Market Review: January 08, 2024

Closing Recap

Monday, January 08, 2024





DJ Industrials




S&P 500








Russell 2000













After breaking a nine-week weekly winning streak, US equity futures traded off a bit over night, then gained a little momentum into the open with no significant economic releases to serve as a guide. Technology names were back in a leadership position this morning, with XLK the leading S&P sector ETF performer early. Energy was weak off the open on demand concerns, with XLE following both oil and nat gas lower. By midday, equities were continuing to test highs, with S&P futures bouncing along the $4,763 resistance pivot and Nasdaq futures moving sideways near highs in tandem. After some early weakness, small caps bounced back with the IWM outperforming the SPY, but still slightly lagging the QQQ. Breadth was holding steady at about 2:1 favoring advancers.


Data-wise today, Goldman was out today noting they expect core PCE inflation declined to 2.9% in December 2023 and see it falling to 2.2% in December 2024. Implied rates today continue to call for cuts during the year as the March level is 5.158% but December 2024 is at 3.944%. Separately, following some bullish Sell-side strategist calls last week, JPMorgan’s strategists were out this morning noting equity markets are now overbought with complacent sentiment, as recessions probabilities are now viewed as low while most macro calls are, “hopeful.” JPMorgan maintains a neutral stance on US and emerging markets. If satisfaction equals performance minus expectations, perhaps we should be a little more concerned as @bespokeinvest noted the latest NY Fed survey of consumer expectations reflects the lowest one-year inflation expectations in three years.


Heading into the final hour of trading, stocks continued to push higher with Energy the only sector remaining in the red (XLE, -1%). Technology (XLK, +2.5%) continued to lead to the upside, with Consumer Discretionary (XLY, +1.7%), Communications (+1.4%) and Real Estate (XLRE, +1.3%) also showing above-average gains. Breadth remained strongly in favor of advancers and small caps also held gains after a slow start, with the IWM +1.8%. As the sector performance would indicate, Growth was outperforming with the Russell 1000 Growth +1.79% versus its Value counterpart at +0.5%. Generally, a good day for equity holders outside of energy closing near the highs.


  • February gold futures slipped $16.30/oz, or -0.79%, to settle at $2,033.50. Despite back-to-back gains in the last two sessions, modest weakness in the Dollar and expectations for rate cuts as the year progresses, gold eased on slightly tempered expectations for a near-term cut by the Fed. We will see CPI and PPI data later in the week, so today’s move on no data is more just about positioning and probably doesn’t mean much. The next round of recession speculation and Fed action probabilities later in the week will provide more dynamic catalysts to start the year.
  • WTI crude futures for February slipped $3.04/bbl, or -4.12%, to settle at $70.77. Brent similarly faded 3.35%, or -$2.64/bbl, to finish at $76.12 on Saudi price cuts and a rise in OPEC output in December (increases from Iraq, Nigeria, and Angola). The price cuts, in particular, continue to reflect uncertainty on the demand side (China) and have more than offset geopolitical concerns and potential ripple effect to supply disruption.

Currencies & Treasuries

  • U.S. Treasury yields were modestly lower after gains of over 16-bps last week for the benchmark 10-year amid the stronger-than-expected nonfarm payrolls report. The benchmark 10-year yield was down 3-bps to 4.01% (off earlier lows of 3.97%) after hitting a three-week high. On Saturday, Federal Reserve Bank of Dallas President Lorie Logan warned that the U.S. central bank may need to resume raising its short-term policy rate to keep a recent decline in long-term bond yields from rekindling inflation. We get both December CPI (on Thursday) and PPI (Friday) this week. Busy week of auctions with $110 billion of notes: three-year and 10-year notes, as well as 30-year bonds, including heavy corporate debt issuance.
  • Bitcoin prices surged on Monday, up over 7% above $47,000 in anticipation that the SEC will approve the spot bitcoin ETFs this week (possibly expected Wednesday). Investment Managers BlackRock, VanEck, Ark Investments/21Shares and Bitwise, among others, said in filings with the SEC that they expect to significantly undercut the average market rate for U.S. ETFs as the battle for market share heats up ahead of an SEC approval deadline on Wednesday.





WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • Several retailers provided guidance ahead of this week’s ICR Exchange Conference; a few standouts are:
  • AEO raised its Q4 outlook to a gain of low double digits, following a successful holiday season as now sees operating profit of about $130M, up from previous guidance of $105M-$115M.
  • ANF boosted its FY24 net sales view to +14%-15% from prior +12%-14% and operating margin for Q4 was raised to around 15% from 12%-14% and the full-year outlook was lifted to 11%.
  • BOOT issues preliminary Q3 EPS at or above $1.79 vs. est. $1.72 and revs $520.4M below consensus $527.91M; reports preliminary Q4 SSS down 9.7%.
  • CROX raises its Q4 revenue outlook to over 1% y/y (vs. prior view -4% to -1%) citing successful holiday season with market share gains for both brands and sees prelim FY23 Rev $3.95B vs. est. $3.94B.
  • DTC shares slid after guided FY revs $490M-$500M, below prior $520M-$540M view and lowered FY adj Ebitda forecast to 14%-15%, from prior 17%-18%.
  • GCO falls as reports Q4 comp sales -6%; said sales decelerated in the weeks approaching Christmas as cuts FY23 adj EPS $0.65-$0.85 from prior $1.50-2.00 citing less interest in boots.
  • LULU raises its guidance for sales and earnings after a strong holiday period; raises Q4 EPS to $4.96-$5.00 vs. prior $4.85-4.93 and revs guide in-line with consensus.
  • TLYS guided Q4 sales $169M-$172M, down from the prior $172M-$178M citing sluggish demand for its accessories and apparel and said 9-week holiday period ended Dec. 30, 2023, net sales fell 7.4% to $139.7M.

Leisure, Gaming & Lodging:

  • In ride sharing/meal delivery: DASH upgraded from Hold to Buy, new top pick at Jefferies with $130 tgt saying they estimate EBITDA will double in the next two years to $2.5B and 17% above ’25 consensus, driven by increased advertising penetration and reduced losses at Int’l/ New Verticals.
  • In Lodging: HST was double upgraded from Underperform to Buy at Bank America with $23 tgt saying the company has steadily improved capital allocation under current management, markets and geographic exposures should be favorable with overexposure to group/urban and more cost levers in full-service than select service, reopening of 2 Naples properties and compelling valuation relative to the sector overall.
  • In Online travel: SABR upgraded from Underperform to Neutral at Bank America saying believes near-term risks have somewhat eased on air bookings, as management is no longer assuming 1.5pp recovery per quarter, and Sabre has largely been successful in realizing the $200M annualized cost savings laid out in Q1’23 and is now more likely to de-lever the balance sheet sooner than previously expected.


  • Oil related companies declined (APA, EOG, COP, FANG, PXD, XOM) after sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output offset Middle East supply concerns. Saudi Arabia on Sunday cut the February price of its flagship Arab Light crude to Asian customers to the lowest level in 27 months, cutting by $2 a barrel from January to $1.50 a barrel over Oman/Dubai quotes, a level last seen for November 2021.
  • In majors & Oil Equipment Sector: Piper Sandler downgraded CHX and HP to Neutral from Overweight as U.S. land is a slow to no growth market, it can’t bake in meaningful potential US growth, and that there are several more compelling FCF stories. The firm said their current favorite names are SLB, TS, WFRD, LBRT, FTI. CVX was upgraded to Buy with $184 tgt at Jefferies noting the company lagged US peers in ’23, but see it as well positioned to reverse in 2024.
  • In Solar: Wells Fargo upgraded ENPH and NXT to Overweight and downgraded SPWR to Underweight and cut FSLR and ARRY to EW from OW as the broker said it expects solar to rebound in 2024 driven by Fed easing, higher battery attaches rates, clarity on IRA, and steady utility scale demand growth. Wells Fargo said they prefer residential to utility scale solar given greater rate sensitivity as top picks: RUN & ENPH. Downgrade FSLR to Equal weight on valuation, upgrade NXT to overweight on share gains and backlog, downgrade ARRY to Equal weight on mkt share losses and downgrade SPWR to underweight on liquidity related headwinds.

Banks, Brokers, Asset Managers:

  • In Brokers & Exchanges: Barclay’s upgraded exchanges CBOE and ICE to Overweight and downgraded CME & MKTX to EW from OW, said still find valuation compelling for IBKR & LPLA despite potential rate headwinds. The firm said a "soft landing" and falling rates are somewhat mixed for the brokers and asset management sector. This bodes well for the alternative asset managers despite the recent run-in shares. Also continues to like KKR and remain Overweight but see relatively less upside given the recent run-in shares.
  • In Asset Managers: Wells Fargo upgraded BEN to EW from UW and downgraded TROW to Underweight in traditional asset managers saying as a more constructive backdrop emerges, but uncertainty persists amid recent large increases in market levels, the firm continues to emphasize names (top picks BLK and IVZ) with product and channel breadth and scalable franchises in higher flow markets.

Bitcoin, FinTech, Payments:

  • In FinTech/Payments: Keybanc upgraded FI to OW from SW predicated on an improved outlook in merchant solutions growth runway, and raised price tgts on MA to $475 from $430, GPN to $155 from $135, Visa (V) to $300 from $275 and MQ to $8 from $7 saying performance across coverage universe was mixed in 2023 with relatively downbeat sentiment keeping stock performance in check through much of the year, and while it’s a bit early to call for a “sentiment reversal” or drastically improving fundamentals in its view, the group participated in broader improved Q423 performance.

Insurance & Services:

  • JP Morgan upgraded AON to Overweight, downgraded HIG, FIHL to Neutral in P&C Insurance 2024 Preview as they forecast business trends in the P&C sector to be healthy but believe that the risk-reward in stocks is not compelling. The firm said they remain bullish on ALL and PGR and negative on RYAN and TRV. They cut HIG to Neutral due to a less constructive view on the commercial lines market, a mixed outlook for business trends, and the stock’s recent recovery
  • Goldman Sachs with a 2024 life insurance outlook: MET upgraded to Buy as risks associated with its CRE exposure are priced-in, downgraded VOYA and CB to Neutral saying they are more positive on life insurers in 2024 amid improved capital positions, lagged rate benefits, depressed valuations, constructive on property cat reinsurers (book value compounding outweighs pricing declines), and guarded on Commercial Lines.
  • In Insurance brokers: Goldman Sachs upgraded BRO to Buy, downgraded MMC to Sell (from Buy) saying to look for several tailwinds for insurance brokers to linger, yet decelerate somewhat in 2024 (inflation, firm P&C pricing, higher short-term rates). They raise BRO to Buy as sees organic growth upside from an accelerating hard market in employee benefits and cut MMC to Sell as consensus expectations are baking in a greater continuation of recent market/idiosyncratic tailwinds then they would anticipate.
  • In Consumer Services/Lending: DFS, SLM, OMF named top picks in 2024 at TD Cowen; also, OP rated on SYF, Underperform-rated on CACC and NAVI (which they downgraded today) as TDCowen expects industry balance growth of 13-14% in 2023 and ~5% in 2024, with private label growing ~10% and ~5%. Account originations remain above pre-pandemic levels, though have moderated. Oppenheimer raised its price target on TREE to $45 from $25 and making it a top small cap pick into ’24 on an improving Insurance segment, lower rates benefiting Consumer/ Homes segments, and refinancing the ’25 Convertible before going current.
  • In Financial Services: LDI was hit with a cybersecurity incident, causing it to shut down certain systems; the company said that an investigation was ongoing, but it had determined an unauthorized third party accessed certain systems and encrypted data. EFX was upgraded from Underperform to Buy at Bank America and raise tgt to $300 from $164 saying after several head fakes, firm thinks the mortgage market is finally poised for a recovery amid Fed rate cuts.

Biotech & Pharma:

  • AMAM surges after JNJ agreed to buy the drug developer for $2B to gain access to its portfolio of targeted cancer therapies. Ambryx is currently developing candidates for treatments for multiple types of cancer. .
  • BCRX said 2023 Orladeyo sales were up 29% Y/Y and management introduced 2024 guidance of $380- 400M (20% Y/Y growth at midpoint), and now plans to out-license its oral factor D inhibitor, BCX10013, with potential POC data from its ongoing trial in PNH patients around mid-2024.
  • CLRB said its therapy to treat Waldenstrom’s macroglobulinemia met the main goal when tested in patients who received at least two different therapies in relation to disease progress; said patients who took the therapy Iopofosine showed 75.6% overall response rate, which is the proportion of patients who have a partial or complete response.
  • CSTL guided 2023 total revenue to exceed $210M, handily beating its guidance of greater than $200M, although guidance excluded Dx-SCC revenues, but shy of the $220.0M consensus.
  • EXEL guided 2024 revs $1.825B-$1.925B, below the $2.067B estimate and 2024 net product revenue of $1.65B- $1.75B, short of the $1.86B consensus.
  • MRK to acquire HARP in proposed deal for equity value of $680M, paying $23.00 per share in cash as the board of directors of harpoon has unanimously approved transaction
  • MRNA provided prelim 2023 sales of $6.7B for its COVID vaccine, surpassing lower end of its FY forecast, while reiterating its goal of returning to sales growth in 2025.
  • NVAX reaffirmed 2023 guidance combined research and development & selling, general & administrative expenses to be between $1.15B – $1.25B and said is in the process of initiating a new cost reduction program.
  • PRTA shares tumbled following the company update saying remained on track with programs.
  • PULM along with partner Cipla, agreed to stop enrollment in a Phase 2B study of PUR1900 and close the study as it prioritizes limiting cash burn and pursuing strategic alternatives.
  • REGN said prelim eye drug Eylea’s sales $1.34B, below expectations as Wells Fargo last week pegged consensus Wall Street estimates for U.S. sales of Eylea at $1.53B.
  • RGNX said U.S. district court issues decision on Regenxbio and University of Pennsylvania NAV technology patent infringement lawsuit saying they “are disappointed by decision and believe court got it wrong" on court decision on patent infringement lawsuit decision by court.
  • RVNC said saw Q4 prelim sales to be between $58M-$59M below est. $61.7M; forecasts 2024 product revenue of at least $280M vs. est. $299.9M; said its President Dustin Sjuts to step down from the role, effective Mar. 31.

Healthcare Services & MedTech movers:

  • In Medical Services: BSX announced it will acquire AXNX for the purchase price is $71 in cash per share, reflecting an equity value of approximately $3.7B and an enterprise value of approximately $3.4B. . EXAS issued revenue guidance slightly above views, but management changes weighed on stocks.
  • In Life Sciences & Diagnostics: TMO was downgraded to Market Perform from Outperform at Bernstein and name GH as top pick in Life Science Tools and Diagnostics noting 2023 has been a rough year for the diversified tools companies as companies missed guidance, cut guidance, and then rinsed and repeated (sometimes more than once). But the firm revisits the five drivers of demand weakness for pharma / biotech: consumable destocking, instrument pull-forward, low funding for small biotech, weakness in China, and "general cautiousness" in large pharma.


  • In Tankers/Shipping: Maersk (AMKBY) and ZIM shares tumbled on reports several sources in the Middle East confirm to ShippingWatch that the first shipping lines have made agreements with the Houthis to prevent their ships from being attacked in the Red Sea.
  • In Freight and Package Delivery: FDX was upgraded from Hold to Buy at Melius and raised tgt to $310 from $278 saying they are turning more constructive as the company’s cost reduction plan starts to become more evident. ODFL was upgraded to Positive from Neutral with a $470 price target at Susquehanna.
  • In Airlines: ALK was downgraded from Buy to Hold at Melius; ULCC was downgraded from Overweight to Equal Weight at Morgan Stanley and cut tgt to $8 from $10 noting for the past few quarters the airline has been impacted by aircraft delays and ATC constraints. LUV was downgraded to Underperform with $24 tgt at Bernstein saying the discount airline model is disadvantaged in the new world of airline marketing, and the company faces both secular and idiosyncratic cost pressures that will keep earnings power well below pre-pandemic levels near term.

Aerospace & Defense

  • Among top stories on the day was the FAA having issued a grounding order for the BA 171 MAX 9 aircraft in operation. They have indicated that they are focused on the Alaska event, and not looking at the broader MAX program. SPR shares tumbled as they are responsible for the initial door plug installation, which is then finalized by Boeing. Airlines ALK and UAL each said they will ground its fleet of Boeing (BA) 737 Max-9 jets after a window and a portion of the plane’s fuselage blew out shortly after take-off in Portland on Friday.
  • Other News: AVAV and VSAT were among a list of five US defense companies sanctioned by China in response to the latest round of U.S. arms sales to Taiwan; will freeze the assets of these companies and ban people or organizations in China from engaging them, the spokesperson  
  • In Defense IT: CACI tgt cut to $370 (from $382) and raise LDOS to $126 from $121 at TDCowen saying defense IT offers healthy Q4 results & solid guides despite expected weak Q4 B2B’s and with fewer risks than defense primes. TDCowen sees 2-11% CY2024 organic growth and the group sells for a 15% discount to slower growing primes (ex-HII). The firm said their favorites into the print are BAH and LDOS.

Materials, Metals & Mining

  • In Steels: CMC reported top and bottom-line results above consensus ($1.49/$2.00B vs. est. $1.45/$1.89B) saying margins on steel products are likely to experience some further compression during Q2, however, recent price announcements should support an inflection and improved margins going forward. United States Steel Corp. (X) is disputing allegations that it breached its labor agreement with the United Steelworkers union by failing to provide information about critical developments of the company’s sale to a Japanese buyer.
  • Other Metals: FCX was upgraded to Outperform from MP at Bernstein and tgt raised to $48.50 (from $41) while GOLD was upgraded to OP from MP in 2024 metals outlook. Bernstein said they like copper in general in 2024 and saw the end of 2023 mining events push 2024 closer to deficit. 2024 brings a significant catalyst for the company with the Indonesia special mining license extension around Grasberg.
  • In Chemicals: UBS downgraded AXTA as they see much of the positive margin uplift as now more priced in, leaving risk/reward more balanced. UBS’s modestly updated 2024/25 EBITDA estimates are ~1%/~4% below consensus. UBS also downgraded CBT to Neutral from Buy as see risk/reward as more balanced as believes that CBT has achieved a structurally higher level of earnings in its Reinforcement segment.

Hardware & Software movers:

  • AAPL new mixed-reality headset will become available in the U.S. starting Feb. 2 as its Vision Pro headset, initially unveiled in June, will be available for pre-sale Jan. 19.
  • DADA shares tumbled as announced that in course of its routine internal audit, certain suspicious practices were identified; said suspicious practices may cast doubt on some revs and notes Q4, FY guidance should no longer be relied upon after audit headlines (JD shares fell as well as DADA is a subsidiary of JD).
  • DELL upgraded to overweight from neutral at JP Morgan and raised tgt to $90 from $77 saying expects AI-driven computer investment cycle to benefit the likes of Dell and HPQ.
  • FSLY upgraded to sector perform from underperform at RBC Capital and raise tgt to $18 from $12 citing re-accelerated organic growth despite tough macro-economic conditions under new CEO Todd Nightingale.
  • FN was downgraded to Neutral from Overweight at JPMorgan on limited upside with valuation pricing in a significant AI premium already, even though it is raising its estimates for a stronger ramp in the Nvidia/Mellanox business.
  • GRMN downgraded to Neutral from Overweight at JPMorgan on its expectation for limited upside as it modestly moderates its revenue forecast on a slightly more muted outlook relative to underlying consumer spending following a solid holiday season, which it believes was bolstered by a product cycle and channel fill.
  • NTAP downgraded to Underweight from Neutral at JP Morgan as it expects Storage to be a relative underperformer relative to other IT Hardware companies positioned to benefit more directly from the Compute investment cycle toward AI training.
  • SNX upgraded to Neutral from Overweight at JPMorgan as sees limited upside with the valuation ahead of historical levels and reaching recent peaks despite expectations for modest revenue growth next year and limited progress to date relative to operating margins tracking toward the long-term target range.
  • TWLO shares rose after announcing CEO and board chair Jeff Lawson will step down from his roles effective Jan. 8 and expects to report revenue and non-GAAP income from operations for Q4 above its previous guidance.
  • UPWK upgraded to Buy at Jefferies with $20 tgt as views it a top small cap recovery play.


  • The Philly semi-index (SOX) rebounded over 3.2% after falling around -4.5% last week, seeing general strength ahead of expected CES announcements this week. The SOX had a straight move higher out of the gate, rising above 3% to 4,060, led by standouts ARM, NVDA (new ATH), AMD, and MRVL.
  • NVDA shares hit new all-time highs ahead of CES presentations this week and on reports the company plans to begin mass production in the second quarter of 2024 of an AI chip it designed for China to comply with U.S. export rules.


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.