyst rating: Neutral

CEO Musk's assurance boosted confidence.

Hershey Co

Hershey Co

Positivesentiment_satisfied
Analyst rating: Neutral

Defensive sector strength in broader market weakness.

Molson Coors Beverage

Molson Coors Beverage

Positivesentiment_satisfied
Analyst rating: Neutral

Same as Hershey Co.

Campbell's Company

Campbell's Company

Positivesentiment_satisfied
Analyst rating: Neutral

Same as Hershey Co.

General Mills

General Mills

Positivesentiment_satisfied
Analyst rating: Neutral

Same as Hershey Co.

Kraft Heinz

Kraft Heinz

Positivesentiment_satisfied
Analyst rating: Neutral

Same as Hershey Co.

J M Smucker

Positivesentiment_satisfied
Analyst rating: N/A

Same as Hershey Co.

Lockheed Martin

Lockheed Martin

Positivesentiment_satisfied
Analyst rating: Buy

Potential fighter jet contract win.

Super Micro Computer

Super Micro Computer

Positivesentiment_satisfied
Analyst rating: Buy

JPMorgan upgrade.

Context

Business Insights and Market Implications Summary

Market Performance

  • S&P 500 Index: -0.81%
  • Dow Jones Industrials Index: -0.95%
  • Nasdaq 100 Index: -0.97%

Stock Movers

Losers

  • FedEx (FEDX): Down >-11% after cutting full-year EPS guidance to $18.00-$18.60 from $19.00-$20.00, citing inflation and demand concerns.
  • Nike (NKE): Down >-7% due to digital traffic decline and elevated inventory amid tariffs.
  • Micron Technology (MU): Down >-7% after forecasting Q3 gross margin below consensus.

Economic Sectors Under Pressure

  • Travel Stocks: Marriott (-5%), Carnival (-4%), Hilton (-3%).
  • Homebuilders: Lennar Corp (-4%) due to weak home sales margins and order forecasts.
  • Semiconductors: KLA, Applied Materials, AMD, GlobalFoundries, ASML, Lam Research, Marvell Tech, Qualcomm (-2%+).

Gainers

  • Tesla (TSLA): Up >+2% after CEO Musk's assurance to employees.
  • Food & Beverage: Hershey (+1%), Molson Coors (+0.86%), Campbell's (+0.74%).
  • Lockheed Martin (LMT): Up >+1% amid potential fighter jet contract news.

Interest Rates and Bonds

  • 10-year T-note yield: Down -1.9 bp to 4.218%.
  • German Bund Yield: Down -2.7 bp to 2.753%.
  • UK Gilt Yield: Up +1.1 bp to 4.656%.

Market Trends and Concerns

  • Global Economic Outlook: Weakness in corporate earnings and geopolitical risks weigh on sentiment.
  • Tariffs Impact: Concerns over US tariffs' effect on economic growth and corporate profitability.
  • Geopolitical Risks: Escalation in Middle East tensions (Israel-Hamas, Yemen Houthi rebels) increases market volatility.

Central Bank Policy

  • Fed: Officials signal support for steady policy despite economic strength and inflation above target.
  • ECB: Swaps discount 59% chance of -25 bp rate cut in April.

Market Volatility

  • Triple-witching event causes higher volume and potential price movements.
  • Stocks down over past two weeks due to tariff fears and geopolitical tensions.

Long-Term Implications

  • Tariffs may weaken global trade and corporate earnings, with broader economic impacts.
  • Defensive sectors (food, beverages) show resilience amid market weakness.