Market Review: February 12, 2024

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Closing Recap

Monday, February 12, 2024





DJ Industrials




S&P 500








Russell 2000













U.S. stocks finish mixed after making new all-time highs earlier for the S&P (on light volume) ahead of an important inflation data point tomorrow morning (CPI) and snapping the 4-day win streak for the S&P 500; though the Dow Jones Industrials closed at a record high and Smallcaps outperformed. The market euphoria (or madness) in anything “AI” related continues to defy normalcy as NVDA overtook AMZN in market value ($1.81 trillion vs. $1.8 trillion) on Monday, the latest in a stunning rally over the past year fueled by soaring demand for its chips used in artificial intelligence (AI) computing. The chipmaker is now the fourth most valuable US-listed company, sitting below GOOGL at $1.85 trillion market capitalization, MSFT $3.11 trillion and AAPL at $2.9 trillion. Just truly amazing moves in the likes of names like NVDA, or SMCI, AVGO, or ARM in latest week (among tons of other chip related names, etc.) posting meteoric movies on the hopes of AI growth potential and the impact chips will have…but at what point do these things take a pause remains the question? Today saw light volume overall following the Super Bowl hangover for many, but stocks still pushed higher early into a busy week of earnings and key inflation data (CPI tomorrow and PPI later this week). We saw market-related gains (energy, materials, comm services) broader than normal though stock market strength is still concentrated as the top 10 holdings in the S&P 500 now make up over 32% of the index (as per CNBC). Bitcoin adding to market buying frenzy, hitting its highest levels since December 2021 above $50,000 before paring gains. Stocks saw profit taking late in the day in tech.


Tomorrow: Jan Consumer Price Index: Forecasts for headline CPI M/M to rise +0.2% (vs. +0.3% prior) and rise +2.9% Y/Y (vs. prior month +3.4%). On a core basis, or ex food & energy, CPI M/M expected to rise +0.3% (vs. Dec +0.3%) and Y/Y rise +3.7% (vs. Dec +3.9%). @bespokeinvest noted “January 2024 CPI YoY is expected to come in at 2.9%. If that happens, it will end a 33-month streak of 3%+ readings, the longest in 30+ years. From September 1972-May 1983, we went 129 straight months without a sub-3% CPI YoY reading.”  The ongoing deceleration has been the key driver for US markets most of 2023, pushing major averages higher with no meaningful pullbacks along the way (last time the S&P 500 closed lower by more than 2% was almost a year ago (2/21). Reminder the S&P 500 and Nasdaq Composite came into this week with a 5-week winning streak and up 14 of last 15 weeks in an astounding run off the October lows.


Canaccord strategist Tony Dwyer noted all three large-cap benchmarks hit new highs as the S&P 500 Index got the most attention, closing above the 5,000 level on Friday for the first time ever. The Russell 2000 Index had a good week, up 2.41%, its best this year, but still 17% below its record high. Despite the new record high in the SPX, less than 10% of the stocks in the index hit a new 52-week high on Friday. He noted the weekly stochastic on the SPX remains in extremely overbought territory for the third consecutive week at 98. The most significant change was in the NAAIM Exposure Index which rose to 93.77% from 87.36%— back into high optimism territory.


In lone piece of US economic data today: The U.S. federal budget deficit fell sharply in January to $22 billion as receipts hit a record for that month, partly because tax refunds fell after the Internal Revenue Service cleared a backlog of pandemic-delayed tax returns, the U.S. Treasury said on Monday. The deficit last month was $17 billion, or 43%, less than the $39 billion deficit in January 2023. Outlays for the month grew 3% to $499 billion, while receipts jumped 7% to $477 billion.

Commodities, Currencies & Treasuries

  • Oil prices with small gains as WTI crude gains $0.10 to settle at $76.92 per barrel, while Brent Crude futures settle at $82.00/bbl, down 19 cents, 0.23%. Natural gas prices fall to 52-week low for third straight trading session, down 4.28% to $1.7680 per million btus. Gold prices fell -$5.70 to settle at $2,033 an ounce ahead of CPI data tomorrow. Treasury yields finished lower, with the 10-yr yield down about 1.7 bps to 4.17% after rising over 16-bps last week. Markets await key CPI inflation data tomorrow (with PPI data later this week). The dollar index (DXY) held around the 104 level, down slightly into tomorrow’s CPI inflation report.





WTI Crude















10-Year Note




Sector News Breakdown


  • RIVN was downgraded to Equal Weight from Overweight at Barclays and cut tgt to $16 from $25 saying great product/tech not enough to avoid increased signs of demand pressure amid broader EV slowdown; says demand softness implies risk from pricing, slower volume growth – longer path to breakeven; notes need for capital raises.
  • TSLA temporarily cut prices of some of its Model Y cars in the U.S. until Feb. 29, less than a month after the carmaker cut Model Y prices in Germany. Tesla reduced prices for its Model Y rear-wheel drive and Model Y Long Range by $1,000 to $42,990 and $47,990 respectively, representing a discount of 2.3% and 2% from previous prices.

Retail, Consumer Staples & Restaurants:

  • In Food Sector: HSY was downgraded from Equal Weight to Underweight at Morgan Stanley and cut tgt to $183 saying last week earnings alleviated some investor concerns as the company guided to better than feared 2024 EPS but is increasingly cautious on the stock following Q4 results last week and a +25% move in cocoa prices since its note.
  • In Beverages: PEP was upgraded to Buy from Neutral at Citigroup and raise tgt to $195 after earnings noting the co has been a heavily debated stock over the last six months after providing initial 2024 guidance at the high-end of LT targets at Q3 (instead of Q4 historically), which the market expected to be cut.
  • In Discount Retail: BIG shares fall after saying delivered 4q performance in line their guidance on comparable sales, gross margin rate, operating expenses, and inventory and generated substantial cash flow in 4q, which was used to pay down debt on $900m asset-based lending facility (to report on 3/7) – note Loop Capital downgraded to Sell from Hold and slashed tgt to $1 from $6.
  • In Apparel Retail: URBN upgraded from Sell to Neutral at UBS and raise tgt to $41 from $21 saying now sees less risk to URBN’s LT earnings outlook as: macro headwinds have faded, Nuuly service looks like a better LT opportunity than previously thought and has more gross margin expansion potential than previously thought. VFC shares active after Reuters reported Engaged Capital gains support of VF heirs to shake up North Face owner.
  • In Department Stores: TD Cowen lowers JWN & M 4Q comp ests as well as Macy’s (M) & KSS FY24 EPS estimates as cautions on warmer weather, negative data from credit card and retail sales results, and weaker home, aspirational, and select apparel trends. Meanwhile, positives include an extra day before Christmas, hopefully conservative guidance, easier comp & gross margin comparisons in 4Q, and low bar for FY24 Street estimates.
  • In Online Retail: AMZN founder Jeff Bezos has sold $2B of the retail and cloud company’s stock, his first sale in more than two years. The sale was disclosed late Friday night. Bezos sold 12M Amazon shares for $2.04B, an average price of $170.21 each, from Feb. 7 to 8

Homebuilders, Building Products, Home Furnishing:

  • In Home Improvement Retail: LOW was upgraded from Neutral to Overweight at JP Morgan and added it to Analyst Focus List w/ $265 tgt (up from $210) as continues to believe that goods share of wallet headwinds are moderating with trends ultimately reverting toward wage growth.
  • In Home Furnishings/Flooring: MHK upgraded from Hold to Buy at Deutsche Bank and raise tgt to $152 from $98 after the company recently reiterated the belief that demand should inflect in 2H24, but also now offering clear building blocks for profit growth. MLM said to acquire 20 active aggregates ops from affiliates of Blue Water for $2.05B.

Leisure, Gaming & Lodging:

  • For Gun/Ammo sector (SWBI, RGR, VSTO): CBS News reported major credit card companies are moving to make a merchant code available for firearm and ammunition retailers to comply with a new California law that will allow banks to potentially track suspicious gun purchases and report them to law enforcement.
  • In Food Delivery: Thousands of drivers for ride-sharing platforms UBER, LYFT and food delivery app DASH will strike across the United States on Valentine’s Day seeking fair pay, drivers’ groups said on Monday.
  • In Casinos & Gaming: BYD was downgraded to Neutral from Positive at Susquehanna Financial Group.


  • In Oil E&P: FANG and Endeavor Energy Resources announced that they have entered into a definitive merger agreement under which Diamondback and Endeavor will merge in a transaction valued at approximately $26B, inclusive of Endeavor’s net debt. FANG board to approve 7% dividend increase; sees Q4 production 273.1 MBO/d (462.6 MBOE/d); sees FY25 capital budget $4.1B-$4.4B.  
  • In Aerospace & Defense: JOBY said it signed an agreement with Dubai’s Road and Transport Authority (RTA) to launch air taxi services in the Emirate by early 2026; Joby to own exclusive right to operate air taxis in Dubai for six years.
  • In chemicals: Loop Capital upgraded CTVA from Hold to Buy noting the company’s earnings guidance for 2024 was ahead of expectations and encouraging, but the bridge to accelerating growth through 2025 underscores the compelling structural and secular nature of CTVA’s growth drivers. Loop downgraded FMC to Hold from Buy.

Banks, Brokers, Asset Managers:

  • In Banks: TD Cowen said they believe the risk is rising for bank dividends and for loan concentration in the wake of NYCB’s troubles. Both issues were regulatory priorities coming out of the Financial Crisis though the agencies became less strident in recent years. TDCowen expects that to change given the market’s response to NYCB’s dividend cut and to its CRE exposure.
  • In Payments: MQ upgraded to Buy from Neutral at Bank America with $8 tgt as believes MQ has an enviable combination of near-term visibility w/75%+ of TPV now renewed) and longer-term opportunities (ie. credit) that could drive attractive medium-term top-line growth (’25-’26) of ~20%.
  • In Asset managers: BEN preliminary month-end assets under management (AUM) of $1.60 trillion at January 31, 2024, compared to $1.46 trillion at December 31, 2023. LAZ preliminary assets under management as of January 31, 2024, totaling approximately $243.8 billion. The month’s AUM included a foreign exchange depreciation of $2.3 billion, net outflows of $2.1 billion and market appreciation of $1.6 billion. TROW preliminary month-end assets under management of $1.45 trillion as of January 31, 2024. Preliminary net outflows for January 2024 were $4.8B.
  • In Credit Cards (COF, DFS, MA): Bank America said aggregated credit card data indicates spending declined 0.8% y/y in January, better than the 1.0% y/y decrease in December. Notably, January credit card spending declined 10.6% m/m, but data suggests spending historically declines by 14.6% m/m in January. Jan. Total credit card spend: -10.6% m/m; -0.8% y/y, Jan Restaurant spend: -16.6% m/m; -4.4% y/y, and Jan, and Travel spend: +28.6% m/m; -1.5% y/y.

Insurance Sector:

  • AIZ downgraded from Ooutperform to Market Perform at KBW Inc. on valuation following the strong end to the year but raises estimates and target (from $170 to $182); said despite a positive business outlook, they do not anticipate upside catalysts near term.
  • LNC was upgraded to Hold at Jefferies and raise ests but lower tgt to $26 as highlights that LNC traded lower on its print, despite giving greater clarity on a FCF improvement plan and an RBC ratio target of 425%. Further, notes LNC’s FCF guide for 2026 is near pre-COVID run rates at $0.8B vs $0.9B pre-covid, and ahead of its $0.6B estimate.
  • Citigroup upgraded WTW to Buy from Neutral saying fundamental restoration, conservative guide and improved sentiment/credibility present upside opportunity from EPS and re-rating while downgraded EG to Neutral citing the unexpected Q4 casualty reserve charge & optics/timing add an overhang. (WTW also upgraded by BMO Capital).
  • PRI was downgraded to Market Perform at Raymond James on valuation.

Biotech & Pharma:

  • ANTX shares tumbled after saying the company decided to voluntarily pause enrollment in a late-stage portion of a mid-to-late-stage study testing its experimental drug to treat a type of bacterial lung infection, pending further data review. The voluntary pause was after the analysis of the ongoing mid-stage study.
  • BTAI said it received fast track designation from the FDA for a treatment aimed at small cell neuroendocrine prostate cancer.
  • CBAY agreed to be acquired by GILD for $32.50 in dela valued at $4.3B ; CBAY also announces FDA acceptance of NDA and priority review for Seladelpar for the treatment of primary biliary cholangitis.
  • IMVT reported financial results, with the company noting it plans to initiate trials in 10 indications for IMVT-1402 over the next two years, with 4-5 potentially registrational within the next fiscal year.
  • LRMR shares declined after reporting Phase 2 data of Nomlabofusp in Friedreich’s Ataxia.
  • SYRA rises after announced healthcare workforce contract with the County of Fairfax, Virginia earlier.
  • TEVA upgraded from Neutral to Overweight at Piper and raised tgt to $19 from $12, its first Buy recommendation on the shares since 2011, owing to the erosion of Copaxone and Teva leaning in heavily on U.S. generics via the $41B Actavis Generics purchase in 2016 just ahead of what turned out to be a fraught period for the space.
  • UTHR upgraded from Sell to Neutral at Goldman Sachs as believes current levels appropriately reflect the balance of potential positives and risks for the business over the near to intermediate term. GSCO sees the company’s franchise position within the highly attractive PAH market as unique.

Hardware & Software movers:

  • Elon Musk’s X is adding new advertiser targeting features to better entice video creators and compete against GOOGL’s YouTube.
  • BMR shares surged (as much as 1,555% at one point to around $35 per share) after the company said it has teamed with NVDA to accelerate adoption of its newest video standard, AV1.
  • MNDY shares slumped after guidance as sees FY24 revenue $926M-$932Mvs. consensus $927.54M, FY24 operating income $58M-$64M and FY24 free cash flow $200M-$206M.
  • TRMB forecast Q1 results below estimates, expecting sluggish demand for its products and services in an uncertain economy as sees revenue between $905M-$935M vs. est. $977M and EPS between $0.57-$0.62 vs. est. $0.67.
  • Unity (U) was downgraded to Underperform at Macquarie saying they believe staff cost cuts will not mask the disarray, while reiterate Outperform on APP, Neutral on APPS.
  • VIAV was upgraded from Hold to Buy at Stifel saying while the company is coming off a challenging 2023, in which top-line revenue declined 19% y/y and non-GAAP EPS contracted 55%, the firm thinks the worst is behind them and expects modest revenue recovery in C2024 with earnings likely to accelerate at a significantly faster rate.


  • The Philly semi-index (SOX) remains an unstoppable force, rising as much as +1.6% to top prior closing high 4,574.93 (highs around 4,640 today), as momentum on AI growth prospects still boost shares (NVDA, SMCI, AVGO, ARM, MRVL). At what point is too far too fast come into play? Northland noted SMCI to a top pick on November 14th 2023, noting shares have increased from $256/share to $740/share, approximately up 3x, while FY25 EPS estimates have increased from $19/share to $27/share, representing significant P/E multiple expansion from 13x to 27x. The semi-index (SOX) did pare gains late day in small bout of profit taking.


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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