Mid-Morning Look: April 11, 2024

Mid-Morning Look

Thursday, April 11, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks were looking lower overnight, still feeling the disappointment of a third straight month of higher consumer prices (CPI) after yesterday’s data weighed on stocks/bonds, but major averages got a small boost this morning as producer prices (PPI) showed a deceleration from the prior month, helping ease some of the concerns. The CPI carries more weight than the PPI, but today’s report gave a little hope to those still hoping/expecting rate cuts by the Fed this year which were diminished yesterday following the CPI pop. After hitting new April highs of 17.61 this morning (taking out prior 16.92 on 4/4), the CBOE Volatility index (VIX) reversed lower following the tamer producer price index (PPI) inflation data, turning negative below the 16 level (but now back above 16.50 as stocks fade the higher open). Treasury yields jumped yesterday on the CPI, with the 10-yr hitting highs above 4.59%, slipping to 4.51% after the PPI, but has worked its way back to 4.57%. Meanwhile, the European Central Bank (ECB) decided to keep the three key ECB interest rates unchanged, as expected. Overnight, China saw a decline in PPI and CPI inflation helping the Shanghai Index. Next up, attention turns to earnings with large cap banks JPM, WFC, Citi reporting tomorrow morning (and next few weeks), before the Q1 flood gates open. Stocks pulled back after a modestly strong opening at morning lows.

Economic Data

  • Producer Price Index (PPI) headline M/M rose +0.2% vs. est. +0.3% (prior +0.6%) and Y/Y rose +2.1% vs. est. +2.2% (prior +1.6%). On a core PPI reading (excluding food/energy), M/M rose +0.2% in-line with estimate (prior +0.3%) and Y/Y rose +2.4% vs. est. +2.3% (prior +2.0%)
  • Weekly Jobless Claims fell to 211,000 from 222,000 prior week and below consensus 215,000; the 4-week moving average fell to 214,250 from 214,500 and continued claims climbed to 1.817M from 1.789M prior week; the U.S. insured unemployment rate unchanged at 1.2% in latest week.






WTI Crude















10-Year Note




Sector Movers Today

  • In Chemicals: ALB upgraded from Hold to Buy at Berenberg and raise tgt to $160 from $130 noting its FY24 guidance in Feb was underwhelming, followed by a surprise USD2.3B convertible preferred stock issuance. But from here expects growing lithium volumes, upside to lithium prices and no need for a further equity raise. Wells Fargo upgraded ASH to EW from UW as it sees compelling evidence from FY2H24 that its earnings’ run rate is ramping up supporting stronger EBITDA growth into FY25 and upgraded PPG to OW from EW as sees an exit of the US architectural coatings market as the right strategic move.
  • In Restaurants: TD Cowen raises tgts for CAVA to $73 from $63, CMG to $3,400 from $2,900 and SG to $22 from $17 saying their panel suggests a favorable Q124 fast casual sales & margin environment that increases its conviction in the sub-sector. Given fast casual’s YTD valuation expansion, TDCowen believes this places greater importance on raising 2024 adj. EBITDA guidance to sustain stocks’ runs. Stifel raised prices tgts on CMG, EAT, DPZ and FRPT and cut tgts on MCD and SBUX while continues to favor high-growth restaurant companies with attractive unit economics (E.G., BROS, WING).



  • ALPN +36%; agreed to an acquisition by VRTX at $65 per share or ~$4.9B in total cash, which equates to an equity value of $4.6B, and a roughly 70% premium to ALPN’s opening price of ~$38 while the transaction is expected to close in 2Q:24; deal focusing on Povetacicept for IgA nephropathy treatment. https://tinyurl.com/ms7mx3p5
  • ARVN +3%; entered a strategic license agreement with NVS for worldwide development and commercialization of its experimental prostate cancer drug called ARV-766; ARVN will receive commercial milestones of up to $1.01 billion as well as tiered royalties for ARV-766 and receive a $150M as upfront payment.
  • DASH +1%; upgraded from Neutral to Buy at MoffettNathanson and raise tgt to $164 saying its newly published industry tracker for U.S. restaurant and grocery delivery reveals share gains for DoorDash in each category, along with an increasing rate of adoption for grocery delivery.
  • NKE +2%; upgraded from Neutral to Buy at Bank America and raise tgt to $113 saying estimates finally look achievable, Nike is taking bold steps to- transform, and cites upcoming potential catalysts that include the Olympics and the company’s analyst day meeting this fall.
  • RENT +140%; reported revenue 2% above consensus, though the beat was driven by product sales, as ending active subs fell 5.8K Q/Q and 1Q24 revenue guidance came in 3% below consensus at the midpoint – but loyalty improved by 10% Y/Y in FY4Q23.
  • RLYB +69%; as announces collaboration to advance therapeutic solutions for pregnant individuals at risk of fetal and neonatal alloimmune thrombocytopenia; said to receive funding for FNAIT awareness initiative and equity investment from JNJ, as received an equity investment of $6.6 million.



  • BTU -2%; guided prelim Q1 adj Ebitda $160M and sees revs about $980M vs. est. $1.03B and prelim Q1 income from continuing operations, net of income taxes of $45M.
  • HOOD -2%; was downgraded to Sell at Citigroup as they believe after recent price moves (fueled in part by Bitcoin), current valuation levels have disconnected from fundamentals and the risk/reward is negatively skewed.
  • KMX -11%; as Q4 profit fell -27% as EPS of $0.32 vs. the $0.45 estimate while Q4 used vehicle sales of $4.50B missed the est. $4.6B, hurt by decreased profitability from units sold.
  • LOVE –14%; as guided Q1 sales $126M-$132M vs. est. $147.5M after posted Q4 gross profit $149.6M vs. est. $158.4M and guides lower FY25 adj Ebitda view.
  • RCEL -30%; after cutting its commercial revenue guidance for Q1 to $11.0M-$11.3M, ~26.1% – 28.1% below consensus estimates and the guidance provided on the Q423 call of $14.8M-$15.6M, promoting a downgrade at BTIG to neutral from buy.


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.