Market Review: April 05, 2024

Closing Recap

Friday, April 05, 2024





DJ Industrials




S&P 500








Russell 2000













What a difference a day makes! A day after major U.S. averages posted one of the worst daily returns in 2024 on cautious Fed comments, economic data, and geopolitical fears…nearly all was erased today…despite more cautious Fed comments (Logan) on timing of rate cuts and very strong monthly jobs report for March, lessening chances of rate cuts in the near-term by the Fed. But the market keeps chugging along higher, again not far from record highs for the S&P 500 and Nasdaq while the Dow Jones Industrials its 4-day losing streak. Still, U.S. stocks posted declines on the week ahead of key inflation data next Tuesday (March CPI). Bespoke invest noted the “next day % change after the last five 1%+ down days for the S&P 500 ETF $SPY: 12/20/23: +0.95%, 1/31/24: +1.31%, 2/13/24: +0.91%, 3/5/24: +0.51%, 4/4/24: +1.00% (today)” …as investors take any market pullback as a buying opportunity.


Today’s jobs data likely made the Fed’s interest rate cut decision going forward a bit more complicated as the economy is showing no signs of slowing/weakness, at least when it pertains to the jobs sector after a strong payroll figure (nonfarm/private), a drop in unemployment, and wages staying strong! There were also more cautious Fed comments today (followed Kashkari, Barkin, Goolsbee yesterday) as Fed Dallas President Logan said this morning there is no urgency right now for Fed to cut, we have time as she says the risk of cutting rates too soon is higher than being late. Meanwhile, Federal Reserve Governor Michelle Bowman said Friday that it’s possible interest rates may have to move higher to control inflation, rather than the cuts her fellow officials have indicated are likely and that the market is expecting. Still, no fear as stocks surged all morning into the afternoon. And somehow, earnings season is right around the corner with big banks set to report next Friday morning (JPM, Citi, WFC).


A 4.8-magnitude earthquake struck the Northeast Friday morning, according to a preliminary estimate from the U.S. Geological Survey. The earthquake happened around 10:23 a.m. ET about 4 miles north-northeast of Whitehouse Station, N.J., according to the USGS. People in states including New Jersey, New York, Connecticut, Maryland, Massachusetts, and Pennsylvania reported feeling the ground shaking. The USGS hadn’t reported any aftershocks in the 30 minutes after the earthquake struck. The epicenter of the earthquake appeared to be about 40 miles from NYC.


In geopolitical news, Reuters noted the head of Lebanon’s armed group Hezbollah said on Friday that Israel’s strike on Iran’s consulate in Damascus this week marked a "turning point" since Oct. 7, when Palestinian group Hamas launched an attack on Israel that has led to escalating regional tensions. The Damascus strike on Monday killed seven Iranian Revolutionary Guards Corps members, among them a senior Quds Force commander. Iran has vowed revenge.

Economic Data

  • March Nonfarm payrolls climb 303,000 m/m (highest since May 2023) above consensus around +200K while revisions showed: February +270,000 (prev +275,000), January +256,000 (prev +229,000). March private sector jobs rose +232,000 above consensus +160,000 and government jobs jumped +71K vs. 63K last month while Manufacturing jobs flat vs. est. +5K. The unemployment rate dipped to 3.8% vs. estimate/prior 3.9%. Wages showed March average hourly earnings all private workers +0.3% from prior month (est. +0.3%) and March average hourly earnings +4.1% from year earlier (est. +4.1%).
  • Credit card debt surges to a new all-time high, just as card APR rates hit fresh record. The average rate across all commercial banks on all credit card amounts just hit a new record high of 21.59% in Q1 ’24, despite the drop-in rates observed in late 2023. Revolving credit in February rose by $11.3 billion, up from an upward revised $8.6 billion pushing total revolving credit to a record $1.339 trillion.


  • U.S. WTI crude oil futures settle at $86.91 per barrel, rising $0.32 or 0.37% as Brent crude hit $91 a barrel (both highest levels since late October) as signs of tighter supply and improving demand continue to boost sentiment. Oil prices jumped this week amid prospects of a wider regional conflict in the Middle East (Iran/Israel) and intensifying attacks against energy facilities in Russia and Ukraine have raised concerns over global supplies.
  • Gold prices settle at new all-time highs, jumping $37 to $2,345.40 an ounce, posting its third straight week of gains, supported by strong safe-haven inflows and prospects for lower U.S. interest rates this year, despite Fed commentary and economic data signaling different.
  • Treasury yields rise on day/week, boosted by stronger March employment data as the 10-or yield gained 18.5bps to 4.377%, its highest-level year to date while the 2-yr added 12.2bps to 4.730%. Labor market data this week (ADP/Nonfarm payrolls), both indicating the economy remains hot and narrowing the possibility of interest-rate cuts by the Fed in the summer. CPI data next week is expected to show inflation cooling slightly.






WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Retail: Keybanc noted in retail, data suggests that consumer spending trends accelerated in March as for the month, indexed spend increased 3.2% y/y compared to flat growth in February, a 0.9% decrease in January, and a 2.6% increase in December. Of note, March includes Easter, which shifted from April in the prior year. As such, Keybanc believes it would need to see March and April data together to understand the full impact. Looking to April, comparisons get easier for BBY, DLTR, FIVE, SNBR, TGT, and WMT. OLPX announced CFO Eric Tiziani is leaving the company to pursue a new opportunity, while also reiterating its FQ1 sales outlook of $92-97M.
  • In Restaurants: DNUT upgraded to Overweight from Neutral at Piper Sandler and raised tgt to $20 from $14, following last week’s announcement of a national partnership with MCD. Wells Fargo noted for the sector, March checks improved slightly, but Restaurant sentiment is delicate & LW yesterday raised fresh traffic concerns. KRUS rises after results as Q2 EPS loss (-$0.09) vs. est. loss (-$0.03); Q2 revs $57.3M vs. est. $56.6M; raises FY24 revenue view from $239M-$244M to $243M-$246M (est. $242.9M).
  • Food Sector: Deutsche Bank noted shares of food distributors USFD, SYY, PFGC were weak Thursday after LW comments of softening restaurant traffic, adding to already negative sentiment on the restaurant space as trends remain weak. DBAB continues to have a positive view on the food distributors broadly and view the magnitude of the pullbacks as a buying opportunity, particularly ahead of catalysts with upcoming Investor Days for SYY/USFD.
  • In Leisure: CNK upgraded to Overweight at Wells Fargo on better tentpole performance, the de-risking of ’24 and growing conviction on and said consumer demand is driving enduring results/sees more films being announced. In ride hailing, UBER shares strong after Needham said thinks the improvement in pricing created a tailwind in Q1 and will create an even more significant tailwind in Q2 if pricing holds and Jefferies raised tgt to $100 as is increasingly leveraging an expanded Mobility product suite.
  • In Autos: TSLA shares tumbled late morning following reports they have canceled the long-promised inexpensive/low-cost car; TSLA will continue developing self-driving robotaxis on the same small-vehicle platform. Later after the Reuters tweet, Tesla CEO Elon Muck posted on “X” that Reuters is lying in regards to the report on cancelling their low cost EV’s

Energy, Industrials and Materials

  • In Oil Sector: In Refiners, Piper raised price tgts on DINO (to $70), MPC ($204), PARR ($47), PBF ($61) and PSX ($187) as view the group as still relatively inexpensive on a longer-term view. In E&P, GPOR downgraded to Sector weight from Overweight at Keybanc on valuation as sees limited room for further stock-specific multiple expansion amid the current challenged macro environment for natural gas/outperformance since start of 2023. Baker Hughes (BKR) said that weekly oil rigs rose two to 508 this week, while gas rigs fell by two to 110, their lowest since January 2022.
  • In Industrials: ETN upgraded to outperform at RBC Capital and raise tgt to $371 from $286 as they see ETN shares as the best large-cap way to play the current electrical supercycle citing confidence in the array of multiyear secular drivers powering 330 +$1B megaprojects, having its coverage’s best broad-based datacenter exposure with an expected mid-teens CAGR, with potential for further adjacency buildouts. In HVAC Industry, TD Cowen raises price tgts on LII, TT, CARR and JCI in Q1 preview as favors them in that order.
  • In Transports: TD Cowen trucking/logistics preview says cautious on TLs as lowers estimates below consensus into Q1 with contract pricing likely notching lower amid persistent overcapacity and competitive bid season despite some signs of spring uptick. TL brokerage gross margins should see pressure from short-lived, weather-related spot rally in early Q1. LTLs (favors XPO) are bright spot in Q1 as seasonality comes amid firm pricing.
  • In Solar & Alternative Power: ENPH downgraded along with PLUG at Citigroup; ENPH cut to neutral from buy after reaching its full valuation, while Plug Power cut to sell from neutral on dilution and elusive profitability. NOVA, SEDG, SPWR price tgts cut at Susquehanna saying the expected rebound in residential solar equipment demand is taking longer than expected to materialize, driven mostly by the NEM 3.0 transition weighing on CA volumes so lowered its ’24 U.S. resi installation growth forecast to 15% from -10%.


  • In Lending: SOFI upgraded to Market Perform from Underperform at KBW Inc, raising the price tgt to $7.50 from $6.50 as believes the share price decline and the recent capital raise remove much of the risk of negative catalysts to investors; sees opportunities for growth in the financial services and technology segments. FHN was also upgraded to Outperform from Market Perform at KBW Inc.
  • In Brokers/Exchanges: CME downgraded to Hold from Buy at Deutsche Bank and tgt cut to $210 from $235 in Q124 Preview saying they favor Alt managers and reiterate their short-term catalyst Buy call on NTRS. The firm still sees stock price performance this earnings season being driven mostly by individual company fundamentals across its coverage, it sees at least a mildly positive bias for the stocks, though note that elevated market conditions create more downside risk should markets turn down abruptly during earnings season.
  • In REITs: PSA upgraded to OW from EW in self-storage, calling it their top idea in storage, based on its view that it’s best-positioned to navigate an uncertain housing and demand environment, with industry-leading growth metrics likely to sustain through 2024. Bank America with several changes in Shopping center REITs as upgraded AKR to Buy from Neutral (tgt to $20 from $18) as sees upside to 2024 guidance from recovering Street retail assets including lagging markets like Chicago, KIM downgraded to Neutral from Buy (tgt to $20 from $24) after disappointing NYC Retail REIT Executive Summit last week and SKT upgraded to Neutral from Underperform (tgt to $31 from $24) saying Tanger did an excellent job of showcasing its platform at conference last week. ROIC also downgraded to Underperform from Neutral (tgt to $12 from $14.50).

Biotech, Pharma, Services and Devices:

  • SWAV agreed to be acquired by JNJ for $335 per share (vs. Thursday close $319.99) in deal that has an enterprise value of about $13.1B including cash acquired.
  • Agilent (A) was upgraded to Buy from Hold at Stifel and raised tgt to $163 from $145 saying responses from the firm’s biopharma survey suggest some good 2H acceleration in instrument demand, which – along with a few less-than-bullish data points on consumables side – has increased A’s relative attractiveness.
  • CRBU has added an off-the-shelf cell therapy for patients with the autoimmune disease lupus to its research pipeline. A clinical trial will begin before the end of the year, the company said.
  • TDOC CEO Jason Gorevic is departing the company, effective immediately; reaffirms prior Q1 and FY guidance. The board has appointed Mala Murthy acting CEO while it searches for Gorevic’s permanent successor.


  • In Media: FOXA upgraded from Neutral to Buy at Seaport Global ($37 tgt) saying cyclically strong (and possibly new record) Presidential election ad spending is coming soon; certain Fox News ratings and direct-response advertising challenges are behind it; sports programming continues solid ratings momentum. PARA shares declined after CNBC reported earlier this morning that Skydance’s pitch to the media company’s special committee will keep the company public.
  • In Telecom: in cable, ATUS downgraded to Underweight at Wells Fargo as the firm remains incrementally negative on cable sector saying fiber is becoming a bigger headwind and firm reduces ests. + target prices on an incrementally negative backdrop (said CMCSA is the best house in the hood but lacks positives, CHTR is washed out, CABO has enduring risk and cut ATUS to Underweight).
  • In Software: SNOW was upgraded to Buy from Neutral at Rosenblatt with $185 tgt as came away from recent presentations in Toronto, and its customer discussions encouraged; WDC upgraded to Buy from Neutral at Rosenblatt as well and raise tgt to $115 from $65 saying industry data points are suggesting that Q224 NAND Flash average contract prices will increase by 15%+ sequentially.
  • In Security Software: Wells Fargo said they collected feedback from 35 resellers in Q124 and noted strong net results for NET (+28%) FTNT (+28%), and CHKP (+24%) while results for TENB (+3% net) downticked and CRWD and PANW were the only off-calendar vendors with net positive results.
  • In Electrical Components/Hardware: VRT initiated at Outperform and $96 tgt at Oppenheimer as regards the company as a leading AI infrastructure player with sustainable competitive differentiation in data center power and thermal management, positioned well for growth and wallet share gains as compute density increases. VRT tgt was raised to $90 from $80 at Evercore/ISI noting several industry developments + data points work calling out that should bode positively for VRT longer term.


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.