Mid-Morning Look: April 24, 2024

Auto PostDaily Market Report

Mid-Morning Look

Wednesday, April 24, 2024

Index

Up/Down

%

Last

DJ Industrials

-31.16

0.08%

38,475

S&P 500

8.91

0.18%

5,079

Nasdaq

92.16

0.59%

15,790

Russell 2000

1.00

0.05%

2,003

 

 

U.S. stock markets are mixed as NYSE breadth weak, with Technology (XLK) and Consumer Discretionary (XLY) doing all the heavy lifting as most other S&P sectors are lower to start the day. Shares of TSLA lifting the XLY sector, rising over 14% following earnings results that missed/came in well below last year numbers, but positive comments on Robotaxis and launching a more affordable model that can be produced on the same manufacturing lines helped sentiment. Tech is higher behind a spike in semiconductors (SOX +2.3%) after TXN results beat, helping analog/auto chip names. Tech also awaits META; IBM earnings results this afternoon. No big sector losers on the day, with modest losses for Materials (for a 2nd day), Energy, Staples, and Healthcare. Lone piece of U.S. economic data was in-line with consensus (Durable Goods), ahead of GDP data tomorrow and the PCE inflation report on Friday. Treasury yields near morning highs 4.66% for the 10-yr (where it was prior to yesterday’s decline on PMI data), while the dollar bounces and gold fall a 3rd day after recent record highs. No Fed speakers still until next week FOMC meeting results. Dow Transports are down over 2.5%, led by weakness in ODFL, NSC, HA after earnings/commentary/guidance for each disappointed. Other big earnings tonight expected from CMG, LRCX, NOW, VKTX.

Economic Data

  • March Durables orders rose +2.6% vs. consensus +2.5% and vs Feb +0.7%; Durables ex-transportation orders +0.2% (consensus +0.3%) vs Feb +0.1%; March Durables ex-defense orders +2.3% vs Feb +1.5% (prev +2.1%); March nondefense cap orders ex-aircraft +0.2%, (cons +0.2%) vs Feb +0.4% (prev +0.7%).

 

 

Macro

Up/Down

Last

WTI Crude

-0.41

82.95

Brent

-0.35

88.07

Gold

-7.90

2,334.20

EUR/USD

0.000

1.0699

JPY/USD

0.15

154.96

10-Year Note

0.06

4.658%

 

Sector Movers Today

  • In Online travel/Lodging: ABNB was upgraded to Buy from Neutral at Mizuho and raised tgt to $200 from $150 saying the potential launch of sponsored listings is expected to generate double-digit EBITDA upside over the long-term. In Hotels, HLT Q1 results were mixed as EPS beat but revs of $2.57B missed the $2.93B estimate while reports revenue per available room, a hotel’s top-line performance metric, rose 2% year-on-year to $104.16 in Q1 and raised its outlook.
  • In Toy Retail: MAT reported a smaller-than-expected loss for Q1 (-$0.05 vs. -$0.12 est.) while Q1 sales of $809.5M missed the consensus of $831.8M but reaffirmed its full-year sales and profit forecasts. HAS shares also rallied behind results after posting a smaller-than-expected drop in Q1 sales and tops profit estimates on leaner inventories and steady digital gaming revenue ($0.61/$757.3M topped ests $0.27/$738M).
  • In Oil Services: BKR reported a 2% EBITDA beat and FCF was nicely above Street ests. IET was above the top end of the guide while OFSE was a touch below the midpoint. 1Q IET orders should give confidence in the annual order outlook of $11.5B – $13.5B. New energy orders were an impressive $239MM. WFRD posted a beat and a guide-up, and WFRD posted the highest EBITDA margin in 15 years. ’24 EBITDA margins are now expected to be 25% vs these occurring in ’25. The 2Q guidance is above Street, and 2Q EBITDA margins should be ~25%.
  • In Consumer Lending: ENVA reported Q1 adjusted EPS upside of $1.91 (above ests) driven primarily by stronger-than-projected originations and ending loan balances, particularly for SMB; SYF Q1 adj EPS $1.18 missed the $1.34 estimate; Q1 net interest income (NII) rose 8.7% to $4.41 billion from $4.05 billion but below ests $4.45B; said interest and fees on loans increased 15% to $5.3 billion.

 

Stock GAINERS

  • BA +2%; Q1 revenue of $16.57B tops estimates of $16.22B while posts smaller-than-expected loss of (-$1.13) vs. est. (-$1.76) noting the first quarter results reflect the immediate actions we’ve taken to slow down 737 production to drive improvements in quality.
  • BIIB +6%; on EPS beat while Skyclarys sales of $78 million beat expectations and should assuage concerns about a slow commercial launch. Leqembi sales of $19 million were also better than the lowered expectations.
  • BSX +6%; boosted its 2024 adj EPS outlook to $2.29-$2.34 from prior forecast of $2.23-$2.27 after Q1 EPS/revs topped consensus ($0.56/$3.86B vs. est. $0.51/$3.69B); Organic sales +13.1% y/y, Cardiovascular sales +16.3% y/y, Cardiology sales +17.9% y/y, MedSurg sales +7.8% y/y.
  • RILY +41%; shares jumped after filing its annual report with U.S. SEC after missing initial deadline of Feb. 29 as well as 15-day grace period; the firm said an independent investigation reached same conclusion as prior internal review that RILY was not involved/knowledge of any alleged misconduct by former Franchise Group CEO Brian Kahn/affiliates.
  • TSLA +13%; reported a sharp drop in Q1 revenue, deliveries, margins, and EPS from a year ago, but shares pushed higher overnight after the company said that it would introduce new models in late 2024/2025 to be built on its existing production lines.
  • TXN +6%; reported in line at $3.66B, with JunQ guided up ~4% q/q, in line but better than feared; for MarQ 1) Autos/Industrial both down q/q, seeing JunQ stabilizing Industrial trends, 2) 2024E Analog Pricing potentially down LSD% y/y, as it noted vs up 5%/15%/15% in 2023/22/21.
  • VRT +11%; shares surge to record high after raises FY24 adj. EPS forecast to the range of $2.29-$2.35 from prior $2.20-$2.26 and sees FY sales $7.54B-$7.69B vs. prior $7.52B-$7.66B; comes after beating Q1 top/bottom line saying strength in orders and acceleration of AI-driven demand boosted results.

 

Stock LAGGARDS

  • BG -4%; as Q1 sales of $13.42B missed the $13.96B estimate, but better adj EPS; noted sales from company’s largest agribusiness segment falls to $9.74B from $10.85B y/y; said rise in export volumes were offset by weak trading margin.
  • ENPH -1%; Q1 earnings disappointed due to lower demand in Q1 and Q2 on lower-than-expected revenues and an increasingly cautious outlook from lower underlying demand; but mgmt said see signs of a near-term trough;
  • GD -5%; Q1 EPS $2.88 missed the $2.93 estimate after failing to deliver any G700 jets while facing sustained supply chain challenges and higher input costs; Q1 revs topped expectations.
  • HUM -4%; quarterly profit beat but withdrew its 2025 profit forecast, which it had slashed to $22 and $26 per share from $37 in January, citing more uncertainties.
  • MAS -5%; Q1 sales missed while EPS beat; said Q1 North American sales in fell -2% while international sales fell -5%, hurt by soft demand in key markets of Europe and China.
  • ODFL -9%; selling accelerated following conference call comments about revs after in-line Q1 results.
  • TAP -1%; was downgraded to sell from neutral at Citigroup saying repeating a record 2023 may be tough.
  • UBER -3%; along with early weakness in LYFT after Elon Musk talked up the TSLA robotaxi concept on the company conference call last night.

_________________________________________________________________

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.

Live Trading

Open an Account

Paper Trading

Register