Mid-Morning Look: April 16, 2024

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Mid-Morning Look

Tuesday, April 16, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks mixed early as the Dow Jones Industrial Average outperforms behind UNH results, as the Index looks to snap its 6-day losing streak, while the Russell 2000 falls over 1% as Smallcaps and other interest rate sensitive sectors (Utilities, REITs) tumble as Treasury yields soar. Note yesterday marked the first close beneath the 50-day MA for the S&P 500 (SPX) in 110 trading days (5,116), longest since 2011. Small caps underperform again, dropping below its 50 and 100dma last few days, as Russell 2000 -7% in April so far and -3% YTD and falling again today as Treasury yields back to November highs (10-yr at 4.7%) as economic data (outside of today Housing Starts data) has generally been strong and inflation stubbornly high (3 straight months of rising CPI), lending to though the Fed is unlikely to cut interest rates anytime soon. Nick Timiraos of the WSJ noted that Jefferson said the Fed staff is expecting core PCE to print at 2.8% for March, and for headline to print at 2.7% – a touch higher than what the sell-side forecasts have penciled in (Core PCE data is due Friday 4/26). European stocks tumble, tracking losses in their Asian counterparts with the prospect of a higher-for-longer Federal Reserve, rising Middle East tensions and patchy Chinese economic data all playing their part (GDP was better overnight, but retail sales and industrial production both missed), The weaker IP data out of China having impact on metals/miners/copper names early. Big day for bank earnings with BAC, BK, MS all reporting results (details below). Housing data for March showed a sharp decline in Housing Starts/building Permits. Despite major averages modestly higher early, NYSE breadth nearly 3:1 decliners leading advancers.

Economic Data

  • March housing starts fell -14.7% M/M to 1.321M unit rate, below consensus 1.487M and Feb 1.549M units as single-family starts -12.4% to 1.022M unit rate; multifamily -21.7% to 299,000-unit rate. March housing permits -4.3% to 1.458M unit rate vs. consensus 1.515M and vs Feb 1.523M unit rate. March single-family permits -5.7% to 973,000-unit rate; multifamily -1.2% to 485,000-unit rate.
  • March industrial output rose +0.4%, in-line with consensus +0.4% and Feb +0.4%; March mining output fell -1.4% while utilities output +2.0%. Capacity Utilization use rate 78.4% vs. consensus 78.5% and Feb 78.2%. U.S. March manufacturing output +0.5% (consensus +0.3%) vs Feb +1.2% (previous +0.8%); cap use 77.4% vs Feb 77.1%.






WTI Crude















10-Year Note




Sector Movers Today

  • In Grocers/Food: KR was upgraded to Overweight at Wells Fargo and raised its tgt to $65 from $58 citing improving fundamentals and potential for a huge buyback as sees a bottoming of disinflation in Q1 with potential for better 2H pricing. In Restaurants: CAVA price tgt raised to $74 from $65 at Wedbush as view 2024, 2025 same-store-sales growth and EBITDA expectations as conservative. The Financial Times reported the EU is set to fine MDLZ for blocking cross-border sales. In Protein stocks, Barclays downgraded PPC to EW from Overweight citing valuation while upgraded TSN to Overweight from Underweight saying the company is now in position to turn its performance around after challenges in recent quarters.
  • In Metals: SBOW said Kimmeridge Energy Management has withdrawn its proposal to combine its gas-producing assets in South Texas with SilverBow Resources; GOLD prices slumped as reported lower-than-expected preliminary gold production of 940K ounces for Q1 hurt by planned maintenance and sequencing at its mines, below analysts’ estimates of 984K ounces, according to LSEG data. MT downgraded to Hold from Buy at Deutsche Bank in the steel sector citing weak growth prospects. FCX, SCCO, AA, and other industrial metals decline early following softer China Industrial Production data overnight.
  • In Banks: BAC Q1 adj EPS $0.83 topped est. $0.77 on slightly better revs $25.82B vs. est. $25.46B; net interest income (NII) slid 3% to $14B due to higher deposit costs and modest loan growth, Q1 investment banking fees jumped 35% to $1.6B; Q1 sales and trading revenue rose 2% to $5.2B; BK Q1 adjusted EPS $1.29 vs. est. $1.19; Q1 revs $4.53B vs. est. $4.39B; announces new $6B share repurchase program. MS Q1 EPS $2.02 vs. est. $1.66 and revs rose 4% y/y to $15.18 top consensus $14.46B; FICC sales & trading rev $2.49B above ests. $2.33B, with weaker net interest income (NII) of $1.80B vs. est. $1.9B; Wealth management net new assets fell 13% y/y, the third consecutive quarter of y/y declines; PNC Q1 net interest income missed estimates and EPS beat and revs miss for Q1 and said sees Q2 net interest income down about 1% vs. q1 and most recent and sees q2 core noninterest expense up 2%–4% vs Q1 while sees Q2 revs stable.



  • ERIC +4%; rises as Q1 operating profit excluding restructuring charges rose to 4.3B crowns ($394Mm) from 4.0B y/y, despite a 15% sales drop (ests. for a decline in profit to 1.7B crowns) and said it expects sales to stabilize in the 2H’24 amid signs some customers are looking to spend again.
  • ITCI +19%; revealed positive topline results from a study evaluating lumateperone met the primary endpoint as an adjunctive therapy to antidepressants to treat major depressive disorder; said topline results from its second Phase 3 study is anticipated late in the second quarter.
  • MCBC +38%; WTFC to acquire MCBC in an all-stock transaction as the aggregate purchase price to Macatawa shareholders is currently estimated to be approximately $510.3M, or $14.85 per share. As of December 31, 2023, MCBC had approximately $2.7Bin assets, $2.4B in deposits and $1.3B in loans.
  • MS +3%; Q1 EPS $2.02 vs. est. $1.66 and revs rose 4% y/y to $15.18 top consensus $14.46B; FICC sales & trading rev $2.49B above ests. $2.33B, with weaker net interest income (NII) of $1.80B vs. est. $1.9B; Wealth management net new assets fell 13% y/y, the third consecutive quarter of y/y declines.
  • SMCI +5%; price tgt was raised to $1,500, maintains Buy at Loop Capital as they continue to gain confidence in both its net-bullish Gen AI server industry posture and SMCI as an increasing leader in the need for both complexity and scale.
  • UNH +7%; notes swung to a loss in Q1 after being the target of a cyberattack but Q1 adj EPS $6.91 topped the est. $6.62 on better revs $99.8B and MLR (ratio of medical costs to premium revenue), rose to 84.3% from 82.2% in the same period a year ago.



  • BAC -4%; extends losses after earnings results (broke below 50dma $35.40 earlier).
  • FCX -3%; as copper producers (SCCO) and other metal names (AA) weaker as metal prices fell after softer industrial output data out of China grew 4.5% year-on-year in March, slowing from the 7.0% pace seen in Jan/Feb and well below analysts’ expectations of 6%.
  • HIMS -5%; downgraded from Buy to Hold at Jefferies and cut tgt to $15 from $17 saying the company has done a good job executing but expectations have caught up to reality, limiting potential upside to numbers.
  • LYV –6%; shares fell after the WSJ reported that the Justice Department could soon file an antitrust suit accusing the concert-ticketing giant of stifling competition https://tinyurl.com/46hc2vd7 .
  • MITK -4%; Q1 adj EPS $0.14 missed the $0.18 estimate on revs $36.9Mm vs est. $39.02Mm; sees Q2 revs $46-47Mm vs est. $45.27Mm; reit FY guide revs $180-185Mm vs est. $181.81Mm and adj op mgn 30.0-31.0%.
  • PACB -40%; said sees Q1 revenue below expectations due to the increasing number of customers delaying instrument purchases, softness in consumable shipments; says unlikely to meet revenue guidance of at least $500M in 2026.
  • SBOW -5%; said Kimmeridge Energy Management has withdrawn its proposal to combine its gas-producing assets in South Texas with SilverBow Resources.
  • SKIL -26%; announces Jeffrey R. Tarr’s decision to retire from his role as CEO while forecasts 2025 GAAP revs $530M-$550M vs. est. $579M and 2025 adj. EBITDA $105M to $110M, vs. est. $123.5M.
  • TSLA -3%; falls a 3rd straight day near 52-week lows.


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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