Stock market today: US stocks rebound from inflation fueled selloff | February 14, 2024

Stock market today: US stocks rebound from inflation fueled selloff | February 14, 2024

Stock Market

  • The stock market attempted to recover after a sell-off triggered by the higher-than-expected January CPI report.
  • The broad US equity market is trading slightly above its fair value estimate.
  • Small-cap stocks rebounded after a significant decline, while disruptive stocks and cryptocurrencies surged.
  • The CBOE Volatility Index (VIX) decreased from 16 to 14.

Share Buybacks and Layoffs

  • Fourth-quarter earnings season revealed a trend of share buybacks, layoffs, and concerns about inflation.
  • Companies in the communication services sector are leading in share buybacks, including Meta, Disney, and Uber.
  • Analysts noted a focus on operational efficiency, leading to layoffs and a renewed focus on AI.

Inflation and Interest Rates

  • Chicago Fed President Austin Ghoulsby attempted to calm market fears, stating that one month of higher CPI does not indicate a trend and that the Fed still plans to cut rates multiple times this year.
  • Morningstar's US economics team expects inflation to average 1.9% this year and subside further in 2025.
  • Higher borrowing costs may lead to increased mentions of layoffs as companies seek to protect their margins.

Undervalued Sectors and Real Estate Stocks

New York Community Bank

  • The problems at New York Community Bank (NYCB) are seen as idiosyncratic to the bank and not indicative of broader banking system issues.


  • Bitcoin's recent resilience and price increase above $552,000 is attributed to supply and demand dynamics, with the introduction of spot Bitcoin ETFs potentially driving further demand.
  • Coinbase benefits from increased interest in cryptocurrency, with spot Bitcoin trading volumes surging over 30% in Q1 compared to Q4 of last year.
  • Robinhood reported positive Q4 earnings with a surprise profit and 10% growth in cryptocurrency revenue, signaling broader market engagement in crypto.

AI and Cybersecurity

  • Microsoft and OpenAI have identified groups using AI, including ChatGPT, for hacking purposes, targeting enemy nations and organizations.
  • Countries named in the report include China, Iran, North Korea, and Russia, with groups like Charcoal Typhoon, Salmon Typhoon, and Emerald Sheet.


  • Wayfair is seen as a buy due to its market dominance in pure-play online furniture retail, outperforming competitors and gaining market share.
  • Margin expansion is expected for Wayfair, with potential for $600 million in EBITDA even in a flat revenue scenario and a long-term target of high teens EBITDA margin.
  • Growth potential for Wayfair lies in its continued market share gains, below-average e-commerce penetration in the furniture category, and opportunities in B2B and underpenetrated areas.


  • Etsy's growth has slowed down in the past year and it is fully exposed to consumer discretionary spending, which is currently facing headwinds.
  • Etsy is facing increasing competition from Temu, which is spending heavily on advertising and driving up the cost of performance marketing.


  • Lyft's fourth-quarter earnings report showed strong progress towards profitability, offsetting concerns about a clerical error in the report.
  • Lyft reported record bookings, ridership, and driver earnings, and projects continued free cash flow positivity through 2024.
  • Lyft's customer obsession strategy, cost discipline, and increasing volume are driving its financial success.

Cisco and Tesla

  • Cisco's earnings report showed beats in adjusted EPS and revenue but disappointed with its guidance, leading to a decline in share price.
  • The company plans to cut 5% of its global workforce as part of a cost-streamlining strategy.
  • Institutional investors are turning bearish on Tesla, with concerns about Elon Musk's focus on AI, potential negative volume growth, and recent price increases.

Lithium Mining

  • Lithium mining, once seen as a lucrative opportunity, has faced challenges post-pandemic, with prices dropping significantly from their 2022 peak.
  • Piedmont Lithium CEO Keith Phillips discussed the company's restructuring plan to cut costs and adapt to volatile lithium pricing.
  • The restructuring involves a $10 million cost-cutting plan and a 27% workforce reduction to ensure cash flow and cost control in the current market.


  • Twitter's Q4 results showed beats on both adjusted EPS and revenue compared to consensus estimates, but the company's Q1 revenue forecast missed analysts' expectations.
  • HSBC downgraded Twitter's stock due to its low growth profile, and the company has been dealing with decelerating sales growth post-pandemic.
  • Recent leadership changes at Twitter, including the departure of CEO Jeff Lawson and the appointment of

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