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- Friday January 12 @ 9:00am
Friday January 12 @ 9:00am
Stocks mixed but trying to move higher in the face of negative catalysts
Matthew
January 12, 2024
"No one can know the future, but what are those trends and numbers telling you?"
📈 The Markets Overnight
🌏 Asia: Mixed
🌍 Europe: Up
🌎 US Index Futures: Mixed
🛢 Crude Oil: Up strongly
💵 Dollar: Up slightly
🧐 Yields: Mixed
🔮 Crypto: Mostly up
🌏 Major Global Catalysts
💵 Economic Reports and Events Today
Consensus forecasts shown
8:30am Core PPI m/m 0.2% expected, 0.0% reported. Change in the price of finished goods and services sold by producers, excluding food and energy. (link)
8:30am PPI m/m 0.1% expected,- 0.1% reported. Change in the price of finished goods and services sold by producers. (link)
Monday US Markets are closed for Martin Luther King Jr Day (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
None
Pre-Market Tuesday:
MS Morgan Stanley EPS 1.01 Rev 12.75B
GS Goldman Sachs EPS 3.32 Rev 10.80B
PNC PNC Financial Services EPS 2.94 Rev 5.30B
🔮 Selected Analyst Ratings Changes
QCOM Qualcomm Citigroup Upgrades to Buy Targets 160.00
CIEN Ciena Evercore ISI Group Upgrades to Outperform Raises to 57.00
LYV Live Nation Entertainment Roth MKM Upgrades to Buy Raises to 114.00
REGN Regeneron Pharmaceuticals RBC Capital Upgrades to Outperform Targets 1076.00
SNOW Snowflake Barclays Downgrades to Equal-Weight Targets 198.00
TWLO Twilio Piper Sandler Upgrades to Overweight Raises to 82.00
📉 Stocks In Play
JPM Up 2% as EPS beats, sales miss, and the company sees a strong 2024. (link)
TSLA Tesla Down 3% adding to yesterday's nearly 3% decline as negative catalysts pile on. In just the last 24 hours...Another price cut in China, Hertz dumping 20,000 EVs including some Telsas, Berlin Gigafactory shutdown due to supply chain issues caused by Red Sea shipping delays, and a pay hile for all US production workers in an attempt to stave of UAW organization. (link)
ZIM ZIM Integrated Shipping Up 8% as shipping rates continue to spike on Red Sea attacks. See also NAT. (link)
CCJ Cameco Up 6% as uranium miners breakout to new all-time highs. (link)
DAL Delta Air Lines Down 6% as disappointing guidance overshadows their earnings beat. Other airlines UAL, AAL, JBLU under pressure on the news. (link)
UNH UnitedHealth Group Down 5% on higher costs. (link)
MDAI Spectral AI Low float micro-cap medical AI company up 24% after announcing the company has commenced enrollment for a pivotal study aimed at validating their DeepView AI technology for burn injuries. (link)
💬 Commentary
The major indices made a nice round trip today, falling sharply during the morning session and recovering in the afternoon to finish the day near unchanged. Small caps diverged yet again, with IWM closing 0.78% lower, although they too managed to recover some of the earlier losses. Only the energy and technology sectors managed to eke out gains on the day, with the latter leading, up 0.5%. Utilities put in a dismal performance, down 2.3%. A hot CPI number was the major catalyst for the volatility early in the day, helped by a strong jobs report. The recovery later in the day was aided by some dovish Fed speak and aggressive dip buying. Strangely, the probabilities for a March rate cut increased today as the 10-year yield closed below the important 4% level for the first time in over a week.
Earnings season began this morning with some of the big banks reporting along with United Health and Delta Airlines. Both of the latter missed and are down about 5%. Of the 6 banks we're watching, only three, JPM, C, and BK are higher. Needless to say, earnings season is not off to the best start, and the market is reacting negatively to that, setting up for a gap-down open. Global tensions aren't helping matters with last night’s US-led attacks on Houthi bases in Yemen pushing crude oil strongly higher by 3.5% and gold by 2%.
The market got a bit of a lift on this morning’s PPI producer inflation report, bringing the large-cap indices up to near unchanged. IWM small caps have been outperforming all morning and are currently up 0.5%. This is a welcome sign that we could be seeing the beginning of a rotation from large caps to small caps which have been lagging this week and, aside from brief rallies, for most of the last year or more. It should be a very interesting day, and like yesterday, subject to high volatility, and if there’s a deep pullback, we very likely see buy-the-dippers save the day again.
Have a great long weekend everyone!
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