Mid-Morning Look: January 13, 2025

Mid-Morning Look

Monday, January 13, 2025

Index

Up/Down

%

Last

DJ Industrials

117.00

0.28%

42,058

S&P 500

-43.81

0.75%

5,783

Nasdaq

-287.57

1.51%

18,872

Russell 2000

-17.18

0.79%

2,172

 

 

U.S. stocks open the week lower as S&P futures (Spuz) fall to their weakest level since November (overnight low 5,809) while S&P (SPX) falls as low as 5,775, with sharper declines in the Nasdaq contracts falling over -1% and Smallcap Russell 2000 also falls early as Treasuries extending Friday’s slide early with the 10-yr yield jumping over 4.8% (highest since Nov 2023) as investors further reduce expectations for Fed rate cuts after last weeks payrolls data and ahead of the CPI and PPI December inflation reports the next few days. Crude oil extends Friday’s rally on sweeping US sanctions on Russian energy industry, jumping to a three-month high around $78-handle. Asian equities lose ground for a fourth straight day. Meanwhile, the California wildfires could be the costliest disaster in US history, the state’s governor said, as forecasts of heavy winds raised fears that the catastrophic blazes would spread further. The Euro approached the 1.02 handle against the US dollar, hitting its lowest since November 2022 in the process as the dollar index (DXY) tops 110 (again for 1st time since Nov 2022). In stock news, today is filled with tons of retailers and biotech and drug companies issuing guidance ahead of their presentations this week at the ICR Exchange and JP Morgan Healthcare conferences respectively. There were also three M&A deals in the Healthcare/Biotech sector today (JNJ buys ITCI, BIIB proposes to buy remaining stake in SAGE, and LLY said it would buy cancer therapy developer Scorpion Therapeutics). Energy stocks (XLE) outperform as crude oil extended gains for a third session, driven by wider U.S. sanctions on Russian oil and the expected effects on exports to top buyers India and China. Crypto stocks slide (COIN, MSTR, MARA) after Bitcoin officially falls below $90,000 for the first time since November 18th and remains about ~3% away from bear market territory (off recent all-time highs above $108,000). Big banks kick off earnings mid-week with JPM, WFC, GS among them.

 

 

Macro

Up/Down

Last

WTI Crude

1.15

77.72

Brent

0.89

80.65

Gold

-23.00

2,692.00

EUR/USD

-0.0041

1.0203

JPY/USD

-0.34

157.35

10-Year Note

-0.02

4.777%

 

Sector Movers Today

  • In Energy: Bank America with several changes in the E&P sector today, as EOG, CHRD and MGY are all downgraded to Neutral from Buy and upgraded RRC, GPOR and OVV to Buy. Bank America said they believe 2H25 is framed by tight gas balances that sets up for a material shift higher the forward curve, creating momentum around gas E&P’s that could shift valuations higher to $4.00 NYMEX – the new baseline for our Gas E&P valuations. DVN top oil pick, EQT deleveraging, CTRA gas overlooked.
  • In Online/Internet: ETSY was upgraded to Hold from Underperform at Jefferies and raised tgt to $55 from $45, positive on the internet sector heading into 2025, citing a supportive macro backdrop and constructive valuations. Jefferies cites improved second half growth and a more balanced risk-reward on the shares for the upgrade of Etsy. The firm also downgraded PINS to Hold from Buy (tgt to $32 from $40) on expectations of slower Performance+ rollout and margin growth against its “more muted” advertising checks. Top picks UBER, Z, APP, TTWO.
  • Shares of chip companies NVDA, AMD, AVGO and others decline after the U.S. government says it would issue a new regulation designed to control access to U.S.-designed artificial intelligence chips and technology by other countries – curbs will take effect 120 days from publication. Also, a report in the Information noted some of NVDA’s biggest customers are facing new delays in getting its most advanced AI chips up and running in data centers, having been plagued by overheating as well as glitches involving the way the chips connect. Semi equipment: both COHU and ICHR were downgraded from Buy to Hold at Needham (ICHR guided lower this morning).
  • In Ag Chemicals: MOS (tgt to $30 from $26) upgraded to Neutral from Underperform and CF (tgt to $105 from $79), LXU (tgt to $11 from $9) and NTR (tgt to $58 from $50) were double upgraded to Overweight from Underweight saying the recent World Agricultural Supply and Demand Estimates report from the United States Department of Agriculture produced “decidedly constructive data” for the agriculture sector going into 2025. Piper said the significant shift in its agriculture outlook, which is almost always directed by grain fundamentals, is driven by substantial adjustment to the estimates for the recently harvested crop, especially corn and soybeans.

 

Stock GAINERS

  • DVN +3%; strong early gains in energy stocks (APA, VLO) as oil prices jump.
  • ENFN +8%; as CWAN to acquire ENFN for $11.25 per share in cash, stock; Clearwater will pay $30M to terminate Enfusion’s tax receivable agreement; deal equates to a purchase price of approximately $1.5B.
  • HHH +9%; after Pershing Square Capital Management LP has proposed a deal to merge one of its subsidiaries with the real estate company.
  • ITCI +35%; as JNJ entered into a definitive agreement to acquire all outstanding shares of ITCI for $132.00 per share in cash for a total equity value of approximately $14.6 billion.
  • OPCH +12%; guides prelim Q4 net revs $1.34B-$1.35B above est. $1.27B.
  • SAGE +33%; confirmed that BIIB has submitted to the Company an unsolicited, nonbinding proposal to acquire all the outstanding shares of Sage Therapeutics not already owned by Biogen for $7.22 per share.
  • UNH +4%; Health insurers (CI, CVS, HUM) rise after the U.S. government on Friday proposed 2026 reimbursement rates for Medicare Advantage plans run by private insurers that will result in a 2.2% increase in payments, compared with a decline of 0.2% last year.

 

Stock LAGGARDS

  • AAPL -2%; as large cap tech seeing broad mkt weakness early on dollar/Treasury yield push higher.
  • ANF -16%; forecasts FY net sales +15%, vs. prior forecast +14% to +15% (est. 15.2%), sees fourth-quarter net sales to between 7% and 8%, vs. previous 5%-7% forecast, in line with estimates of 7.5% growth.
  • CMTL -32%; posts Q1 operating loss of $129.2M and said it is not providing guidance; also says turnaround exec Ken Traub has replaced John Ratigan as president and CEO.
  • EIX -9%; down a 6th straight day on Los Angeles wildfire concerns.
  • IRBT -19%; guides Q4 revenue to be about $171M vs. consensus $187.84M as well as GAAP operating loss of approximately ($59M) and non-GAAP operating loss of approximately ($47M).
  • MRNA -19%; tumbles as forecasts 2025 revenue to $1.5B to $2.5B, below prior forecast $2.5B to $3.5B.
  • RGTI -21%; as quantum computer names tumbled a second week (IONQ, QBTS, QMCO, QUBT), adding to weakness last week after NVDA CEO said last week as CES conference that he does not expect a quantum computer for at least 15 years, and added it’s probably 30 years away.
  • ZUMZ -9%; guides Q4 EPS $0.72-$0.77 vs. prior view $0.83-$0.93 (est. $0.89) and cuts Q4 net sales to $275M-$277M, below prior forecast $284M-$288M.

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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.