Mid-Morning Look

Friday, February 09, 2024

Index	Up/Down	%	Last
DJ Industrials	-58.16	0.16%	38,666
S&P 500	12.21	0.24%	5,010
Nasdaq	106.19	0.67%	15,899
Russell 2000	9.97	0.51%	1,989

 

 

More record highs for major U.S. averages as the S&P 500 (SPX) opened above 5,000 (after touching briefly late Thursday before settling just below) and has continued to push higher since. Momentum the key driver as the winners keep winning and losers lagging, with S&P and Nasdaq on track for a 5^th week of gains and up 14 of last 15 weeks. There was no major economic data out today in the U.S., though annual CPI revisions were released, as Dec CPI was revised lower to +0.2% from +0.3% and December core CPI (ex-food/energy) was unrevised at 0.3% (though oct and Nov were revised higher). Theat CPI report helped the inflation case and hopes for rate cuts by the Fed. Risky assets surge with Bitcoin up 20% now in 2-weeks, topping $47,000 while the high beta AI tech stocks (NVDA, AMD, GOOGL, MSFT), still leading mkts. In fact as stock markets higher, only tech (XLK) and Discretionary (XLY) are in the “green” while Staples (XLP), REITS (XLRE) biggest losers. Treasury yields are higher, oil prices jumping, and the dollar little changed though gold declines again. New day, same story thus far as technology stocks (heaviest weight in S&P) helping keep broader mkt averages higher. NYSE breadth has early modest lead for decliners over advancers though fear (VIX index) remains depressed.

 

 

Macro	Up/Down	Last
WTI Crude	0.48	76.70
Brent	0.68	82.31
Gold	-10.20	2,037.70
EUR/USD	0.0008	1.0784
JPY/USD	0.03	149.34
10-Year Note	0.003	4.173%

 

• In Gaming: Online Sports Betting stocks (DKNG, FLUT, CZR, MGM, PENN) in focus ahead of Super Bowl Sunday weekend with expected gambling figures to crush prior records (CNBC noted $23.1B expected to be bet by American on the Super Bowl this year – in various ways). Regional casino BYD generated $339M of land-based EBITDAR, +9% vs +8% vs consensus expectations based across its three segments, including Locals 5% above consensus, Downtown +11%, and MW&S +10% and Stifel said operating margins trends remain healthy.
• In FinTech/Payments: AFRM Q2 results were significantly better than expectations including GMV & revs well above high end of the guide, and guided next quarter and year revs above views, but shares sank initially; ADYEY was upgraded to Outperform at KBW and Outperform at TD Cowen based on rising estimates & valuation noting Adyen put to rest prior concerns on growth compression & competitive commoditization. PYPL was downgraded to Hold from Buy at Argus after issued disappointing EPS guidance for Q124 and 2024 as recently announced innovation efforts take time to meaningfully add to EPS.

 

• CLSK +20%; boosted by Bitcoin strength (above $47K today) and Q1 results as reported revenue of $73.8MM vs. est. $70.4M as top line experienced substantial growth, expanding 165% YoY and 40% QoQ.
• DOOR +344%; OC agreed to buy doormaker DOOR for $133 per share (38% premium to Thursday close) in a deal valued at $3.9 billion http://tinyurl.com/2b5yytpp (shares of comp JELD moved in sympathy).
• NET +24%; after Q4 beat and mostly in-line guide with revenue of $362.5M vs. est. 353.1M steady at 32% y/y growth, and EPS beating by $0.03 with 11.0% operating margin, 14% free cash flow margin.
• NVDA +2%; is building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced artificial intelligence processors http://tinyurl.com/2rjk6eb5
• PI +11%; reported in line with its Jan 16 prelim numbers and guided Q1 above (guides Q1 revs $72-75Mm vs est. $70.84Mm, adj EBITDA $3.0-4.5Mm vs est. $0.7145Mm, adj EPS $0.08-0.13 vs est. $0.02).

 

• NWL -11%; shares fall on guidance as co expects FY24 net sales to decline in the range of 5% to 8% vs. est. of 5.50% drop due to choppy demand and sees year EPS $0.52-$0.62 below ests $0.79 while reported FY23 gross margin of 28.9% compared with 30% in the prior year.
• PEP -3%; mixed Q4 as core EPS $1.78 beat est. $1.72 but Q4 revs $27.85B below est. $28.4B as average prices jumped 9% for the quarter, while organic volume slipped 4%; sees FY organic revenue growth of at least 4% vs 9.5% growth in 2023; forecasts fiscal 2024 core EPS of $8.15, vs. ests $8.14
• PINS -11%; company beat on earnings in its fourth-quarter report but issued a softer forecast.
• PLCE -53%; lowers Q4 revenue view to $454M-$456M from $460M-$465M and said Q4 adj operating loss is expected to be (9.0%)-(8.0%) of net sales, vs, prior of +2%-3% and said working with its advisors and lenders to obtain new financing to support operations.
• PRO -3%; posted better Q4 top-line results on subscription strength, though EBITDA came in a touch lower and issued lower initial 2024 subscription revenue growth guidance of ~13% (vs. cons. 15.6%).

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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.