Mid-Morning Look: January 12, 2024

Mid-Morning Look

Friday, January 12, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks are mostly higher following a very busy morning of earnings, geopolitical news, and economic data, all impacting major averages which remain on track for solid gains this week. Energy (XLE) the best performing sector early in the S&P amid a spike in oil prices after the US and UK launched airstrikes on Houthi rebel targets in Yemen is response to a string of attacks that have disrupted commercial shipping in the Red Sea (Brent topped $80 per barrel earlier). The news also sparked a rally in precious metals as gold jumped over 2%. Inflation data this morning more stock market friendly as the December PPI came in lower than expected after yesterday’s “hotter” CPI report. The data helps market views for lower rate cuts in coming months.  Financials are mixed, with JPM trading to all-time highs following earnings results, while BAC and WFC results send those bank shares lower. Managed care stocks as a higher medical loss ratio overshadows earnings beat from Dow component UNH. Airlines tumbled after DAL beats for quarter but lowers its profit forecast for year. Bitcoin slips and crypto stocks tumble after massive run in December/early January. Luxury retail names fall behind a sharp profit warning from Burberry overseas. The Nasdaq is still on track for a 3% weekly advance as large cap tech has paced the week gains (NVDA, META, MSFT, AMZN). The S&P 500 has officially broken above 4,800 for the first time since January 2022 this morning and is less than 20 points away from making a new intraday all-time high (all-time closing high still stands at 4,796.55).

Economic Data

  • December Producer Price Index (PPI) headline fell -0.1% M/M, lower than the +0.1% estimate (prior was unchanged) and on a Y/Y basis rose +1.0%, below the +1.3% estimate. On a core basis, or PPI ex Food & Energy showed prices unchanged vs. est. +0.2% and Y/Y rose +1.8% vs. est. +1.9%. The PPI inflation data “cooler” than the CPI report released on Thursday.






WTI Crude















10-Year Note




Sector Movers Today

  • In Luxury Retail: BURBY warned of a slowdown in demand for luxury goods for the 2nd time in 3-months as Burberry now expects FY2023/24 adj operating profit in a range between 410M-460M pounds, down from Nov guide when they said the profit number would be towards the lower end of analysts’ forecasts of 552M-668M pounds; said retail revenue in the 13 weeks to Dec. 30 was down 7% at 706M pounds (luxury retail names TPR, RL, PVH also active).
  • In Fertilizers/potash: CF was upgraded to Equal Weight from Underweight at Barclays with $85 tgt saying they expects 7% free cash flow yield in 2024 and marginally raises its ammonia sales expectations in view of recently acquired Waggaman facility’s volume. Barclays downgraded ICL to Underweight driven by higher Red Sea and SE Asia exposure vs peers. NTR was downgraded to Market Perform from Outperform at Raymond James and cut tgt to $65 from $80 citing concerns over protracted pressure in potash.
  • Four of the largest banks in the U.S. reported earnings today/mixed views:
  • 1) Citigroup (C) reported a Q4 net loss of $1.8B vs. net income of $2.51B y/y, said revenue fell 3% to $17.4B from $18B (below ests $18.75b) noting the recent devaluation of the Argentine peso had wiped out $880 million of the most-recent quarter’s revenue. By segment: Services business revs rose 6% to $4.5B, trading revenue fell 19% to $3.4B as trading on bonds and other fixed-income securities tumbled 25%, thanks to the Argentina, wealth-management business -3% y/y to $1.7B and IB revs rose 22% to $949M.
  • 2) BAC Q4 adj EPS $0.70 tops the $0.68 est. as revenue of $22B was down -10% y/y; Q4 net interest income down 5% to $13.9B as they spent more to keep customer deposits, and provision for credit losses at $1.1B; took a pre-tax charge of $2.1B in Q4 to pay a "special assessment" fee to replenish a FDIC fund; will also take a charge of about $1.6B in Q4 as it phases out a Bloomberg interest rate benchmark used in some commercial loan contracts. BAC had unrealized losses of almost $98B in Q4, down from paper losses of $131.6B in the last quarter.
  • 3) JPM shares hit all-time highs after Q4 results as adj EPS of $3.97 topped ests of $3.36 as Reports revenue of $38.57B, up 12% y/y; said expects FY net interest income (NII) of $90B, higher than analysts’ estimates of $86.2B; fees came in weaker on a 7% miss in Equities trading and 6% miss in IB revs while FICC came in 5% better.
  • 4) WFC Q4 adj EPS $1.26 tops the $1.17 estimate while Q4 revs rose 2% y/y to $20.5B and slightly above ests $20.3B; warned that 2024 net interest income (NII) could be 7% to 9% lower than a year earlier; raised Q4 provision for credit losses up to $1.28B vs. est. $1.32B; non-interest expense dropped 2.5% in the quarter.



  • CCJ +7%; strength in uranium stocks (UEC, URA, UUUU) after Kazakhstan’s Kazatomprom said it may cut its 2024 production plan due to difficulties with the availability of sulfuric acid needed for uranium production.
  • CIEN +3%; upgraded from In Line to Outperform at Evercore/ISI and raise tgt to $57 as thinks the recent earnings report has sufficiently reset expectations and enabled a path to beat and raise as it goes through FY24.
  • IFF +2%; after named Erik Fyrwald as CEO, succeeding Frank Clyburn, effective Feb 6, reaffirmed its FY23 sales forecast and was upgraded to Buy at Jefferies and raised tgt to $112.
  • JPM +1%; trades all-time highs after earnings results; Q4 results as adj EPS of $3.97 topped ests of $3.36 as Reports revenue of $38.57B, up 12% y/y; said expects FY net interest income (NII) of $90B, higher than analysts’ estimates of $86.2B.
  • QCOM +1%; upgraded to Buy from Neutral at Citigroup with $160 tgt saying industry checks indicate inventory replenishment in the wireless end market continues and they expect upside to Qualcomm print and guide – raise ests, tgt and launch a positive catalyst watch.
  • TWLO +3%; Piper upgraded from Neutral to Overweight and raised tgt to $82 from $75 after 6 months of the stock digesting top-line estimates coming down.
  • VLO +2%; strength in energy stocks as oil prices jump on US/UK attack on Yemen; shares of EQT, MRO, CTRA among leaders in S&P.
  • WIT +15%; reported better results and guidance lifting shares today, followed better results from INFY this week; shares of CTSH up in sympathy.



  • BA -1%; as the FAA said it will significantly increase oversight of Boeing saying that they believe there are "other manufacturing problems" at the company. The FAA will conduct a new audit of the Boeing 737-9 MAX production line and its suppliers.
  • DAL -5%; results beat but cut forecast; Q4 adj EPS $1.28 vs. est. $1.17; Q4 revs $14.22B vs. est. $13.52B; forecasts 2024 adj EPS $6 to $7, compared with its previous target of more than $7 per share outlined at an investor day in December 2022 and vs. est. $6.50.
  • MNTS -33%; after saying there is substantial doubt about its ability to continue as a going concern.
  • TSLA -3%; extends weekly losses after dropping the price of its China Model 3 to 245,900 yuan, and the price of the Model Y dropped to 258,900 yuan.
  • UNH -4%; posted Q4 EPS and rev beat and reaffirmed year guidance, but shares dropped (dragging comps HUM, CI, ELV lower) after its medical loss ratio (MLR) missed consensus by ~100 bp (85.0% vs. 83.9% consensus).


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.