Markets retreat after weak consumer confidence

Dow fell 67, advancers & decliners were the same & NAZ retreated 337.  The MLP index dropped 4+ to the 316s & the REIT index rose 6 to 416.  Junk bond funds fluctuated & Treasuries saw buying which reduced yields.  Oil was off 1+ to 69 as tariff threat hurts demand outlook & gold sank 47 to 2915.

Dow Jones Industrials

Consumers grew more pessimistic about the economic outlook in Feb as worries brewed about a slowing economy & rising inflation, the Conference Board reported.  The board's Consumer Confidence Index slipped to 98.3 for the month, down 7 points & below the forecast for 102.3.  This was the lowest reading since Jun 2024 & the largest monthly drop since Aug 2021.  "Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income," said Stephanie Guichard, the board's senior economist for global indicators.  "Pessimism about future employment prospects worsened and reached a ten-month high."  The decline in consumer confidence comes with Pres Trump threatening additional tariffs against US trading partners.  Trump said that duties against Canada & Mexico "will go forward" in Mar after a delay in Feb.  Economists worry that the tariffs could spark another round of inflation at a time when the Federal Reserve is weighing whether to lower interest rates further or hold steady as policymakers weigh the impact of Trump's aggressive fiscal & trade policy moves.  Though most economic indicators reflect continued growth, the Conference Board gauge matches other recent surveys showing waning confidence.  Last week, the University of Michigan reported a larger-than-expected monthly decrease of nearly 10% in Feb while the 5-year inflation outlook among respondents hit its highest level since 1995.  Along with the overall drop in confidence, the Expectations Index tumbled 9.3 points to a 72.9 reading, the first time since Jun 2024 that the measure has fallen below the level consistent with recession.  However, the current conditions measured improved somewhat, with 19.6% saying conditions are "good," up 1.1 percentage point from Jan.

February consumer confidence posts biggest drop since 2021in latest sign of slowing economy

Home Depot (HD), a Dow stock, on topped Wall Street's quarterly sales expectations, even as elevated interest rates & housing prices dampened consumer demand for large remodels & pricier projects.  For the full year ahead, the company expects total sales to grow by 2.8% & comparable sales, which take out the impact of 1-time factors like store openings & calendar differences, to increase by about 1%.  HD projected adjusted EPS will decline about 2% compared with the prior year.  CFO Richard McPhail said "housing is still frozen by mortgage rates."  Yet he added HD saw broad-based growth, as sales increased in about ½ of its merchandise categories & 15 of its 19 US geographic regions.  HD anticipates consumers will stop putting off projects as they gradually get used to higher interest rates, rather than waiting for them to fall.  "They tell us their lives are moving on," he said.  "Their families are growing. They're moving for a new job. They're upsizing their home. They want to upgrade their standard of living. Home improvement always persists, and so the question, I think, will be around the mindset of whether long-term rates have gotten to a new normal."  In the 3-month period that ended Feb 2, EPS was $3.02, up from $2.82 & revenue rose 14% from $34.8B in the year-ago period.  Comparable sales, a metric also known as same-store sales, increased 0.8% across the company.  Those results ended 8 consecutive qtrs of falling comparable sales.  They also exceeded expectations of a decline of 1.7%.  Comparable sales in the US increased 1.3% year over year.  Regions hit by hurricanes Helene & Milton contributed about 0.6% to comparable sales, McPhail added.  The stock soared 13.41 (2%).

Home Depot earnings beat estimates, as comparable sales losing streak ends

Eli Lilly (LLY) released higher doses of its weight loss drug Zepbound in single-dose vials at as much as ½ its usual monthly list price to reach more patients without insurance coverage for the blockbuster injection, such as those with Medicare.  It expands its effort to boost the US supply of Zepbound as demand soars, & to ensure eligible patients are safely accessing the real treatment instead of cheaper compounded versions.  LLY is now offering higher doses of Zepbound in single-dose vials through a “self-pay pharmacy” section on its direct-to-consumer website, LillyDirect, which began make more of the medication available in vials in Aug.  Eligible patients diagnosed by a health-care provider with obesity alone or along with obstructive sleep apnea, Zepbound's newly approved use, can pay for those vials themselves on the site.  The company is selling 7.5 milligram & 10 milligram vials of Zepbound for $499 per month when patients fill their first prescription, & any time they refill within 45 days of their previous delivery.  Otherwise, those 2 doses will cost $599 & $699, respectively.  Also, LLY is lowering the price of both of the lower-dose vials of Zepbound by $50.  The 2.5 milligram vial will now cost $349 & the 5 milligram vial will now be priced at $499.   Those vials will make more of the medication available because they are easier to manufacture than autoinjector pens, which cost roughly $1,000 per month before insurance.  “We are, in the absence of full coverage for people suffering from obesity like other chronic diseases, we are just trying to fill that room and provide a more affordable solution, particularly for the Medicare population because none of our affordability solutions can be applied to them,” said Patrik Jonsson, pres of LLY diabetes & obesity.  The stock soared 19.88 (2%).

Eli Lilly offering more cheaper vials of Zepbound weight loss drug

Stocks fell across the board as Pres Trump's revived tariff threats & potential toughening of China curbs weighed on market optimism & the chances of interest rate cuts.  The biggest move in markets, however, came from the cryptocurrency markets, where the price of bitcoin tumbled below $90K for the first time since Nov.