Breakfast News: Retail Therapy
March 3, 2025
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Friday's Markets |
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| S&P 500 5,955 (+1.59%) |
| Nasdaq 18,847 (+1.63%) |
| Dow 43,841 (+1.39%) |
| Bitcoin $84,214 (-0.1%) |
Source: Image created by JesterAI.
1. Evaluating the State of the Consumer
Three high-profile retailers report this week, giving us insight into the U.S. economy, which could influence the Federal Reserve's March 18 rate decision. A fourth-quarter update is due from Best Buy (BBY -1.19%) Tuesday. The electronics retailer missed Q3 expectations, with $9.45 billion revenue down 3.2% year over year. The focus is on expanding high-margin technology services and health sales.
- Worst earnings miss in two years: Target (TGT -0.77%) also posts Tuesday, after adjusted earnings per share (EPS) of $1.85 in the third quarter fell well short of the estimated $2.30. The retail giant projected Q4 flat sales, but revised its guidance in January based on holiday sales. Expect comparable sales to grow 1.5%.
- Up 239% in the past 5 years: Costco (COST -1.55%) reports its second quarter Thursday, after a Q1 revenue miss and earnings beat. Holiday season sales almost doubled expectations.
2. Stocks to Watch This Week
Okta (OKTA -0.41%) reports its fourth quarter after today's closing bell, after strong cash flow but slowing revenue growth in the third quarter. Q4 could be all about customer retention and growth through new products. Okta also plans a global focus on IT security and developers.
- Ranked 14th for its ability to beat the market over the next 5 years across all Motley Fool recs: We'll have a Q4 update from four-time Hidden Gems recommendation CrowdStrike (CRWD 1.79%) Tuesday. The cybersecurity company hit record quarterly revenue last time, but guidance was weaker than expected. Watch for further news on fallout from July's outage incident.
- Driven by AI demand: Broadcom (AVGO 0.22%) reports on Thursday (when the latest Stock Advisor rec is released, too). The semiconductor and infrastructure software company saw a 51% year-over-year revenue rise in Q4 2024. Guidance suggests a 22% revenue rise in Q1 compared to last year.
3. Midweek Key Earnings
Wednesday brings three further reports to watch, beginning with a Q2 update from Zscaler (ZS 1.12%), which expects slowing growth in 2025. It comes after the company's security platform exceeded half a trillion daily transactions in Q1, helping push revenue up 26%.
- Third-quarter revenue up 22%: MongoDB (MDB -1.19%) smashed through Q3 revenue and earnings guidance. The company expects between $515 million and $519 million in Q4 revenue.
- Q3 revenue and earnings beats: Continued customer growth after a strong Q3 could accelerate Veeva's (VEEV -0.71%) revenue growth in 2025.
4. Crypto Rout Reversal
Cryptocurrencies regained ground over the weekend, after President Trump announced plans for a U.S. strategic crypto reserve. The reserve will include Bitcoin (BTC 1.34%), Ethereum (ETH 1.96%) – ranked 5th in The Motley Fool's Cryptoball database – and several other currencies.
- "I will make sure the U.S. is the crypto capital of the world": The president spoke ahead of the first White House Crypto Summit on Friday.
- Worst week since 2022: Bitcoin climbed back over $90,000, after falling below $80,000 during the day Friday, but could still be heading for its worst month since 2022.
5. Next Up: Macro Data
February's Manufacturing Purchasing Managers' Index (PMI) is due today, with Services PMI Wednesday, providing insight into growth prospects. Friday brings the monthly jobs report, with 160,000 new jobs expected in February, up from 143,000 in January.
- "The economy could be slowing down faster than the Fed is willing to react": Speaking to Yahoo Finance, Interactive Brokers' (IBKR 1.20%) Steve Sosnick highlighted some investor fears.
- "The Tooth Fairy doesn't pay 'em!": With 25% tariffs on Mexico and Canada, and 10% on China, due Tuesday, Warren Buffett says they are a tax on goods and could raise inflation. Treasury Secretary Scott Bessent says they won't, and China will "eat any tariffs that go on."
6. Foolish Fun
Think of an example when a company has secured your trust as a consumer (as well as, if applicable, as an investor). Share with friends and family, or become a member to hear what your fellow Fools are saying!
