Mid-Morning Look: September 23, 2024
Mid-Morning Look
Monday, September 23, 2024
Index |
Up/Down |
% |
Last |
DJ Industrials |
68.97 |
0.16% |
42,130 |
S&P 500 |
17.48 |
0.31% |
5,720 |
Nasdaq |
48.09 |
0.27% |
17,996 |
Russell 2000 |
6.99 |
0.31% |
2,234 |
U.S. stocks looking to add to prior two-week gains, looking higher early as most S&P sectors are positive to kick off the week. The U.S. Treasury 10-year hits three-week high of 3.779% after strong S&P PMI data. Natural gas prices outperform, moving to the highest levels since June of this year; gold prices touching new all-time highs. Strength remains broad based as Discretionary (XLY), Materials (XLB), Industrials (XLI), Financials (XLF), and Utilities (XLU) all holding at/or near 52-week highs coming into today. CNBC also notes the S&P 500 (SPX) at historic highs along with S&P Equal weight; notes breadth for S&P A/D historic highs and Smallcap Russell 2000 just 3% from its all-time highs. After the aggressive 50-bps rate cut last week by the Fed, and more rate cuts expected in the next two meetings of 2024, investors continue to be bullish on the stock market with the S&P and Dow at record highs, Nasdaq less than 4% away and Russell less than 3% away. A few Fed speakers out this morning already talking about the outlook for more cuts (Goolsbee, Kashkari). Increased tensions in the Middle East between Israel and Lebanon does not have impact on stock markets or commodities this morning. Fear continues to be absent as the CBOE Volatility Index (VIX) drops back below the 16 level. Strong start after mixed results Friday for U.S. stocks.
Economic Data
- U.S. S&P Global September flash composite PMI at 54.4 (vs 54.6 in August) and U.S. S&P Global September flash services PMI at 55.4 (vs 55.7 in August). S&P Global September flash manufacturing PMI at 47.0 (vs 47.9 in August).
Macro |
Up/Down |
Last |
WTI Crude |
0.66 |
71.66 |
Brent |
0.54 |
75.04 |
Gold |
12.50 |
2,658.70 |
EUR/USD |
-0.003 |
1.1132 |
JPY/USD |
0.11 |
144.03 |
10-Year Note |
0.059 |
3.787% |
Sector Movers Today
- Bitcoin prices +1.25% to $63,600, hitting one-month highs and sustaining its rally after the Federal Reserve’s super-sized rate cut last week, while the Yen extended its decline in markets thinned by a Japanese holiday. Bitcoin miners: CORZ was initiated at Buy and $16 tgt by Canaccord noting the Coreweave deal is a long-term revenue, attractive margins, low capex requirements: a formula for multiple expansion. Bitcoin miner BITF said it had entered into a settlement agreement with rival and top shareholder RIOT, under which Amy Freedman was appointed to its board. The two companies have been locked in a dispute since April, when Riot made an unsolicited $950M to buy them.
- In Refiners, TD Cowen said they remain cautious and reduce 2H24 EBITDA to 25% below consensus and maintain FY25 EBITDA 20% below as the firm sees risk cracks continue to fall into YE24 with US product inventories trending above historicals. The group looks overvalued on 24-25 multiples, and TDCowen sees the largest near-term downside to beta levered names including VLO, PBF, and DK could hold up best near-term, while MPC remains top pick on peer-leading distribution. Lowered tgt prices on CLMT, DINO, DK, MPC, PARR, PBF, PSX, and VLO.
- In Footwear: ONON was upgraded from Underperform to Neutral at Bank America and raised tgt to $55 from $21 noting the company reported Q2 revenue +29% cFX, with retail growth accelerating at the start of Q3. This makes it one of the fastest growing brands across European sporting goods and consumer discretionary overall. NKE was placed on Negative Catalyst Watch at JP Morgan ahead of Nike’s Q125 (June-Aug) print and lowers estimates driven by a 10% gross profit dollar decline (below-Consensus 9.3%) with 10.3% top-line contraction (& GPM +10bps < Street at +25bps).
Stock GAINERS
- BDTX +7%; after the company outlined positive initial data from Phase 2 trials of BDTX-1535, an oral cancer treatment.
- BHVN +20%; said it saw positive topline results from a study demonstrating the efficacy of troriluzole in patients with spinocerebellar ataxia; said the study achieved its primary endpoint, showing statistically significant improvements at years 1 and 2.
- CEG +5%; extends gains from Friday after the company announced a plan to restart Unit 1 of the TMI nuclear plant along with signing a 20-year, fixed-price VPPA with MSFT.
- CIEN +4%; upgraded to Buy at Citigroup and raised tgt to $68 from $44 saying the extended overhang from excess inventory and weak demand in telco/cable is gradually lifting and will yield a return to M-HSD growth in FY25, in its view.
- INTC +2%; after late Friday Dow Jones reported QCOM made a takeover approach to Intel in recent days, according to people familiar with the matter. https://tinyurl.com/yvuhr4bx . Then over the weekend, reports indicated that Apollo (APO) has offered to make a multibillion-dollar investment in INTC https://tinyurl.com/mrybyy2z
- TSLA +3%; extends recent gains (shares +15% this month) ahead of its Robotaxi event on 10/10.
- VTYX +23%; said it would receive a $27 million from SNY; said it agreed to grant Sanofi an exclusive right of first negotiation related to the company’s VTX3232 drug candidate for neuroinflammatory and neurodegenerative conditions.
Stock LAGGARDS
- AZN -1%; said its experimental precision drug developed with Japan’s Daiichi Sankyo did not significantly improve overall survival for patients with a type of breast cancer in a late-stage trial.
- GM -2%; was downgraded to Market Perform from Outperform at Bernstein with a $53 price target noting shares have appreciated 85% since last November, but the firm’s data now signals rising earnings headwinds.
- MCO -2%; downgraded along with SPGI at Raymond James; SPGI downgraded to Market Perform from Outperform and MCO downgraded to Underperform from Market Perform at Raymond James in credit rating agencies saying see risks to their estimates and valuation multiples.
- NVO -3%; extends Friday losses and dropping below its 200dma $126.10; shares fell over 5.4% on Friday after releasing Monlunabant 2a trial data.
- RVNC -9%; after saying a dispute with a key customer is delaying its deal to be acquired by Crown Laboratories.
- ULTA -2%; was downgraded to hold from Buy at TD Cowen saying they see a lack of upside to Street estimates as comps likely remain negative in the near-term and the industry undergoes further normalization. Promo intensity, increased distribution points at Sephora & AMZN, and category normalization are likely to persist for the next year.
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.