Market Review: March 06, 2024

Closing Recap

Wednesday, March 06, 2024





DJ Industrials




S&P 500








Russell 2000













U.S. stocks closed the day with modest gains, pulling back all afternoon, but still snapped the 2-day losing streak for the S&P 500/avoiding its first 3-day losing streak since the first week of January as market euphoria continues following day 1 of Fed Chairman Powell’s testimony on the economy, interest rates, and monetary policy. There were no major surprises by Powell, sticking to the script that the Fed is dependent on data for rate cuts, and they do see cuts coming later this year, but again didn’t elaborate. Powell did note that the Fed isn’t necessarily looking for inflation to go all the way down to 2% but they do need more evidence. Market strength was broad based with nearly all eleven S&P sectors finishing higher (Consumer Discretionary lagged as TSLA selling persists), but technology again led behind software (CRWD earnings) and of course semiconductors, as the Philly semi-index (SOX) hit a new intraday all-time high of 5,051.99 before paring gains back below 5,000 (still +2% on the day). Gold prices made a new record high for a 4th day and Bitcoin volatility continues, up 5% today back to $67K. In banking news, NYCB shares volatile, falling below $2 per share after reports they were seeking capital, only to rebound later after having raised $1 bln from investors including former U.S. Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital. Interesting stats: The S&P 500 index (SPX) hasn’t suffered a drop of 2% or more in one day since February 2023, the longest run without such pullback in six years and 3rd longest streak since 2000 as per Bespoke. @charliebilello noted: “US household interest payments on non-mortgage debt hit a record $573 billion over the past year and is close to surpassing interest payments on mortgage debt ($578 billion) for the first time ever.” More data tomorrow (and payrolls data on Friday) as well as some big earnings coming up AVGO, COST, GPS, MDB, MRVL.

Economic Data

  • ADP national employment report increased by 140,000 private sector jobs in February, slightly below 150,000 consensus, while the January payrolls change revised to +111,000 from +107,000.
  • January JOLTs Job openings reported at 8.863M vs. est. 8.850M and vs. December revised 8.889M from 9.026M.
  • Wholesale inventories for January revised to -0.3% (vs. consensus -0.1%) from -0.1% while wholesale sales -1.7% (vs. consensus +0.5%) vs Dec +0.3% (prev +0.7%) and stock/sales ratio 1.36 months’ worth vs Dec 1.34 months.

Commodities, Currencies and Treasuries

  • Gold prices rises $16.30 to settle at $2,158.20 an ounce, a 4th straight closing all-time high as the dollar slide again and Treasury yields dipped following commentary from Fed Chairman Powell. Oil prices jumped and pared gains, but still finished the day higher as U.S. crude oil futures settle at $79.13/bbl, up 98 cents, or 1.25% (off earlier highs of $80.67), while Brent Crude futures settle at $82.96/bbl, up 92 cents, 1.12%.
  • U.S. Treasury yields fell to session lows around 4.08% after Federal Reserve Chair Jerome Powell said that continued progress on inflation "is not assured", though the central bank still expects to reduce its benchmark interest rate later this year. Private payroll data (ADP) and job openings (JOLTs) data also moved prices. Benchmark 10-year yields were last down 2 basis points on the day at 4.105%. The U.S. dollar weakened -0.4% as Chair Powell’s opening remarks in Congress reinforces the Fed’s reliance on data. The US dollar/Japanese yen slips to 3-week low.





WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Apparel Retail: ANF Q4 results topped consensus (EPS $2.97/$1.5B topped est. $2.83/$1.43B in sales) as Abercrombie sales rose 34.8% to $755.2M and Hollister sales increased 9.1% to $697.7M while Q4 same-store sales, or sales of stores open at least a year, rose 16%. ROST enjoyed a traffic-driven strong top-line beat, coupled with stronger-than-expected GM; approves $2.1B stock buyback, boosts quarterly dividend 10%; Q4 EPS $1.82 vs est. $1.65 on revs $6.023B vs est. $5.793B and comps +7% topped estimates.
  • In Footwear: FL shares tumbled after guiding FY EPS of $1.50-$1.70 per share below consensus estimate of $1.93 as CFO said 2024 will serve as a cash rebuilding year and company will not resume a dividend at this time; for Q4, gross margin declines 350 bps on higher markdowns and comp sales fell (-0.7%). SKX tgt rose to $74 from $70 at TD Cowen citing its improving position in the marketplace and it thinks execution on EBIT margin initiatives and FCF consistency could produce ROIC improvement and valuation multiple expansion. TD Cowen says they continue to favor DECK, ONON and SKX within the footwear space over NKE.
  • In Beauty/Cosmetics: EL (along with TARO, UL) shares active following a report that high levels of the carcinogen benzene were detected in acne products containing benzoyl peroxide, independent testing laboratory Valisure says in a petition filed with the U.S. FDA. The lab says that benzene can form at high levels in benzoyl peroxide acne treatment products when handled or stored at higher temperatures. Acne products from brands including Estee-owned Clinique, Proactiv, Target’s Up & Up have elevated levels of the carcinogen, Bloomberg reported. ODD reported a top-and bottom-line beat, with net revenues coming in ~14% above consensus and growing ~44% y/y on better margins but shares slipped on lower FY24 EPS outlook.
  • In Department Stores: JWN shares stumble as reported a top-and-bottom line beat, though GM missed expectations, with management citing ongoing momentum at Rack while also noting a still cautious consumer environment and forecasts annual EPS $1.65-$2.05 vs. consensus $1.98. JD shares jumped as posted a quarterly revenue increase and launched a new $3 billion share repurchase program.
  • In Food & Beverage: BF/B shares dropped after lowering its annual organic net sales forecast to be flat vs prior forecast of 3% to 5% growth citing slower-than-expected growth as higher prices dragged its volumes; also said sees FY organic operating income growth to be flat to up 2% compared with its prior forecast of 4%-6% growth. UNFI reported Q2 results slightly better/in-line, but cuts FY24 revenue view to $30.5B-$31B from $30.9B-$31.5B (est. $31.01B) and announced CFO will leave company, sending shares lower; CPB also reported earnings.

Homebuilders, Building Products, Home Furnishing:

  • Mortgage applications to purchase a home increased 11% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand was still 8% lower than the same week one year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.02% from 7.04%. Applications to refinance a home loan increased 8% for the week and were 2% lower than the same week one year ago.

Autos, Leisure, Gaming & Lodging:

  • In Towing/RV Sector: THO shares tumbled after reported adj Q2 EPS of $0.13, below the Street’s $0.67 as sales fell -6% y/y to $2.2B and operating profit of $18.3mn was 53% below last year; the co also cuts FY24 revenue view to $10B-$10.5B from $10.5B-$11B (est. $10.65B) and lowers its FY24 consolidated gross profit margin in the range of 14.0% to 14.5% vs. prior view 14.5% to 15.0% (shares of comps CWH, PATK, LCII were active in sympathy).
  • In EV Autos/Charging: CHPT disappoints again, reports Q4 revenue down -24% y/y to $115.8M (missing est. $118.8M) as Q4 net loss widened to $94.7M from $78.7M y/y and guided Q1 revs $100M-$120M, missing $120.6M est. NIO was downgraded from Buy to Outperform at CLSA and tgt cut to $6 from $9.80 after results noting Q4 ASP declined 1.8% QoQ, and net loss rose 20.8% QoQ to Rmb5.59B and missed consensus by 10%. MSCO comments on TSLA noting EV demand continues to decelerate despite continued price cuts and says fleets are dumping EVs and strong hybrid momentum is competing for the marginal EV buyer.

Energy, Industrials and Materials

  • In Aerospace & Defense: PLTR shares rallied on news it received a contract from the U.S. Army worth $178.4 million to develop ten artificial intelligence-powered ground stations as part of a project called Titian, or Tactical Intelligence Targeting Access Node.
  • In E&P Sector: BE signs agreement with SHEL for renewable hydrogen energy project; VNOM announced 11.5M shares sold by its parent FANG for gross proceeds of $402M as deal priced at $35.00 per share (the sale cut FANG’s stake in VNOM from 55.8% to 49%, or ~87.2M shares, per SEC filing).
  • In Transports: ODFL downgraded from Buy to Neutral at Bank America saying sees limited upside given the stock’s elevated multiple and the fact that volume growth has lagged the firm’s forecast.


  • NYCB shares tumbled midday after the WSJ reported the bank is seeking to raise equity capital in a bid to shore up confidence in the troubled regional lender. NYCB shares rebounded sharply midday after reports the bank will receive a $1 billion equity investment and name a new slate of board members and chief executive; add former Treasury Secretary Steven Mnuchin and representatives from Hudson Bay and Reverence Capital to the board.
  • In Banks: According to a report in Reuters, U.S. regulators are expected to significantly reduce the extra capital banks must hold under a proposed rule that has drawn aggressive push back from Wall Street. Bank regulators led by the Federal Reserve in July unveiled the "Basel III" proposal to overhaul how banks with more than $100B in assets calculate the cash they must set aside to absorb potential losses. The agencies said it would increase aggregate capital by around 16% for the roughly three dozen affected lenders.
  • In Large cap/Regional Banks: After rallying on Tuesday, banks were pressured on Wednesday in a possible rotation out of the sector and back into technology which fell yesterday; Few comments at Wall Street conferences: FITB said sees Q1 rev coming in toward top end of range (had seen Q1 revenue down 4% to 5% vs Q4) and said sees Q1 NII toward bottom end of range, down 3%. BAC said it expects its investment banking revenue to rise by 10% to 15% in Q1 from a year earlier, while its net interest income could come in on the high end of its forecast range.
  • In Insurance: PGR upgraded from Equal Weight to Overweight at Morgan Stanley and raised tgt to $227 from $185 saying its strong culture of tech innovation, favorable competitive environment, and gradual business mix shift should give it the ability to outgrow the market.
  • In Credit Cards: Oppenheimer said they are incrementally positive on BFH based on read-through from SYF comments on late fee recapture after the CFPB released its final ruling on late fees which will now be $8. SYF recently discussed that it expects to fully offset the impact to ROA with new fees and higher APRs.
  • In Financial Services: Experian (EXPGY) was upgraded to Buy at Jefferies saying new analysis shows accelerating growth in Experian’s Brazil and B2C businesses.

Biotech & Pharma:

  • AKRO priced a public offering of 11M shares of its common stock at $29.00 per share.
  • BBIO public offering of 8.6M shares of its common stock priced at $29.00 per share.
  • CELZ said the FDA granted orphan drug status to its experimental immunotherapy to prevent graft rejection in patients with brittle type 1 diabetes, undergoing pancreatic islet cell transplantation.
  • MDGL was initiated with a Buy/High Risk rating and $382 tgt at Citigroup noting the co is developing resmetirom, a thyroid hormone receptor-beta (TRβ) agonist, that CITI believes is well positioned to be the first approved therapy to address the untapped, potentially multibillion-dollar market for non-alcoholic steatohepatitis (NASH).
  • VNDA said it received a Complete Response Letter (CRL) from the FDA, declining to approve expanded use of its drug Hetlioz to treat insomnia characterized by difficulties with sleep initiation as the agency identified deficiencies in company’s marketing application and said it cannot be approved in its present form.

Healthcare Services & MedTech movers:

  • In Managed Care: Barclay’s initiated coverage on the U. S. Health Care Facilities & Managed Care sector with a Neutral industry view that tilts positively toward facilities with durable volume growth and MCOs that have a differentiated mix of earnings toward the ACA exchanges and commercial segments. But Barclays was cautious on Medicare saying reimbursement challenges, increasing cost trend, and slowing senior growth make the MA investment case less compelling now than at any point in the last ten years. Top Overweight ratings include CNC, CI, EHC, THC; notable EWs include CVS, HUM, SGRY, PRVA; and UWs include AGL, ALHC.
  • In Diabetes Sector: DXCM said the FDA cleared the use of its 15-day wear sensor, known as Stelo, intended for people with type 2 diabetes who do not use insulin as the first continuous glucose monitor (CGM) to be available over the counter, without a prescription at a competitive price starting in summer 2024.


  • In Cyber Security: CRWD reported strong Q4 earnings of $0.95 (est. $0.82) on revenues of $845.3M (est. $839.1M), FQ4 ARR of $3,435M (34% y/y) beat consensus by $37M, and FQ1 ARR was guided roughly $35M above consensus and announced intent to acquire Flow Security (a data security posture management, DSPM, provider).
  • In Storage: BOX posted beat as Q4 adj EPS $0.42 vs. est. $0.38 and revs $263M vs est. $262.97M with $100M stock buyback but guides FY25 EPS and sales both below consensus.
  • In Cloud Software: BASE exceeded F4Q Total ARR expectations, guided F1Q slightly above consensus, and FY25 in line with consensus. ARR growth of 25% exiting FY24 was driven by a growing Capella mix (now 11% of Total ARR), large on-premises renewals and expansions, and accelerating net new logos add.
  • In AI: CNBC reported Shane Jones, who’s worked at MSFT for six years, has been testing the company’s AI image generator in his free time and told CNBC he is disturbed by his findings. He’s warned Microsoft of the sexual and violent content that the product, Copilot Designer, is creating, but said the company isn’t taking appropriate action.
  • In Telco: EVC shares tumbled after saying they received communication from META that it intends to wind down its ASP program globally and end relationship with all its ASPs … company estimates Meta’s ASP program represented approx $23.8Mm of the $57.7Mm consolidated EBITDA.
  • In Semis: SMCI was initiated with a Buy and Street high $1,350 tgt at Argus calling it a leading computer and server provider for the age of generative AI as in addition to a full line of rack and blade servers for cloud, enterprise, data center and other applications, SMCI provides GPU-based systems for deep learning, high performance computing.
  • In PC Sector (DELL, HPQ, LNVGY): IDC said PC market with global shipments forecast to reach 265.4M units in 2024, up 2.0% from the prior year according to the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. While vendors focused on clearing inventory in 2023, IDC expects 2024 to be an expansion year with the introduction of AI PCs, which will ultimately drive the market forward to 292.2M units in 2028 and a compound annual growth rate (CAGR) of 2.4% over the 2024–2028 forecast period.


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.