Market Review: February 06, 2024

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Closing Recap

Tuesday, February 06, 2024





DJ Industrials




S&P 500








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U.S. stocks pushed into positive territory late day, with the S&P 500 and Nasdaq little changed as the earnings barrage continues. There was no major economic data today, with strength in Materials (XLB), REITs (XLRE), Healthcare (XLV), and Industrials (XLI), while the 2024 leaders Technology (XLK) and Communications (XLC) were the only ones in the “red”. NYSE breadth improved on Tuesday from recent days where breadth has been overly negative. Today’s leaders were Russell 2000 Smallcaps (IWM) and Transports, bouncing, but still down YTD. So just how confident (or not fearful) have investors been of this stock market? Gunjan JS tweets: "The VIX is on track to close below 15 for the 59th consecutive day, longest stretch since **2018** –Dow Jones Market Data." That is one long stretch for investors to not need/require downside protection as major averages have jumped 4-straight weeks and 13 of the last 14 for a 20% bounce off October lows. Will SPX hit 5,000 soon? Busy night of earnings coming up with AMGN, CMG, Ford, ELF, ENPH, GILD, FTNT, PRU, SNAP among them.


Asia was the big story overnight as the Nikkei Index fell -193 points to 36,160, but the Shanghai Index jumped 87 points or 3.23% to 2,789, and the Hang Seng Index surged 626 points, or 4% to 16,136. The 3% gain for Shanghai and over 4% surge for the Hang Seng come after reports of increased ETF buying from a state fund and the CSRC pledged to increase efforts to guide funds and investors into the market, and support listed firms. There were also headlines that President Xi would discuss the stock market with financial regulators. Note the Shanghai Composite closed at its lowest level since 2020 the day prior after a six-day losing streak. Hong Kong stocks are still down 5% this year with Shanghai equities 6% in the red. U.S. listed China stocks saw big gains on the day (BABA, BIDU, JD, NIO, LI, PDD, XPEV, etc.)


There were a handful of Fed speakers weighing in on interest rates as Cleveland Fed President Mester said doesn’t want to offer timing on rate cut; forecasts no rush to lower Fed rate target; still leans toward three rate cuts for 2024; says wants more data before deciding on rates; expects to forecast rate cuts later this year; said the Fed should not rule out asset sales for balance sheet and expects balance sheet run off to slow before being stopped.

Economic Data

  • Total household debt rose by $212 billion to reach $17.5 trillion in the fourth quarter of 2023, according to the latest Quarterly Report on Household Debt and Credit. Credit card balances increased by $50 billion to $1.13 trillion over the quarter, while mortgage balances rose by $112 billion to $12.25 trillion. Auto loan balances rose by $12 billion to $1.61 trillion, continuing an upward trajectory seen since 2011. Delinquency transition rates increased for all debt types except for student loans. Student loan balances were effectively flat, with a $2 billion increase and stand at $1.6 trillion. In total, non-housing balances grew by $89 billion.

Commodities, Currencies & Treasuries

  • U.S. crude oil futures settle at $73.31 per barrel, up 53 cents, 0.73% while Brent Crude futures settle at $78.59/bbl, up 60 cents, 0.77%. Front-month gas futures for March delivery on the NYMEX fell 7.3 cents, or 3.55, to settle at $2.009 per million British thermal units (mmBtu), their lowest close since April 13, 2023. Crude futures rise for a second straight session after last week’s selloff but with gains limited by easing expectations of conflict in the Middle East.
  • Gold prices rise $8.50 to settle at $2,051.40 an ounce as yields fall to afternoon lows and the dollar index (DXY) declines -0.2%. Treasury yields sunk most of the day amid a lack of economic data, pulling back after a two-day surge (the 10-yr yield falls under 4.1%).
  • The 10-year declined 7.2 bps to 4.091%, while the two-year lost -6.4 bps to 4.406%. Both snap a two-day winning streak triggered by stronger-than-expected job creation in the U.S. The 10-year peaked at 4.178% last month, as markets started to delay their calls for the Fed’s first cut.





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10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In the Food Sector: BRBR Q4 results beat and raised its FY24 guidance and now expects revenue in the range of $1.87 to $1.95B (12% to 17% growth), up $40M or 2% at the mid-point, and EBITDA of $375 to $400M.
  • In Retail: COST announced that longtime CFO Richard Galanti to step down and be succeeded by KR’s Gary Millerchip, while Todd Foley will assume the role on an interim basis. KSS shares popped late afternoon after Reuters reported Vision One Management Partners pushes Kohl’s to explore a sale.

Leisure, Gaming & Lodging:

  • In Casinos/Gaming: A record 67.8M American adults are expected to bet on Super Bowl LVIII, a 35% increase from 2023, per an American Gaming Association study; Bettors plan to wager an estimated $23.1B on this year’s Big Game, up from $16B last year (online betting names include DKNG, FLUT, CZR, MGM, PENN).
  • In Autos: TSLA was downgraded to neutral from Outperform at Daiwa saying the ramifications of increasing focus on governance concerns could limit Tesla’s propensity to invest for the very long term and innovate; LI was upgraded from Hold to Buy at Deutsche Bank but lower tgt to $41 from $45 saying after 32% decline since late Nov, sees a compelling set-up in the coming quarters driven by a robust product pipeline. TM raised its full-year operating profit forecast by nearly 9% and revs to Y43.5T from Y43T after its Q3 earnings topped analysts’ estimates thanks to a weaker yen and strong sales of high-margin cars.
  • In auto rental: HTZ posted a wider-than-expected fourth-quarter loss as it booked charges to cover the costs of a major reduction of its EV fleet; adjusted per-share loss came to $1.36, wider than the $1.05 loss per-share FactSet consensus. Revenue rose to $2.184 billion from $2.035 billion, ahead of the $2.154B consensus.

Energy, Solar

  • The U.S. Energy Information Administration (EIA) on Tuesday raised its 2024 world oil demand growth forecast by 30,000 barrels per day to 1.42 million bpd. In its monthly forecast, the agency raised its oil demand growth estimate for 2025 by 80,000 bpd to 1.29 million bpd.
  • Oil Equipment: CHX delivered better Q4 Ebitda, generated strong FCF, doubled the buyback authorization to $1.5 billion, increased the dividend by 12% to $0.095 per quarter, and guided 1Q24 EBITDA $179-189 million. Overall energy space (XLE) saw gains in rotation out of tech winners today.
  • Solar sector active ahead of earnings results for a few names, with ENPH reporting tonight after the close; the TAN index been pressured in 2024 amid investors expectations rolling back from prior view of aggressive FOMC cuts.


  • In Banks: NYCB shares tumbled early as markets remained concerned in the Commercial Real Estate (CRE) sector and losses in regional banks.
  • In Fintech: FI Q4 adj EPS $2.19 topped the $2.15 estimate but revs rose 3.2% y/y to $1.72B, below the $1.75B estimate but on better adj operating margins of 40.7% vs. 39.2% y/y; forecasts 2024 adj EPS $8.55-$8.70 vs. est. $8.57 and forecasts 2024 organic revs +15% to +17%.
  • In Credit Cards (AXP, COF, MA, V): Credit card debt in the U.S. reached a new record of $1.13 trillion in Q4. That is up 4.6% from Q3 to Q4 according to the New York Federal Reserve.

Biotech & Pharma:

  • LLY shares extend to all-time highs after Q4 beat (EPS $2.49/$9.35B vs. est. $2.19/$8.93B), helped by strong Mounjaro revenue of $2.21B (from $279M a year earlier) vs. est. $1.75B and higher realized prices improved gross margin by 2.1 percentage points to 80.9% of revenue (Humalog revs -33% y/y and Alimta -88% y/y) and co guided FY24 revenue $40.4B-$41.6B above consensus $39.38B. Separately, LLY tirzepatide SYNERGY-NASH result met its primary endpoint where up to 74% of participants achieved an absence of MASH with no worsening of fibrosis at 52 weeks.
  • Following the LLY results, shares of NASH drug developers declined after Eli Lilly’s weight loss drug meets main goal in liver disease trial; shares of MDGL, AKRO, ETNB and NRBO among names that fell.
  • VRTX released Phase 3 results for its next-generation triple regimen for cystic fibrosis late Monday as Vanza-triple phase 3 studies in adult/pediatric CF cleanly succeeded: in adults, Vanza unequivocally met the primary endpoint of non-inferiority on ppFEV1 vs Trikafta (also beat Q4 results – shares downgraded at Evercore after rally in shares).

Healthcare Services & MedTech movers:

  • In Managed Care: CNC beat Q4 ests amid higher premiums in its commercial insurance business, btu profit only slightly better as medical costs were slightly higher than expectations; Q4 commercial unit memberships jumped nearly 72% to 4.3M; raised its FY24 premium and service revenue outlook to $134.5B-$137.5B.
  • In Healthcare Services: GEHC was a bright spot in the S&P 500, among top gainers after Q4 adj EPS $1.18 vs. est. $1.07; Q4 revs $5.2B vs. est. $5.09B; sees FY24 adj EPS $4.20-$4.35, vs. consensus $4.22, sees organic revenue growth of approximately 4% y/y.

Industrials & Transports

  • ACM reported better than expected results as adjusted EPS of $1.05 was above consensus of $0.95, as beat in EPS and EBITDA reflects ongoing execution of ACM’s strategy of pursuing higher-margin design business in the Americas.
  • AGCO reported a top and bottom line miss for Q4, but FY profit and rev guide was above consensus.
  • CARR Q4 EPS results topped views with mixed guidance as sees FY sales about $26.5B, above estimate $24.4B, while mid-point of EPS guide $2.80-$2.90 below the $2.87 estimate.
  • CMI shares slipped on results, guidance; sees full year 2024 revenues expected to decline between 2% and 5%; EBITDA expected to range between 14.4% and 15.4% of sales.
  • SYM posted in-line Q1 results but introduced new FQ224 EBITDA guidance lighter than consensus on in-line revenues.
  • In Shippers/tankers: The Baltic Dry Index rises 5.57% to 1,516 in London. EURN was downgraded to Hold from Buy after the company announced a Q4 EPS miss due to lower-than-expected revenues and believes shares will trade just below the mandatory take-over price of $17.86/share ($18.43/share net of $0.57/share dividend paid in December).
  • In Truckers/Logistics: JBHT, HUBG removed from Tactical Underperform List at Evercore/ISI; SAIA was downgraded to Hold from Buy at Stifel after sharp price appreciation since October. UPS upgraded from Neutral to Buy at UBS and raised tgt to $175 from $160 as expects management to deliver a strong cost reduction program to support margin expansion and attractive EPS growth despite facing a backdrop of muted revenue growth.

Aerospace & Defense

  • BA workers demand a 40% pay raise, escalating production risks according to report as Boeing Co. executives have spent the past month grappling with the aftermath of a near-catastrophe on an airborne 737 Max jet not now a new risk looms: a labor rift.
  • Aerospace supplier SPR posted a surprise Q4 profit $0.48 vs. loss of -$1.48 y/y) but said they won’t provide guidance until the timing of 737 Max production increases becomes clear.
  • The head of the U.S. Federal Aviation Administration (FAA) will tell lawmakers on Tuesday that the agency is stepping up oversight of Boeing in the wake of a 737 MAX 9 mid-air emergency. "We will have more boots on the ground closely scrutinizing and monitoring production and manufacturing activities," according to written testimony from FAA Administrator Mike Whitaker ahead of his appearance at the House Transportation subcommittee.

Materials, Metals & Mining

  • In Papers & Packaging: CCK reported Q2 EPS of $1.24, well below midpoint guide of $1.45 due to under-absorption of fixed costs and lower equity earnings, while guided Q1 and FY lower on softer BevCan and North American aerosol demand (guides Q1 EPS $0.90-$1.00, below consensus $1.43 sees FY24 adjusted EPS $5.80-$6.20 vs. est. $6.80).
  • In Chemicals: FMC reported Q4 EBITDA of $254M below consensus of $268M as volumes fell 25% y/y (vs. -26% in Q3), and pricing declined 5% (vs. -3% in Q3); also lowered ’24 guidance (revenue of $4.50B-$4.70B vs. est. $4.69) and for Q1 expects EBITDA of $150M at the midpoint compared to consensus of $265M. DD reports Q4 a little better than recent preannouncement, helped by $1B share buyback and 6% increase in dividend; LIN reports better quarter and raises guidance a day after competitor APD cut forecasts.

Hardware & Software movers:

  • DOCU shares slumped after saying they will stay a public company after failed takeover talks; reduce workforce by approximately six percent, impacting approximately 400 employees; announces restructuring plan to support multi-year growth and said it expects to meet/exceed Q4 and FY24 guidance.
  • FN shares tumbled as Q2 results topped consensus but guides Q3 revs $705-725Mm, below consensus of $718.38Mm and adj EPS $2.08-2.15 vs est. $2.11 (forecasts moderation in sequential datacom growth).
  • PLTR shares outperform after a stronger-than-expected Q4 and outlook, prompting analysts to raise price tgts (Citigroup upgraded to Neutral from Sell) as Q4 beat led by backlog and US Commercial growth acceleration.
  • VRNS shares rally behind earnings and guidance as Wedbush upgraded shares to Outperform on the heels of another strong quarter with further evidence the model transition is hitting its next gear of growth and the AI Revolution.


  • After rising over 5% so far in 20204 (after a massive +40% gain in 2023) the Philly semi-index (SOX) took a breather today, falling over 2% midday as momentum names AMD, NVDA, SMCI and others saw profit taking.
  • AMKR Q4 results topped consensus but sees Q1 EPS $0.03-$0.19 vs. est. $0.27 and revs $1.30B-$1.40B vs. est. $1.51B, sending shares lower on the guidance.
  • COHR Q2 adj EPS $0.36 vs. est. $0.26; Q2 revs $1.13B vs. est. $1.12B; sees FY24 adjusted EPS $1.30-$1.70, vs. consensus $1.28; sees FY24 revenue approximately $4.55B-$4.7B, consensus $4.59B.
  • NXPI Q4 results topped consensus, reflecting in-line demand in core-industrial and auto, with upsides from mobile, while comm infra was below while guided Q1 revenue to decrease 9% q/q, slightly below consensus; said 4Q GM of 58.7% was above consensus (+20 bps), and 1Q GM guidance of 58.0% is 10 bps lower than the ests.
  • RMBS tumbles as Q4 revs $122.2M vs. est. $134M; sees 2024 GAAP operating costs and expenses to be between $89M and $85M; sees Q1 license billings revs between $59M-$65M and royalty revs between $43M-$49M.
  • WDC shares active after Reuters reported Bain Capital is in talks with SK Hynix to restart negotiations to merge memory chip makers Western Digital and Japan’s Kioxia Holdings, Kyodo newswire reported on Saturday, citing unidentified sources.
  • Commerce Secretary Raimondo said in an interview late Monday that the US expects to announce in next six to eight weeks "several more" semiconductor chips funding announcements; notes there is no "artificial timeline" and vows to award semiconductor funds "as fast as possible but get it right."


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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