Mid-Morning Look

Thursday, February 29, 2024

Index	Up/Down	%	Last
DJ Industrials	-92.28	0.54%	38,855
S&P 500	7.90	0.15%	5,077
Nasdaq	85.01	0.54%	16,033
Russell 2000	27.87	1.37%	2,068

 

 

U.S. stocks are back in rally mode following an in-line January inflation report, boosting hopes it will lead to interest rate cuts sooner than later by the Fed and giving the stock market the next catalyst it needs to push further into unchartered record territory. Treasury yields fell on the data and stocks rose, especially those most leveraged to interest rates like Smallcaps as the Russell 2000 outperforms, rising for the 5^th time in 6-days. The personal consumption expenditures (PCE)price index, excluding food and energy costs, increased 0.4% for the month and 2.8% from a year ago. Most importantly: core PCE saw 12 consecutive months lower than the previous month. Nearly all eleven S&P sectors are “positive” with modest weakness in Healthcare (XLV), while Communications (XLC) outperform. With the PCE data behind us, and not scaring markets, Fed speakers on deck for later today and then next week attention turns to jobs data. All systems go early as the S&P 500 (SPX) makes another run at 5,100 as stock looking to make it a 16^th winning week in the last 18 as the S&P remains up over 20% from the October lows (in a straight line). Within the last few minutes, stocks paring gains as S&P failed to break above 5,100.

• Weekly Jobless Claims climbed to 215K from 202K the prior week and vs. consensus 210K; the 4-week moving average fell to 212,500 from 215,500; continued claims climbed to 1.905M from 1.860M prior week and the US insured unemployment rate climbed to 1.3% from 1.2% prior week.
• Personal income for January jumped +1.0% vs. consensus +0.4% and above December +0.3% while Personal Spending rose +0.2%, in-line with consensus while the personal saving rate was 3.8%.
• Chicago PMI February index 44.0 below consensus 48.0; prices paid rose at faster pace, new orders fell at slower pace, inventories fell at slower pace, and production fell at faster pace.
• Pending Home sales index for January fell -4.9% vs. consensus +1.0% and down -8.8% from Jan 2023.

 

 

Macro	Up/Down	Last
WTI Crude	0.16	78.70
Brent	-0.05	83.63
Gold	13.80	2,056.50
EUR/USD	0.0011	1.0847
JPY/USD	-1.34	149.35
10-Year Note	-0.042	4.233%

 

• In Precious Metals: space gets a boost after the January PCE inflation data came in-line with economist expectations and showed improvement M/M and Y/Y, helping boost precious metal prices. Jefferies assumed coverage on space with Buys on GOLD and NEM and initiated Buys on AGI, LUGDF initiated with a Buy and Hold ratings on AEM, KGC, and PAAS – said sector leaders NEM and GOLD, which have underperformed but are both guiding to rising production and falling unit costs in the medium-term forecast.
• In Crypto: Bitcoin remains the story of the week, moving back near the $64,000 level overnight (up 48% in February alone) as the recent surge into the crypto drives record $520 million inflow into BlackRock’s ETF in a single day. Reports showed that the iShares Bitcoin Trust (IBIT) saw its biggest one-session haul Tuesday, marking the largest daily inflow so far among the batch of new US exchange-traded funds investing directly into Bitcoin. Overnight MARA announced its Q423 and year-end results, posting revenue of $156.8M for the quarter, up roughly 5.5x over last year’s $28.4M, on a hash rate that more than tripled to 24.7Eh/s through the year.
• In Beverages: MNST Q4 gross profit as a percentage of net sales rose to 54.2% vs 53% in the prior quarter while Q4 sales rose 14.4% y/y to %$1.73B but was short of $1.75B consensus; guidance better as estimates sales in January to be up about 17%, compared to a year ago. CELH reported a 4Q beat to revenue, gross margin, EPS, and EBITDA. Revenue of $347 mm exceeded Street estimates ($331.5 mm) by almost 5 pts. BUD shares fell after reporting Q4 revenue of $14.5B, below the $15.5B estimates though earnings beat.

 

• BBY +6%; reports smaller-than-expected drop in Q4 comparable sales and beat profit expectations (Q4 comparable sales fell 4.8%, its ninth straight quarterly decline but better than -5.3% est.)
• DUOL +19%; posted a strong quarter with DAU accelerating for the 10th consecutive quarter with bookings and revenue coming in 15% and 3% ahead of consensus, respectively, and EBITDA coming in $4.5M above the high end of guidance and guided 2024 bookings and revenue 2% and 3% ahead of consensus.
• HRL +12%; after results for top gainer in the S&P 500, bouncing off multi-year lows earlier this month; posted Q1 adjusted EPS $0.41 vs. est. $0.34 and revs $3.0B vs. est. $2.92B and affirmed guidance.
• NTRA +14%; posted a smaller EPS loss on better revs for Q4, propelled by a material GM% beat (~600bp) plus a strong ’24 guide (sales & GMs ~5% ahead) as guides FY revs $1.32-1.35B vs est. $1.276B.
• OKTA +27%; F4Q revenue beat by $19M/3% and cRPO of 16% beat consensus 11%, raised the top-line guidance relative to consensus by 3% at the midpoint for the quarter and 1% for the year, and guided Q1 revenue of $603.0M-$605.0M versus the consensus of $583.9M.
• PARA +6%; posted mixed Q4 results after a surprise Q4 profit but sales of $7.64B missed the est. $7.85B and said for Q4, added 4.1 million subscribers for Paramount+, compared with 2.7 million in the previous quarter.
• PSTG +17%; delivered FQ424 revenue above guidance and the Street while TD Cowen said the eight-figure deal with a "major GPU cloud provider" was the highlight of the call and follows another 8-digits deal last quarter.

 

• CC -41%; after the company postponed reporting Q4 results for a second time last night (was originally due on Feb. 14) after reviewing internal control over financial reporting; places existing top management on administrative leave and appoints new CEO, CFO.
• DV -17%; shares tumbled as reported 4Q revenue that was relatively in-line with better-than-Street EBITDA, but the forward outlook disappointed, like IAS.
• IRWD -30%; shares tumbled after saying its experimental treatment called apraglutide, for a condition associated with chronic intestinal failure failed to meet two secondary goals, in a specific set of patients, in a late-stage trial. The treatment did meet the main study goal of reducing dependency on supported nutrition in patients.
• SNOW -20%; delivered a forecast that missed analysts’ estimates and announcing that CEO Frank Slootman is stepping down; guided Q1 product rev. $745M-$750M below est. $769.5M.
• WW -26%; after quarterly results and as the company revealed that media icon Oprah Winfrey will exit its board later this year.

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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.