Mid-Morning Look: April 17, 2024

Mid-Morning Look

Wednesday, April 17, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks opened higher but quickly fade, as the S&P 500 tries to snap its 3-day losing streak following a recent spike in Treasury yields, rise in the dollar and lowered rate cut expectations by the Fed amid sticky inflation. No U.S. economic data today but we get the Beige Book at 2pm and several Fed speakers post-close (Mester at 5:30pm; Bowman at 7:15pm). The Nasdaq falters led by weakness in semiconductors as the SMH hits first touch of the 50dma since 11-2-23 here – down 1.4% to $216.05 – 50dma $216.40 after shares of ASML tumbled overnight as orders missed, weighing on equipment stocks (AMAT, LRCX, KLAC) and the group overall. Insurance stocks are weak as Dow component TRV drops over -7% following earnings miss on larger catastrophe losses. Dow Transports -1.6% at 15,000 (far cry off 52-week higher of 16,717) as weakness in truckers JBHT, KNX following earnings/guidance disappointments offsets strength in airlines behind UAL beat +11% as rails falling in sympathy with truckers not helping. Bank earnings remain mixed as weaker net interest income (NII) takes its toll on shares of USB today on miss/lower guide. Shares of industrial metals are higher early after reports the White House is calling for higher tariffs on Chinese steel and aluminium, to help shore up the American steel sector Europe was higher overnight while Asia was mixed with big gains in China. Markets still closely watching the developments in the Middle East with expectations of a retaliation by Israel against Iran after the latter’s drone attack this weekend. Markets are currently little changed as we head into meat of earnings season.






WTI Crude















10-Year Note




Sector Movers Today

  • In Beauty: ELF was upgraded from Hold to Buy but lower tgt to $190 from $220 as believes ELF can double the business over the next three years growing at a low to mid 20% CAGR driven by high teens unit volume growth and M-HSD% pricing growth. They also cut tgts on COTY to $13 from $16, SBH to $11 from $13, and ULTA to $520 from $580 in a Beauty preview saying recent stock pullbacks of (13%) imply modest expectations ahead of earnings but TDCowen remains constructive on the category (says prefers ULTA into the print).
  • In Trucking/Logistics: JBHT shares dropped after Q1 operating EPS missed expectations due to soft pricing and margins in the Intermodal segment (EPS $1.22/$2.94B below consensus $1.52/$3.121B) as posted a -9% decrease in segment gross rev per load in both intermodal and truckload/intermodal volume was flat vs same period y/y; KNX issued disappointing guidance as forecasts Q1 adj EPS $0.11-$0.12 below prior guidance $0.37-$0.41 and below consensus of $0.30 (shares of CHRW, ODFL, XPO were also active in sympathy).
  • In Metals & Mining: shares of STLD, NUE, AA, CENX, FCX, CLF were higher early after reports the White House is calling for higher tariffs on Chinese steel and aluminium, to help shore up the American steel sector; Biden proposes raising 301 tariffs on China steel, aluminum. Citigroup upgrades its base case NY silver price forecasts for 2024 (12%) and 2025 (19%) to $29/oz and $31/oz, respectively. VALE reported growth of 6.1% in Q1 iron ore production from a year earlier, driven by improved output from a key project in northern Brazil, while sales of iron ore, meanwhile, rose 14.7% to 63.83 million tons.



  • AA +3%; along with gains in other metals (CENX, FCX, STLD) after Bloomberg reported that President Joe Biden will propose higher tariffs on Chinese steel and aluminum during a visit to Pittsburgh.
  • LLY +2%; said its weight-loss drug tirzepatide succeeded in two late-stage trials testing it in patients with obstructive sleep apnea saying the drug helped cut the frequency of irregular breathing in patients with obstructive sleep apnea by as much as 63% on average across two late-stage trials.
  • PLCE +35%; after receiving $90 million in unsecured financing from majority shareholder Mithaq Capital to pay back debts and vendors.
  • UAL +11%; reported a smaller-than-expected loss on slightly better revs $12.5B and the demand environment remained strong with a double-digit percentage increase in business demand quarter over quarter, as compared to pre-pandemic lowers FY24 adjusted CapEx view and sees Q2 adj EPS $3.75-$4.25 vs. est. $3.76.
  • VNDA +30%; after confirmed that, since March 2024, it received several unsolicited proposals from Future Pak, LLC to acquire all the outstanding shares of Vanda, with the most recent proposal from April 1 offered $7.25 – $7.75 per share. https://tinyurl.com/8dpwazd7



  • ADSK -8%; shares fell after announced will not file 10-k for year ended Jan 2024 within 15-day extension period due to ongoing internal investigation re free cash flow, non-Gaap operating margin practices.
  • ASML -6%; shares dropped overnight after Q1 net bookings were EUR3.61B, well below the estimates of nearly EUR5.10 billion; bookings for extreme ultraviolet lithography machines came to EUR656M after posted Q1 net profit of EUR1.22B vs. prior EUR2.05B and sales came to EUR5.29B, down from EUR7.24B.
  • CPRI -1%; after the NY Times reported the FTC is preparing to sue to block TPR’s $8.5B takeover of Capri Holdings, saying FTC commissioners will meet this week to discuss the case, which could precede a formal vote on whether to file a lawsuit https://tinyurl.com/cm44t2r7
  • JBHT -8%; as operating EPS missed expectations due to soft pricing and margins in the Intermodal segment, while KNX -5% as issued disappointing guidance as forecasts Q1 adj EPS $0.11-$0.12 below prior guidance $0.37-$0.41.
  • RMD -5%; in sleep apnea sector along with weakness in INSP after LLY reported positive results of its obesity drug Zepbound in obstructive sleep apnea.
  • SAGE -19%; after announcing topline results of its Phase 2 PRECEDENT study of Dalzanemdor (SAGE-718) as a treatment for Parkinson’s Disease, with the study not hitting stat sig on its primary endpoint. The company will no longer pursue further development of SAGE-718 in PD given these results.
  • TRV -8%; Q1 core EPS miss ($4.69 vs. est. $4.90) driven by elevated catastrophe losses ($20B) and less than expected favorable reserve development.
  • URBN -3%; downgraded to Underperform at Jefferies and cut tgt to $32 from $42 saying they have identified a notable deceleration in rolling 3-month foot traffic to all three of URBN’s brands, per its latest monthly data.
  • USB -4%; after cutting its forecast for full-year interest income (NII) between $16.1B-$16.4B from prior view of over $16.6B after Q1 NII declined 14% to $3.99B and net interest margin (NIM) fell to 2.70% vs. 3.1% y/y.


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.