Market Review: January 09, 2024

Closing Recap

Tuesday, January 09, 2024





DJ Industrials




S&P 500








Russell 2000













U.S. stocks swung between gains and losses this afternoon following morning weakness as stock markets remain in “chop” mode ahead of the important consumer price index (CPI) inflation data this Thursday. The data could provide further clues as to the timeliness and aggressiveness of interest rate cuts that Wall Street is eagerly anticipating from the Fed in March. Currently around -130bps of cuts vs. the Fed’s view announced last month of roughly -75bps. Still, major U.S. averages remain strong with the S&P 500 less than 2% from its record highs into the CPI results, but concerns arise that market expectations may be over optimistic as to the number of rates cuts forecasted for 2024. Also, CNBC’s @BobPisani noted, “first the Santa Claus Rally failed, now the First Five Days indicator is also negative. Despite a huge rally Monday led by tech stocks that drove up the S&P 500 by 1.4%, a second seasonal indicator is flashing red.” We also get the start of earnings season this Friday with several big banks reporting including JPM, Citi, and Wells.


The market continues to be held higher by the biggest names in tech/the market. as @KobeissiLetter notes “the market cap of the Magnificent 7 is now FOUR TIMES that of the Russell 2000. Microsoft alone is the size of the entire stock market in Canada. The market cap of the Magnificent 7 is the same size as the stock markets in the UK, Canada, and Japan combined.” Combined, the seven names— Amazon, Apple, Alphabet, Microsoft, Meta Platforms, Tesla, and Nvidia —boast nearly a $12 trillion market cap, making up 28% of the S&P 500 and nearly 23% of the entire stock market in the U.S. 


Smallcaps underperform on Tuesday, but Goldman Sachs Strategy said they see 9% upside next six months for the Russell 2000 Smallcaps and 15% upside next 12 months saying low current valuations and a healthy economic outlook indicate that the Russell 2000 small-cap index should outperform. They said they are looking for S&P 500 firms to beat analyst forecasts in aggregate in Q423, despite a higher bar relative to recent quarters.

Commodities, Treasuries and Currencies

  • U.S. crude oil futures settle at $72.24/bbl, up $1.47, 2.08% (off highs $72.93 and lows $70.47) and Brent crude futures settle at $77.59/bbl, up $1.47, 1.93%. Prices jumped after sliding in the previous session as markets weighed Middle East tensions against demand worries and rising OPEC supply. Today, the EIA raised its forecast for 2024 world oil demand growth by 50,000 bpd, now forecasts 1.39M bpd y/y increase and noted 2025 world oil demand to hit 103.67M bpd, up 1.21M bpd from 2024. U.S. crude oil production to climb by 290,000 bpd to 13.21M bpd in 2024 (versus previously forecasted climb of 180,000 bpd).
  • Natural gas prices extended January gains, surging 13.4% at $3.378/MMBtus as the EIA forecasted U.S. natural gas production and demand, as well as liquefied natural gas (LNG) exports, will hit record highs again in 2024. Also boosting prices was expectations of increased demand given the storms traveling along the East Coast and potential lost power as freezing winter weather boosts demand and shuts in some production.
  • Gold prices erased early gains, ending lower by -$0.50 to $2,033 an ounce. The dollar moved higher (DXY +0.4% at 102.60 after rising 1% last week), tracking a rise in U.S. Treasury yields (10-yr at 4.016%) as investors await key inflation data later this week. Bitcoin held near its strongest level since April 2022 around $47K on growing anticipation the SEC will imminently approve spot bitcoin exchange-traded funds (ETF).





WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In grocers: ACI Q3 EPS and sales topped estimates but saw a drop in gross margins – reported Q3 EPS $0.79 on sales $18.56B vs. est. $0.65/$18.37B and comp store sales rose +2.9% above est. +2.5% but gross margins fell -0.64% citing strong growth in pharmacy operations, which carries lower margin rates.
  • In Restaurants: DPZ was upgraded from Underperform to Market Perform at Bernstein and raised tgt to $370 citing an attractive near-term setup. The firm said despite continued skepticism on pizza category outlook, believes the n-t setup for 2024 has turned attractive and there are no immediate catalysts that could materially pressure DPZ.
  • In Retail: TCS shares fell after cutting its Q3 revenue view to $214M from $220M-$225M (est. $225.4M) saying expects its profitability for the quarter to be negatively impacted by the sales shortfall. URBN reported that November and December net sales increased 10% compared to the same two months the year prior.

Leisure, Gaming & Lodging:

  • In Ride Hailing/Food Delivery: shares of UBER, DASH, LYFT shares active after the WSJ reported that the Biden administration issued a new rule Tuesday intended to put more gig workers on company payrolls, impacting many industries, most notably at ride-share and food-delivery companies such as Uber Technologies and DoorDash.
  • In Leisure Products: Truist raised price tgt on marine and RV products with BC (PT to $115 from $90), MBUU (PT to $62 from $55), HZO (PT to $45 from $40), MCFT (PT to $22 from $20), ONEW (PT to $38 from $30), CWH (PT to $30 from $25), LCII (PT to $140 from $125), PATK (PT to $125 from $95) saying they anticipate a relatively lackluster consumer demand environment to persist in ’24 as many of its cyclical R&L end markets continue to find a post-COVID bottom amid higher rates and challenged affordability.

Energy, Industrials and Materials

  • In Utilities: ES announced an impairment of $1.4 billion-$1.6 billion related to its offshore wind joint venture with Orsted, but Citigroup said this should be viewed as Eversource catching up with Orsted’s impairments announced over the last few months, as opposed to fresh concerns developing. NEP was downgraded to Neutral at CIBC following the 20% rally over the last few weeks.
  • In Industrials: GE announced its biggest-ever order for onshore wind power generation equipment as privately held Pattern Energy is buying 674 GE wind turbines with an electricity-generating capacity of 2.4 gigawatts. That brings Pattern’s GE Vernova-based wind capacity to 4.3 gigawatt hours. AYI Q1 adj EPS $3.72 vs. est. $3.23; Q1 revs fell -6% y/y to $935M but was in-line with consensus $935.14M; Revenue from its lighting and light-control business fell 7.5% to $70.7M, while its intelligent spaces unit climbed 13%. MSM Q1 adj EPS $1.25 vs. est. $1.31; Q1 revs $953.97M vs. est. $972.06M; Backs FY24 adjusted operating margin view 12%-12.8% and backs FY24 tax rate view 25%-25.5%.
  • In Airlines: Dow Transports fell just shy of -1% on day, underperformed broader averages. Airlines active with several analyst weighing in as UAL was upgraded from Underperform to Buy at Bank America as sees a valuation disconnect vs UAL’s execution and its more favorable leverage outlook than expected. Bank America downgraded JBLU from Neutral to Underperform and cut tgt to $3 from $6 after rallying 56% from the early November trough. Lastly, ULCC was downgraded to neutral at Bank America as well.
  • In Metals & Mining: CENX was upgraded to Buy from Neutral at B Riley earlier and tgt raised to $14 from $10 calling it the greatest beneficiary of the 45X production tax credits. Gold miners and other metal prices were down as materials and industrials underperformed.
  • In Paper & Packaging: GPK will raise prices for certain products in a move that more companies will likely follow, Truist noted yesterday saying it’s another sign that destocking–the trend of companies reducing their inventories and therefore their packaging needs–is on the decline, with boxboard making a comeback early this year. Truist said GPK’s $50/ton price increase for coated recycled paperboard and coated unbleached kraft paper, effective Feb. 1, could lead to similar price increases at WRK and others.
  • In Chemicals: PPG said it is reviewing strategic alternatives for its silica products business which represented between 1% and 2% of PPG’s total net sales in 2023. Keybanc previewed the sector ahead of earnings, making tgt changes and calling shares of FMC, OLN, CTVA, AXTA, and ECVT seen as most compelling risk/reward noting many of their "longs" have performed exceptionally well in Q4; as a result, it has less confidence in NT performance. BASFY was downgraded to Underperform at Bernstein saying they can’t get comfortable with BASF’s fundamentals at these prices and takes its 2024 and 2025 numbers down as sees as ripe for correction. GVDNY upgraded to Market-Perform, from Underperform at Bernstein citing an unusual 2-year underperformance.

Banks, Brokers, Asset Managers:

  • Deutsche Bank upgraded JPM to Buy saying should benefit from upside to net interest income guidance and downgraded WFC to Hold as expects weak net interest income guide for 2024, and says credit is likely to be more volatile vs peers. The firm sees three key themes to 2024: 1) lower interest rates–which are good for bank capital, but generally bad for earnings; 2) credit quality–which will likely be the most important theme for bank stocks whether there’s a credit cycle; and 3) regulation and the political backdrop.
  • Jefferies upgraded regional banks RF and KEY to Buy; said bank valuations have expanded as the market adjusts for peak/lower rates, overcoming downward PPNR revisions for many (but at a lesser pace). The firm noted P/Es remain below historical averages, with potential for more expansion in a benign soft landing, plus help from growing book values and capital ratios. Other picks: JPM/CMA/FITB in large-caps and FHN/WAL in midcap
  • Goldman Sachs said they favor JEF (on CL), PIPR, HLI and upgrade IBKR to Buy in Investment Banks into earnings as expect ~20% yoy top-line growth for advisors and IBanks in 2024E vs ~5% for industry fees, though this is broadly priced in. Favor names with leverage to IBanking recovery, ability to drive margin growth and sustainability, and attractive valuation Goldman also downgraded PJT to Neutral and PWP to Sell.
  • KBW Inc. downgraded FITB to Market Perform and ahead of Q4 earnings, said they recommend Overweight positions on shares of CADE, PB, CASH, HTLF, HFWA and underweight in MTB, NYCB in banks as estimate EPS will decline by -24% y/y in Q423 and -9% q/q (not annualized) due to continued NII headwinds and some degree of credit normalization. Said modest loan and deposit growth likely continues (+3% and +2%, LQA), though NIM pressure should continue to moderate (-5bps vs -8bps q/q).
  • In Bank and Broker News: CMA announced non-core charges impacting its Q423 earnings including a $25M expense initiative charge and non-cash charges from swap re-designation. JEF Q4 EPS $0.29 vs est. $0.34 on net revs $1.2B vs est. $1.236B, and increased share buyback to total $250Mm.

Bitcoin, FinTech, Payments and Services:

  • In FinTech: PYPL was downgraded to EW from OW at Morgan Stanley saying they think PayPal is moving too slowly on key strategic initiatives such as improving Branded Checkout, and believe acceleration is difficult given the range of relationship interests PayPal manages. The firm is also less optimistic that PayPal can monetize Venmo as a widely used checkout tool for young Gen Z/Y shoppers amid slow progress on acceptance.
  • In Insurance: WRB downgraded from Outperform to In Line at Evercore/ISI as it now has slight downside to consensus estimates in ’24 and are 5% below in ’25 as it believes upward pressure on ’24 loss ratios from increased conservatism it expects mgmt to embed in loss picks will lead to underwriting income misses.

Biotech & Pharma:

  • BNTX estimated total revenue of about 3B euros for 2024, down from revenue of about $4B-$5B euros targeted for 2023; expects to return to revenue growth in 2025 and plans to launch its first oncology drugs from 2026 onwards.
  • ESAIY and BIIB said that their Alzheimer’s treatment Leqembi had won approval in China, the third country after the United States and Japan. The two companies are preparing to launch the drug in the second quarter of Eisai’s 2024/25 business year starting in April.
  • GRFS shares tumbled after short-seller Gotham City Research criticized the financial reporting of the Spanish pharmaceutical company, which denied the allegations. Gotham City Research said in its report that it believes Grifols’s debt-to-earnings ratio is worse than reported by the company.
  • GSK said it had struck a deal to acquire asthma drug developer Aiolos Bio for up to $1.4 billion, saying it would pay $1 billion upfront and up to $400 million in milestone payments if specific aims are achieved, in a deal that gives it access to Aiolos’ Phase II ready AIO-001 asthma treatment.
  • ILMN said that it expected consolidated revenue for the year to be down 2% to $4.497B, which compared to Nov forecast for total revenue to fall 2% to 3%, compared with prior projections for growth of 1%.
  • MCRB shares jumped after saying they received FDA Fast Track Designation for SER-155, a microbiome therapeutic meant to prevent gastrointestinal-associated bacterial infections.
  • MRK shares touched all-time highs today.
  • PFE and GMAB said the FDA granted priority review to their request to convert the accelerated approval of Tivdak for certain patients with cervical cancer to full approval (FDA has set a target action date of May 9 for the application).
  • SRPT shares rose as Wedbush noted the upside guidance to ELEVIDYS and the potential of label expansion on the Horizon. Wedbush said SRPT expects an FDA response (day 74 letter) on the filing for ELEVIDYS/DMD in early March 2024 and a PDUFA date in August 2024 which would make ~86% of DMD patients eligible for ELEVIDYS treatment.

Healthcare Services & MedTech movers:

  • In PBMs: CAH said they expect Q2 medical segment profit to be in-line with Q1 profit, due to anticipated non-recurring adjustments in the second quarter, disappointing the Street.
  • In Healthcare Technology: HCAT said it expects 4Q23 and 2023 total revenue to come in above the midpoint of its guidance ranges and expects 4Q23 and 2023 adjusted EBITDA to come in either at or above the midpoint of its guidance ranges.
  • In Dental Equipment: XRAY said it expects full-year net sales to be at or above the high end of its guidance range of between $3.9 billion and $3.94 billion (est. $3.92B) and reaffirmed its EPS outlook.
  • In Healthcare Services: WBA agreed to pay HUM $360M to settle a drug-pricing dispute, the WSJ reported as the lawsuit alleged the retail-pharmacy chain overcharged for prescription-drug reimbursements. Walgreens had asked a federal court to vacate a previous award in Humana’s favor for $642M. . ACCD Q3 EPS loss (-$0.28) vs. est. loss (-$0.44); Q3 revs $99.37M vs. est. $96.24M; sees Q4 revenue $121.5M-$125.5M, below consensus $126.33M but raises FY24 revenue view to $411M-$415M from $410M-$414M (est. $412.75M). CTLT shares rose as CEO said the company has "a leading position as a provider of capacity to manufacture GLP-1s."
  • In Medical Equipment: CUTR guided FY revenue in range of $211.5M-$212.5M up from prior guidance of about $205M (est. $211M) and said cash and marketable securities of approximately $143M as of end of Q4, vs. prior view of about $135M. DHR said for Q4, estimated revenues are anticipated to decrease in low-double digit percent range y/y; estimated non-GAAP base business core revenue for Q4 of 2023 is expected to decline in mid-single digit percent range. NEOG said Q2 sales slipped -0.2% to $229.6M and lowered its FY24 revenue view to $935M-$955M from $955M-$985M and Ebitda outlook saying despite seeing signs of improvement in end markets, those improvements are happening slower than previously expected.

Internet, Media & Telecom

  • In Media: NFLX was downgraded to Neutral from Buy at Citigroup with an unchanged $500 price target saying across 2024 and 2025, the Street has lofty expectations for Netflix, but 2024 revenue estimates may be a tad too high. There were also several analysts that previewed upcoming earnings for META, AMZN, GOOGL, taking tgts higher at TD Cowen. PARA was upgraded to Neutral at MoffettNathanson and up tgt to $13 and reiterate Buys on FOXA and CMCSA saying believe continuous M&A speculation will be the focus for investors in the coming months.
  • In Internet: GDDY upgraded from Neutral to Overweight at Piper and raised tgt to $121 from $100 on a lower discount rate and higher terminal free cash multiple.
  • In social media: MTCH shares jumped after the WSJ reported Elliott Investment Management has built a big $1B stake in the Tinder owner and intends to meet with Match to discuss ways to improve online dating company’s performance

Hardware & Software movers:

  • In Networking: The WSJ reported HPE is in advanced talks to buy JNPR for about $13 billion according to the WSJ, saying a deal between the two companies could be announced as soon as this week, . EXTR shares fell after saying Q2 revenues are now expected to be approximately $294-$297M vs. consensus of $320.5M and said remain confident in our long-term strategy.
  • In Software: Unity Software (U) said it plans to cut about 1,800 employee roles or 25% of the current workforce and forecasts costs substantially incurred in Q1
  • In Computer Hardware: SNX reported Q4 EPS $3.13 vs. est. $2.68 and revs $14.41B vs. est. $14.48B; guides Q1 EPS $2.60-$3.10, vs. consensus $2.91 and sees Q1 revenue $14B-$14.7B vs. est. $14.81; boosted quarterly dividend 14% to 40c.
  • In Security Software: CRWD upgraded from Equal Weight to Overweight at Morgan Stanley and raised tgt to $304 from $203 as sees an improving demand outlook for CRWD as accelerating cyberattacks, multiple new products and GenAI tailwinds drive estimates upside. Citigroup said CRWD, ZS float to top picks, with CYBR their top SMID idea (#s upside, profitability normalization, line-of-sight to >$10B market cap all growing investor audience) and downgraded FTNT to Neutral (low #s confidence balancing risk/reward) and RPD to Buy.


  • NVDA, AMD strength again keep the semi sector anchored, with the SOX up modestly on day.
  • Samsung (SSNLF) reported a likely 35% drop in Q4 operating profit to 2.8 trillion won ($2.13B) in Oct-Dec from 4.31 trillion won a year earlier and below the 3.7 trillion est. as weak consumer demand persisted in many of its businesses. Rival LG Electronics also noted Q4 operating profit of 313B won, well below estimates due to intensifying competition and higher spending on marketing.
  • MCHP negatively preannounced F3Q (Dec) results saying sees prelim Q3 revs down sequentially about -22% vs. guidance of down (15%-20%) citing weakening economic environment customers faced. They indicated demand at distributors and end-customers was weak, resulting in backlog being pushed out of the quarter, noting that several customers had extended shutdowns at the end of the quarter.


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.