Mid-Morning Look: March 11, 2024

Mid-Morning Look

Monday, March 11, 2024

Index

Up/Down

%

Last

DJ Industrials

-190.57

0.49%

38,532

S&P 500

-20.29

0.40%

5,103

Nasdaq

-31.33

0.19%

16,052

Russell 2000

-15.34

0.74%

2,068

 

 

U.S. stocks open slightly to the downside to kick off the trading week ahead of key CPI inflation data Tuesday morning (economists expect a 0.4% gain in consumer prices, or a 0.3% rise excluding food and energy) after mixed jobs data last Friday took stock markets lower for the day/week. Early weekly weakness nothing unexpected into tomorrow’s CPI inflation report as Bespoke invest tweeted: "If the S&P 500 closes red again today, it will be the 6th week in a row with a decline on the first trading day of the week. 3/11: -0.28%, 3/4: -0.12%, 2/26: -0.38%, 2/20: -0.60%, 2/12: -0.09%, 2/5: -0.32%." (yet note markets have finished higher 5 of the last 6-weeks). Crypto currency prices new all-time highs for Bitcoin rising above $72K this morning while Ethereum (ETH) hits $4,000 for the first time since December 2021 while COIN, MARA, MSTR, RIOT, CLSK and ETF’s like IBIT, BITB, BTCO, HODL, GBTC see increased flows. Seeing some rotation out of big tech winners this year such as semis (SMH, NVDA, ARM, SMCI) and into tech laggards this year as GOOGL, MSFT, AAPL rebound. Also seeing early strength in US China listed stocks after hotter inflation data overseas this weekend. Quiet start to the day with breadth in favor of decliners and nine of eleven S&P sectors in the “red”. No major economic data today ahead of inflation data this week and no Fed speakers all week into Fed meeting next week.

 

 

Macro

Up/Down

Last

WTI Crude

-0.94

77.07

Brent

-0.86

81.22

Gold

2.10

2,187.60

EUR/USD

-0.0018

1.092

JPY/USD

-0.05

147.02

10-Year Note

0.006

4.094%

 

Sector Movers Today

  • In Lodging/Travel: CHH terminated its hostile bid for rival hotel chain WH after failing to gather enough support from the target’s shareholders. The company will also withdraw its nomination of independent director candidates for election at Wyndham’s 2024 annual meeting; CHH board authorized a 5Mm share repurchase plan. CHH was double upgraded to Buy from Underperform at Jefferies citing the ceased efforts to acquire Wyndham Hotels. Hyatt (H) was downgraded from Overweight to Equal Weight at Morgan Stanley with the stock rallying 30% in the past 3 months as sees a more balanced risk-reward.
  • In Utilities: UBS downgraded AEP from Neutral to Sell as it sees the timeline for successful regulatory outcomes as long dated and management change uncertainty presents an overhang. UBS believes the valuation discount to peers could widen as AEP works through this transition. They upgraded PNW to Neutral as sees the key catalysts for its Sell call having now played out and believe the stock appears reasonably valued at a 3% discount to peers. XEL was upgraded to Outperform at Wolfe Research as believes can achieve EPS growth near the top-end of its L-T 5-7% annual EPS growth target through 2027 with further upside potential from renewables/ gen investments and was upgraded to Overweight at Barclay’s following sharp underperformance related to the Texas Smokehouse fire.

 

Stock GAINERS

  • AMPY +10%; said it remains confident that its operations are not related to the March 7th oil spill discovered by the U.S. Coast Guard off the coast of California; added operations and development program at its Beta Offshore subsidiary have not been disrupted.
  • BALY +16%; after Standard General delivered a non-binding letter to the board of directors of the company proposing a transaction under which it would acquire all the outstanding shares of common stock not currently owned by Standard General at a price of $15.00 per share.
  • ETRN +6%; after EQT agreed to buy back its former unit Equitrans Midstream Corp. (ETRN) in an all-stock transaction valued at about $5.2 billion, will be exchanged for 0.3504 shares of EQT common stock.
  • JKS +3%; Chinese solar names JKS, CSIQ rise after Bloomberg reported speculation the government will relax caps on renewable installation, improving the outlook for the sector https://tinyurl.com/5f66tnpy
  • LIN +2%; to replace SPLK in the Nasdaq-1oo Index starting March 18th
  • MRNA +9%; outperforms in biotech and is among early leaders in the S&P 500.
  • MSTR +9%; cryptocurrency-linked companies rally as Bitcoin extends gains to an all-time high, surpassing the $72,000 mark, further lifting shares of CLSK, COIN, MARA, RIOT, and others.
  • XEL +2%; upgraded to Outperform at Wolfe Research as believes can achieve EPS growth near the top-end of its L-T 5-7% annual EPS growth target through 2027 with further upside potential from renewables/ gen investments and was upgraded to Overweight at Barclay’s.

 

Stock LAGGARDS

  • BA -3%; shares stumbled on two stories: the WSJ reported the Justice Department has opened a criminal investigation into the Boeing (BA) 737 MAX blowout on an Alaska Airlines (ALK) flight, citing documents and people familiar with the matter. 2) according to Bloomberg, DAL expects deliveries of its Boeing (BA) 737 Max 10 aircraft could be pushed out to as late as 2027 as the plane maker undergoes federal safety and criminal reviews.
  • EQT -8%; down the most in S&P after acquires ETRN in M&A deal.
  • FTRE -10%; after forecasts 2024 revenue to be $3.14B-$3.21B as mid-point below consensus $3.2B and reported a Q4 EPS loss of (-$0.41) vs. est. loss (-$0.38); said will sell its enabling services segment and patient access businesses to private equity firm Arsenal Capital Partners for up to $345M.
  • META -4%; shares slumped after Republican Presidential candidate Donald Trump this morning in a CNBC interview noted that TikTok was a national security threat but likened it to threats posed by other social media networks such as Meta’s Facebook.
  • WH -1%; after CHH terminated its hostile bid for rival hotel chain WH after failing to gather enough support from the target’s shareholders. The company will also withdraw its nomination of independent director candidates for election at Wyndham’s 2024 annual meeting.

_________________________________________________________________

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.