Mid-Morning Look

Tuesday, March 05, 2024

Index	Up/Down	%	Last
DJ Industrials	-202.70	0.52%	38,784
S&P 500	-43.94	0.86%	5,087
Nasdaq	-289.71	1.80%	15,915
Russell 2000	-12.48	0.60%	2,061

 

 

U.S. stocks under pressure early, as weakness carries over from the late roll yesterday, tumbling further overnight amid several headlines in the tech space weighing on some large caps, while markets eagerly await Fed Chairman Powell testimony on Capitol Hill on Wednesday and Thursday discussing the economy/monetary policy. Tech the big drag this morning as AAPL falls -3% after reports that iPhone sales in China plummeted 24% as consumers buy cheaper domestic phones; AMD shares dropped after its plan to sell revamped AI chips in China was blocked as US officials as the new chip is still deemed too powerful; TSLA extends its selling pressure after disappointing Chinese vehicle deliveries and price cuts; large cap names GOOGL, MSFT also extending recent declines. On the positive side, retailer TGT shares +10% after beating earnings expectations while Consumer Staples, Utilities, Financials, and Energy rise. Bitcoin prices topped their all-time intraday highs of $68,990 made on 11/10/21 this morning, moving above $69,000 before pulling back sharply afterwards. Super Tuesday upon us with big primary voting day, several Wall Street conferences taking place and markets await key jobs data the remainder of the week. Early weakness early with no bounce in first hour, will weakness continue into Powell tomorrow or will we see yet another “buy the dip” moment?

• February ISM Non-Manufacturing (services) PMI reported at 52.6 vs. 53.0 consensus and 53.4 prior, while prices paid at 58.6 vs. 64.0 prior, employment 48.0 vs. 50.5 and new orders 56.1 vs. 55.0 prior.
• January Factory Orders fell (-3.6%) vs. (-3.1%) consensus and (-0.3%) in December (revised from +0.2%).

 

 

Macro	Up/Down	Last
WTI Crude	-0.03	78.71
Brent	-0.77	82.04
Gold	12.50	2,138.80
EUR/USD	0.0014	1.0867
JPY/USD	-0.60	149.90
10-Year Note	-0.08	4.139%

 

• Dialysis companies rally: DVA and FMS shares jump after NVO results of a clinical trial for blockbuster drug Ozempic in people with diabetes and chronic kidney disease, as the trial achieved its main primary objective by showing a 24% reduction in the risk of kidney disease-related events in people with type 2 diabetes and chronic kidney disease – but came in below street ests (Citi had expected a relative risk reduction of 30% on objective).

 

• AVAV +25%; shares jumped after Q4 beat as adj EBITDA $28.8Mm tops est. $23.88MM on revs $186.6Mm vs est. $170.62Mm, and guides FY revs $700-710Mm vs est. $700.83Mm, and EPS $2.69-2.83 vs est. $2.73.
• DVA +6%; along with gains in FMS after NVO diabetes drug Ozempic trial showed a 24% reduction in the risk of kidney disease-related events, slightly below some investors’ expectations (Citi est. was for 30%).
• PAY +22%; after results/guide; Q4 EPS $0.07 in-line with consensus on better revs $164.8M vs. est. $157.4M; sees FY24 revenue $720M-$744M vs. est. $732.2M and sees FY24 adjusted EBITDA $65M-$75M vs. $58.1M in FY23; but guided Q1 revs $170M-$176M vs. est. $177.9M.
• RGNX +4%; following interim safety and efficacy data from its early-stage trial testing its muscle disorder therapy in patients with Duchenne muscular dystrophy.
• TGT +11%; Q4 adj EPS $2.98 vs. est. $2.40; Q4 sales rose 1.6% y/y to $31.47B vs. est. $31.35B; Q4 comp sales fell (-4.4%) vs. +0.7% y/y but in-line with expectations; foot traffic was down 1.7% from the year prior, an improvement from down 4.1% in Q3; guides Q1 EPS $1.70-$2.10 vs. est. $2.08 and FY $8.60-$9.60 vs. est. $9.15.

 

• ALB -13%; shares fell after the announcement of $1.75B depositary shares offering.
• AXGN -9%; posted Q4 EPS loss and forecasts 2024 gross margin 76% to 79%, below est. 81%.
• GTLB -15%; as FQ4 revenue growth of 33% Y/Y nicely surpassed ~28% consensus forecast citing improved buying behavior across all customer sizes but provided a poor FY25E initial revenue outlook.
• MSTR -7%; takes advantage of its 111% YTD stock price advance behind gains in Bitcoin as announced a proposed private offering of $600M of convertible senior notes…to acquire more Bitcoin.
• SFIX -16%; mostly in-line Q2 as EBITDA $4.45M vs. est. $4.5M and Q2 revs $330.4M vs. est. $330.5M but lowered its FY rev outlook to $1.29B-$1.32B from the previous $1.30B-$1.37B.
• SOFI -8%; after saying it plans to offer $750 mln of convertible debt, that would mature in 2029, to "qualified institutional buyers" in a private offering.
• TNDM -8%; gave back much of yesterday’s gains after announced proposed private placement of convertible notes.
• ZG -3%; Short seller SprucePoint Capital negative on ZG saying they sees 40% to 60% long-term downside risk to Zillow’s share price as believes Zillow is a mature business under increasing pressures with recent failed growth initiatives that illustrate management is incapable of innovating and delivering on goals.

• Intapp (INTA) 7M share Spot Secondary priced at $36.50.
• Quoin Pharmaceuticals (QNRX) 4.063M share Secondary priced at $1.60.
• TKO Group (TKO) 5.35M share Block Trade priced at $79.00.

_________________________________________________________________

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.