Markets Rebound After Initial Selloff Triggered by Middle East Tensions

Market Overview - Market focus this week includes US-Iran war news, corporate earnings, and economic indicators [1] - The February ADP employment change is expected to increase by +40,000, while the ISM services index is projected to slip by -0.3 to 53.5 [1] - Q4 nonfarm productivity is expected to rise by +1.8%, and unit labor costs are anticipated to increase by +2.0% [1] Economic Indicators - The February ISM manufacturing index fell -0.2 to 52.4, exceeding expectations of 51.5 [2] - The ISM prices paid sub-index rose +11.5 to a 3.5-year high of 70.5, surpassing expectations of 60.0 [2] - Weekly initial unemployment claims are expected to rise by +3,000 to 215,000 [1] Corporate Earnings - Over 90% of S&P 500 companies have reported Q4 earnings, with 74% beating expectations [6] - S&P earnings growth is projected to increase by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [6] - Excluding the Magnificent Seven tech stocks, Q4 earnings are expected to rise by +4.6% [6] Stock Movements - Defense stocks are rising due to the war in Iran, with Aerovironment up more than +12% and Northrop Grumman up more than +4% [4][14] - Energy producers are rallying as WTI crude oil prices surge, with Marathon Petroleum up more than +4% [15] - Airline stocks are under pressure due to rising crude oil prices, with American Airlines down more than -45% [11] Sector Performance - Precious metals are experiencing increased demand, with gold prices reaching 1-month highs [4] - Bond yields initially fell but have since risen, with the 10-year T-note yield up 10 basis points to 4.04% [4] - Cryptocurrency-exposed stocks are gaining, with Bitcoin up more than +6% [16] Company-Specific News - Seagate Technology is down more than -5%, leading losses in the Nasdaq 100 [11] - Norwegian Cruise Line Holdings forecasts full-year EPS of $2.38, below the consensus of $2.59, leading to a -9% decline [12] - Elevance Health is down more than -3% due to potential suspension of enrollment in Medicare Advantage plans [18]