Market Review: January 10, 2024

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Closing Recap

Wednesday, January 10, 2024





DJ Industrials




S&P 500








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U.S. stocks melted higher most of the day (small blip lower late), showing no concern into a key inflation data point coming up tomorrow morning, which could provide insight as to the timing and speed of widely anticipated rate cuts for the Fed following their pivot to a more dovish stance at their December meeting. The biggest gains today came from the biggest winners of 2023, as Technology, Consumer Discretionary, and Communications sectors all rose +0.7% or more on expectations of an accommodating Fed. Headline CPI M/M estimate tomorrow is for a gain of +0.2% (vs. +0.1% prior) and Headline CPI Y/Y to rise +3.2% (vs. prior +3.1%). The core CPI, or ex: food & energy expected to rise +0.3% M/M (same as prior month) and core CPI Y/Y est. +3.8% (vs. +4.0% prior). We also get weekly jobless claims, but the CPI will be the focus. Treasury yields pushed higher midday to best levels (10-yr 4.03%) following a weaker 1-yr bond auction. After a few days of selling pressure to kick off the New Year, markets are back to buying on any pullback, with the S&P closing in on its all-time highs.  The rally today was again in the mega tech, large cap names that Wall Street has come to acknowledge as the primary drivers of the broader market, with mass gains in META up over 3% on no major news, AMZN, GOOGL, MSFT, and NVDA again making a new record high as investors continue to chase winners. Energy and Smallcaps were the biggest laggards. Stocks pulled off their best levels in the final 30-minutes after NY Fed President Williams provided comments on the economy, rates, and inflation. CPI tomorrow, PPI Friday and bank earnings get things going end of week too!



  • Oil prices reversed lower following weekly inventory data as WTI crude -$0.87 or 1.2% to settle at $71.37 per barrel and Brent Crude futures settle at $76.80/bbl, down 79 cents, 1.02%. Weekly Crude inventories 1.34M build vs. consensus of -199K draw (bearish), gasoline inventories post 8.03M build vs. consensus of 1.66M build (bearish) and Distillates 6.53M build vs. consensus of 988K build (bearish), according to the EIA data. U.S. gasoline stockpiles rose last week to the highest since February 2022, up nearly 245 million barrels as stockpiles in the Midwest gained to 56.5 million barrels, the highest since April 2022. Gold prices slipped -$5.20 to settle at $2,027.80 an ounce.

Currencies & Treasuries

  • The U.S. dollar was mixed, falling against the euro but rising vs. the Japanese yen as soft economic data in Japan may make it less likely that the Bank of Japan will raise rates out of negative territory this month. The dollar index (DXY) edged lower ahead of tomorrow’s CPI inflation report. Bitcoin prices were volatile, down around $45,350 after briefly hit a 21-month high of $47,897 Tuesday after a social media message on the U.S. SEC account claimed the regulator had approved bitcoin ETFs but was later revealed to have been made by an unauthorized person.
  • Treasury yields moved to the high’s midday following a lackluster 10-yr auction where the US Treasury sold $37B in notes at a yield of 4.024% vs. 4.019% when issued prior (4th tail in a row), and the bid-to-cover ratio 2.56, as primary dealers take 15.15% of U.S. 9-year 10-month notes sale, direct 18.74% and indirect 66.11%. The 10-year yield ended around 4.03%, near its best level of day awaiting the CPI data tomorrow.

Economic Data

  • November wholesale inventories unrevised at -0.2% (consensus -0.2%) and business sales unchanged (vs. consensus -0.3%) vs Oct -1.5% (prev -1.3%); the Nov stock/sales ratio 1.34 months’ worth vs Oct 1.35 months. We have not seen a positive wholesale inventory number M/M since November 2022 as per CNBC.





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10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Retail: PSMT Q1 adj EPS $1.24 vs est. $1.09 on revs $1.17B vs est. $1.158B; comps +8%. DTC was downgraded to Neutral from Buy at Citigroup as believe the outlook for 2024 now looks more challenging after a much softer-than-expected holiday season.
  • In Beverages/Spirits: STZ was downgraded to Hold from Buy at Argus saying the company is likely to benefit from high single-digit growth in its beer business, but stubbornly high packaging costs, competition from craft brewers, and higher operating expenses remain a concern. BUD was upgraded to Buy and ROYUF downgraded to Underperform at Jefferies as sees 2024 as an inflection year for beer to become more consistent with 1) volume growth resuming, 2) margin improvement starting to become visible, 3) re-rating potential as the discount to staples narrows.

Homebuilders, Building Products, Home Furnishing:

  • In Home Improvement Retail: HD upgraded to Outperform at Wedbush and raise tgt to $380 from $330 saying although home improvement retail demand weakened in 2023 believes many of the downward key drivers are bottoming or reversing, which should translate to stronger demand in 2024.
  • In Homebuilders: LEN raised the annual dividend to $2.00 from $1.50 per share and increases its stock repurchase program by $5B. ZG was downgraded from Buy to Neutral at Bank America but raised tgt to $60 from $47 saying believes the stock is pricing a steady recovery in housing in 2024 (shares are up over 40% y/y), near record low home affordability could limit volume upside (even w/ lower rates) and real estate commission lawsuits are an overhang. KBH expected to report earnings after the close tonight.
  • In Housing data: Weekly US Mortgage Bankers Assoc data showed the applications index rose +9.9% in the latest week, the purchase index climbed 5.6%, the refinance index surges 18.8% and the average 30-year mortgage rate climbs 5 bps to 6.81% in Jan 5 week.


  • In Utilities: EXC was upgraded to Buy from Neutral at Mizuho citing its conservative earnings and capital assumptions following the negative IL decision last December. JPMorgan downgraded NS to Underweight from Neutral with an unchanged price target of $19. Keybanc said in another regulatory setback for AEP, West Virginia PSC issued an order rejecting an earlier stipulation between AEP’s Wheeling Power Company and APCo with other parties in the fuel cost recovery case.

Banks, Brokers, Asset Managers:

  • BMO Capital downgraded shares of AXP, COF, SYF, ALLY, C, and GS saying all six are sensitive to rising net charge-off (NCO) rates for credit card (+185 bps) and/or prime auto (+29 bps) loans. BMO launched coverage on aircraft lessors AER and AL at Outperform noting both benefit from an air travel industry offering more passengers than seats. Airline passenger traffic grew +50% last year, but aircraft manufacturing is down -40% since the pandemic. The firm also initiated disruptive-tech lenders: AFRM, SOFI and consumer lenders ENVA, BFH at Market Performs.
  • KBW Inc. downgraded PFSI to Market Perform from Outperform and UWMC to Underperform from Market Perform primarily on valuation. KBW notes despite the recent decline in interest rates, KBW assumes mortgage volumes remain weak through 2025 as long rates decline only modestly.
  • Citigroup named HOOD a new 90-day downside catalyst watch and opened a 90-day negative catalyst watch a SCHW as well ahead of the expected SEC equity market structure rules in early 2024 and the Thinkorswim client conversion in 1H24 as continues to prefer the growth stories in the space (LPLA/IBKR).

Bitcoin, FinTech, Payments:

  • Lots of noise in crypto space today: The SEC will decide on Wednesday whether to approve an application from asset managers to launch a spot bitcoin ETF after a fake post on the agency’s social media account saying they had been approved sparked confusion on Tuesday; BTC prices are flattish around $45,450.
  • AULT announced that the Company has decided that it will start holding up to 20% and minimum of 5% of the Bitcoin it mines on the Company’s balance sheet.
  • BLK and Ark Investments said they were lowering the fees on their proposed spot bitcoin exchange traded funds. BlackRock would charge 0.25%, compared with the 0.30% fee set earlier. Ark Investments and 21Shares lowered their fee to 0.21% from 0.25% earlier.

Insurance & Services:

  • TD Cowen initiated 16 names in the P&C Insurance sector; named ACGL, KMPR, TRV top picks and initiated Outperforms on ALL, AON, GSHD, HIG, MAX, WTW and Market Perform on AIG, AJG, CB, EG, LMND, MMC, PGR, RNR and ROOT at Market Perform. The firm said pricing appears solid, with projected commercial P&C rates in the mid-to-high single-digits in 2024 and personal lines poised to return to profitability, following recent substantial rate increases. That said, they temper excitement about the sector than most leading to defensive positioning.


  • In Commercial REITs: KBW said remain cautious on the commercial mortgage REITs (CMREITs) based on credit. KBW remains cautious on Underperform-rated CMTG due to heavy transitional loans and on GPMT based on 44% office and uncertain credit. For ABR and BXMT, remains cautious and believe it’s too early to get positive. KBW is also cautious on RC due to the Broadmark overhang, transitional small balance multifamily, and GMFS outlook.

Biotech & Pharma:

  • ACRS said its once-daily version of its atopic dermatitis drug did not show statistical significance in a mid-stage trial while the twice daily version met the trial’s main goal.
  • AMRN shares jumped on prelim Q4 revs of $72M-$74M topping consensus of $62.1M saying its European business grew 65% in Q4 vs Q3, benefiting from launch of its heart disease drug Vazkepa in 3 additional markets.
  • CHRS terminated its TIGIT Program collaboration with Junshi Biosciences; despite termination with Junshi biosciences on TIGI, said to continue to support patients in its current studies involving CHS-006; said collaboration agreement remains effective & active for all other purposes.
  • PIII said it expects FY24 revenue to be in the range of $1.45B-$1.55B, topping ests of $1.42B and expects to achieve meaningful profitability in 2024; sees FY24 adjusted EBITDA to be between $20M-$40M.
  • SANA shares jumped after the company discussed early Phase 1 trial results from its SC291 CAR T-cell therapy.

Healthcare Services & MedTech movers:

  • DCGO shares slumped after Fuzzy Panda Research disclosed a short position in the company saying billing practices amounted to Medi-Cal and Medicare Fraud, citing former employees.
  • GDRX shares rose after rev guidance above views; sees Q4 revs $195M-$197M, above prior forecast $188M-$194M and FY revs $749M-$751M, topping forecast $742M-$748M.
  • ISRG guided Q4 sales of $1.93B, topping consensus of $1.87B and saying procedures with its surgical robot da Vinci rose 21% in Q4 while expects worldwide da Vinci procedures to rise ~13% to 16% in 2024 from 2023.
  • MASI guided 2024 revenue to $2.05B-$2.17B, above est. $2.09B and Q4 revs $541M-$551M vs. est. $537M.
  • MDRX lowered full-year revenue view to $608M-$622M from prior view $615M-$635M and cut its FY adj EPS view to $0.79-$0.88 from the prior $0.80-$0.90 view.

Industrials & Materials

  • In Transports: FWRD downgraded to Underperform from Peer Perform with $50 PT at Wolfe noting it was the worst performing stock in their transport coverage last year with significant downward EPS revisions and the announced acquisition of Omni Logistics – but still doesn’t see great options from here. Susquehanna made several changes as they upgraded UAL in airlines and downgraded ALK, SNCY while in trucking, upgraded CHRW to Neutral and downgraded HUBG to Neutral saying they see less value than it had previously.
  • In Industrials: ITW was downgraded from Neutral to Underperform at Bank America as the firm thinks the company is likely to miss consensus 2024 EPS on lower-than-expected margins (as Welding, the highest margin business, lags and Auto OEM, the largest segment, contributes to headwinds as well). AZZ forecasts FY adj. EBITDA $315M to $335M, above prior forecast $300M to $325M and boosted its FY sales view to $1.45B to $1.55B, from prior $1.4B to $1.55B. VMI upgraded to Buy from Neutral at DA Davidson and raise tgt to $290 from $230 saying after a tough 2023 for the shares, sees estimates at/near the end of a downward revision cycle with better catalysts ahead supported.

Aerospace & Defense

  • Truist upgraded shares of HWM (tgt to $74 from $47) and HXL (tgt to $96 from $62) to Buy from Hold and SPCE to Hold from Sell (tgt to $3 from $1) saying enters 2024 it maintains a positive view of the aerospace and defense sectors given their respective long-cycle characteristics and positive investment attributes. Truist said they consider both HWM/HXL to be two of the higher quality Commercial Aero OEM Plays for 2024.
  • Goldman Sachs a few changes in sector: WWD upgraded to Buy from Sell on potential upside from content gains on next-generation aircraft, HXL upgraded to Neutral from Sell, and downgrades MRCY to Sell from Neutral (cut tgt to $24 from $37) as believe consensus expectations are elevated amidst pressures on organic revenues and free cash flow driven by delays in key programs. Overall, Goldman remains bullish on commercial aerospace and cautious on defense.

Materials, Metals & Mining

  • In Chemical sector: DOW and LYB both downgraded to Hold from Buy in commodity chemical sector at Deutsche Bank as targets are unchanged at $58 for Dow and $105 for Lyondell, saying the cuts are based on the forecasted slow recovery of global ethylene and polyethylene operating rates in ’25-’26 versus projected trough conditions in ’24.
  • Uranium sector strong (CAJ, UEC, UUUU), extending gains from Wednesday after the U.S. Department of Energy on Tuesday said it has about $500 mln in funding from the 2022 Inflation Reduction Act for HALEU, or high assay low enriched uranium fuel, sending uranium prices higher.

Internet, Media & Telecom

  • SNAP price tgt raised to $13 from $7 at Morgan Stanley (but remain underweight) citing better near-term ad trends, China-based spend, AMZN partnership, and AI.
  • JPM said its Internet survey showed: AMZN expected to be the best performing Internet Mag7 stock (~50%) and GOOGL the worst (46%); UBER expected to lead Large-Caps (37%), PINS the Mid-Caps (35%), and Z/ZG (21%) & MTCH (18%) amongst Small-Caps; Online Ads expected to be the best performing sub sector (META/GOOGL preference split at 32% each); investors prefer UBER in rideshare/food delivery (58%), BKNG in online travel (38%).
  • Goldman Sachs made several changes: assumed coverage of EBAY (Sell), CHWY (Buy), RENT (Buy) saying they remain cautious on the eCommerce sector amidst a continued shift of consumer budgets away from discretionary goods, competition from Asia-based platforms, and consumer preference for platforms with scale. Goldman downgraded ETSY to Neutral, initiated on RVLV at Sell based on current industry headwinds in the high-end online apparel space.

Hardware & Software movers:

  • AAPL was hit with its third analyst downgrade this month as Redburn cut amid worries over valuation.
  • HPE confirmed WSJ reports the prior day by agreeing to acquire JNPR in an all-cash transaction for $40.00 per share, representing an equity value of approximately $14B (more than the $13B offer the WSJ reported Tuesday).
  • PD shares popped midday after Bloomberg reported the company is considering options amid takeover interest from private equity firms and has been speaking with advisers about a potential sale.
  • SGH rises as Q1 EPS $0.24 and sales fell -41% y/y to $274.2M; forecasts Q2 net sales $260M to $310M and EPS $0.15-$0.35; board of directors approved a $75 mln share repurchase authorization.
  • TOST upgraded from Neutral to Buy at Goldman Sachs with $24 tgt based on room to take market share, the potential to outperform on better-than-expected expense mgmt, and attractive valuation vs peers.
  • Global shipments of traditional PCs marginally surpassed expectations in the fourth quarter of 2023 (Q423) with nearly 67.1M PCs shipped, down 2.7% from the prior year, according to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. Despite the improved results, Q423 was the eighth consecutive quarter of year-over-year shipment volume contraction.


  • Citigroup said they remain bullish on semicap equipment, moving LRCX top its top pick, w/ AMAT moving down to #2; least preferred name is WOLF as the firm sees risk to the co’s SiC opportunity (competition + slowdown in auto demand in ’24). Citi said expects the group to grind higher on positive CAPEX revisions, particularly DRAM memory, and drive upside to Street 2024 (down 2% vs Citi +5%) and 2025 wafer fab equipment (up 10% vs Citi +30%) ests.
  • KeyBanc said views December carrier survey and Key First Look Data results as slightly negative for the Apple supply chain (AVGO, CRUS, QCOM, QRVO, SWKS). Keybanc’s First Look Data shows Indexed Spending +27% m/m in December, below the 3-yr avg. of +37%, where its data indicated below-average Spend in each month of the quarter.
  • AEHR shares tumbled as Q2 EPS/revs beat but guides FY revs $75-85Mm vs est. $103.13Mm and GAAP net income 20-25% of revs saying slowing EV growth rates are having a "negative impact on the timing of several current and new customer orders (AEHR involved in SiC chips, which pressured other players in group ON, WOLF).
  • IMOS reported Q4 revenue that increased 22.2% from the fourth quarter of 2022 to $187M, representing an increase of 2.6% from the third quarter of 2023.
  • TSM said Q4 revs came in at T$625.5 billion ($20.10 billion) vs. $19.93B y/y; and topped its prior view of a range of between $18.8-19.6B; for December alone, TSMC reported that revenue fell 8.4% year-on-year to T$176.3 billion, which was down 14.4% compared with the previous month.


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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