Mid-Morning Look

Monday, March 04, 2024

Index	Up/Down	%	Last
DJ Industrials	-71.09	0.18%	39,016
S&P 500	-6.41	0.12%	5,130
Nasdaq	-49.53	0.31%	16,224
Russell 2000	8.71	0.42%	2,085

 

 

U.S. stock market action muted to kick off the trading week after the S&P 500 and the Nasdaq’s record-closing highs on Friday led by strength in the semiconductor/AI sectors. Last week’s in-line PCE inflation data helped spark the next leg higher for major averages heading int Congressional testimony from Fed Chairman Powell this Wednesday and Thursday about the economy/rates. The Philadelphia semiconductor index (SOX) topped 5,000 for the first time this morning, extending its 2024 gains to over 18% thus far led by NVDA, AMD, ARM, TSM, etc. while SMCI surged following news it will be added to the S&P 500 index when the rebalance takes place. The other market phenomenon has been Bitcoin, with the crypto price rising above $66K and nearing its intraday all-time high of $68,990 made on 11/10/21. Wall Street has continued to get more bullish by the day given the now 4-month rally to record highs (S&P and Nasdaq come into the week up 16 of the last 18 weeks). Bank America today lifted its year-end target for the benchmark index to 5,400, from 5,000. Gold prices also adding to Friday’s record closing higher, topping $,2100 this morning. Few notable stock stories today (Macy’s confirms M&A offer and SAVE/JBLU deal was terminated), and some weakness in normal tech leaders (AAPL, TSLA, GOOGL), media names biggest drag in S&P (WBD, PARA), while banks among best performers in S&P (MS, PNC, NTRS) – but weekly watchers will focus on jobs data, Fed Chairman Powell testimony, and the ongoing momentum in AI/tech/Bitcoin that has raised market levels to a state of euphoria – can it sustain?

 

 

Macro	Up/Down	Last
WTI Crude	-0.53	79.44
Brent	-0.22	83.32
Gold	13.50	2,109.20
EUR/USD	0.0024	1.0861
JPY/USD	0.23	150.34
10-Year Note	0.039	4.221%

 

• In Sporting Goods/Ammo: VSTO announced that its Board of Directors rejected an unsolicited indication of interest received on February 19, 2024, from MNC Capital pursuant to which MNC expressed interest in acquiring Vista Outdoor in an all-cash transaction for $35.00 per Vista share. In Guns/Ammo (SWBI, RGR, VSTO): U.S. unadjusted criminal background checks rose 9.1% to 2.44Mm in February from 2.237MM, citing monthly FBI National Instant Criminal Background Check System (NICS) data, but was down -4.9% y/y from 2.57Mm.
• In Paper & Packaging: IP, PKG and BALL all upgraded to Buy at Bank America saying its research, including its proprietary Box Surveys and BofA Global Ag & Materials Conference company & panel commentary, suggests a containerboard upcycle has begun. IP was double upgraded from underperform saying co commentary suggests trends, after a choppy period, have stabilized and are improving.
• In Oil E&P: BP was upgraded from Hold to Buy at Jefferies and raise tgt to $42.30 as expects the stock to continue to close its valuation Gap vs peers supported by a greater focus on distributions, reduced CAPEX risk and relatively conservative consensus earnings growth expectations. EQT said it would curtail nearly 1 billion cubic feet per day (Bcfd) of natural gas production through March as the reduction is expected to total nearly 30 to 40 bcf of net production during the first quarter (the EQT headlines helping boost nat gas prices early).

 

• DECK +3%; will replace ZION in the S&P 500 effective prior to the open of trading on Monday, March 18, to coincide with the quarterly rebalance and ZION will replace SMCI in the S&P MidCap 400.
• IOVA +6%; said the FDA lifted a partial clinical hold placed on the registrational IOV-LUN-202 trial investigating LN-145 TIL cell therapy in non-small cell lung cancer. Iovance developed additional safety measures and monitoring in collaboration with the FDA/independent committee.
• LYFT +5%; and DASH were both upgraded at RBC Capital to Outperform w/ $23 tgt for Lyft up from $17 and raised the tgt to $175 from $130 for DASH in ride hailing/food delivery.
• M +15%; confirmed this weekend that it has received a revised, unsolicited, non-binding proposal from Arkhouse Management and Brigade Capital Management to acquire all the outstanding shares of the company for $24.00 per share in cash.
• MSTR +20%; the Bitcoin investor shares extend 2024 advance, now up about 100% in 2-months as Bitcoin tops $66K – reminder the all-time intraday high of $68,990 was made on 11/10/21.
• SMCI +19%; on the news it will replace WHR in the S&P 500 effective prior to the open of trading on Monday, March 18, to coincide with the quarterly rebalance and WHR will replace SMCI in the S&P MidCap 400.

 

• BIVI -45%; sold 21 million shares, along with warrants to buy up to 10.5 million shares, at a combined price of $1.00 per share and associated warrants, well below Friday’s closing price of $1.89.
• RVNC -10%; offering of 16M shares prices at $6.25 per share.
• SAVE -17%; JBLU and SAVE terminated their merger agreement, weeks after a judge ruled that the $3.8 billion deal would reduce competition and harm cost-conscious fliers. Spirit Chief Executive Ted Christie said that the airlines concluded that regulatory obstacles would likely be insurmountable. JBLU to pay $69m break-up fee.
• TSLA -4%; China’s February total shipments fell 15.5% from January to 60,365 units, according to Bloomberg calculations based on preliminary data released by China Passenger Car Association.
• WBD -5%; as media stocks tumble (PARA as well) as good Dune movie weekend fails to excite investors.
• ZVRA -12%; after saying the FDA extended its decision on marketing application of ZVRA’s experimental treatment, arimoclomol, for an ultra-rare genetic disorder.

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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.