Mid-Morning Look: April 03, 2024

Mid-Morning Look

Wednesday, April 03, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks remains captive to economic data/macro, with today being no exception. U.S. futures fell initially after March ADP private payrolls showed the biggest gain in jobs since July of 2023, following the stronger ISM Manufacturing report recently that raised concerns of slower rate cuts this year. But stocks quickly reversed those losses, spiking to highs following the ISM Services report today, with headline figure missing ests (back to bad is good for mkts), while the prices paid inflation component fell 5-points from the prior month – renewing hopes of at least 3 rate cuts this year. Earlier this morning, in a CNBC interview, Atlanta Federal Reserve President Raphael Bostic said he sees only one interest rate cut this year. He thinks the move, if it were to happen, would be in the fourth quarter. Those comments also initially weighed on sentiment.


Treasury yields extend gains/bond prices losses this morning as the 10yr yield is up 36bps since March 8 to 4.43% this morning. Yields have jumped in recent days as recent economic data (ISM Manufacturing, ADP payrolls today) and Fed commentary (Bostic this morning) has raised market concerns that there could be even less rate cuts this year as the economy remains strong and inflation, while slowly decelerating, remains stubbornly high. Yields pulled back after the ISM service results today. In stock news, Beauty stocks fall after ULTA comments at conference, chip stocks hold up well after Taiwan has largest earthquake in 25-years/production fears, INTC tumbles on foundry headlines, autos out with monthly auto sales, crypto names rebound as Bitcoin partially recovers. Commodity prices rise with crude extending gains and gold prices fresh all-time highs approaching $2,300 an ounce.

Economic Data

  • ADP Private Payrolls reported at 184K vs. est. 148K (prior month upwardly revised to 155K from 140K).
  • ISM Services PMI for March reported at 51.4 vs. est. 52.7 (prior reading 52.6), business activity index 57.4 in March (consensus 56.7) vs 57.2 in February, prices paid index 53.4 in March vs 58.6 in February, new orders index 54.4 in March vs 56.1 in February and employment index 48.5 in 48.0 in February.
  • S&P Global March final composite PMI at 52.1 (vs flash 52.2) and U.S. S&P Global March final services PMI at 51.7 (vs flash 51.7).






WTI Crude















10-Year Note




Sector Movers Today

  • In Semiconductors: Taiwan struck by 7.4 mag earthquake, strongest in 25 years; tsunami warnings issued for surrounding countries including Japan; so far 26 buildings reported collapsed, at least 60 injured with several killed; chip maker TSM evacuated some factories as a precaution; MU said all team member safe and co is evaluation impact to operations and supply chain. UMC said it evacuated some facilities in Hsinchu and Tainan, cities on the western side of Taiwan. Acer said there was no material impact on operations. In a company update, INTC said its foundry business had $7B in operating losses for 2023 vs. $5.2B the year before but expects foundry segment operating losses to peak in 2024.
  • In Media: SPOT said to raise prices by $1-$2 for individual, family plans and introduce new music and book plans; DIS tgt raised from $125 to $140, maintains Buy at Guggenheim (ahead of annual shareholder meeting today) and raised its FQ2 segment operating income forecast at Experiences to $2.3B (vs. $2.2B prior), consistent with management’s commentary in early March; PARA discussing entering into exclusive talks with Skydance for potential deal according to NY Times report saying Skydance founder David Ellison met w/ PARA’s board in late March to discuss his vision for a deal https://tinyurl.com/ycx53yd4 ; ROKU remain Perform rated and lower 2025 ests at Oppenheimer and reworking its ’24E quarters on weak studio SVOD spending, continued weakness in CTV pricing on more inventory coming into the market, and lack of visibility post Hollywood strike.
  • In Industrials: AYI reported Q2 adj EPS $3.38 vs. est. $3.25 and revs $906M vs. est. $906.7M; Q2 EBIT $140M vs. est. $131M; Q2 gross margins came in at 45.5%; CSL initiated at Buy and $455 tgt at Goldman Sachs as believes is well positioned to benefit from the macro, industry and company-specific dynamics over the next several years, contributing to above average growth relative to global peers and GIR’s building products coverage. March N.A. Class 8 net orders fell nearly 10,400 units from February, a 38% m/m decline (vs normal seasonality of -9% in March vs. Feb) and 8.7% from a year ago to 17,300 units (shares of CMI, PCAR leveraged to data).



  • CALM +5%; overall sales volumes rose 3.2% in Q3 as sold 300.8M dozen compared with 291.4M dozens y/y but sales fell due to y/y drop in egg prices, still Q3 revs of $703.1M topped consensus est. $692.35M.
  • GE +4%; among top S&P movers after finalizing its split into three companies this week.
  • OWL +5%; said it would buy life insurer Kuvare Insurance Services for $750M in a cash-and-stock deal; deal will be financed via $325Mm in cash and $425Mm of Blue Owl’s shares, the asset manager said.
  • PLAY +9%; Q423 EBITDA of $152M exceeded consensus by $6M as stronger restaurant margins more than offset softer comps while did not provide FY24 financial guidance.
  • SIG +9%; boosted its FY25 EPS outlook to $9.90-$11.52 from prior $9.08-$10.48 per diluted share and said plans to repurchase half of the preferred shares from Leonard Green & Partners, for around $414M.
  • SPOT +5%; plans to raise prices by about $1 to $2 a month in five markets by the end of April, Bloomberg News reported on Wednesday, citing people familiar with the matter.
  • VNDA +44%; said it got FDA approval for Fanapt (iloperidone) tablets for treating manic or mixed episodes associated with bipolar I disorder in adults.



  • HSY -2%; for one of top S&P sector decliners.
  • INTC -6%; after saying losses have deepened at its factory business and the unit May not reach a break-even point for several years; said its foundry business had $7B in operating losses for 2023 vs. $5.2B the year before. INTC expects foundry segment operating losses to peak in 2024 and then to improve.
  • ULTA -13%; shares tumbled following disappointing comments at JP Morgan conference saying they see Q1 comps on the lower end of 1H guide of low single digits; the commentary sunk shares as well as other beauty related companies with ELF, EL, COTY shares sliding early.
  • WOLF -3%; downgraded from Overweight to Equal Weight at Wells Fargo and cut tgt to $30 from $55 saying they remain long-term bulls on the market prospects for SiC in xEV applications, but notes TSLA still drives ~55% of SiC market demand, & notes TSLA volumes possibly declining in `24.


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.