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.

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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.