Mid-Morning Look
Tuesday, January 21, 2025
Index |
Up/Down |
% |
Last |
DJ Industrials |
257.05 |
0.59% |
43,743 |
S&P 500 |
23.81 |
0.40% |
6,020 |
Nasdaq |
10.94 |
0.05% |
19,640 |
Russell 2000 |
20.85 |
0.92% |
2,296 |
U.S. stocks are mostly higher after posting their biggest weekly gains of 2025 last week, though the tech heavy Nasdaq is lagging early behind weakness in AAPL and TSLA. There was no U.S. economic data today (generally quiet week) or Fed speakers as investors turn attention to quarterly earnings results and as investors digest President Trump comments after his near 200 executive orders yesterday. Seeing some focus on tariff related stocks, space names (LUNR, RKLB) following comments by Trump on Monday inauguration. There were also several Wall Street analysts’ calls that pushed shares of AAPL, ALAB, TER lower; WBA down on DoJ headlines; GM rises on positive analyst comments; SCHW, KEY, FITB moving on earnings in financials. The U.S. dollar recovers after posting its biggest daily percentage drop in 14 months after President Donald Trump suggested the U.S. could impose tariffs on Canada and Mexico by Feb. 1, countering expectations he might take a gradual approach. Treasury yields dip and Bitcoin back down to $103,000 after making new highs this weekend above $109,000. Oil prices dip and gold is little changed.
Macro |
Up/Down |
Last |
WTI Crude |
-1.69 |
76.19 |
Brent |
-1.09 |
79.06 |
Gold |
4.10 |
2,752.80 |
EUR/USD |
-0.0018 |
1.0396 |
JPY/USD |
-0.16 |
155.42 |
10-Year Note |
-0.03 |
4.58% |
Sector Movers Today
- In Apparel Retailers: Morgan Stanley with a slew of changes as URBN was upgraded to overweight from equal-weight (tgt to $63 from $41) to reflect incremental profitability expansion confidence, & what it sees as positive EPS revision & valuation re-rating potential in ’25e; AEO was upgraded to EW from UW with $16 tgt as a function of the drivers of its Underweight thesis playing out & being appreciated in the stock’s -30% Oct TD move; ROST downgraded to EW from UW as only downgrade in changes today on stretched valuation and resumed coverage on TPR with an Equal Weight and $65 tgt saying cheap valuation is balanced by seemingly full out-year estimates.
- In Lending: TREE was upgraded to Outperform from Market Perform at Northland with a $60 price target as believes 2025 will still be about Insurance but will also see growth in Consumer and slightly better adj. EBITDA margins. RDFN reported home prices are rising in every major metro for the first time since 2022. In Cleveland, the median home sale price rose 15% year over year in December–the biggest increase among the 50 most populous metros. Next came Milwaukee (14.5%), Philadelphia (14%), Miami (11.8%) and Chicago (11.1%). NAVI was upgraded from Neutral to Buy at Seaport Global with $18 tgt based on a sum-of-the-parts analysis.
- In Crop, Seed and Chemicals: Barclays with several changes as they upgrade shares of FMC, LVRO, and ICL and downgrade BG, CF, MRFG, MOS, saying as they enter 2025, they are more optimistic about crop protection and maintain our positive outlook on diversified international protein names and ingredients. In contrast, they add caution to grain processor coverage and adjust ratings in fertilizer given the recent run-up in share prices. For fertilizer, seed and crop protection – they recognize that the strength in potash volumes in 2024 did not bring stock appreciation for major potash players and cut NTR to EW and MOS to UW (both from OW); foresee strength in nitrogen as up CF PT by 4% but downgrade the stock to EW; for Crop Protection, upgrade FMC to OW based on relative valuation, and upgrade LVRO to OW (from EW) also on a relative valuation basis; for grains/processing, we turn more cautious on both names, downgrading BG to EW from OW and maintaining UW on ADM.
- In Internet/Online: TikTok re-opened on Sunday after the US administration had allowed the blackout on Saturday night, as well as Trump expressing an interest to visit China within his for first 100 days. WIX upgraded to Strong Buy at Raymond James and raised tgt to $300 reflecting increased conviction in Wix Studio winning market share among partners/agencies from incumbent WordPress that should help drive a dual acceleration in growth and profitability. U.S. listed China stocks outperformed early (BABA, BIDU, PDD, NTES, etc.) as President Donald Trump holds off on China tariffs; Trump had threatened a 60% tariff on Chinese goods during his campaigns. Trump signs executive order to delay enforcement of ban on popular short-video app TikTok by 75 days but says he might impose tariffs on China if Beijing does not approve potential U.S. deal with TikTok. TME was upgraded to OW at Morgan Stanley calling it an underappreciated defensive play amid the market’s macro concern.
Stock GAINERS
- GM +2%; was upgraded to Buy from Hold at Deutsche Bank saying they see the company reporting to the high-end of its guidance range in the fourth quarter.
- MMM +4%; reported Q4 adj EPS $1.68 topping expectations of $1.66, driven by higher sales of industrial adhesives, tapes and electronics while sales of $5.508B topped consensus of $5.78B while guiding 2025 adj EPS $7.60-$7.90, as mid-point roughly in line with estimate of $7.77 per share.
- MRNA +5%; was awarded an additional $590 million from the US government to accelerate development of pandemic influenza vaccines as health officials struggle to contain a dangerous strain of bird flu in dairy farms.
- RDW +19%; along with gains in other space names RKLB, LUNR after President Trump comments yesterday as he set a new goal in his inauguration speech saying he wants to go to Mars. Shares of traditional space companies and NASA suppliers aren’t moving as much (BA, LMT).
- SCHW +6%; following better Q4 results posting a 44% rise in Q4 adjusted profit, helped by rise in asset management fees as EPS of $1.01 topped $0.91 consensus.
- TEM +25%; following recent filing by California Representative Nancy Pelosi disclosed new stock trades, which included seven investments involving artificial intelligence equities, According to recent filings shared on January 20, Pelosi made a total of nine trades, with the majority focused on AI-related stocks. https://tinyurl.com/52b4cps8
- WSC +4%; after Semafor reported that the company is fielding interest from private equity buyers https://tinyurl.com/yc5z2zdh
Stock LAGGARDS
- AAPL -2%; was downgraded to Underperform from Hold at Jefferies and lower forecasts driven by weak iPhone sales and the general CE market and reduced outlook for iPhone 17/18 due to slower AI uptake and commercialization (was also downgraded to Hold from Buy at Loop Capital).
- ALAB -8%; was downgraded to Equal weight from Overweight at Morgan Stanley as valuation prices in enthusiasm for the new PCIe switch products and ASIC ramps and said they don’t see any major catalysts that would warrant another re-rating.
- FTAI -27%; its board determines to commence review in response to assertions by short seller Muddy Waters; says review includes engagement of independent advisers; the firm says they strongly disagree with assertions made in Muddy Waters report while noting they can’t rule out possible delay in filing 2024 10-k due to timing of report
- GOEV -63%; said it filed for bankruptcy under Chapter 7 and will be liquidating its assets.
- IREN -15%; after announces sales agreement prospectus covers offering of up to $1B of ordinary shares that may be issued under at market issuance sales agreement.
- LEN -3%; shares slipped ahead of spin-off of Millrose. Recall on 1/10, the Co noted Lennar expects to distribute to its stockholders one share of Millrose Class A or Class B common stock for each two shares of Lennar Class A or Class B common stock held of record at the close of business on January 21, 2025.
- TER -5%; downgraded to EW from OW at Morgan Stanley (tgt to $117 PT from $121) saying expectations for Teradyne to regain market share in 2025-2026 are too high, and the firm models for a more muted recovery in the company’s drivers (smartphone and NAND).
- WBA -12%; after the Department of Justice sued the company for allegedly dispensing opioids and other controlled substances at pharmacies across the US while ignoring red flags that the prescriptions were likely illegal.
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.