Morning Preview: January 03, 2024

Early Look

Wednesday, January 3, 2024

Futures

Up/Down

%

Last

Dow

-96.00

0.25%

37,897

S&P 500

-14.25

0.30%

4,773

Nasdaq

-71.50

0.43%

16,648

 

 

After a messy first day of trading for the New Year, U.S. futures are again looking lower ahead of data and Fed minutes from the December meeting. Stocks finished mixed on Tuesday as the Nasdaq posted its worst day since October falling -245 points or 1.63% as Apple (AAPL) shares fall -3.6% to close at lowest since November 13 in a bout of profit taking to kick off 2024. Declines among big-tech names were triggered by a move higher by Treasury yields as the yield on the 2-year Treasury jumped 8-bps to 4.328% and the benchmark yield on the 10-year Treasury rose 8.4-bps to 3.944%. The S&P 500 ended last week within 1% of a record closing high reached in early 2022 and came into this week with a 9-week winning streak along with the Nasdaq and Dow Jones Industrial Average. The Dow managed a modest gain on Tuesday led by strength in healthcare stocks (AMGN, JNJ, MRK), while the S&P losses were mitigated by strength in 2023 laggards Consumer Staples, Energy, and Utilities. The Fed’s December policy meeting minutes and a slew of labor market data are on the roster for this week as market participants look to determine the timing and depth of potential rate cuts. In Asian markets, The Nikkei Index remained closed at 33,464, the Shanghai Index rose 4 points to 2,967, and the Hang Seng Index dropped -142 points to 16,646. In Europe, the German DAX drops -155 points to 16,614, while the FTSE 100 falls -70 points to 7,650.

 

Market Closing Prices Yesterday

  • The S&P 500 Index slipped -27.00 points, or 0.57%, to 4,742.83.
  • The Dow Jones Industrial Average rose 25.50 points, or 0.07%, to 37,715.04.
  • The Nasdaq Composite dropped -245.41 points, or 1.63%, to 14,765.94.
  • The Russell 2000 Index declined -14.28 points, or 0.70% to 2,012.80.

Economic Calendar for Today

  • 7:00 AM ET                  MBA Mortgage Applications Data
  • 8:30 AM ET                  Fed’s Barkin speaks about economic outlook.
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 10:00 AM ET                ISM Manufacturing PMI for December…est. 47.1
  • 10:00 AM ET                JOLTs Job openings for November…est. 8.85M
  • 2:00 PM ET                   FOMC Meeting Minutes from December 13th meeting
  • 4:30 PM ET                   API Weekly Inventory Data

 

Earnings Calendar:

  • Earnings Before the Open: UNF
  • Earnings After the Close: CALM RGP SLP

 

Other Key Events:

  • China Caixin Services PMI for December

 

 

Macro

Up/Down

Last

Nymex

-0.12

70.26

Brent

-0.07

75.82

Gold

-13.80

2,059.60

EUR/USD

-0.0027

1.0920

JPY/USD

0.83

142.81

10-Year Note

+0.032

3.976%

 

Sector News Breakdown

Consumer

  • Keurig Dr Pepper (KDP) downgraded to Equal Weight from Overweight at Morgan Stanley.
  • Wendy’s (WEN) downgraded to Equal Weight from Overweight at Barclays.
  • Xponential Fitness (XPOF) downgraded to Neutral from Overweight at Piper.
  • Yum! Brands (YUM) upgraded to Overweight from Equal Weight at Barclays.

Energy, Industrials and Materials

  • PNM (PNM) downgraded to Neutral from Buy at Mizuho after deal termination.
  • Mizuho downgraded several E&P names, cutting AR, CHK, CPE, GPOR, OXY, XOM to Neutral from Buy and downgraded CRK, SWN to Underperform; upgraded CIVI and PBF to buy.

Financials

  • Intuit (INTU) is being questioned by US lawmakers who say tax credits the company received could have been better spent to build a free government alternative to its popular online tax preparation software, TurboTax – Bloomberg.
  • Charles Schwab (SCHW) downgraded to Neutral from Buy at Goldman Sachs.
  • CME Group (CME) downgraded to Sell from Neutral at Goldman Sachs.
  • Rocket Companies (RKT) downgraded to Equal Weight from overweight at Wells Fargo.
  • State Street (STT) upgraded to Buy from Neutral at Goldman Sachs.
  • Unum (UNM) upgraded to overweight at JPMorgan.

Healthcare

  • Agios Pharmaceuticals, Inc. (AGIO) said that the global Phase 3 ENERGIZE study of mitapivat in adults with non-transfusion-dependent alpha- or beta-thalassemia achieved its primary endpoint of hemoglobin response. Statistical significance was also achieved for both key secondary endpoints associated with change from baseline in FACIT-Fatigue Score and hemoglobin concentration.
  • Bristol Myers (BMY) downgraded to Neutral from Buy at Bank America and cut tgt to $60 from $68 following mixed performance from new launches.
  • Dyne Therapeutics (DYN) announces positive initial clinical data from ACHIEVE trial in DM1 patients and DELIVER Trial in DMD patients demonstrating promise of the FORCE™ platform in developing therapeutics for rare muscle diseases.
  • Longboard Pharmaceuticals (LBPH) announces a $150M common stock offering.
  • Patterson Companies (PDCO) to replace Chico’s (CHS) in S&P 600 at open on 1/5.
  • Regulus Therapeutics (RGLS) announced it has completed enrollment in the third cohort of patients in the Phase 1b MAD study of RGLS8429 for the treatment of ADPKD.
  • Soleno Therapeutics (SLNO) files automatic mixed securities shelf.
  • Teva (TEVA) upgraded to Neutral from Underweight at Piper Sandler.

Technology, Media & Telecom

  • The Walt Disney Company (DIS) and activist investor ValueAct Capital Management L.P. have entered into an information-sharing agreement while the entertainment giant undergoes a transformation. The agreement will allow Disney to consult with the investment firm on strategic matters, including via meetings with the board and mgmt.
  • Nvidia (NVDA) initiated with a Neutral at DA Davidson and $410 price target saying out-year consensus expectations are unlikely to materialize and will start reverting to trend line within the next six quarters.
  • Pure Storage (PSTG) to replace Patterson Companies (PDCO) in the S&P 400 at open on 1/5.
  • Verizon (VZ) upgraded to overweight from sector weight at KeyBanc Capital Markets.
  • Tencent Music (TME) and Universal Music Group (UMGNF) announced the renewal of a multi-year strategic licensing agreement.

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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.