Market Review: April 25, 2024

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Closing Recap

Thursday, April 25, 2024





DJ Industrials




S&P 500








Russell 2000













US equity futures took a hit overnight following disappointing guidance from META and a disappointing report from IBM. One strike not great, two strikes hmmm, three strikes buckle up for a bumpy ride. Today’s third strike was a reported +3.7% US core PCE advance versus a projected +3.4%. The qtr/qtr GDP advance was softer, at +1.6% versus the expected +2.5%, so the Fed has some thinking to do. Perhaps tomorrow’s data will help. Overall, investors remain a bit more cautious with the Fear & Greed Index still in the Fear range at 37 versus 33 a week ago, but 69 (Greed) just a month ago. Separately, the AAII weekly bull-bear survey saw bulls fall from 38.3% to 32.1% last week. Neutrals jumped from 27% to 33.9%. Unsurprisingly, early breadth was heavily in favor of decliners at almost 9:2. Small caps were fairly in-line early with IWM -1.33% versus SPY -1.27% and QQQ -1.55%. Sector-wise, Communication and Technology were leading S&P sector ETFs lower while Materials and Utilities were least bad in a sea of red. 


With META taking a big hit today, @bespokeinvest highlighted an interesting early divergence with QQQ -1.2% but SMH +1.6% at the time (ended -0.6% and +1.9%); not something we see often. Speaking of META, @bespokeinvest notes today is looking set to be the third time since 2018 the stock will lose over $100B of market cap in a single day. On a separate topic, @charliebilello notes the April 2024 value of $2,840 makes a new record high monthly mortgage payment required to buy the median-priced home for sale in the US, a 92% rise over the past four years. On a volatile day, @DataTrekMB points out the Nasdaq 100 relative price volatility has been climbing relative to the S&P, with the ratio between the QQQ and S&P now 37%. Investors have been relatively better rewarded for the volatility but may not want to watch the day-to-day. 


Heading into the final hour of trading, stocks were off their lows and breadth had improved to about 2.7:1, still favoring decliners. Small caps had given up some relative performance and trailed both the Nasdaq and S&P with IWM -0.65% versus SPY -0.45% and QQQ -0.6%. On a sector basis, Materials (XLB, +0.70%), Energy (XLE, +0.30%), Industrials (XLI, +0.3%) and Utilities (XLU, +0.35%) had all moved into the green to lead the S&P sector ETFs. Communications (XLC, -3.725) remained the primary laggard on the back of META’s -11% performance, while Healthcare (XLV, -0.7%) and Real Estate (XLRE, -0.5%) were also soft. Value outperformed but the Russell 1000 Value still faded -0.43%. Its Growth counterpart was another victim of the META slide at -0.97%, despite gains in some other large-cap tech names like NVDA, MRVL AAPL and AMD.

Economic Data

  • US Q1 economy grows at 1.6% annual rate; est. 2.5% and well below prior 3.4% reading and ending 6 straight quarters of 2%+ growth; the inflation readings not well received by stock market as Q1 core PCE +3.7% above consensus +3.4% (prior +2.0%), Q1 GDP deflator +3.1% vs. consensus +3.0% (prior +1.6%) and Personal Consumption for Q1 reported at +2.5% vs. consensus +3.0%) and prior +3.3%. Data comes ahead of March PCE/Core PCE readings Friday morning.
  • Weekly Jobless Claims fell to 207,000 from 212,000 last week and below consensus 215,000; the 4-week moving average fell to 213,250 from 214,500 prior week; continued claims fell to 1.781M from 1.796M prior week and the US insured unemployment rate unchanged at 1.2%.
  • March Pending Home sales index +3.4% (consensus +0.8%) to 78.2 and were up +0.1% from March 2023


  • June WTI crude futures faded early on the soft economic data. GDP qtr/qtr advance data came in light at +1.6% versus an expected +2.5% and sparked demand concerns for crude. Prices slipped to about $82/bbl before rallying through the afternoon to settle at $83.57, +$0.76/bbl, or +0.92%. Brent similarly settles +$0.99/bbl, or +1.12%, to $89.01. Ongoing uncertainties around geopolitics and related supply continue to balance the demand concerns and today’s headlines on lower expected oil loadings from Russia’s western ports also gave a little price support. We get more inflation data tomorrow, so the Fed will remain in focus and potentially tip the scales on investor views of weaker demand versus at-risk supply.
  • As was the case in crude, gold futures rode the rollercoaster today with an initial slide following the economic data releases and later recovery, though finished off the highs. The June futures settled at +$4.10/oz, or just +0.18%, to $2,342.50. Slower growth on one side and higher inflation readings on the other are not a recipe for the multiple Fed cuts investors had embedded in their forecasts just a couple months ago. As we have said before, the future is murky so expect more volatility as the Fed, and investors, try to find clear signals to establish a direction in rates and underlying growth.





WTI Crude















10-Year Note




Sector News Breakdown


  • In Autos: Ford Motor (F) posted a quarterly earnings beat, an upbeat 2024 outlook and cost discipline; raises FY adj free cash flow $6.5B-$7.5B from prior $6B-$7B and lowers top end of CAPEX for year to $8B-$9B from $8B-$9.5B.
  • In Car Rental: HTZ swung to a wider Q1 loss of (-$1.28) vs. est. loss (-$0.45) while revs rose 2% to $2.08B topping $2.04B estimate; said Direct operating expenses were up 3% y/y; said it now plans to sell 30,000 EVs in 2024 as part of disposition plan, an increase of 10,000 vehicles from its original target.
  • In Auto Retail: ORLY Q1 comps come in light at 3.4% vs cons 4%, revs in line and EPS slight miss, $9.20 vs consensus $9.29; SAH reports Q1 adj EPS $1.36 vs consensus $1.30 and revenue $3.38B vs consensus $3.45B.

Retail, Consumer Staples & Restaurants:

  • In Retail: DECK downgraded to Neutral from Buy at Bank America and cut tgt to $860 from $875 as sees a better risk/reward elsewhere in the analyst’s coverage; TJX was upgraded to Buy from Neutral at Goldman Sachs and raises tgt to $110 PT as views TJX as a best-in-class operator and market share winner.
  • In Restaurants: CMG reported Q1 EPS of $13.37 exceeded consensus by $1.68 driven by stronger comps (including MSD traffic growth) and restaurant margins, as well as almost $0.50 benefit from lower tax rate while raised 2024 comp guidance, implying upside to Q2.
  • In Food & Beverages: KDP Q1 revs of $3.5B tops est. $3.4B and EPS $0.38 above $0.35 estimate while Q1 net sales of refreshment beverages and coffee in U.S. up 4.3% and 2.1%, respectively, and international net sales up 11.8%; Nestle (NSRGY) reported a 1.4% rise in organic sales growth in Q1, missing the consensus of 2.9% while prices rose 3.4% in the period, well down from the nearly 10% last year; UL reported Q1 underlying sales growth of 4.4% and a 2.2% rise in volume growth; said it expects full-year underlying sales growth within its multiyear range of 3% to 6%. MNST was downgraded to Neutral from Overweight at JP Morgan citing cost pressures and weaker low-end consumer and was double downgraded to Sell from Buy and cut tgt to $46 from $65 saying while they still view Monster as a great company, it no longer sees it as a high growth story.

Homebuilders, Building Products, Home Furnishing:

  • Homebuilder MTH reported big beat for Q1 of $5.06 vs $3.55 on deliveries (3,507), gross margin (25.8% vs 23.8%) & SG&A (10.4% vs 10.7%) while orders were +14.5% YoY vs St 11.4% and FY24 guidance implies 2Q-4Q EPS of $14.89 vs our $13.62 & margin of 24.4% vs our 23.2%. Follows PHM’s strong release earlier this week.
  • Appliance retailer WHR shares fell as RBC Capital noted significantly weaker core MDA NA margins were masked by interest/sundry gains, restructuring exclusions (vs. RBC’s ests.), and better trends in SDA/LatAm, with the maintained FY’24 NA margin guide now looking like even more of a stretch.

Leisure, Gaming & Lodging:

  • In Leisure products: in cruise lines, RCL boosted its annual profit forecast for a second time this year after Q1 revs rose 29% y/y to $3.73B (vs. est. 43.69B) on strong demand and higher prices; Boating space weak as HZO lowered its FY net income view to $2.20-$3.20 from prior range of $3.20-$3.70 after missing Q1 results and BC shares fell after in-line Q1 results but guided Q2 EPS and revs below views ($1.85-$2.05 vs. est. $2.04 and revs $1.5B-$1.6B vs. est. $1.61B); in motorcycles, HOG shares tumble as revs fell -3% y/y to $1.73B but topped consensus saying the decline was driven by the decrease in wholesale shipments and lower global pricing; said Motorcycle shipments declined about 7% to 57,700 from 62,200.


  • In FinTech: ADYEY shares fall after posting Q1 sales miss (rose 21% y/y to 438M euros vs. est. 442m euros), as the net take rate decreased to 14.7 bps, down from 15.7 bps in Q4 and 17.7 bps in Q1 2023, according to Stifel; said for net revenue growth, aim to continue to grow net revenue annually between the low-twenties and high-twenties percent, up to and including 2026 (shares of SQ, PYPL, GPN active in sympathy).
  • In Insurance: WTW Q1 EPS $3.29 beats Street while lower segment revs which outpaced lower expenses; maintained its 2024 guidance of mid-single digit organic growth, a 22.5-23.5% adjusted operating margin, $15.40-17.00 of operating EPS, and (unquantified) FCF margin expansion; BFH reported a Q1 miss driven by higher provision (-$1.25/share), higher share count (-$0.02/share), and higher tax rate (-$0.10/share), partially offset by higher net revenues.

Biotech & Pharma:

  • ABBV said its drug, Rinvoq, for treating a type of inflammatory skin condition showed superior efficacy to REGN and SNY’s Dupixent in a late-stage head-to-head study.
  • ALGN reported 1Q revenue/EPS that were 2%/9% above consensus; raised its 2024 revenue guidance by 2% to 6-8%, based on 1Q results, its 2Q guide of $1.03-$1.05B (Street $1.03B), and improved outlook over the balance of the year.
  • AZN Q1 sales coming in 7% ahead of expectations with broad based strength across the product franchise including Oncology, Cardiology, Rare Disease and Respiratory.
  • BMRN reported in-line 1Q total revenue and a non-GAAP EPS beat on lower OpEx ($649mn and $0.71 vs. consensus of $651mn and $0.61).
  • BMY Q1 revs $11.87B topped $11.48B estimate though sales of cancer drug Opdivo was $2.08B missing ests; cut its FY24 outlook due to deal expenses, maintains rev outlook; says targeting $1.5B cost savings by end of 2025, to be reinvested into innovation.
  • MRK 1Q results beat helped by Keytruda Strength and raises guidance; lower SG&A Drives EPS Beat $2.07 (vs. $1.90); forecasts FY adj EPS $8.53 to $8.65, forecast $8.44 to $8.59; Raises FY24 revenue view to $63.1B-$64.3B from $62.7B-$64.2B, vs. consensus $63.83B.


  • In Airlines: AAL posted strong Q1 results while guided Q2 adjusted EPS of $3.75-$4.25, vs estimates of $3.76; LUV said it expects less than half of the new aircraft deliveries previously expected from BA in 2024 and cut its annual capacity forecast and now expects available seat miles to be up about 4% from previous estimate of about a 6% growth; said to exit certain airports as loss widens, revenue falls short.
  • In Rails: UNP posted better-than-expected Q1 earnings and said its profitability outlook is gaining momentum with strong service product, improving network efficiency and solid pricing while they plan to resume buybacks in Q2.
  • In Package Delivery: UPS upgraded from Hold to Buy with $170 tgt at HSBC Holdings citing improved confidence in UPS’s ambitious 2026 targets are a potential catalyst: For 2026, HSBC’s forecast is 9% below the company’s organic adj. OP target while consensus is 10% lower. Recall that UPS did not meet its 2023 targets outlined in 2021.

Industrials & Machinery

  • In Machinery & Multi Industry: CAT Q1 revs of $15.8B misses the $16B estimate (Q1 EPS beat) and said expects Q2 sales to decline and turn flat annually as demand for construction equipment eases; HON reports a top and bottom-line beat (EPS $2.25 on sales $9.1B vs. est. $2.17/$9.03B) saying strength aviation business, which jumped 18% YoY, offsets slowdown in industrial and building automation units.
  • In Industrials: AOS posted a Q1 profit beat amid price hikes and demand for its water heaters and treatment products as sales in North America, which accounted for 75% of its total sales in 2023, rose 2,% to $766.3 million; reaffirmed its earlier forecast for full-year profit between $3.90-$4.15 per share. EME shares jump following earnings and raises FY24 EPS view $15.50-$16.50 from $14.00-$15.00 and upped rev guidance. GWW shares fell early on EPS miss and lower revs $4.24B vs. $4.39B and said gross margins fell 50bps to 39.4%.

Materials, Metals & Mining

  • In Metals: BHP is weighing a possible acquisition of Anglo American (NGLOY), Bloomberg reported last night ; Separately, Anglo American is considering a sale of its De Beers diamond unit and has held discussions with potential buyers, a separate process from BHP’s takeover bid  
  • In Chemicals: SHW was upgraded to Overweight from Sector Weight with $400 tgt at Keybanc as expects SHW to continue taking share in architectural paint, where it benefits from a secular shift from DIY to the Pro channel.

Internet, Media & Telecom

  • In social media: META tumbles as reported beats for Q1 results but shares sunk behind rises expenses and capex saying sees FY24 Total Expenses $96B-$99B (from $94B-$99B); said continues to expect operating losses for reality labs to increase meaningfully y/y; sees year capex for 2024 $35B-$40B up from prior $30B-$37B.
  • Meta’s MarQ CAPEX came in at $6.7B (-15% QoQ and 19% below BofA), but mgmt raised 2024 guidance from $30-37B to $35-40B driven by AI investment, and w/ CAPEX expected to increase in 2025; supportive AMD, ANET, NVDA.
  • In Advertising: WPP posted a -1.6% decline in organic revenues citing less spending from tech clients; but said expect to see growth in the second half and sees Q2 being little better than Q1; recall rivals OMC, IPG each reported underlying revenue growth in their latest results while PUB posted 5.3% organic rev growth.

Hardware & Software movers:

  • Huawei’s Q1 smartphone shipments rose 110% y/y, taking its market share in China to 17.0% from 8.6% a year earlier, IDC said. The report from research firm IDC was broadly in line with Counterpoint Research’s earlier report which showed increased market share in China for Huawei and other Chinese smartphone makers while AAPL lost ground.
  • IBM confirms agreement to acquire HCP for $35 per share in cash, while IBM shares fell on results/guidance as EPS beat by about $0.09 on better margins (rose 100bps to 54.7% vs. the Street 54.1%) while revs fell a bit short, a function of Consulting (+2% FXN vs. the Street +6%) while Software did a bit better (+6% vs. the Street +5%); guidance unchanged.
  • NOW forecast Q2 subscription revenue in range of $2.525B-$2.53B below estimates of $2.540B saying businesses are spending cautiously in tough economy; comes after better Q1 results.
  • SNPS announces broad EDA and IP collaborations with TSM for advanced node designs.


  • Chip makers: STM lowered its full-year sales forecast to $14B-$15B from prior $15.9B-$16.9B as weakening auto demand weighs on chip suppliers and the company’s gross margin plunged to 23% in Q1 from 45% y/y; Q1 Revenue fell 18% to $3.46B, missing analysts’ expectations of $3.61B. MBLY reported a near 50% drop in Q1 revenue to $239M but topped consensus of $231.6M; said net loss widened to $218M in Q1 from $79M y/y.
  • In semi equipment: TER forecasts Q2 profit and revenue above estimates after beating analysts’ expectations for Q1 results as benefits from strong demand for its chip-testing equipment used by memory and networking chips; sees Q2 EPS 64c-84c on revs $665M-$725M, both above consensus of $0.60 and $636.6M respectively. LRCX delivered a solid beat and raise, with growth expected to accelerate into C2H; NAND recovery is off to a good start with two consecutive quarters of 25-30% sequential growth as per TD Cowen.
  • In RFID chips: PI shares jumped as reported Q124 results and provided Q224 guidance ahead of expectations while the ongoing adoption of RFID continues with key 2024 customer deployments on track (Walmart and UPS).


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.

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