Mid-Morning Look: May 16, 2024

Mid-Morning Look

Thursday, May 16, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks holding at or near record highs, taking a breather following a monster run the first two-weeks of May, as investors digest a round of mixed economic data and better earnings results from Dow components. Wal-Mart (WMT) lifts retailers/consumer discretionary (DG, DLTR, COST, TGT) after its strong quarter results, commentary, and guidance while Cisco (CSCO) reverses overnight gains as quarterly results topped consensus. The “SPY” comes into trading today riding its longest “green” day streak since Oct 2021 (10-green days in a row), as all-time highs along with the Dow and Nasdaq. Futures barely budged after several economic data points which showed Jobless Claims down from last week, in-line with consensus; Philly biz conditions weaker than prior and ests (prices paid softer, new orders tumble); April housing starts rise off low March figures, but below ests and April imports/exports above consensus. Trading action muted early after big rallies the days prior following CPI and PPI inflation reports. At this point, with the S&P rising almost every day in May, advisors and money managers are continuing to chase performance, with the large caps doing lots of the heavy lifting. Federal Reserve Bank of Minneapolis President Neel Kashkari repeated the central bank likely needs to keep interest rates at the current level for “a while longer,” and questioned how much they’re restraining the US economy. Meanwhile, Federal Reserve Bank of New York President John Williams says the softer tone of April’s CPI is “kind of a positive development,” Reuters reported, citing an interview. Williams says he doesn’t expect to get “greater confidence” on inflation progress toward a 2% goal in the “very near term.”


Economic Data

  • Weekly Jobless Claims fell to 222,000 from 232,000 last week and vs consensus 220,000; the 4-week moving average climbed to 217,750 from 215,250 prior week (previous 215,000); continued claims climbed to 1.794M from 1.781M prior week and the U.S insured unemployment rate unchanged at 1.2%.
  • Philadelphia Fed business conditions for May reported at 4.5, below consensus 8.0 and April 15.5; prices paid index 18.7 vs April 23.0; new orders index -7.9 vs April 12.2; employment index -7.9 vs April -10.7 and the six-month business conditions for May 32.4 vs April 34.3.
  • US April housing starts rose +5.7% to 1.36M unit rate (est. 1.42M rate) vs March -16.8% (1.287M-units); April single-family starts -0.4% to 1.031M unit rate; multifamily +30.6% to 329,000-unit rate. U.S. April housing permits fell -3.0% to 1.44M unit rate vs. est. and prior read of 1.485M-unit rate.
  • U.S. April export prices +0.5% vs. est. +0.4% and vs March +0.1% while April import prices +0.9% above consensus +0.3% and vs March +0.6% (prev +0.4%); the April Y/Y import prices +1.1%, export prices -1.0%.






WTI Crude















10-Year Note




Sector Movers Today

  • In Insurance: CB shares jumped after quarterly filing showed Warren Buffet’s Berkshire Hathaway has taken a stake of 25.9M shares, or about a $6.7B-dollar position. AFL is acquiring a 40% stake in Tree Line Capital Partners, a private credit shop focused on lending to small- and medium-size companies, the WSJ reported last night, paying about $250M for the stake according to people familiar with the matter. CRBG shares rise after AIG said it will sell a 20% stake in the company to Japan’s Nippon Life Insurance for $3.8 billion (AIG had a nearly 53% stake before the latest deal as per filing). ALL said April estimated catastrophe losses $494M, or $390M after tax as losses included 11 events estimated at $491M.
  • In Semiconductors: AMAT reports earnings after the close in equipment sector; CRUS was downgraded from Buy to Hold at Benchmark as shares approach fair value following the firm’s latest beat and raise earnings report – said appreciates the new content growth at Apple and remain upbeat on the migration to laptops but says current share price is reflecting these incremental BOM gains; several analysts positive NVDA into results later this month; INTC was upgraded to Peer Perform from Underperform at Wolfe noting sentiment/expectations low, and the stock now down 38% year-to-date.
  • In Energy: Reuters reported CVX is set to launch the sale of its remaining UK North Sea oil and gas assets, in a move that would Mark the U.S. energy giant’s exit from the ageing basin after more than 55 years. Reuters confirmed the planned divestment comes as Chevron prepares for the $53B acquisition of rival HES. EOG downgraded from Buy to Hold at Truist and cut tgt to $136 from $163 saying some of its historical prestige has been removed as the focus has shifted towards shareholder return and other similar strategies employed by its peers. CTRA was upgraded to Buy at Truist as forecast Coterra on pace to potentially generate $2.5B+ FCF in 2025 setting up a solid shareholder return story; the firm also downgraded OXY to Hold from Buy; In refiners, VLO was downgraded to Hold from Buy at Argus noting the company’s lower first-quarter earnings reflected a weaker performance within the Refining business.



  • ASTS +32%; shares jump after entering into a commercial agreement with AT&T (T) to provide their first space-based broadband network direct to everyday cell phones.
  • CB +5%; quarterly filing showed Warren Buffet’s Berkshire Hathaway has taken a stake of 25.9M shares, or about a $6.7B-dollar position.
  • CRBG +11%; shares rise after AIG said it will sell a 20% stake in the company to Japan’s Nippon Life Insurance for $3.8 billion (AIG had a nearly 53% stake before the latest deal as per filing).
  • GDRX +12%; was upgraded from Market Perform to Outperform at Raymond James with $10 tgt following the company’s inaugural investor day where it leaves incrementally positive on the stock.
  • GOOS +20%; after results as Q4 revs $358M topped consensus $316.4M on better earnings of $0.19 vs. est. $0.07; Q1 Ebit $40.1M tops est. $22.4M and margins better as Q4 EBIT margin 11.2%, vs. est. 6.52%.
  • MGNI +26%; adds to yesterday’s 8% gains after NFLX said it opened new programmatic ad partners, naming MGNI as SSP partner (also named TTD, and GOOGL).
  • RHHBY +3%; said its Genentech unit reports positive phase Ib results for its dual GLP-1/GIP receptor Agonist CT-388 in people with obesity; said over 24 weeks, a once-weekly subcutaneous injection of CT-388 achieved a clinically meaningful and statistically significant mean placebo-adjusted weight loss.
  • SBOW +10%; shares rise after Crescent Energy (CRGY) agreed to acquire SBOW in $2.1B deal (confirmed overnight story by Bloomberg). SBOW’s largest shareholder Kimmeridge Energy had also made a similar bid earlier this year but later withdrew the offer https://tinyurl.com/3rvu8jx4  
  • TRUP +13%; upgraded to Buy at Bank America as expect material improvement in operating margins and the company may begin over-earning; notes Trupanion has 27% rate flowing through its book vs. 15% veterinary inflation rate assumption.
  • WMT +6%; after results and guidance; reported Q1 adj EPS $0.60 above consensus $0.53 and revs rose 6% y/y to $161.51B vs. est. $159.58B; as total US comparable sales ex-gas +3.9%, vs. est. +3.42% and raised its FY net sales to rise at the high end, or slightly above its prior growth forecast of 3% to 4% (DG, DLTR, TGT rise in sympathy)



  • AMC -9%; along with weakness in GME fall sharply a second day (after surging Monday/Tuesday) as the euphoria over the return of "Roaring Kitty", who was the central figure in 2021 meme stock rally, fizzles out.
  • BIDU -3%; after earnings results and guidance.
  • COIN -4%; possible as the Financial Times reported the CME has been holding discussions with traders who want to buy and sell bitcoin on a regulated marketplace.
  • CSCO -1%; reported a good 3QFY24 (April), beating estimates (off a low bar) and guiding Q4/FY25 modestly above the Street estimate, despite continued inventory digestion that will pressure Networking revenue though 1HFY25.
  • DE -3%; as Q2 EPS $8.5 3topped est. $7.86 on better revs $15.24B vs. est. $13.28B but lowers FY forecasts for net to about $7.0B, below prior $7.50B-$7.75B; sees FY24 Production & Precision Ag net sales down 20%-25%, sees FY24 Small Ag & Turf net sales down 20%-25% and sees FY24 Construction & Forestry net sales down 5%-10%.
  • SPIR -22%; after results; Q1 revenue results were weaker than expected, coming in below the low end of its guidance (missed its midpoint by $2.3M).
  • UAA ; guides FY25 revenue to be down at a low double-digit percentage rate, vs ests for up 2% and guided year EPS $0.18-$0.21 vs. est. $0.59 saying is facing lower wholesale channel demand and inconsistent execution across its business; announces restructuring plan; board approves restructuring plan and announces $500M buyback.


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.