Mid-Morning Look: March 15, 2024

Mid-Morning Look

Friday, March 15, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks mixed in a reversal of yesterday’s trading action as Smallcaps (IWM) outperform early after falling -1.8% Thursday behind a spike in Treasury yields/hotter PPI inflation data/lower rate cut expectations from Fed. Large caps pressured today, especially in tech with follow thru profit taking in semis (SOX) and weakness in software after ADBE guidance disappoints, sending shares lower. The semiconductor index (SOX) fell nearly 1% before paring losses to 4,740, down from 5,217 record highs just a week ago (3/8) ahead of NVDA GTC event next week. ADBE, JBL, SMAR among technology stocks tumbling this morning on lower guidance, while ULTA falls -6% after its guidance in Beauty space. Treasury yields pop again, up big on the week as the 10-yr hit highs above 4.32% following multiple economic data points (see bullet points below). Stocks are fighting to avoid their first 2-week losing streak of 2024, pressured this week by hotter inflation reports for February from CPI/PPI reports, but looking to bounce into expected volatility late day. Options tied to more than $5 trillion in stocks, exchange-traded funds and equity indexes are set to expire Friday during the quarterly triple witching. Index options with a notional value of $3.2 trillion expired at the open, with most of those contracts linked to the S&P 500. After that, $1.9 trillion in options chiefly tied to single stocks and index-tracking exchange-traded funds will expire at the close – MarketWatch.com noted. In addition to triple witching opex, S&P, Russell and Nasdaq indexes will rebalance on the close today. These include the S&P500, 400, 600, S&P Sectors, Russell US indexes, and Nasdaq-100.

Economic Data

  • NY Fed’s empire state current business conditions index weaker than expected falling -20.9 in March (vs. consensus -7.0) and vs -2.4 in February; new orders index -17.2 in March vs -6.3 in February, prices paid index +28.7 in March vs +33.0 in February, employment index at -7.1 in March vs -0.2 in February and the Fed’s empire state six-month business conditions index +21.6 in March vs +21.5 in February.
  • Import Prices for February rose +0.3% (consensus +0.3%) vs Jan +0.8% (prev +0.8%) while Feb export prices +0.8% (consensus +0.2%) vs Jan +0.9% (prev +0.8%). On a Y/Y basis, Feb import prices fell -0.8%, export prices -1.8%.
  • Industrial production for February climbs +0.1% M/M vs. estimate for unchanged (and vs. -0.5% in Jan) while capacity utilization rate at 78.3%, below consensus 78.5% and in-line with January; Feb manufacturing output +0.8% (consensus +0.3%) vs Jan -1.1% (previous -0.5%); cap use 77.0% vs Jan 76.4%.
  • University of Michigan surveys of consumers sentiment prelim March 76.5 vs. consensus 76.9 and vs final Feb 76.9; the current conditions index prelim March 79.4 (consensus 79.2) vs final Feb 79.4 and expectations index prelim March 74.6 (consensus 75.1) vs final Feb 75.2.
  • University of Michigan surveys of consumers 1-year inflation outlook prelim March 3.0% vs final Feb 3.0% and University of Michigan surveys of consumers 5-year inflation outlook prelim March 2.9% vs final Feb 2.9%






WTI Crude















10-Year Note




Sector Movers Today

  • In Autos: Piper initiating coverage of five cornerstone stocks in the automotive sector, including the “Detroit 3” and two key suppliers: STLA init OW and $39 tgt and is favorite under coverage, GM initiated at Neutral and $44 tgt and Ford (F) Neutral and $13 tgt, though like Ford more than GM, due to “Ford Pro” and a bigger EU presence. In Suppliers, initiate BWA at Overweight and $43 tgt and a Neutral on MBLY ($31 tgt). They also upgraded RIVN to Overweight from Neutral, and PT raised to $21 from $15; considering Rivian’s -54% YTD selloff, looking anew at RIVN’s CAPEX outlook and the enthusiasm around the unveiling of the new R2 SUV and downgraded PSNY to Neutral, citing a risk that PSNY’s China-centric business model could be threatened by regulation.
  • Auto chip makers weaker (ON, STM, NXPI) after Bloomberg reported China urges EV makers to buy local chips as the U.S. clash deepens. The Chinese government has quietly asked electric-vehicle makers from BYD Co. to Geely Automobile Holdings Ltd. to sharply increase their purchases from local auto chipmakers, part of a campaign to reduce reliance on Western imports and boost China’s domestic semiconductor industry. The order also appears to be in response to US efforts to curb Chinese chip technology https://tinyurl.com/yru5b2nh
  • In Steel Sector: Nippon Steel (NISTF) defended its proposed acquisition of US Steel (X) late Thursday after President Biden said the company should remain American owned and operated. Earnings guidance from two steel makers as STLD guided Q1 EPS $3.51-$3.55 above consensus $3.35 saying profitability from their steel operations are expected to be meaningfully stronger than sequential Q4 results; NUE guides Q1 EPS $3.55-$3.65 vs. est. $3.76 but said steel mills segment’s earnings are expected to increase in Q1 due to higher average selling prices and volumes.
  • In Monthly credit card data: COF said February net charge-offs were 5.95% vs. 4.16% y/y and delinquencies 4.72% vs. 3.72% y/y; 30+ day performing delinquencies rate for domestic credit card 4.72% at Feb end vs 4.78% at Jan end. DFS credit card delinquency rate 1.74% at Feb end vs 1.69% at Jan end and credit card charge-off rate 2.20% at Feb end vs 2.03% at Jan end. JPM said credit card delinquency rate 0.80% at Feb end vs 1.07% at Jan end; and credit card charge-off rate 1.58% in Feb vs 1.72% in Jan. BAC credit card delinquency rate was 1.39% at Feb end vs 1.35% at Jan end and credit card charge-off rate was 2.03% in Feb vs 2.06% in Jan.



  • AVD +25%; reported Q423 results in line with preliminary guidance while raising its AEBITDA target to $70M-$80M on improved operating leverage. It reconfirmed its 2024 target of revenue up 8%-12% on its core business.
  • CDLX +54%; posted better Q4 results as Q4 adj EPS $0.14 vs est. $0.12, but guidance much better as sees Q1 billings $105-109Mm, revs $70-73Mm vs est. $66.46Mm, adj EBITDA ($1.0)Mm-$1.0Mm vs est. ($3.298)Mm.
  • GERN +80%; after FDA Advisory Committee’s (AdCom) overwhelmingly positive vote in favor of imetelstat providing an improved benefit/risk profile in LR-MDS patients.
  • ISRG +1%; rises after winning FDA clearance for its next-generation robotic surgery system, da Vinci 5 (da Vinci 5 builds on the company’s earlier system, da Vinci Xi).
  • MDGL +15%; announced accelerated approval for Rezdiffra (previously resmetirom) for the treatment of MASH with moderate to advanced liver fibrosis (consistent with F2/F3), with the label importantly not requiring NASH diagnosis per biopsy; unveiled the price of $47,400 annual WAC.
  • PHR +2%; beat Q4 revenue and EBITDA expectations, along with FY25 guidance that was maintained for revenue, but increased by +$1M at the midpoint for EBITDA.



  • ABT -4%; after an Illinois jury has ordered Reckitt Benckiser unit Mead Johnson to pay $60Mm to the mother of a premature baby who died of an intestinal disease after being fed the company’s Enfamil baby formula; verdict comes in the first trial out of hundreds of lawsuits claiming that Enfamil and ABT’s Similac caused NEC.
  • ADBE -13%; reported a generally disappointing FQ1, as net new Digital Media ARR of $432M was above mgmt’s $410M guidance, but below investor expectations and no raise to full year; Q2 ARR guide of $440M was below Street of ~$460M as there seems to be greater 1H pricing headwinds than most appreciated.
  • JBL -12%; shares declined after guiding full-year revenue at $28.5B, below the Street consensus of $30.5B while forecasts full-year earnings of $8.40 vs. estimate/forecast around $9.00.
  • PD -9%; posted top and bottom line beat for Q4 results, but guided Q1 and FY EPS/revs below views; guides Q1 revs $110.5-112.5Mm vs est. $113.4Mm and adj EPS $0.12-0.13 vs est. $0.18; sees FY revs $470-478Mm vs est. $480.67Mm and adj EPS $0.65-0.70 vs est. $0.82.
  • SMAR -7%; posted slightly higher FQ4 revenue and solid operating margin results, though Q1 and FY25 revenue guidance came in 2% below the Street; guided Q1 adjusted EPS $0.36-$0.27 vs. est. $0.20 but revs seen $257M-$259M below consensus $263.61M.
  • ULTA -6%; reported a top-and-bottom-line beat with better GM and SGA, while mgmt issued EPS guidance just-below the Street at the High-End and revenue just-above at the Low-End and announced a 2025 expansion into Mexico and a $2B share repurchase; guided FY24 to $26.20-27.00, the mid-point below a Street figure of $27.03.
  • ZG -8%; along with weakness in RDFN after the National Association of Realtors has reached a nationwide $418M settlement of claims that the industry conspired to keep agent commissions high, it said Friday, a deal set to usher in the biggest changes to how Americans buy and sell homes in decades.


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.