The stock market closed mostly higher on Wednesday after Fed officials raised the possibility that interest rate cuts may come later. Fed Chair Jerome Powell said that the central bank may lower interest rates, assuming inflation continues to cool.
Overall, S&P 500 was up 0.1% to 5,211, while NASDAQ increased 0.2% to 16,277.
Tweet of the Day
How overbought is the market? @michaelsantoli takes a look at the S&P 500 over the last four years for clues. "What happens when you're this overbought? Near-term, you should expect some consolidation, but actually, it carries higher down the road on average," he notes. pic.twitter.com/bHkZ5sGn4g
— CNBCOvertime (@CNBCOvertime) April 1, 2024
Chart of the Day
Here is the ten-year chart of Palo Alto Networks (PANW) as of March 5, 2024, when the stock was at $291.
Palo Alto Networks sees itself as a “one-stop shop” for cybersecurity — or Platformization. It is offering to give no-cost introductory offers on some services until customers’ contracts end with other cybersecurity companies. They are basically trying to be like ServiceNow (NOW), Salesforce (CRM), or Workday with customers working with just one cybersecurity company. This stance will negatively affect billings and revenue growth for the next 12 to 18 months.
In the earnings call, management stated that they saw a “significant shortfall” in the US Federal Government market, which they expect will continue in the next couple of quarters. Management also said that overall demand has not changed, while margins continue to get stronger. However, added customers are getting spending fatigue in cybersecurity.
Billings grew 16% in each of the last two quarters, but management expects just 2% to 4% billings growth this quarter. Investors sold on this news.
PANW is part of the Growth Portfolio and Aggressive Growth Portfolio. However, David Sharek, Founder of School of Hard Stocks, will sell the stock from the Aggressive Growth Portfolio on this news of a slowdown in revenue.
