Mid-Morning Look: July 29, 2024
Mid-Morning Look
Monday, July 29, 2024
Index |
Up/Down |
% |
Last |
DJ Industrials |
-105.88 |
0.26% |
40,481 |
S&P 500 |
13.21 |
0.24% |
5,472 |
Nasdaq |
96.19 |
0.57% |
17,456 |
Russell 2000 |
2.69 |
0.12% |
2,262 |
U.S. stocks open the week higher as the S&P and Nasdaq both look to rebound after last week’s losses, while the Smallcap Russell 2000 extends its gains in July amid hopes of interest rates cuts by the Fed in September. Note the S&P 500 and NASDAQ-100 were down about 5% and 9%, respectively, peak-to-trough last week. One of the busier weeks of the summer on deck starting with Q3 U.S. Treasury Quarterly Refunding announcement this afternoon for initial ests. 3:00 PM ET. Then tomorrow the JOLTS job report as well as tech earnings from MSFT and AMD. On Wednesday 7/31, the FOMC interest rate meeting and Powell press conference as well as Bank of Japan central bank meeting, ADP private payrolls at 8:15 AM and Q3 Quarterly Refunding announcement follow up at 8:30 AM; followed by earnings that night from META, ARM and QCOM. On Thursday 8/1, the Bank of England rate policy meeting as well as heavy data doe with U.S. Nonfarm Productivity and Unit Labor Costs, ISM Manufacturing PMI and that night earnings from AAPL, AMZN, COIN and INTC. Lastly on Friday, the monthly nonfarm payroll report and earnings from mega energy companies CVX and XOM. Lots of potential catalysts this week, which explains for the slow start to markets today, chopping in narrow range since the open.
Macro |
Up/Down |
Last |
WTI Crude |
-0.36 |
76.80 |
Brent |
-0.33 |
80.80 |
Gold |
8.30 |
2,389.30 |
EUR/USD |
-0.005 |
1.0806 |
JPY/USD |
0.30 |
154.02 |
10-Year Note |
-0.024 |
4.176% |
Sector Movers Today
- In Crypto: strength in the crypto mining sector, with Bitcoin rising back near $70,000, not far off its all-time highs around $73,500, boosting shares of miners, investors, blockchain names. Republican presidential candidate Donald Trump talked up bitcoin this weekend and promised friendlier regulation for the industry, lifting shares of miners, exchanges, investors, etc. including COIN, BITF, CLSK, IREN, MARA, RIOT, MSTR and others. Trump has projected himself as the pro-bitcoin candidate ahead of the election in November.
- In Semiconductors: ON shares rise 10% early on results this morning, while ARM slides after HSBC downgraded. Overall strength early as ON, LSCC, SWKS, AMD, QRVO, QCOM, ARM, MCHP, INTC, and MPWR among top chip companies expected to report earnings this week after mixed results from NXPI, TXN, SLAB last week. KeyBanc noted after results last week, analog appears to continue to bottom, as sub-sectors within industrials continue to show signs of recovery. Auto destocking continues and appears to still have room to go, with OEMs (STM, TSLA, GM, F) and tier-1s (GNTX) showing disappointing Q2 performance and outlook. Signs of a sustained cyclical recovery and improving demand trends in China. IoT inventory destocking continues to see progress, as observed by SLAB’s print.
- In Energy stocks: OXY agreed to sell Delaware Basis assets in Texas and New Mexico to PR for about $818M and said it has separately completed other asset sales totaling about $152M. VTLE signed in partnership with NOG under which the two companies will acquire Point Energy’s assets in an all-cash transaction for total consideration of $1.1 billion. Eni SpA (E) was upgraded to Outperform saying the company is starting to demonstrate value creation in its ‘satellite’ strategy for the energy transition, through sell-downs in both Plenitude and Enilive at significantly higher multiples.
- In Security Software: CRWD was removed as a top pick at Morgan Stanley, though remains Overweight rated as lower PT to $360 from $396 saying latest checks indicate -20% reduction in 2H Net New ARR (NNARR) post the outage, implying low-single digit % headwind to total ARR this year. FTNT was downgraded to Neutral from Buy at Guggenheim without a price target as the firm looks for a more opportune time to enter the shares, saying its upgrade on August 6, 2023, was “obviously too early.”
Stock GAINERS
- COMM +14%; positively preannounced Q2 sales & EBITDA and said it would engage w/ creditors to address upcoming maturities and explore ways to deleverage the balance sheet.
- GH +3%; announced that the FDA approved the company’s SHIELD blood test as a primary screening option for colorectal cancer (CRC) screening.
- INSP +4%; guides prelim Q2 revs $195.9M tops consensus $186.4M; raises FY revenue forecast to $788M-$798M, vs. prior forecast $783M to $793M.
- ON +13%; on slightly better, to mixed results; posts Q2 adjusted EPS profit of $0.96 topping consensus of $0.92 on revs $1.74B vs. est. $1.73B; guided Q3 EPS $0.91-$1.03 vs. consensus $0.97 and revs $1.7B-$1.8B vs. consensus $1.78B while sees Q3 gross margin 44.4%-46.4% and operating expenses $305M-$320M.
- RVTY +3%; reported Q2 revenue in line, FY24 EPS guidance raised, revenue guidance tightened due to FX; Q2 adj EPS of $1.22 beat consensus of $1.12, and updated FY24 revenue guidance to $2.77-$2.79B from $2.76-$2.82B to reflect updated foreign exchange rates and raised adjusted EPS guidance to $4.70-$4.80 from previous of $4.55-$4.75.
- TSLA +5%; was named new “Top Pick” in U.S. Autos at Morgan Stanley, replacing Ford (F), citing 40% upside to the firm’s $310 price target, more managed expectations on autos and powerful emerging drivers of firm value. Morgan warns that near-term expectations around FSD and robotaxi may be too high.
Stock LAGGARDS
- ABT -4%; after the co was ordered by a jury to pay almost $500 million over allegations that it hid the risk that its premature-infant formula could cause a potentially fatal bowel disease, according to reports. Shares of rival Reckitt Benckiser (RBGPF) down in sympathy amid fears of a similar outcome for their litigation
- ARLP -6%; cut its coal sales volume forecast for the full year; said Q2 revs declined -7.6% to $593.4M from $641.8M (below consensus $629.5M).
- BMRC -7%; after reporting Q2 EPS loss (-$1.36) vs. $0.28 profit y/y as provision for credit losses on loans surges to $5.2M in Q2 vs $350,000 in Q1, largely due to increased individual reserve for one non-owner occupied commercial real estate (CRE) loan totaling $16.7M.
- EXAS -3%; after competitor GH announced that the FDA approved the company’s SHIELD blood test as a primary screening option for colorectal cancer screening.
- IART -24%; reported slightly better Q2 results but cuts FY24 adj EPS view to $2.41-$3.57 from $3.01-$3.11 (est. $3.04) and lowers FY24 rev view to $1.609 to $1.629 from $1.672B-$1.687B.
- IOVA -3%; was downgraded to Neutral at Piper and cut tgt to $10 from $19 citing an apparent slow launch of the firm’s recently approved treatment for patients with advanced melanoma, Amtagvi.
- SCHW -2%; downgraded from Overweight to Neutral at Piper and cut tgt to $64 noting earlier this month, SCHW announced that over the next several years it plans to lower balance sheet duration and reduce the size of its bank by relying more heavily on third party banking relationships.
- SNDX -14%; said the FDA extended the review of its drug to treat patients with leukemia by three months, to Dec. 26.
- VTYX -21%; after saying they are ending internal development of its VTX958 pipeline candidate following the drug’s failure in a mid-stage study in the inflammatory bowel disorder Crohn’s disease.
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.