Market Review: April 18, 2024

Closing Recap

Thursday, April 18, 2024





DJ Industrials




S&P 500








Russell 2000













The S&P 500 (SPX) posted its first 5-day losing streak since the beginning of the year (12/28-1/4) as markets couldn’t hold early gains! The last 6-day losing streak for the S&P, you must go back to October 2022 (10/5-10/12). U.S. stocks edged higher all morning led by strength in several sectors, but markets topped out around the European close (11:30 AM ET), giving up gains before sliding late day, taking out the overnight lows and marked an 8th straight day of lower lows for S&P futures (Spuz). A big fade took the wind out the sails for investors as stock markets have been unable to hold any bounce for most of April after 5-straight months of “dip buying” being rewarded. The combination of Treasury yields pushing to 5-month highs, rising oil prices (down this week but off 5-month highs), soaring mortgage rates (30-yr fixed back near 7.5%), lower interest rate cut bets by the Fed given higher inflation (CPI 3 months of rising prices), and Middle East/war tensions were enough to scare investors into earnings season which started this week. The roll comes after major averages recently hit fresh record highs, but the S&P is now down about 5% from those levels. Markets are now pricing in a total of 42 basis points in interest rate cuts from the Fed by the end of this year, down from more than 160 basis points in cuts expected in January! Meanwhile tensions in the Middle East not easing after the head of the Iranian Nuclear Protection and Security Corps Ahmad Haqtalab said on Thursday that Iran has identified Israeli nuclear facilities and has its "hand on the trigger" to target them if Israel attacks Iran’s nuclear centers, according to the Iranian state news agency Tasnim. The big earnings coming next week in tech with likes of MSFT, META, GOOGL, TSLA, INTC, but first NFLX results tonight and Dow components PG, AXP tomorrow morning.

Economic Data

  • April Philadelphia Fed factory index 15.5 vs. est. 2.0; April prices paid rose to 23.0 vs 3.7; new orders rose to 12.2 vs 5.4; employment fell to -10.7 vs -9.6; shipments rose to 19.1 vs 11.4; delivery time rose to -9.4 vs -16.7; inventories fell to -8.9 vs 4.4; prices received rose to 5.5 vs 4.6.
  • Weekly Jobless Claims unchanged at 212,000 vs. consensus 215,000 and from 212,000 prior week; the 4-week moving average unchanged at 214,500 from 214,500 prior week (previous 214,250); continued claims climbed to 1.812M vs. consensus 1.810M from 1.810M prior week.
  • March Existing Home Sales fell -4.3% y/y to 4.19M unit rate vs. consensus 4.20M and down from Feb 4.38M; March inventory of homes for sale 1.11M units, 3.2 months’ worth; the national median home price for existing homes $393,500, +4.8% from March 2023.
  • March leading economic indicators (LEI) fell (-0.3%) vs. consensus drop of (-0.1%); Feb leading economic indicators revised to +0.2%.
  • U.S. 30-yr fixed rate mortgages 7.10% April 18 week, highest since December, vs 6.88% prior week.


  • Oil prices finished little changed at $82.73 per barrel after hitting three-week lows earlier ($81.56) on Thursday, while Brent Crude futures settled at $87.11/bbl, down 18 cents, 0.21%. New sanctions on Iranian oil were included as part of a foreign aid package released by House Republicans Wednesday that is slated for a floor vote later this week. Gold prices rose $9.60 to settle at $2,398.00 an ounce after hitting highs of $2,408 earlier as ongoing tensions in the Middle East between Israel and Iran added to investor interest despite robust economic data from the U.S. that raised prospects of fewer interest rate cuts.

Currencies & Treasuries

  • Treasury prices cheapened further as yields ended near highs for the 10-yr (above 4.64%) and the U.S. dollar firmed following comments from NY Fed’s Williams who said rate hikes were a possibility, though not his base case. His remarks add to recent stronger than expected data that have pushed back and pared back rate cut expectations to later in the year, with only one or possibly two reductions this year. The 2-year yield is up 5 bps to 4.986%. Though it hit a 2024 intraday peak of 5.006% on Tuesday.





WTI Crude















10-Year Note




Sector News Breakdown


  • TSLA was downgraded to Hold from Buy at Deutsche Bank and cut-price target to $123 (from $189) citing the high likelihood of Model 2 push-out and the company’s change of strategic priority to Robotaxi; views Tesla’s shift as thesis-changing and worry the stock will need to undergo a potentially painful transition in ownership (shares traded new 52-week lows).
  • In Car Rental: CAR tgt to $183 from $202 and HTZ to $6 from $10 in car rental earnings preview at Deutsche Bank saying as Q1 earnings approach, they believe results are likely to confirm what all relevant data points have been pointing to since January: it will be a weak quarter across the board, but one that it strongly believes will prove to be the trough of the post-Covid correction cycle.

Retail, Consumer Staples & Restaurants:

  • In eCommerce/Online Retail: Morgan Stanley said that U.S. eComm is growing at an ~8% CAGR, but the largest players are taking an outsized share. Firm said framework shows opportunities through secular pressures as CHWY is best positioned with a durable margin story and they pair EBAY (which is upgraded to Overweight from Underweight) and ETSY (which they downgrade to UW from EW) on growth convergence. RBC Capital said remain Outperform rated and $100 tgt on SHOP as data shows continued solid Plus and POS uptake; the firm said data from several third-party sources suggests healthy uptake of Shopify Plus and POS during Q1, which implies MRR growth is likely to meet or exceed consensus expectations.
  • In Retail: BJ was downgraded from Buy to Hold at Loop Capital (tgt to $80 from $85) after mgmt talks, lowering estimates for merchandise same-store sales and gross margin and said assumes merchandise comp flat in FQ1 on top of +6% in FQ1:23. IBTA 6.56M share IPO priced at $88.00 opened at $117, well above marketed range of $76-$84 for $577.3M total raise (WMT owns about 8.3% stake, roughly 2.7M shares). JWN shares popped late day after the WSJ reported the Nordstrom family is weighing taking retailer private
  • In Consumer, Food & Beverages: NAPA downgraded to Equal Weight from Overweight at Barclay’s saying industrywide inventory destocking will continue to weigh on its growth outlook and visibility in the near term. In beauty, L’Oreal (LRLCY) said Q1 like-for-like sales +9.4%, vs. est. +6.61%, helping beauty stocks (EL, ELF).

Leisure, Gaming & Lodging:

  • In Casinos: LVS reported Q1 profit above estimates (EPS $0.75 vs $0.62) as adj property EBITDA $1.21B vs est. $1.137B on revs $2.959B vs est. $2.94B, but analysts cut price tgt saying while Q1 results out of Singapore were better than expected, results out of its Macau operations were a lot softer than expected as renovation disruptions weighed on Macau margins and pressures are expected to continue through the end of year. MCRI Q1 EPS $0.93 vs est. $0.96, adj EBITDA $38.548Mm vs est. $38.65Mm on revs $121.657Mm vs est. $122.32Mm.
  • In Theme Parks: B Riley upgraded SIX to Buy from Neutral and reiterated Buy ratings on FUN, PRKS but reduce ests as weather expected to adversely impact Q124 attendance; the firm lowered Q1 estimates across the board with an expectation of some additional attendance pressures later in the quarter. KeyBanc said data tracking Disney (DIS) and Universal (CMCSA) theme parks showed y/y declines in all Universal Studio parks, and LSD growth at Disney parks as California parks continue to experience more difficult comparisons vs. last year.

Energy and Industrials

  • In Industrials: Oppenheimer previews sector for Industrial/Machinery saying TKR remains their top pick and upgraded MWA to Outperform from Perform while remains bullish on the broadening, strengthening secular drivers of the water space (further supporting its MWA upgrade), with XYL the most uniquely positioned; SNA reported quarterly sales that fell short of expectations, pushing the stock to lowest point since mid-Feb.
  • In Homebuilders: DHI shares jump as Q2 revs rose 14% to $9.11B, above ests $8.15B and vs. $7.97B y/y; raised its FY24 rev outlook to $36.7B-$37.7B from prior $36B-$37.3B, citing current market conditions and results for the first half of the year; said had 45,000 homes in inventory, of which 27,600 were unsold, as of March 31.
  • In MLPs/Pipelines: WMB downgraded to Underperform at Wolfe research saying it is a great company, not a great value; KMI reported Q124 adj EBITDA of $2,137M, in line with Street estimates of $2,133M and reiterated its 2024 budget.
  • In Oil Services: BKR tgt to $43 from $40, HAL to $50 from $45 and NOV to $25 from $24 at Morgan Stanley as they upgrade oilfield services industry’s outlook to attractive saying strong oil prices and liquefied natural gas related activity have made it change the oilfield services’ industry outlook to attractive. Adds North America activity is nearing a cyclical trough and international onshore and offshore are still in the upcycle.

Banks, Brokers, Asset Managers:

  • More pressures in regional banks as earnings mixed and NII, NIM disappoint; growing trend this far in Q1.
  • CMA Q1 net income fell 59% to $131M but EPS topped ests; expects NII to fall for the full year.
  • KEY Q1 EPS of $0.20 misses the $0.22 estimate while net interest income (NII) was down 19.9% to $886M and said net interest margin (NIM) from continuing operations shrinks to 2.02% from 2.47%.
  • OZK better results as Q1 EPS $1.51 vs est. $1.46 on NII $376.934Mm vs est. $368.07Mm, credit loss provision $42.923Mm, tangible BV per common shr $37.62.
  • SNV Q1 adj EPS $0.79 missed the $0.99 estimate on weaker revs $537.7M vs. est. $547M; Net interest income slipped 13% y/y citing lower average earnings assets and higher funding costs.

Other Financials:

  • In Insurance: ALL said March catastrophe losses were $328M and March estimated catastrophe losses $259M after-tax as total catastrophe losses for Q1 were $731M pre-tax; rate increases for Allstate brand auto insurance resulted in a premium impact of 0.9% for March and 2.4% YTD; rate increases for Allstate brand homeowners’ insurance have resulted in a premium impact of 0.7% for March and 3.4% YTD; MMC Q1 EPS $2.89 tops $1.71 estimate on higher RIS revs +.10, higher consulting revs +.06, higher corporate income +.04 and lower taxes +.08. PRI shares tumbled following a short call from BearCave.
  • In Consumer Finance/Lending: ALLY Q1 adj EPS of $0.45 topped the $0.33 consensus as Q1 consumer auto applications were a record 3.8Mm, driving $9.8B of origination volume; provision for credit losses rose to $507M from $446M y/y but down from $587M in Q4; DFS posts big EPS beat of $3.53 vs est. $2.95 driven by higher revenue (+$0.56/share), lower expenses (+$0.01/share), and lower after-tax impact from preferred (+$0.01/share), slightly offset by higher taxes (-$0.01/share).
  • In Financial Services: EFX shares dropped on mixed Q1 results, and weaker guide as sees Q2 revs $1.41-1.43B below est. $1.44B and adj EPS $1.65-1.75 vs est. $1.87; sees FY revs $5.67-5.77B vs est. $5.783B; Q1 results missed consensus’ estimates on lower Employer Svcs. sales & more muted mortgage inquiries.

Biotech & Pharma:

  • BHVN shares stumbled after announces 5.609M share spot secondary priced at $41.00.
  • CERE said its experimental Parkinson’s disease drug tavapadon improved symptom control in patients when tested as an add-on therapy to levodopa, the standard of care, in a late-stage study.
  • ITCI shares slumped after 6.85M share Secondary priced at $73.00.
  • In Managed Care: ELV Q1 beats as adj EPS $10.64 tops est. $10.53 on mostly in-line revs of $42.3B amid higher premiums in its commercial plans and lower-than-expected medical costs which was 85.6% for the first quarter and raises FY24 adjusted EPS view to greater than $37.20 per share vs. prior view of EPS ‘greater than’ $37.10.
  • In Life Sciences: the group was weak after German lab supplies maker Sartorius (SOAGY) posted Q1 results that missed expectations for order intake and revenues as order intake came in at 826.3M euros ($882.82M), while revenues reached 819.6M euros; company reported a (-6%) sequential decline in Bioprocessing Solutions order intake (equating to a 10% miss vs. expectations); shares of DHR, RGEN, AVTR, WAT, MTD, A, TMO were volatile.
  • In Hospitals: HCA, THC, UHS shares fell after TD Cowen with cautious comments following March hospital survey saying survey weakens dramatically, reigniting medical-trend debate – 305 hospitals report only +1.0% yty March revenue growth; far weaker than February’s +11%.


  • In Airlines: ALK reported Q1 adj EPS loss (-$0.92) vs. est. loss (-$1.05); forecast current-quarter profit above estimates driven by expectations of a strong summer season as travel demand soars; sees Q2 EPS $2.20-$2.40 vs. est. $2.12; JBLU was upgraded to neutral from underweight at JPMorgan saying the company is increasingly well-positioned for a modest potential move to the upside based on improving market sentiment.
  • In Rails: CSX reported another in-line quarter despite several headwinds that emerged during the quarter including the Baltimore port outage; softer truck market; weaker domestic coal; a deterioration in operating metrics; and poor weather in Q1, but still managed to reiterate its guidance.

Materials, Metals & Mining

  • In Materials & Metals: aluminum producer AA reports Q1 adj EPS loss (-$2.81) vs. est. loss (-$0.64) on better sales $2.60B vs. est. $2.55B and adj EBITDA $132M vs. est. $113M (down from $240M y/y); LAC shares tumbled as a 55M share Spot Secondary priced at $5.00.
  • In Chemicals: Deutsche Bank upgraded WLK to Buy from Hold and raising price target to $174, upside of 17% noting stock outperformance has occurred despite weak fundamentals in each of Westlake’s its commodity chains – chlor-alkali / PVC, ethylene / polyethylene, and epoxy. DBAB downgraded CBT to Hold from Buy saying there is a modest 3% upside potential to their upwardly revised $95 price target. LIN was upgraded to Buy from Neutral with an unchanged price target of $510 at Mizuho as believes LIN’s defensiveness and consistency in growing EPS should lead to market outperformance. CF and JERA announce joint development agreement to develop greenfield low-carbon ammonia production capacity in the United States.

Internet, Media & Telecom

  • In Internet: NFLX earnings expected tonight after the close; GOOGL fired 28 employees after they were involved in protests of Project Nimbus, a $1.2 billion joint contract with AMZN to provide the Israeli government with AI and cloud services. DUOL to be added to S&P400 Index, replacing CABO, which moves down to the S&P600.
  • In Cable & Telecom: JP morgan with negative catalyst watch call on CHTR as remain Neutral but are cautious into 1Q24 results next week due to persisting broadband competition, weaker organic broadband trends, and ACP overhang. NBA’s exclusive TV rights negotiating window with ESPN (DIS), Warner (WBD) expected to pass without a deal, CNBC Reported
  • In Online dating: MTCH was downgraded to equal-weight from overweight at Morgan Stanley citing concerns over Tinder saturation and execution and does think that the valuation appears attractive with a >2.5:1 risk-reward skew.

Hardware & Software movers:

  • In AI space: MSFT said to aim to amass 1.8M AI chips by Dec 2024; ORCL confirms to invest >$8B in Cloud Computing and AI in Japan over next 10 years; VEEV AI Partner Program to provide partners with the advanced technology and support needed to integrate Generative AI solutions seamlessly with Veeva Vault applications.
  • ZM was upgraded to a Buy rating at Rosenblatt with a $75 target driven by a refocused channel strategy, yielding partnerships like Avaya, momentum in Zoom Phone and CCaaS, as well as a healthy balance sheet that supports share repurchase ($1.5B) generated by better than 30% FCF margins.
  • ZS was upgraded to overweight from sector weight at Keybanc with $220 tgt given its more constructive view on the competitive landscape, positive channel and survey feedback, catalysts to SASE adoption post-Ivanti, ongoing firewall weakness, and SASE an increasing priority and a more favorable risk/reward.


  • TSM reported Q1 EPS $1.38 vs. est. $1.30 on sales of $18.87B vs. est. $18.31B and compared to $1.30/$16.62B y/y; sees Q2 revenue of $19.6B-$20.4B vs. est. $19.44B; said AI servers are expected to account for a low-teens percentage of its 2024 revenue, more than double from last year but revised down 2024 semiconductor market growth expectations – Smartphone mkt (38% of revenues) still weak, and automotive worsening.
  • MU shares got a lift after Bloomberg News reported the chip maker is on track to receive over $6B in grants from U.S. Commerce Department to help pay for domestic chip factory projects.


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.