Mid-Morning Look: April 29, 2024

Mid-Morning Look

Monday, April 29, 2024

Index

Up/Down

%

Last

DJ Industrials

108.15

0.29%

38,349

S&P 500

16.71

0.34%

5,117

Nasdaq

56.28

0.35%

15,983

Russell 2000

13.20

0.66%

2,015

 

 

U.S. stocks moving higher to kick off the week. After falling for 6-straight trading days from April 12th thru April 19th, the S&P and Nasdaq have now risen 5 of the last 6-trading days, as investors scoop up beaten stocks heading into another crucial trading week, dominated by the Fed, big earnings results, and key economic data. Note the 2-day FOMC meeting begins tomorrow with results 2:00 PM on Wednesday 5/1 (no rate changes expected), AMZN earnings (4/30) and AAPL (5/2) headlines a busy week of results (MCD, AMD, QCOM, KO, MA among others), and key jobs data comes Wednesday 5/1 with private payrolls and the nonfarm payrolls Friday 5/3. Markets looked the other way when it came to hotter inflation data last week, as the PCE/core PCE data Thursday (for Q1) and Friday (for March) was stronger than markets hoped, further lessening chances of an FOMC rate cut this year but had no impact on broader markets. Treasury yields remain high with the 10-yr at 4.64% and the dollar mixed, but Bitcoin prices are noticeably lower down over 3% below $62K. Note the S&P 500 is coming off its best week since early Nov 2023, rising +2.7% after 3 weeks of losses, as corporate earnings generally surprised to upside. No major economic data today and the Fed remains in blackout speech period ahead of the FOMC meeting. Massive move in the dollar/yen overnight, as the yen briefly tumbled past 160 per dollar for the first time since 1990, before rebounding sharply back below to the 155-handle amid mounting intervention speculation. Japanese stock and bond markets remain closed for a public holiday. Consumer Discretionary (XLY) early S&P sector leader behind big gains in Tesla (TSLA) after China FSD headlines this weekend (see below) and tech rises with AAPL up 3% on an analyst upgrade.

 

 

Macro

Up/Down

Last

WTI Crude

-0.47

83.38

Brent

-0.74

88.76

Gold

-0.60

2,346.60

EUR/USD

0.001

1.0702

JPY/USD

-1.52

156.81

10-Year Note

-0.031

4.638%

 

Sector Movers Today

  • In Autos: TSLA shares jumped after receiving long awaited full-self driving (FSD) approval in China after years trying following Musk’s surprise visit to Beijing this weekend. Tesla will partner with Chinese tech stalwart Baidu for mapping and navigation functions that was clearly key to getting the green light from Beijing. Chinese electric vehicle (EV) maker Boyd (BYDDF) posted its weakest quarterly profit growth since 2022 while its revenue growth slowed to the lowest level in nearly four years, hit by slowing EV demand and a bruising price war in the world’s largest auto market.
  • In Leisure: for Cruise lines, Viking Holdings (VIK) increases IPO to 53M shares from 44M shares, as the number of shares being sold by selling shareholders increased by 27%, to 42 million shares from 33 million. The company is still offering 11 million shares and the pricing of the IPO is still expected to be between $21 and $25 this week. In Casino: MLCO, WYNN, LVS shares rise early after Chinese authorities introduced new travel permits to boost tourism. Starting May 6, mainland Chinese citizens will be able to apply for a permit that allows them to enter the world’s biggest gambling hub multiple times in a year.
  • In Insulin/Diabetes: TNDM upgraded to Overweight from Equal Weight at Wells Fargo and raise tgt to $45 from $21 as the firm is increasingly optimistic that Tandem’s share of new pump starts will least stabilize in 2024 after surveying 50 endocrinologists. The survey suggests Mobi is likely to cannibalize Tandem share but perhaps expand the overall market, the analyst tells investors in a research note. Survey implies PODD will expand its leadership in new starts, while TNDM will see stable growth in new starts – implying potential upside in 2024/2025. DXCM remains #1 CGM provider.

 

Stock GAINERS

  • AAPL +3%; was upgraded to Outperform at Bernstein with $195 tgt saying China weakness is “more cyclical than structural” and highlights Apple’s business in the country has tended to be more volatile than the wider business.
  • ALB +5%; mentioned in Barron’s over weekend noting shares were crushed by electrical vehicle slowing growth woes, while lithium prices are down more than 80% since peaking in 2022. But now, lithium prices show signs of stabilizing.
  • BIDU +5%; reached an agreement with TSLA, opens new tab to grant the car company access to its mapping license for data collection on China’s public roads, two people familiar with the matter said. https://tinyurl.com/yx947tpa
  • DCPH +70%; after saying Japan’s Ono Pharmaceutical Co will acquire the cancer drug developer for $2.4 billion in cash, with Ono Pharma offering $25.60 per share, a premium of 74.7% to Friday’s close. https://tinyurl.com/3hkmrtpx
  • DPZ +2%; after Q1 results beat with EPS $3.58 above est. $3.39 and Q1 revs $1.08B in-line with consensus while Q1 comp sales rose +5.6% vs. est. 4.04%; said beat comes consumers in U.S. tap into its loyalty program and other promotions; domestic comps +8.5% and international comps rose +0.9% both topping the consensus.
  • FULT +9%; announced pricing of its public offering of 16.7M shares of its common stock at a price to public of $15 per share to support its acquisition of the deposits and assets of Republic First from regulators, the first U.S. bank failure of 2024.
  • HTLF +16%; confirmed Bloomberg reports late Friday, as agrees to be acquired by UMBF for $45.74 per share, in an all-stock transaction valued at approximately $2.0B.
  • PHG +33%; mkt after saying it has reached a $1.1 billion settlement in the U.S. related its Respironics ventilators and backed its full-year guidance.
  • SHOP +2%; was upgraded to Buy at Citigroup with $105 tgt following a recent round of conference visits/channel checks which highlight a more resilient e-commerce backdrop and accelerated share gains up market.
  • TSLA +10%; shares jumped after receiving long awaited full-self driving (FSD) approval in China after years trying following Musk’s surprise visit to Beijing this weekend. Tesla will partner with Chinese tech stalwart Baidu for mapping and navigation.

 

Stock LAGGARDS

  • ALT -6%; downgraded to Neutral from Buy at Guggenheim saying as time passes with no partnership secured by ALT, firm believes the opportunity to successfully fund Pemvidutide’s future in either obesity or MASH/NASH is growing increasingly tenuous; believes that a major partnership or M&A event would have materialized already.
  • BEN -3%; Q1 EPS of $0.56 missed estimates while revs rose 12% y/y to $2.15B mostly in-line with estimates; Q1 Investment management fees rose 9% to $1.71 billion, while sales and distribution fees jumped 19% to $358.3 million, while Operating expense $2.02B, +21% y/y, well above est. $1.84B.
  • DB -9%; after saying late Friday it expected to be impacted by a legal provision in the second quarter of 2024 after a court indicated it may find claims of certain former Postbank shareholders linked to the unit’s takeover valid.
  • LUV -2%; was downgraded to underperform at Jefferies and cut tgt to $20 from $28 after recent results as noted Q1 RASM missed the lowered guide set just 3 weeks before Q-end, and firm no longer sees meaningful RASM growth.
  • SOFI -4%; shares fell early as posted a modest EPS beat on higher revs ($645M vs. est. $556M), while guided Q2 revs $55M-$565M (below est. $580M) and adj EBITDA of $115M-$125M and Net Income of $5M-$10M.
  • UMBF -5%; after agreed to acquire HLTF for $45.74 per share, in an all-stock transaction valued at approximately $2.0B.

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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.