Mid-Morning Look
Monday, May 13, 2024
Index |
Up/Down |
% |
Last |
DJ Industrials |
67.54 |
0.17% |
39,579 |
S&P 500 |
4.30 |
0.08% |
5,227 |
Nasdaq |
37.34 |
0.23% |
16,378 |
Russell 2000 |
20.90 |
1.01% |
2,080 |
U.S. stocks open the week higher, adding to last week gains as the Dow looks to make it a 9th straight day of gains into key inflation data this week. The S&P is up more than 5% since April 19 and sits less than 1% from its late March all-time high.
Lots of strength this morning in US listed China stocks, with likes of BABA (reports tomorrow), BIDU (reports this week), NIO, PDD, JD all seeing strength. Communications (XLC) the only S&P sector lower amid weakness in META, GOOGL as both are down over 2%. The other big movers this morning are high short interest related stocks, led behind the original “meme” stock of all time, with GME shares up over 100% this morning after “Roaring Kitty” is back whose bullish analysis of the video-game retailer GameStop on Reddit during the pandemic created a national phenomenon, made his first social media post on the X service in three years, in a cryptic post meant to show he was paying attention. This post alone has boosted shares and renewed interest in many of the names that currently have high “short interest”. The news comes after a week of light market volumes and news, as investors eagerly await key inflation data tomorrow (PPI) and Wednesday (CPI) along with retail sales data for April and a handful of large cap retail earnings this week with Wal-Mart and Home Depot results expected.
Macro |
Up/Down |
Last |
WTI Crude |
1.15 |
79.41 |
Brent |
0.87 |
83.66 |
Gold |
-23.50 |
2,351.50 |
EUR/USD |
0.0033 |
1.08.02 |
JPY/USD |
0.18 |
155.90 |
10-Year Note |
-0.029 |
4.475% |
Sector Movers Today
- In Semiconductors: AMAT downgraded to Hold from Buy at Jefferies with a price target of $210, down from $215 and downgraded TXN to Hold from Buy in semiconductors. ARM is setting up an AI division and will have a prototype in the spring of next year, Japan’s Nikkei news agency reported; Arm will set up an AI chip division and target a prototype by next spring, and mass production will be carried out by contract manufacturers. MKSI files to sell $1B of convertible senior notes due 2030. INTC is in advanced talks for a deal with APO in which the equity firm would provide more than $11 billion to build a facility in Ireland, the Wall Street Journal reported.
- In Hospitals (HCA, CYH, THC, UHS): Cantor said they believe has found early indications that April hospital volumes did not show a catch-up on lost March volumes and saw periods of weakness return. Instead of some of the March volume shifting to April post spring break, driving strength near February levels, Cantor saw a one-week recovery then a return to softness. And while it seems to be trending up again in late April, the first month of Q224 leaves many questions and has not played out with the strength Cantor was expecting.
- In Casinos & Gaming: BYD announces additional $500M share buyback authorization; in research, RRR upgraded from Underperform to Neutral at Bank America as see risk/reward more balanced, noting shares have sold off -15% since April 25th following Boyd calling out softness in the LV Locals market and RRR reporting Q1 results in-line with consensus; PENN was downgraded from Buy to Neutral at Bank America and cut tgt to $17.50 from $28 saying ESPN Bet market share is below expectation, high fixed costs drive elevated earnings risk for Q4 and 2025+, core business trends are lackluster and rising balance sheet leverage increases execution risk and volatility.
Stock GAINERS
- ACIU +28%; and TAK sign exclusive option and license agreement for active immunotherapy targeting amyloid beta for Alzheimer’s disease; Takeda to receive exclusive option to license global rights to ACI-24.060, and ACIA to receive upfront payment of $100M upon closing and be eligible for an option exercise fee and additional potential milestones up to $2.1B.
- ARM +3%; on reports is setting up an AI division and will have a prototype in the spring of next year, Japan’s Nikkei news agency reported; Nikkei reports Arm will set up an AI chip division and target a prototype by next spring, and mass production will be carried out by contract manufacturers.
- BABA +5%; ahead of earnings tomorrow morning and overall strength in US listed China stocks.
- GME +83%; after “Roaring Kitty” is back, as Keith Gill, whose bullish analysis of the video-game retailer GameStop on Reddit during the pandemic created a national phenomenon, made his first social media post on the X service in three years, in a cryptic post meant to show he was paying attention. https://tinyurl.com/2k3bzhrv
- INCY +8%; said it is buying back $2 billion worth of stock, including more than $1.67 billion through a modified "Dutch Auction" tender offer; said it set a price range of $52 to $60 a share for the tender offer.
- SQSP +11%; to be taken private by Permira in deal valued at $6.9B in all-cash transaction, as stockholders will receive $44.00 per share in cash; Anthony Casalena will continue to lead Squarespace as CEO.
- TME +7%; Q1 revs $935.9M vs. est. $917.6M; Paying users at its online music streaming service rose 20.2% to 113.5 million y/y; revenue from online music services rose 43%, driven by solid growth in music subscription revenue.
- WBA +6%; on Bloomberg report it is reaching out to potential buyers of its Boots drugstore chain in the UK.
- ZK +9%; adds to gains on the second day of trading after IPO pricing late last week.
Stock LAGGARDS
- BANC -6%; late Friday announced disclosure of a -$0.05/share EPS reduction due to an identified error in the accounting for loan discount.
- GOOGL -2%; Bloomberg reported AAPL is said to be closing in on an agreement to use OpenAI’s technology on the iPhone.
- HCA -2%; after Cantor said they believe has found early indications that April hospital volumes did not show a catch-up on lost March volumes and saw periods of weakness return.
- MKSI -7%; files to sell $1B of convertible senior notes due 2030.
- PENN -1%; downgraded from Buy to Neutral at Bank America and cut tgt to $17.50 from $
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.