Mid-Morning Look

Thursday, December 26, 2024

U.S. stocks slipping initially as investors return from the Christmas Day holiday, pulling back after back-to-back stock market rallies on Monday and Tuesday where major averages finished at their highs. Stocks have pared losses since the open, though most sectors remain in the “red” outside of a few defensive sectors (healthcare, staples). Treasury yields move back to 6-month highs with the 10-yr topping 4.63%, weighing on interest rate sensitive sectors. Later, an auction of $44 billion in 7-year notes is scheduled for today, after $70 billion in 5-year notes on Tuesday was met with solid demand, as markets monitor the appetite for U.S. government debt. Speaking of yields, after the Fed cut rates by another 25-bps last week, Zerohedge tweeted today: “The first time in history when 100bps of rate cuts raised 10Y yields by 100bps”. Meanwhile the US dollar climbs to 157.945 Yen, its highest since July 17. While stocks are down slightly today, major averages are on track for great gains as Month to Date (heading into today’s action) the S&P is flat, the Nasdaq +4.23%, the Dow -3.59% and the Russell 2000 -7.18%. For the year, however, markets broadly higher with the S&P +26.6%, the Nasdaq +33.4%, the Dow +14.8% and the Russell 2000 +11.48%. @bespokeinvest tweeted “If you don’t count NVIDIA $NVDA since it was just added to the Dow in November, Walmart $WMT is the best performing Dow stock in 2024 with a price gain of more than 75%! Also, “With Intel $INTC tossed from the Dow last month, the two worst performers in the 30-stock index in 2024 are Boeing $BA and Nike $NKE, each down roughly 30% YTD.”

• GME shares jumped early following a cryptic tweet from the meme trader known as Roaring Kitty on Wednesday.
• HOTH announced it entered into an exclusive patent license agreement with the U.S. Department of Veterans Affairs.
• MA Mastercard SpendingPulse: total U.S. retail sales grew 3.8%this holiday season; online remained choice for consumers, increasing 6.7% YoY.
• MSTR, COIN, HUT, IREN, MARA, RIOT, and others pulling back as stocks with exposure to cryptocurrencies fall as Bitcoin retreats, giving up earlier gains.
• RAPT was upgraded to Buy with $10 PT at HCW after Rapt and a subsidiary of Jiangxi Jemincare Group announced that they have entered into an exclusive license agreement for JYB1904, or RPT904
• TM shares advanced after Japanese newspaper Nikkei reported on Wednesday that Toyota aims to double its return-on-equity target to 20%.
• UNH was added to the analyst favorites list at Raymond James, saying the company is trading at an historically attractive level following year-to-date underperformance.
• Drone/Space names outperform, extending recent gains: UAVS, RCAT, LUNR, ONDS, EH, etc.
• In Insurance: Raymond James upgraded shares of EVER to Strong Buy and PGR to Outperform in conjunction with the firm’s 2025 playbook and outlook note for the insurance group and downgraded HGTY to Underperform
• Quantum computing stocks QMCO, QUBT, RGTI show strength while IONQ shares lag.