Market Review: February 01, 2024

Closing Recap

Thursday, February 01, 2024





DJ Industrials




S&P 500








Russell 2000













U.S. stocks finished broadly higher on Thursday, recouping a good portion of Wednesday’s Fed Chairman Powell induced selling pressure (after he downplayed a March rate cut to the dismay of markets), seeing very little follow through weakness despite a hotter ISM inflation reading (prices paid), mixed earnings results, and sharp follow thru selloff in regional banks (on CRE risk). After tech related earnings results the day prior from GOOGL, AMD, MSFT (solid but not outstanding) weighed on the sector, investors jumped back into the pool (headfirst) ahead of key earnings results from Apple and Amazon tonight (along with META, CLX, DECK, and others). Disappointing earnings in the insurance space (MET, AFL) and truckers (CHRW, LSTR) this morning was offset by better industrials/materials earnings (CTVA, TT, ETN, BALL, PH posted big gains) and all-time highs in MRK after earnings. Overall, it was another “melt-up” trading day, waiting for the tech earnings tonight and the monthly Nonfarm payroll report tomorrow morning from the BLS (est. 180K jobs added vs. 216K last month). Stocks spiked midday to highs after Atlanta Fed Q1 GDP tracker latest 4.2%, up from 3.0% on Jan 26, helping keep the “soft landing” narrative in place. Oil prices tumbled midday on reports of a possible cease fire with Israel. NYSE breadth was strong all day, with advancers leading decliners by over 3:1 margin as Consumer Discretionary, Consumer Staples, Utes, REITs, Industrials, and Materials all outperformed while the S&P 500 index (SPX) moved back to the 4,900 level.


Stocks fell Wednesday after Federal Reserve Chairman Jerome Powell said the central bank is unlikely to cut rates in March — or any time soon, at least until it sees stronger signs that inflation is sustainably in decline. On Wall Street, that spelled bad news initially for the riskier segments of the market, which includes biotech, lending, and solar. Recall, the November resurgence of such sectors had less to do with the fundamentals than it did with the Fed’s decision to stop raising rates. But given the massive rally in stocks today, those groups rebounded off weakness the day prior. As we kick off November with gains, @bespokeinvest tweeted: Here are the 5 best and worst Februarys in the S&P’s history: 1933: -18.4%, 2009: -11.0%, 2001: -9.2%, 2020: -8.4%, 1946: -7.0% and for top gains: 1931: +11.4%, 1986: +7.2%, 1998: +7.0%, 1991: +6.7%, 1945: +6.2%.


Stock markets showed zero fear (again) into earnings tonight with stocks surging all day, but interestingly, in the last week of January, institutional investors pulled out of US stocks at a record-breaking pace, signaling the top may be in for the market for the near future. According to the latest BofA Securities and Equity Client Flow Trends report, institutional clients, which include mutual funds, pension funds, insurance companies, and banks, had their second-largest selling outflow in data history (since ‘08) and the largest since 2015.

Economic Data

  • Weekly Jobless Claims climbed to 224K from 215K in the latest week and above est. 212K; the 4-week moving average climbed to 207,750 from 202,500 the prior week; continued claims climbed to 1.898M from 1.828M prior and vs. consensus 1.840M; the US insured unemployment rate climbed to 1.3% from 1.2%.
  • U.S. Q4 non-farm productivity rose +3.2% vs. consensus +2.5% and vs Q3 +4.9%; U.S. Q4 non-farm unit labor costs rose +0.5% vs. consensus +1.6% and vs Q3 -1.1% (prev -1.2%).
  • ISM U.S. manufacturing activity index 49.1 in January, above consensus 47.0 and prior 47.1 as prices paid index rises to 52.9 in January from 45.2 in December (above est. 46.9), while new orders jumped to 52.5 in January vs revised 47.0 in December and employment index 47.1 in January vs revised 47.5 in December (previous 48.1).
  • Construction Spending for December rises +0.9% vs. est. +0.5% and vs Nov +0.9% (prev +0.4%); Dec private construction spending +0.7%, public spending +1.3%.
  • S&P Global January final manufacturing PMI at 50.7 (vs flash 50.3).


  • Oil prices were volatile, as North American oil producers and shippers dropped Thursday alongside oil prices, erasing earlier gains, after Qatar said Israel agreed to a ceasefire proposal with Hamas. Prices pared losses/rebounded after Bloomberg later reported Al Jazeera (the source of the initial ceasefire news) deleted its tweet. But by settlement, WTI crude finished near the lows at $73.82/bbl, down -$2.03, 2.68% and Brent Crude futures settled at $78.70/bbl, down $1.85, 2.3%. Gold prices rose $3.70 to settle at $2,071.10 an ounce.

Currencies & Treasuries

  • Treasury yields fell sharply, with the 10-yr yield dropping below 3.83% before paring losses (recall it closed at 4.159% last Friday) amid rising hopes of interest rate cuts (despite Fed Chair Powell saying yesterday that the March timeframe was “unlikely”) and as investors sought the safety of bonds given the recent slide in regional bank stocks after NYCB shares lost more than half its value in 2 days after cutting its dividend and posting larger provision losses as contagion fears in other regional bank stocks weighed on sentiment, pushing the sector lower and bonds higher. The US dollar stayed slightly higher vs. rivals.





WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Retail: BOOT Q4 results were in-line with the previous guide made during ICR a few weeks ago while the company revised its outlook for 2024 to $4.65 from $5.00. GOOS posted in-line Q3 earnings as revs rose to C$609.9 million from C$576.7 million a year ago (in-line with ests) but offered upbeat guidance. Puma (PUMSY) was downgraded to Sector Perform at RBC Capital and lowers tgt to €42 (from €64) saying revenue growth outlook is below peer group average. VSTO mixed Q3:F24 earnings with a miss on top line and beat on the bottom. Adj. EBITDA and Sporting Products sales were in line with estimates; however, the Outdoor segment continues to be impacted.

Homebuilders, Building Products, Home Furnishing:

  • In Homebuilders: MTH posted FQ423 EPS of $5.38 on a 17% YoY decline in total revenues to $1.7B versus its $1.5B estimate as unit closings were 13% lower YoY in FQ423 at 3.9k (guide was 3.5k to 3.7k), gross margin was flat YoY and orders were 60% higher YoY which was below consensus estimate of +62%. CCS FY24 guidance, at the midpoints, was more than 15% higher on closings and total revenues versus consensus, with EPS and revs topping views for Q4.

Autos, Leisure, Gaming & Lodging:

  • In Autos: RACE shares rise after posted a higher-than-expected Q4 after-tax profit at 294 million euros ($318.1 million) while reporting a record EUR1.26 billion for the full year; guided 2024 guidance revenue of more than EUR6.4 billion and earnings before interest and taxes margin of more than 27%–largely aligns with consensus. Hyundai reported total January sales of 47,543 units, a 9% decrease compared with January 2023. TM Jan U.S. sales 165,753 vehicles, up 23.3% on volume basis; Mazda Motor reports North American January sales up 31.8% to 30,279 vehicles.
  • In Chinese Autos: LI delivered 31,165 vehicles in January 2024, up 105.8% year over year. The cumulative deliveries of Li Auto vehicles reached 664,529 as of the end of January 2024. NIO delivered 10,055 vehicles in January 2024, increasing by 18.2% year-over-year. The deliveries consisted of 6,307 premium smart electric SUVs, and 3,748 premium smart electric sedans. XPEV recorded monthly deliveries of 8,250 Smart EVs, representing a 58% increase year-over-year. In early January, the Company launched its X9 Ultra Smart Large Seven-seater MPV.
  • In Casinos (WYNN, LVS, MGM): January gross gaming revenue increased 67% from the year prior to 19.34B patacas ($2.4B), topping ~63% est. Feb is expected to be boosted by Chinese New Year tourism, according to data released by the Gaming Inspection and Coordination Bureau.
  • In Leisure: PTON shares tumbled more than -20% after weak guidance; reported in-line Q2 results but guided Q3 revs $700-725M below consensus $750M and guides FY24revs $2.68-$2.75B below est. $2.98B; members 6.4M v 6.7M y/y; in Boating, BC reported adjusted q4 EPS $1.45, down 27% y/y and below ests and guided FY EPS $7.00-$8.00, below the consensus’ $8.64 and the $8.80 of FY21.
  • In Cruise lines: RCL Q4 EP $1.25/$3.33B vs. est. $1.13/$3.36B and guides Q1 adj EPS $1.10 to $1.20, above est. 91c and sees FY24 adjusted EPS $9.50-$9.70, above consensus $9.19; said it is in a record booked position in both rate and volume on strong booking trends in key itineraries (shares of CCL, NCLH moved in reaction).

Energy, Transports

  • In Solar/Renewable Energy: NXT delivered another beat and raise driven by improved supply chain and management reiterated mid-20s GM% target beyond FY24. SPWR said it has received additional loan waiver extensions until Feb. 16 from Atlas Securitized Products and Bank of America; adds has received commitments for $20 million in financing.
  • In Truckers: CHRW and LSTR disappoint; CHRW reported Q4 EPS $0.50 vs Street at $0.80 as Benchmark noted weak demand and continued high capacity continue to impact revenue and AGP results in NAS; said NAST TL and LTL volume declined 3.5% sequentially and truckload volume was down 1.5% y/y. For LSTR, Q4 EPS of $1.62 on revs $1.2B was mostly in-line but impacted y/y given one less week in 4Q and Benchmark noted trends continue to decelerate with total truck transportation y/y loads down 22% in 4Q given soft demand; said truck revenue per load was down 10% which was lower than the -6% to -8% guidance range.
  • In Rails: NSC shares jumped after the WSJ reported an investor group, led by Ancora Holdings, has taken a roughly $1 bln stake in Norfolk Southern (NSC) and nominated a majority slate of directors in a bid to oust CEO Alan Shaw.

Banks, Brokers, Asset Managers:

  • In Banks: Regional banks (KRE) extended Wednesday losses a day after NYCB shares cratered after recorded Q4 charge-offs of $185M, up from just $24M in prior quarter, driven by just two bad loans, including one on offices; also cut its dividend to $0.05 from $0.17 (the NYCB report raised fears in the sector). Shares of ZION, WAL, BANC, CMA, KEY, FITB, CFG, MTB were among the biggest decliners in the S&P 500.
  • In Payments: FIS closed the sale of its 55% stake in Worldpay and announced 4Q EPS date of 2/26; FIS will receive >$12B in cash proceeds, and the co. will buy back "at least" $3B in stock this year (as was previously communicated)
  • In Insurance: MET and AFL shares fall after earnings: AFL Q4 adj EPS $1.25 vs. est. $1.45; Q4 revs $3.8B vs. est. $4.4B and MET Q4 adj EPS $1.83 vs. est. $1.89; Book value of $35.85 per share, up 7% from $33.45 per share at December 31, 2022; sees 2024 corporate & other adjusted loss of $750M-$850M.

Biotech & Pharma:

  • MRK Q4 adj EPS $0.03 vs. est. loss (-$0.11); Q4 revs $14.6B vs. est. $14.5B; forecasts 2024 sales $62.7B to $64.2B, vs, est. $63.42B; sees FY24 adjusted EPS $8.44-$8.59 vs. est. $8.42; KEYTRUDA sales grew 19% to $25.0B, GARDASIL/GARDASIL sales grew 29% to $8.9B and LAGEVRIO sales declined 75% to $1.4B.
  • PTGX entered into a license and collaboration agreement with TAK); agreement for development, manufacture, and commercialization of company’s Rusfertide and other licensed products.
  • RHHBY reported adjusted operating profit slipped 1% last year to 19.2B francs, less than analysts’ consensus forecast of 19.6B francs; In 2023, COVID sales declined by 4.3B francs. Roche had predicted they would drop 4.5B francs.

Healthcare Services & MedTech movers:

  • In Managed Care (ALHC, HUM, ELV, CNC)/Dialysis sector (FMS, DVA): Overnight, CMS 2025 MA Advance Notice called for a proposed net rate update of -0.16%. RBC Capital said they believe the market expected an essentially flat rate update before risk score trend, reflecting an effective growth rate largely offset by risk-model revision and the absence of a significant Star ratings adjustment. The 2025 Advance Notice is ahead of 2024’s -1.12% update, though well below updates seen in 2022 and 2023. TD Cowen said, on 12/8/23 we previewed a 2025 MA rate increase 0.54%. Today CMS proposed a (-0.16%) cut – both figures reflect benchmarks ex-CMS estimates of plan coding creep. Since 2019 the April Final Notice has improved every year by an average of 100bp. If repeated the FN could land 0.84%. HUM has an incremental (-40bp) Star headwind that could place them at 0.44% vs their 2025 guidance of 0-1%.
  • In Dental Sector: ALGN shares rise after Q4 revs $956.7M tops est. $933.8M; Q4 adj EPS $2.42 vs. est. $2.18; guides Q1 revs $960M-$980M vs. est. $952.5M; 2023 operating margin of 16.7%, non-GAAP operating margin of 21.4%; Major 2023 milestones: 17M Invisalign patients, 4M Vivera retainers, and 100 thousand iTero scanner units.
  • In Health Services: ARAY reported Q2’24 with revenues of $107.2M, above consensus and reaffirmed FY24 revenue and AEBITDA guidance of $460M-$470M and $27M-$30M, respectively.


  • ETN (record highs) Q4 results top consensus and forecasts FY24 adj. profit in the range of $9.95-$10.35 above est. $10.06 saying higher investments in data centers boosted demand for co’s electrical components.
  • HON lower revs and guide; Q4 adj EPS $2.60 vs. est. $2.59; Q4 revs $9.44B vs. est. $9.7B; sees FY24 adj EPS $9.80-$10.10, vs. consensus $9.96 and sees FY24 revenue $38.1B-$38.9B vs. est. $39.01B.
  • ITW Q4 adj EPS $2.42 below last year ($2.95), but in-line with ests as revs $3.98B vs. est. $4.01B; forecasts 2024 rev growth 2 to 4%, organic growth 1 to 3%.
  • LII downgraded to Underweight at JP Morgan and cut tgt to $330 from $370 given reinforced caution on the residential HVAC end market cycle outlook as detailed in its recent research.
  • PH raised its sales and earnings outlook for the year after its aerospace segment boosted sales for the fiscal second quarter; Aerospace Systems segment, sales rose 15%, compared with a 1% decline in the Diversified Industrial unit.
  • SWK lower guide; Q4 adj EPS $0.92 vs. est. $0.79; Q4 revs $3.74B vs. est. $3.84B; sees FY24 adjusted EPS $3.50-$4.50, vs. consensus $4.46; 4Q cash from operating activities $769m, free cash flow $647M.

Materials, Metals & Mining

  • In Chemicals: CTVA reported a better-than-expected 4Q23 result across revenue, gross margin, SG&A, AEBITDA, and AEPS primarily on pricing in the Seed segment and cost reductions in Crop Protection; lowered CY25 EBITDA midpoint target to $4.1B from $4.4B vs est. $4.2B, guided CY24 EBITDA midpoint of $3.6B vs initial $3.56B.
  • In Uranium sector (CCJ, URA, UEC, UUUU): Kazatomprom cuts 2024 uranium production outlook by 12%-14% as the new guidance for 2024 output is 21k-22.5k tons of uranium, according to its Q4 operations (the co’s previous planned range for 2024 was 24.5k-25.5k tons, based on figures in Sept. 29 statement). RBC Capital said it believes this further tightens the uranium market and supports high uranium prices, which it views as positive for uranium equities including Cameco and NexGen Energy within its coverage.

Internet, Media & Telecom

  • In Internet: online retailing giant AMZN expected to report results after the close. Prior to results, the WSJ reported overnight that Amazon could face government order making it liable for third-party products saying the order from Consumer Product Safety Commission (CPSC) could classify company as a distributor, giving it the same safety responsibilities as traditional retailers.
  • In social Media: All eyes on META earnings after the bell as shares fell Wednesday following weaker ad revs from GOOGL; ETSY shares rise after the company appointed Marc Steinberg, Partner at Elliott Investment Management, to the company’s Board, effective February 5, 2024.
  • In Telecom: AT&T (T) upgraded from Neutral to Overweight at JP Morgan and raise tgt to $21 noting the company has been able to show consistent execution in its wireless and broadband businesses and sees solid long-term growth for both segments, especially in broadband with its ongoing fiber build along with incremental opportunities.

Hardware & Software movers:

  • AAPL earnings after the bell – read through to chip sector (AVGO, CRUS, SWKS, etc.)
  • ACN, EPAM, and GLOB highlighted today on CNBC as Mizuho three under the radar “AI” related plays (all were recently initiated at Buys on January 29th at Mizuho).
  • HUBS announced a new pricing model as the company transitions seat-based pricing across all subscription tiers (Starter, Professional, Enterprise) and hubs.
  • PTC reported solid FQ1 results despite ongoing macro challenges, with upside to ARR and FCF; F2QE ARR guidance ($1.995-2.010B) vs. vs. Street: $2.070B)
  • TWLO shares active after publication Theinformation reported Dutch Messaging Startup MessageBird weighs longshot bid to buy Twilio with outside investors –
  • In EMS Sector: BHE reported mixed results and guidance, with the macro impacting the top line but strong GMs and opex controls keeping EPS relatively intact; FLEX in-line results and expectations, including a model re-set due to the recent divestiture of Nextracker. Core Flex sales of $6.42bn declined 11.5% y/y due to continued weakness in consumer, IT datacom and industrial markets, offset somewhat by growth in auto, medical and hyperscale cloud.


  • KLIC Q1 adj EPS $0.30 vs est. $0.26 on revs $171.2Mm vs est. $172Mm; sees Q2 revs $160-180Mm vs est. $192.33Mm and adj EPS $0.15-0.35 vs est. $0.39.
  • MXL shares fell on guidance; after four consecutive quarters of declining revenue that saw sales fall 50% from 1Q to 4Q, the company is guiding another 24% QoQ revenue decline as the inventory rebalancing and demand softness persists across most of the business.
  • NVDA: Reuters reports Nvidia has started taking pre-orders for its new, China-specific AI chip from distributors; distributors have started advertising the chips at ~$15.5k/unit (similar price point to Huawei’s 910B chip)
  • QCOM reported a good DecQ and guided to MarQ top line of $9.3B (in line with Cons) down 6% q/q (est. down ~2%); sees Q2 revs $8.9-9.7B vs est. $9.3B and adj EPS $2.20-2.40 vs est. $2.25; said inventory levels to remain elevated in near-term (shares downgraded ay Citigroup after results).
  • QRVO reported an in-line DecQ and guided MarQ down 14% q/q to ~$925M (consensus $915M) with seasonality at Apple offset by some Android/China improvement.
  • SMCI shares still going, rising more than 8% at $574 (off lows $471.90 on Monday 1/29) on earnings momentum.
  • WOLF shares fell on wider loss and weaker guidance; Q2 EPS loss (-$1.00) vs. est. loss (-$0.66); Q2 revs $208.4M vs. est. $206.4M; guides Q3 EPS loss (-$0.69-$0.57) vs. est. loss (-$0.63); sees Q3 revenue $185M-$215M, below consensus $224.0M; said Mohawk Valley fab revenue tripled sequentially; on track for 20% utilization in Q4.


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.