{"id":23323,"date":"2024-05-15T09:28:01","date_gmt":"2024-05-15T14:28:01","guid":{"rendered":"https:\/\/www.eoption.com\/mid-morning-look-may-15-2024\/"},"modified":"2024-05-15T09:28:01","modified_gmt":"2024-05-15T14:28:01","slug":"mid-morning-look-may-15-2024","status":"publish","type":"post","link":"https:\/\/www.eoption.com\/mid-morning-look-may-15-2024\/","title":{"rendered":"Mid-Morning Look: May 15, 2024"},"content":{"rendered":"\n
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Mid-Morning Look<\/span><\/b><\/p>\n

Wednesday, May 15, 2024<\/span><\/b><\/p>\n\n\n\n\n\n\n\n
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Index<\/span><\/p>\n<\/td>\n

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Up\/Down<\/span><\/p>\n<\/td>\n

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%<\/span><\/p>\n<\/td>\n

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Last<\/span><\/p>\n<\/td>\n<\/tr>\n

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DJ Industrials<\/span><\/b><\/p>\n<\/td>\n

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144.44<\/span><\/p>\n<\/td>\n

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0.37%<\/span><\/p>\n<\/td>\n

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39,701<\/span><\/p>\n<\/td>\n<\/tr>\n

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S&P 500<\/span><\/b><\/p>\n<\/td>\n

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29.61<\/span><\/p>\n<\/td>\n

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0.57%<\/span><\/p>\n<\/td>\n

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5,276<\/span><\/p>\n<\/td>\n<\/tr>\n

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Nasdaq<\/span><\/b><\/p>\n<\/td>\n

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98.98<\/span><\/p>\n<\/td>\n

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0.61%<\/span><\/p>\n<\/td>\n

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16,611<\/span><\/p>\n<\/td>\n<\/tr>\n

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Russell 2000<\/span><\/b><\/p>\n<\/td>\n

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11.63<\/span><\/p>\n<\/td>\n

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0.55%<\/span><\/p>\n<\/td>\n

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2,097<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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U.S. stocks hitting all-time highs for the S&P 500 and Nasdaq, as the SPY rises for a 10th<\/sup> straight day after the April Consumer Price Index (CPI) was reported in-line with consensus and down from the prior month, boosting market hopes\/expectations of a sooner interest rate cut by the Fed. A weaker Retail Sales report for April also helped juice hopes of a cut to help stimulate the economy. SPY hitting a new ATH above $526.70 ($524.61 the prior ATH made 3\/28). Treasury yields dropped following the CPI data, as the U.S. 10-year and 2-year Treasury yields lowest since April 5 at 4.34% and 4.73% respectively. @charliebilello noted \u201cOverall US CPI moved down to 3.36% YoY in April from 3.48% in March. US inflation has now been above 3% for 37 straight months. US Core CPI (ex-Food\/Energy) moved down to 3.62% YoY from 3.80% last month. This is the lowest core inflation reading since April 2021.\u201d The Canadian dollar strengthens to touch a five-week high per U.S. dollar while the Japanese yen continues gain against dollar advance and the Euro also pops on data. Gold prices climbed to a more than three-week peak aided by a weaker dollar after data (has since pared gains). Smallcaps outperform on rate cut hopes as the Russell 2000 rises more than 1% initially; Bitcoin another asset rising, up over 4% topping $64K. In sector movers, Energy (XLE) and Consumer Discretionary (XLY) were weak, but other sectors higher including 1% gains for Utilities (XLU) and REITs (XLRE) as interest rate sensitive sectors rose. Also, the two-day craze of stock buying in high \u201cshort interest\u201d and \u201cmeme\u201d names like GME, AMC seeing profit taking early today. Oil prices slid to the lowest levels since February. <\/p>\n

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Economic Data<\/p>\n

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  • U.S. April Consumer Price Index (CPI) rises +0.3% M\/M, just below consensus of +0.4% while headline CPI Y\/Y rises +3.45%, in-line with consensus and down from +3.5% in March. On the core CPI reading (ex: food & energy), prices rose +0.3%, in-line with estimates and down from March +0.4% and Y\/Y was in-line at +3.6%, down from +3.8% in March.<\/li>\n<\/ul>\n<\/div>\n
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    • April Retail Sales M\/M was flat at 0% below consensus for a +0.4% rise and retail sales ex-autos +0.2%, in-line with consensus and down from March +0.9% (prev +1.1%); April gasoline sales +3.1% vs March +2.1%, April cars\/parts sales -0.8% vs March -0.3%, Retail Sales Ex-autos\/gas\/building materials\/food services -0.3% (est. +0.1%) vs March +1.0%.<\/li>\n
    • March inventory\/sales ratio 1.37 months’ worth vs Feb 1.37 months; U.S. March business sales -0.1% vs Feb +1.4% (prev +1.6%); U.S. March retail inventories ex-autos revised to -0.2% (prev -0.1%).<\/li>\n
    • May NAHB Housing market index 45 (consensus 51) versus 51 in April (previous 51); May index of current single-family home sales 51 versus 57 in April (previous 57); May index of home sales over next six months 51 versus 60 in April (previous 60); May index of prospective buyers 30 versus revised 34 in April (previous 35).<\/li>\n<\/ul>\n

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       <\/span><\/p>\n\n\n\n\n\n\n\n\n\n
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      Macro<\/span><\/p>\n<\/td>\n

      		\n

      Up\/Down<\/span><\/p>\n<\/td>\n

      		\n

      Last<\/span><\/p>\n<\/td>\n<\/tr>\n

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      WTI Crude<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -1.03<\/span><\/p>\n<\/td>\n

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      76.99<\/span><\/p>\n<\/td>\n<\/tr>\n

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      Brent<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -1.26<\/span><\/p>\n<\/td>\n

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      81.12<\/span><\/p>\n<\/td>\n<\/tr>\n

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      Gold<\/span><\/b><\/p>\n<\/td>\n

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      9.500<\/span><\/p>\n<\/td>\n

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      2,369.40<\/span><\/p>\n<\/td>\n<\/tr>\n

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      EUR\/USD<\/span><\/b><\/p>\n<\/td>\n

      		\n

      0.0025<\/span><\/p>\n<\/td>\n

      		\n

      1.0843<\/span><\/p>\n<\/td>\n<\/tr>\n

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      JPY\/USD<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -0.80<\/span><\/p>\n<\/td>\n

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      155.61<\/span><\/p>\n<\/td>\n<\/tr>\n

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      10-Year Note<\/span><\/b><\/p>\n<\/td>\n

      		\n

      -0.064<\/span><\/p>\n<\/td>\n

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      4.381%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

       <\/span><\/p>\n

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      Sector Movers Today<\/p>\n

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      • In Credit Cards\/Finance: DFS<\/b> credit card charge-off rate 2.35% at April end vs 2.48% at March end; and credit card delinquency rate 1.68% at April end vs 1.70% at March end; COF<\/b> said 30+ day performing delinquencies rate for domestic credit card 4.23% at April end vs 4.48% at March end; 30+ day performing delinquencies rate for auto 5.24% at April end vs 5.28% at March end; said April domestic credit card net charge-offs rate 6.07% vs 6.15% in March, April auto net charge-offs rate 1.65% vs 1.66% in March and domestic credit card net charge-offs rate 6.07 % vs 6.15% in March. BAC <\/b>credit card delinquency rate was 1.39% at April end vs 1.41% at March end and credit card charge-off rate was 2.49% in April vs 2.43% in March.<\/li>\n<\/ul>\n<\/div>\n
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        • In Analog Semis: Cantor said investor interest in the Analog sector is on the rise with a clear vision to a trough in fundamentals in 1HCY24. Continues to recommend NXPI<\/b> (raising price target to $325 for upside of ~20%+) as Analog favorite, but also recognize incrementally more upside for both ADI<\/b> (raising price target to $240 for upside of ~15%) and TXN<\/b> (raising price target to $210 for upside of ~10%+) as the cyclical rule of thumb \u2014 a trough is a trough is a trough \u2014 should never be forgotten – says Analog cyclical bottom a done deal for 1H24.<\/li>\n
        • In Retail: BOOT<\/b> reported Q4 EPS above estimates due to higher sales and a much better margin structure than expected as EPS came in at $0.96 which was well above $0.8 consensus as sales improved sequentially in Q424, and trends have turned positive in early Q125; but guides FY25 sales $1.766B to $1.8B below the estimate $1.824B. In luxury retail, Burberry (BURBY<\/b>) said sees 1H of current financial year to remain challenging after posting a 34% drop in annual operating profit on weak China performance; said comp sales in Q4 down (-12%).<\/li>\n<\/ul>\n

           <\/span><\/p>\n

          \n

          Stock GAINERS<\/p>\n

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          • AES<\/b> +4%; among jump in utilities with NRG<\/b> also up 4% as interest rate sensitive names leading higher.<\/li>\n<\/ul>\n<\/div>\n
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            • ARQT <\/b>+13%; rallied on earnings as Needham noted total Zoryve sales of $21.6MM (+60%Q\/Q), was significantly above the Street’s $15.2MM, driven by continued GTN improvements (to low-60%s) and the launch of Zoryve foam that drove a ~70%Q\/Q Rx increase.<\/li>\n
            • BOOT +1%<\/b>; reported Q4 EPS above estimates due to higher sales and a much better margin structure than expected as EPS came in at $0.96 which was well above $0.8 consensus as sales improved sequentially in Q424, and trends have turned positive in early Q125; but guides FY25 sales $1.766B to $1.8B below the estimate $1.824B.<\/li>\n
            • DELL<\/b> +3%; price tgt raised to $152 from $128 at Morgan Stanley saying supply chain and VAR\/CIO checks show DELL gaining momentum in enterprise infrastructure, including competitive AI server wins and inflecting storage strength.<\/li>\n
            • FOUR<\/b> +6%; after filing last night showed Chairman Isaacman buys 85,916 @ $67.09 valued at $5.76M.<\/li>\n
            • MNDY<\/b> +20%; on results\/guidance; Q1 revs rose 34% y\/y to $216.9M vs. est. $210.5M and guided Q2 revenue $226M-$230M above consensus $225.1M, with Q2 operating income $17M-$21M and Q2 free cash flow $47M-$51M.<\/li>\n
            • NU <\/b>+5%; Q1 revenue $2.7B vs. est. $2.49B; added 5.5M customers in Q1, reaching total of 99.3M globally by March 31, compared to 59.6M only two years ago; delivered accelerating KPIs that included a sharp increase in Active Customers up 27% (+27% last quarter).<\/li>\n
            • NXT <\/b>+8%; reported strong 4Q results ahead of expectations and introduced 2025 guidance as benefited from continuing strong demand, NXT’s discipline around pricing and costs, and a favorable sales mix, skewed more heavily toward U.S.<\/li>\n<\/ul>\n

               <\/span><\/p>\n

              \n

              Stock LAGGARDS<\/p>\n

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              • ALB<\/b> -5%; among leaders to downside in the S&P in lithium sector.<\/li>\n<\/ul>\n<\/div>\n
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                • BA<\/b> -1%; shares slipped after the Justice Department says Boeing breached 2021 agreement that shielded it from criminal charges over 737 Max crashes.<\/li>\n
                • DLO<\/b> -26%; fell on earnings as Susquehanna noted Despite very strong TPV growth up nearly 50% (up 4% Q\/Q) and solid revenue up 34%, a 31% decline in revenue from Argentina due largely to devaluation weighed on results. Consequently, DLO fell short on the "rule of 100," landing closer to 60% (EBITDA\/gross profit + gross profit growth).<\/li>\n
                • HAL<\/b> -2%; oil stocks tumble behind decline in WTI crude to lowest levels since February.<\/li>\n
                • INFN<\/b> -6%; reported its preliminary 1Q financial results below expectations with the sharper-than-expected revenue decline related partially to delayed release in book-to-ship orders creating an impact of $25mn, coupled with order push outs into the second half of the year.<\/li>\n
                • KVUE<\/b> -1%; as JNJ<\/b> exited his remaining stake in company, selling ~182.3Mm shares in an offering priced at $20 as part of debt-for-equity exchange; J&J spun off Kenvue a year ago in IPO priced at $22.<\/li>\n
                • PBR<\/b> -9%; after the Brazilian government announced a decision to replace PBR’s CEO Prates with former energy regulator Magda Chambriard in push to intervene in the company.<\/li>\n
                • SPWR<\/b> -30%; shares tumbled after Wolfe downgraded shares to Underperform from Peer Perform noting the co is currently undergoing a CEO search which adds additional uncertainty around the strategic outlook.<\/li>\n<\/ul>\n<\/div>\n

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