On Tuesday, U.S. Treasury yields decreased slightly as investors awaited important data concerning U.S. home prices.
U.S. Treasury yields decline slightly as investors focus on upcoming crucial home-price information
U.S. Treasury yields declined on Tuesday as investors focused on significant data regarding U.S. home prices.
The yield on the 10-year Treasury dropped more than 5 basis points to 4.341%, while the yield on the 2-year Treasury fell over 4 basis points to 4.123% at 4:49 am ET.
One basis point equals 0.01%, and there is an inverse relationship between yields and prices.
Market participants are awaiting the release of the S&P CoreLogic Case-Shiller National Home Price Index, which assesses changes in the average sale price of single-family homes in the U.S. This data will cover the three-month period ending in December.
There are also growing worries regarding U.S. President Donald Trump’s potential tariffs with major trading partners, adding to the ongoing uncertainty that impacts market sentiment. Trump mentioned on Monday that tariffs on Canada and Mexico “will move forward” following the expiration of the month-long delay next week.
The personal consumption expenditure index, due to be released on Friday, is a crucial indicator to monitor this week. As the Federal Reserve’s favored inflation gauge, it significantly influences the central bank’s decisions on rate cuts.
Earlier this month, after a stronger-than-expected CPI report in January, Federal Reserve Chair Jerome Powell suggested that the Fed does not need to rush into further interest rate reductions.
Last week, the S&P Global Purchasing Managers’ Index for manufacturing registered at 51.6 in February, raising alarm bells about the U.S. economic outlook. This figure was below the Dow Jones consensus estimate of 52.8.
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Bitcoin plummets to its lowest level in three months, falling below $90,000 amidst risk-averse market behavior
Bitcoin dropped beneath the $90,000 threshold overnight, impacted by sell pressure in stock markets as the cryptocurrency sector anticipates its next significant driver.
Bitcoin’s price decreased by 6% to $88,519, as reported by Coin Metrics. Earlier, it hit a low of $87,736.
This downturn leaves the leading cryptocurrency nearly 20% away from its peak established on the day of President Donald Trump’s inauguration.
“Equities have encountered several challenging sessions lately, with top-performing stocks significantly down compared to the index, as markets face heightened uncertainty under the new administration,” stated Steven Lubka, head of private clients and family offices at Swan Bitcoin. “This selling pressure has affected bitcoin and the broader crypto marketplace.”
On Monday, the S&P 500 experienced its third consecutive day of losses, struggling to bounce back from last week’s declines spurred by fears of an economic slowdown and persistent inflation.
“The absence of clear short-term triggers, combined with pressure from equities, fosters an atmosphere for profit-taking and short-seller pressure,” Lubka added.
Bitcoin started the year on a bullish note, driven by optimism regarding anticipated favorable changes from the new Trump administration for the cryptocurrency sector. However, following the President’s much-anticipated executive order on crypto at the end of January, which was generally positively received despite more subdued language regarding a strategic bitcoin reserve, the market has lacked new incentives.
While there is still optimism about the long-term benefits of Trump’s policies for cryptocurrencies, market movements seem likely to remain influenced by broader economic dynamics.
“From November to January, there was significant enthusiasm about the prospects of a crypto-friendly U.S. administration,” noted Joel Kruger, market strategist at LMAX Group. “Now, we are left waiting for the next catalyst. The groundwork is laid, but the market is currently in a consolidation phase, reacting to prior events.”
The $90,000 mark represents the floor of the limited range bitcoin has occupied since late November. Analysts caution that a significant drop below this level could lead to a more pronounced pullback towards $80,000.
“There’s potential for Bitcoin to retrace back to the $70,000 – $75,000 range without harming its long-term outlook,” Kruger commented, “and we believe demand will remain robust as we approach those price levels.”
Lubka anticipates that bitcoin will complete this adjustment and continue its upward trajectory by mid-March.
Other cryptocurrencies experienced sharper declines on Monday. Ether and Solana’s SOL token both fell by 9%. The wider cryptocurrency market, as represented by the CoinDesk 20 index, dropped over 8%.
Home Depot exceeded Wall Street projections in its earnings report, putting an end to its streak of declining comparable sales
Home Depot exceeded Wall Street’s quarterly sales estimates on Tuesday, despite the impact of high interest rates and rising housing prices, which have restrained consumer appetite for extensive renovations and expensive projects.
Looking ahead, the company projects total sales to rise by 2.8% for the upcoming year, while comparable sales, which exclude factors like store openings and calendar changes, are expected to increase around 1%. Home Depot also forecasts a decline of approximately 2% in adjusted earnings per share from the previous year.
In a CNBC interview, Chief Financial Officer Richard McPhail noted, “housing remains stagnant due to mortgage rates,” but added that the company experienced widespread growth, with sales climbing in nearly half of its merchandise categories and 15 out of 19 U.S. regions.
McPhail expressed confidence that consumers will begin to tackle postponed projects as they acclimate to higher interest rates, rather than waiting for a decrease.
“They report that life goes on,” he stated. “They’re expanding their families, relocating for work, upgrading homes, and enhancing their living standards. Home improvement is a constant factor, and the main consideration will be whether long-term rates have reached a new norm.”
Here’s how the company performed in the fiscal fourth quarter compared to Wall Street forecasts, as per an LSEG analysts’ survey:
- Earnings per share: $3.02 vs. $3.01 anticipated
- Revenue: $39.70 billion vs. $39.16 billion anticipated
Home Depot shares fell roughly 2% in premarket trading. An earnings call is scheduled for 9 a.m. ET.
For the three-month period ending February 2, Home Depot reported net income of $3.0 billion, or $3.02 per share, up from $2.80 billion, or $2.82 per share, from the previous year. Revenue increased 14% from $34.79 billion year-on-year.
Comparable sales, also known as same-store sales, rose 0.8% across the company, breaking an eight-quarter trend of declining comparable sales and surpassing analysts’ forecasts of a 1.7% decline, according to StreetAccount. U.S. comparable sales grew 1.3% year-over-year.
Regions affected by Hurricanes Helene and Milton contributed approximately 0.6% to comparable sales, McPhail noted.
In the quarter, customer spending increased, with more visits to Home Depot’s stores and online platform compared to the previous year. Transactions reached 400.4 million, an increase of nearly 8% year-over-year. The average ticket rose to $89.11, a slight increase from $88.87 from the same period last year.
Home Depot has faced a more challenging environment for selling home improvement supplies, as sales growth moderated in 2023 after a surge in demand for renovations during the COVID pandemic. Inflation and a shift back to expenditures on services like travel and dining have also weakened consumer interest in larger projects and higher-cost items.
Since mid-2023, Home Depot’s leadership has attributed the company’s difficulties to a tougher housing market, with McPhail stating that a similar issue persisted in the fourth quarter, as consumers hesitated to invest in larger undertakings such as kitchen remodels or new flooring installations.
Mortgage rates remain elevated, despite the Federal Reserve’s rate cuts. According to the National Association of Realtors, the median home price in January was $396,900, up 4.8% from the previous year, marking a record for January.
Adverse weather impacted sales in January, a trend that has continued into February in some regions, McPhail noted.
“Where the weather is favorable, we see strong engagement,” he said. “Conversely, in areas with severe weather, projects stall.”
Despite these challenges, he stated that Home Depot is focused on strategies to drive growth, such as expanding its store network and enhancing its e-commerce offerings.
Online sales increased 9% in the fourth quarter compared to the previous year, marking the most robust quarter for Home Depot’s digital business in 2023, attributable to investments in quicker delivery services, especially for appliances and power tools.
Home Depot opened 12 new stores in 2024 and plans to add 13 new locations in the next year.
The company has also targeted home professionals as a key component of its growth strategy, acquiring SRS Distribution, a Texas-based supplier to roofing, pool, and landscaping businesses, for $18.25 billion last year, its largest acquisition to date.
Some pro-focused categories, including roofing, drywall, and lumber, saw sales increases in the quarter, thanks to Home Depot’s efforts to better serve contractors and home professionals, McPhail indicated.
Home Depot shares closed Monday at $382.42. As of Monday’s close, the company’s stock has declined approximately 2% this year, lagging behind the S&P 500’s roughly 2% increase during the same timeframe.
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Eli Lilly aims to improve access to the weight loss drug Zepbound by offering higher-dose vials at a reduced price
On Tuesday, Eli Lilly announced the release of higher doses of its weight loss drug, Zepbound, in single-dose vials, priced at nearly half of its monthly list price. This move aims to make the treatment more accessible for patients without insurance coverage, including those enrolled in Medicare.
This initiative is part of the company’s strategy to increase the U.S. supply of Zepbound amid rising demand and to help patients access effective treatment rather than cheaper, compounded alternatives.
Eli Lilly is now providing higher doses of Zepbound in single-dose vials available through a “self-pay pharmacy” section on its direct-to-consumer site, LillyDirect. This platform began offering lower doses in vials back in August. Patients diagnosed with obesity or obstructive sleep apnea, Zepbound’s newly approved indication, can purchase these vials directly on the website.
The company has priced the 7.5 milligram and 10 milligram vials of Zepbound at $499 for the duration of the first prescription and any refills within 45 days. Outside this time frame, the costs will rise to $599 and $699, respectively.
Additionally, Eli Lilly announced a $50 price reduction on the lower-dose vials. The 2.5 milligram vial now costs $349, while the 5 milligram vial is priced at $499, as per the company’s release.
Patients must utilize a syringe and needle to extract the medication from the single-dose vial for self-injection, differing from the current single-dose autoinjector pens that allow for simpler skin injections.
Eli Lilly has indicated that vials are easier to manufacture than autoinjector pens, which are priced close to $1,000 monthly prior to insurance.
Typically, patients begin with a 2.5 milligram dose for four weeks, gradually increasing the dose, followed by maintenance doses to manage their weight. Eli Lilly has yet to provide the highest doses of Zepbound — 12.5 milligrams and 15 milligrams — in vial format.
The reduced pricing for the single-dose vials will benefit those who are willing to self-pay, particularly those on Medicare or employer-sponsored plans that don’t cover obesity medications.
“We aim to fill the gap for individuals suffering from obesity, offering a more affordable option as full insurance coverage is lacking, particularly for Medicare recipients, for whom our affordability solutions are non-applicable,” stated Patrik Jonsson, president of Eli Lilly Diabetes and Obesity, in an interview.
Medicare beneficiaries are excluded from Eli Lilly’s savings card programs for Zepbound. Jonsson expressed hope that a proposed rule from the Biden administration will allow Medicare to cover obesity medications under the Trump administration. U.S. Secretary of Health and Human Services Robert F. Kennedy Jr. has voiced doubts about weight loss drugs.
Some patients have resorted to compounding pharmacies for less expensive copies of Zepbound due to the costly branded treatment being in short supply until recently. The FDA has since declared the shortage resolved, which will likely prevent many compounding pharmacies from producing generic versions of the drug.
Jonsson mentioned that Eli Lilly is “not competing on price with the compounders,” asserting that there is no longer a substantial market for mass compounding of Zepbound.
He emphasized that the recent announcement ensures patients “do not depend on unregulated alternatives lacking FDA approval for safety and efficacy.”
Regarding the launch of Zepbound vials, Eli Lilly was unable to disclose the number of patients ordering through LillyDirect but noted “good uptake.”
He estimated that prescriptions filled via LillyDirect’s self-pay pharmacy represent a low- to mid-single-digit percentage of the overall obesity treatment market.
Around 10% of new patients entering the obesity market are using Zepbound through LillyDirect, with the launch of the 7.5 milligram and 10 milligram vials expected to boost this proportion.
LillyDirect, which was launched in January 2024, connects patients with an independent telehealth service capable of prescribing drugs if eligible. The platform also facilitates home delivery of Eli Lilly prescriptions by using a third-party online pharmacy to send them directly to patients.
In December, direct-to-consumer health startup Ro announced its plans to offer single-dose vials of Zepbound through a new collaboration with Eli Lilly.
