Mid-Morning Look

Wednesday, March 19, 2025

U.S. stocks are seeing a decent bounce to start the day, paring some of the prior day losses as investors position themselves ahead of the FOMC policy meeting results and projections later this afternoon. The FOMC statement is expected at 2:00 et which will include new economic projections from policymakers, followed by press conference at 2:30 with Chairman Powell. Markets are expecting the Fed to hold rates steady for the second straight meeting and, given heightened uncertainty, provide limited guidance about the policy path ahead. Note monetary policy has already taken a backseat to trade policy, particularly with the Fed on the sidelines and ahead of President Trump’s April 2^nd reciprocal tariff announcement looming (though nothing particularly incremental on tariffs in recent days). In stock news, technology, consumer discretionary and communications leading (though are biggest decliners YTD), while defensive Consumer Staples and Healthcare are down modestly. Shares of WSM and GIS are moving lower following earnings results this morning in retail and food sectors, while SIG shares rise. Markets remain hopeful the Fed can provide ammo to give this market a boost after the S&P fell -10% and Nasdaq about -15% from recent highs during the 4-week pullback centered around market uncertainty, tariffs and slowing growth/spending fears. Gold prices flattish but holding at record highs, oil prices flat and Bitcoin rebounds near $84,000.

• In Brokers & Banks: MS plans to cut about 2,000 employees later this month in the first major workforce reduction under Chief Executive Ted Pick, Bloomberg reported, citing people familiar with the matter; cuts will take place across the bank, with the exception of its roughly 15,000 financial advisers. Oppenheimer downgraded shares of GS, CG, and JEF to perform from Outperform saying thus far they are not seeing any visible sign of an M&A rebound and fear that the current uncertainty over tariffs, a fiscal “detox” and the general upheaval of 80 years of trade and security arrangements is likely to cause a pause in M&A activity.
• E&C Sector: B Riley transfers coverage as downgraded PWR to Neutral from Buy (PT to $300 from $343) and maintain Buys on MTZ (PT to $165 from $151) BWMN (PT $40), TPC ($40 PT) and ORN ($9 PT) saying near term, the firm expects several underlying drivers to create positive momentum in the sector, including rapidly increasing demand for high-powered AI data centers, funding from federal and state infrastructure programs reaching the construction stage, and the ongoing energy transition from traditional fossil fuels to renewables.

• BA +5%; after Bloomberg reported, citing CFO that Q1 was broadly tracking to expectation, while notes Q1 EPS will include a one-time expense of $100M and that Q1 free cash flow could be “several $100M better; also sees March 787 deliveries similar to February.
• BDTX +32%; after the company entered into a licensing agreement with Servier, a pharmaceutical group governed by a non-profit foundation.
• IMVT +6%; shares volatile (alongside partner ROIV) after their rare disease drug succeeded in a final-phase study, but the duo won’t seek regulatory approval for it; provided data from a Phase 3 study of batoclimab in an autoimmune disorder called myasthenia gravis.
• JILL +8%; reported Q4 results that were in line on revenue and slightly ahead on EBITDA; 2025 guidance looks to be in line at the high end of revenue but below on EBITDA; consensus was modeling for $113.3M and the company guided to $101M-$106M, likely due to lower expected gross margin.
• MOS +2%; was upgraded to Overweight and raised tgt to $33 at Barclay’s after the company hosted an investor day on Tuesday, 3/18, outlining capital reallocation and growth plans.
• SIG +22% as shares jumped on results as Q4 adj EPS $6.62 tops consensus of $6.25 on better revs $2.4B (vs. est. $2.33B) and Q4 same-store-sales declined 1.1%, smaller than estimates of a decline of 2.03%.
• STNE +15%; after results as reported Q4 revenue of 3.61 billion reais ($636.04 million) vs analysts’ average estimate of 3.59 billion reais, and adj EPS of 2.26 reais/share vs est. 1.96 reais/share.
• TSLA +3%; upgraded to Overweight from Neutral at Cantor while maintaining a $425 pt following visits to Tesla’s Cortex AI facilities and manufacturing lines before the upcoming Robotaxi division launch scheduled for June in Austin and later in California during 2025.

• GDS -13%; following quarterly results and guidance weighing on shares.
• GILD -3%; after the U.S. health department is reviewing CDC’s HIV prevention division for potential overlap with other agencies and might be at risk of a shut down.
• GIS -3%; reported mixed Q3 results as EPS beat, but revs miss and organic sales fall -5%) and lowers its FY25 organic sales outlook to down (-1.5%-2%), below prior view of FY25 Organic Sales at lower end of flat to up 1%; also forecasts FY adj. EPS constant FX -7% to -8%, below prior forecast -1% to -3%.
• HQY -19%; reported a top-line beat driven by custodial revenue, which topped consensus by ~3%, but missed on both gross and operating margins, all driven by weaker Service gross margins, driven by higher incremental costs around cybersecurity; raised FY26 rev midpoint, but Ebitda missed ests.
• INTC -5%; after Digitimes reported TSM board member Paul Liu dismisses Intel foundry takeover rumors, calls them unfounded; denied speculation the company is considering acquiring Intel’s struggling foundry business.
• WSM -8%; posted higher-than-expected Q4 results, aided by an extra week in the fiscal year and improved demand despite broader concerns about the economy (revs $2.46B vs. est. $2.35B) on better EPS, while saying see FY25 revenue to be in the range of a decline of 1.5% to growth of 1.5% due to the impact of one less week compared to the prior fiscal year.