Mid-Morning Look: May 07, 2024

Mid-Morning Look

Tuesday, May 07, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks are mixed to little changed after a massive 3-day rally pushed the Nasdaq 100 (QQQ) +4.5% in 3 days and just 2% from the 3/21 all-time highs (ATH) and the S&P 500 index (SPX) is +3.2% in 3 days and 1.6% from its respective 3/28 ATH. After weak sentiment in mid-April following a flurry of higher inflation reports, investor sentiment has improved given a bout of weaker jobs reports, raising prospects the Fed could keep rate cuts on the table in 2024 to help the economy. No major data points today/this week, but the April CPI and PPI inflation reports are due mid-next week. In earnings news, weakness in media space behind mixed Disney (DIS) earnings results as top/bottom line beat and raised EPS growth, but Disney+ subs disappoint, and some segment revs miss. NYSE breadth has advancers leading decliners by 2.5:1 margin despite major averages mostly flat with 10 of 11 S&P sectors in the green early. Early leaders include Materials, REITs, Utilities, and Healthcare with interest rate sensitive stocks rising amid further slippage in bond yields (10-yr down to 4.43% ahead of bond auctions today/this week to tune of $125B in paper).






WTI Crude















10-Year Note




Sector Movers Today

  • In Optical Sector: COHR Q3 beat led by strong Networking revenue, offsetting weaker Materials revenue and lower margins; Q3 adj EPS $0.53 vs. est. $0.40 and revs fell -2.5% y/y to $1.21B vs. est. $1.17B; guides Q4 revs $1.23B-$1.32B above est. $1.27; also noted Telecom recovery “slower than we previously expected.” FN reported Q3 beat citing “record datacom revenue from continued demand for high-data-rate products” while saying sees sequential growth in autos next Qtr but notes ongoing inventory correction in traditional telecom; reported Q3 adj EPS $2.39 vs. est. $2.11; Q3 revs rose 10% y/y to $731.5M vs. est. $717.8M. LITE announced in-line results but disappointing guidance (yet again), as telco inventory continues to linger; company said, “next few quarters’ revenue will continue to be burdened by telecom customer inventory challenges as telco spending has slowed.” (Q3 revs $366.5M vs est. $364.6M on EPS beat, but lower guide).
  • Aerospace & Defense: AXON Q1 EPS of $1.15 tops consensus $0.95 with revenue of $460.7M, up 34% y/y est. $441.6M and issued a FY24 guide above consensus, outperformance on adjusted EBITDA ($108.9M vs. est. of $90.8M) in the quarter. RKLB mixed results as Q1 EPS loss (-$0.09) vs. est. loss (-$0.11); Q1 revs $92.77M vs. est. $94.99M; sees Q2 revenue $105M-$110M, vs. consensus $106.22M and sees Q2 adjusted EBITDA ($25M)-($23M). SPR said that it was "currently engaged in discussions" with BA regarding a potential buyout of Spirit but provided no details. Shares fell after the aircraft-components maker reported a much wider-than-expected Q1 loss, due to delivery schedule changes made by Boeing.
  • In Autos: TSLA shares slipped after monthly data showed its China-made electric vehicles dropped 18% y/y in April to 62,167; deliveries of China-made Model 3 and Model Y vehicles slid -30.2% from March; RACE Q1 revenue EU1.59B, +11% y/y, estimate EU1.57B; Ferrari deliveries 3,560, -0.2% y/y; EMEA deliveries 1,573 units, +2.5% y/y; Americas Deliveries 997 units, +3.6% y/y; Mainland China, Hong Kong, and Taiwan 317 units, -20% y/y. GT mixed Q1 results as the tire company posted better EPS but revs $54.53B missed $4.82B estimate. LCID posted a wider-than-expected loss for Q1 ($0.30 vs est. ($0.25) on revs $172.74Mm vs est. $156.99Mm, forecast higher capital expenditure this year of $1.5B (up from $910M y/y) and reiterated an annual production forecast below. NKLA Q2 revs $7.5M missing the $15.8M estimate; said delivered 75 of its hydrogen fuel cell trucks in the first two quarters of production; delayed its delivery timeline for its reworked battery trucks. RIVN shares edged higher after Digitimes reported speculation arises about AAPL exploring collaboration with the EV startup.
  • In Water & Utilities: group continues to outperform, with XLU rising about 10% in last 15 days and utilities now the 4th best sector in the S&P in 2024 up around 9%; earnings overnight helping several names with shares of MWA rising on results; NRG shares jump after posting Q1 profit of $511M vs. y/y loss of -$1.3B and adj core profit of $849M vs. est. $753M; DUK reports Q1 EPS and revs beat and backs long-term adjusted EPS growth rate 5%-7% through 2028.



  • CROX +9%; beats Q1 sales and profit estimates, while Q2 revenue forecasts fall slightly short of expectations as it sees weakness at its HEYDUDE brand (guides Q2 revs 1%-3% vs analysts est. of about 3.1%.
  • FIS +5%; raised outlook for full-year adj. EPS; reported better-than-expected rev/adj EBITDA/EPS for Q1 and reiterated its rev/adj EBITDA guide, raised its adj EPS guide by $0.22.
  • FMC +6%; posted a Q1 beat, as sales of new products and restructuring cost benefits offset lower volumes. While 2Q24 guidance was in line, FMC expects to see volume and price growth for the first time since destocking began in 2Q23.
  • GFS +10%; posted Q1 EPS/revenue beat while forecast Q2 revs above estimates ($1.59B-$1.64B vs. est. $1.59B), betting on improving demand for semiconductors – midpoint of Q2 EPS view $0.24-$0.34 topped the $0.27 estimate.
  • HIMS +5%; boosted its adjusted Ebitda guidance for the full year above consensus; beats by $0.04, beats on revs; guides Q2 revs above consensus; guides FY24 revs above consensus.
  • IP +6%; shares jumped after Reuters reported Brazilian pulp and paper company Suzano has approached the company to express interest in an all-cash acquisition that would be worth almost $15B and has communicated its $42-per-share offer to International Paper’s board of directors verbally https://tinyurl.com/376ypnw9
  • PTON +14%; after CNBC reported Private equity firms have been circling Peloton for a potential buyout, people familiar with the matter told CNBC noting some of the discussions have centered on how to cut Peloton’s operating expenses to make a buyout more attractive. https://tinyurl.com/kw9czpzk  
  • ZETA +17%; shares jumped as delivered another beat-and-raise quarter with revs of $194.9M was above $187.1M Street, and adjusted EBITDA of $30.5M was above the $29.0M Street.



  • BLDR -14%; Q1 results topped consensus but profit dropped amid higher expenses related to acquisitions and a shift in demand to lower-margin products, while gross profit margins fell 190 basis points to 33.4%.
  • BYON -25%; shares fall as Q1 adj EPS loss wider at (-$1.22) vs. est. loss (-$0.87) on Q1 revs miss of $382.28M vs. est. $389.26M; Q1 orders delivered of 2.2M, an increase of 27% y/y.
  • CELH -6%; after Q1 jumped 37% y/y to $355.71M but was below the $389.86M consensus saying a sequential drop in inventory days dragged revenue by about $20M.
  • DDOG -10%; said that Amit Agarwal will be stepping down as president; quarterly results and guidance topped views.
  • DIS -7%; after mixed results as Q2 EPS $1.21 tops consensus $1.10 and revenue $22.1B in-line with consensus while Disney+ subscribers 153.6M, missed estimates of around 155M; said now sees year adj EPS growth tgt of 25%, up from the 20% it previously forecast.
  • PLTR –13%; as Q1 revenue growth in company’s U.S. commercial business, which accounts for sales to businesses in the country, slowed to 40% y/y, while overall revs $634M tops est. $625.43M; also guides Q2 revenue $649M-$653M, below consensus $653.25M and adj income from operations $209M-$213M (raised year revs).
  • ROK -2%; shares dropped after results and lowered FY adj EPS to $10.00-$11.00 from prior $12.00-$13.50, which followed a top and bottom line beat for Q1, indication a weak 2H’24.
  • TDC -13%; was downgraded to Underperform from Neutral at Bank America and cut tgt to $39 from $48 after results last night noting the company’s execution remains mixed in the near term and the back-half of the year loaded guidance creates incremental risk.
  • TSLA -3%; after monthly data showed its China-made electric vehicles dropped 18% y/y in April to 62,167; deliveries of China-made Model 3 and Model Y vehicles slid -30.2% from March; meanwhile BYD’s sales of passenger vehicles up 48.97%.


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.