Mid-Morning Look: January 03, 2024

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Mid-Morning Look

Wednesday, January 03, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks dropped overnight, adding to the Tuesday declines as interest rate sensitive sectors are volatile as the benchmark US 10-year treasury yield rises to 4% for first time since early December, taking a little “wind” out of the “sails” for 2023 big winners Technology stocks (XLK). Stocks briefly pared morning losses following mixed economic data as JOLTs job openings were mostly in-line with expectations while ISM Manufacturing topped estimates, on softer prices paid data, but overall, still in contraction territory below the 50 level. Stocks have since resumed the selling pressure, falling to lows with the Nasdaq down around 1% and the SPX approaching the 4,700 level. Crypto stocks and Bitcoin prices tumbled (below $42K after topping $45K yesterday) after hitting the highest levels since April 2022 ahead of expected decision by the SEC about possible approval of spot bitcoin ETF applications as early as Tuesday or Wednesday ahead of the Jan. 10 deadline. Markets now await the Federal Reserve’s December meeting minutes (2:00 PM ET later) that could offer hints on its interest rate path. The S&P 500 index is on track of losses hold for its 4th straight down day, a feat last seen In October (10/18-10/23), trying to recover as the S&P, Nasdaq and Dow look to extend their weekly winning streaks to 10-straight. Profit taking and mean reversion the theme to kick off 2024 as biggest winners last year (XLK, XLC, XLY) seeing the biggest drops after 2-days while laggards in 2023 (XLE, XLU, XLV, XLP) have seen strength thus far. The CBOE volatility index (VIX) moves back near yesterday’s highs around 14.25 as NYSE breadth nearly 3:1 decliners leading advancers with almost all sectors in the “red”. Gold prices fell over 1% following the rebound in the dollar and Treasury yields.

Economic Data

  • ISM U.S. manufacturing activity index rose to 47.4 in December from 46.7 in November and above consensus 47.1; prices paid index slipped to 45.2 in December from 49.9 in November; new orders index 47.1 in December vs 48.3 in November and the employment index 48.1 in December vs 45.8 in November.
  • U.S JOLTS job openings for November actual: 8.79M vs. 8.73M and slightly below est. 8.821M.






WTI Crude















10-Year Note




Sector Movers Today

  • In Oil E&P Sector, Mizuho downgraded 8 stocks and upgraded 3: XOM, OXY, AR, GPOR, CPR, CRGY all downgraded to Neutral and SWN, CRK downgraded to Underweight while upgraded CIVI (E&P), PBF (in refiners) and CNX (coal) – saying while micro fundamentals for the industry remain constructive, macro headwinds likely leave oil and natural gas prices trading in relatively tight ranges and temper Mizuho’s enthusiasm.  Thus, Mizuho recommends defensive stock selection in the sector heading into 2024 and says the top picks are CVX, CTRA and CIVI.
  • In Banks: Wedbush top picks include FHN, FCNCA, MTB, EWBC, FITB, & WAL into earnings as expects a stable Q4 for banks with light at the end of the tunnel for NIM compression but expect continued negative credit migration. Wolfe Research with bank rating changes as they upgraded Citigroup (C) to Outperform and $58 target while downgraded NTRS to Underperform from Peer Perform. Evercore ISI several changes in regional bank sector, downgrading RF, SNV to In-line from OP, cuts CFR to underperform and upgraded HBAN to Outperform.
  • Brokers/Exchanges: Goldman Sachs upgraded AMP and STT to Buy as sees better exposure to rate cuts than the Street appreciates. For AMP raise tgt to $453 as looks for solid mid-teens 2023-25E EPS growth CAGR supported by durable cash revenues, expense discipline, and continued capital returns trajectory and ups tgt on STT to $92 from $69 as sees upside to net interest income in 2024/25. The firm also downgraded CME to Sell on slower EPS growth ahead from a normalization in interest rates volatility and rising competition and cuts BX, SCHW, and RJF to Neutral.
  • In Restaurants: BLMN announced that it has entered into a cooperation agreement with activist investor Starboard Value (owns 9.7% of BLMN shares). In connection with the agreement, the company has appointed Dave George (former COO of Darden Restaurants) and Jon Sagal (partner at Starboard) to its board of directors. In Research, WEN was downgraded from Overweight to Equal Weight at Barclay’s saying fundamental challenges are likely to prevail near-term in terms of accelerating unit and comp growth and upgraded YUM to Overweight with $146 tgt as believes the quick-service segment will benefit from trade-down to value.
  • In Semis: Citigroup revised down DRAM and NAND markets’ S/D ratio projections for 1H23E to bake in weaker-than-expected server demand amid rising macro uncertainties, but it also revises up S/D ratio forecasts for 2H23E and 2024E to reflect the impact of Samsung’s downward memory CAPEX revision and potential impact of the China memory ban. In 2024 semiconductor outlook, Wells Fargo said they are positive on fundamental set up and says MU their top pick, prefers NVDA vs AMD at current levels, ALGM, ON & EDA/IP names (ARM, CDNS, SNPS) are also top ideas while the firm downgraded shares of AMBA & MXL to Equal weight from overweight. INTC said it was forming a new independent company around its artificial intelligence software efforts with backing from digital-focused asset manager DBRG and other investors. MBLY was downgraded to Outperform from Strong Buy at Raymond James



  • AGIO +2%; said its drug, called mitapivat, significantly increased hemoglobin levels compared to a placebo in patients with non-transfusion-dependent alpha and beta thalassemia, achieving primary endpoint.
  • BLMN +2%; announced that it has entered into a cooperation agreement with activist investor Starboard Value to add to members to its board of directors.
  • DYN +15%; announced initial clinical data from Achieve trial in DM1 patients and Deliver trial in Duchenne muscular dystrophy patients.
  • FWBI +36%; after RothMKM raised its price tgt to $40 from $11 after the co recently signed a non-binding term sheet to acquire ImmunogenX to gain Phase 3-ready latiglutenase for celiac disease.
  • PSTG +6%; will replace PDCO in the S&P MidCap 400, and Patterson Companies will replace CHS in the S&P SmallCap 600 effective prior to the opening of trading on Friday, January 5.



  • ENPH -6%; weakness in solar stocks SEDG, FSLR, given the recent pullback in rate sensitive sectors as the 10-year yield edged back to 4% ahead of the FOMC policy meeting minutes.
  • ESPR -16%; after Esperion and Daiichi Sankyo Europe announced a $125M amendment to their collaboration, including resolution of pending litigation.
  • TSLA -3%; falls for 4th straight day as large cap mega tech names kick off New Year with profit taking.
  • WAT -5%; along with weakness in ILMN, MTD, and Agilent (A) as Life Science names pressured.


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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