Wall Street’s five-week winning streak came to an end, with the S & P 500 losing 0.42% for the week, while the Dow Jones Industrial Average lost 0.11% and the Nasdaq Composite fell 0.82%. It was a roller coaster week driven largely by inflation data. A hotter-than-expected consumer price index on Tuesday sent stocks reeling, with the Dow posting its biggest drop in a year. Stocks bounced back over the next two days, helped by a softer retail sales report , only to slump again on Friday’s hot producer price index for January. As we said this week, we’re not overly concerned with the hotter-than-expected inflationary readings. One month does not make a trend, plus it shows a resilient economy and buys the Federal Reserve time to gather more data before cutting interest rates. Other notable reports: a weaker-than-expected January industrial production report and much weaker than expected January housing starts number, a decline of 14.8% month over month vs. expectations for a flat month. Earnings season picks back up for the Club next week, with four holdings set to report quarterly results. Overall, results have been solid: Of the 79% of S & P 500 companies that have reported so far, 75% reported an upside earnings surprise, while 65% reported better-than-expected revenue results, according to Fact Set. As a reminder, U.S. markets are closed on Monday, Feb. 19, in observance of Presidents Day. Palo Alto : Expectations are certainly high for this cybersecurity stock, which already made a sizable move up following results from peers Fortinet , Tenable , and Check Point on Feb. 6. All three beat expectations on the top and bottom lines and the consensus numbers for Palo Alto were not updated since then, according to FactSet. As a result, it’s fair to assume that buy-side analysts will be disappointed by anything less than earnings, sales, and guidance all beating expectations. Free cash flow generation is another key watch item, as many analysts use this as the…
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