- Morning Briefing w/ KevinD
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- Thursday September 12 @ 9:00am
Thursday September 12 @ 9:00am
Stocks slightly higher but off earlier highs on hotter than expected producer inflation
KevinD
September 12, 2024
“When people are looking for performance, they sharpen their pencils and find reasons to buy.”
📈 The Markets Overnight
🌏 Asia: Mostly up, China down
🌍 Europe: Up
🌎 US Index Futures: Up a bit
🛢 Crude Oil: Up
🪙 Gold: Up
🧐 Yields: Down a bit
💵 Dollar: Down slightly
🔮 Crypto: Up a bit
🌏 Major Global Catalysts
ECB lower rate to 3.65% from 4.25%. (link)
💵 Economic Reports and Events Today
8:15am ECB Main Refinancing Rate and Statement: 3.65% expected, 3.65% reported, 4.25% previous. The European Central Bank's key interest rate for refinancing operations. (link)
8:30am Core PPI Producer Price Index m/m: 0.2% expected, 0.3% reported, 0.0% previous. Measures changes in the prices of goods and services, excluding food and energy, at the producer level. (link)
8:30am PPI m/m: 0.1% expected, 0.2% reported, 0.1% previous. Tracks the monthly change in the price of goods and services at the wholesale level. (link)
8:30am Unemployment Claims: 227K expected, 230K reported, 227K previous. The number of individuals who filed for unemployment insurance for the first time during the past week. (link)
1:01pm 30-y Bond Auction: 4.31|2.3 previous. Highest yield on a 30-year bond the government sold at auction, and the bid-to-cover ratio of the auction. (link)
2:00pm Federal Budget Balance: -285.7B expected, -243.7B previous. Reflects the difference between the federal government's income and spending for the month. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
Pre-Market Tomorrow:
None
🔮 Selected Analyst Ratings Changes
NAT Nordic American Tankers: Jefferies Downgrades to Hold, Maintains Target at $4.00
ROKU Roku: Wolfe Research Upgrades to Outperform, Announces Target of $93.00
SPG Simon Property Group: Stifel Downgrades to Hold, Raises Target to $159.00
📉 Stocks In Play
SIG Signet Jewelers: Up 14% after reporting better-than-expected Q2 earnings, a slight miss on revenue, and raising guidance above expectations. (link)
MRNA Moderna: Down 13% as the company slashes FY25 guidance and will cut $1.1B from its research budget by 2027. (link)
MU Micron Technology: Down 3% after Raymond James lowers its target to $125. (link)
ME 23andMe: Up 6% on reports the CEO is open to considering other takeover bids. (link)
ROKU Roku: Up 6% after an analyst upgrade and raised target to 93. (link)
NTGR Netgear: Up 20% after the company reported a settlement agreement with TP-Link Systems and raised its Q3 revenue guidance. (link)
💬 Commentary
For the second consecutive day, the market showed early weakness but reversed sharply and trended strongly higher as the day progressed. This underscores renewed strength of the "buy the dip" mentality. This morning’s CPI report showed the annual inflation rate has continued to decline, however a slight uptick in core inflation from July has reduced the likelihood of a 50bps rate cut at next week's FOMC meeting, with those odds now down to 15% from 35% the day before and 51% a month ago. The market still anticipates 1% of rate cuts by the end of the year.
The Nasdaq led the rally, rising more than 2%, driven largely by NVIDIA's 8% surge and strength in other semiconductor and AI-related stocks. SPY gained 1%, while IWM small caps lagged with a more modest 0.3% gain. Interestingly, only 6 out of 11 sectors closed higher, with technology leading the pack, surging 3.4%. Consumer discretionary gained 1%, and communications rose 0.4%. On the downside, staples and energy were notably weak, both losing close to 1%.
Stocks moved higher overnight but pulled back slightly this morning after the PPI report showed inflation at the producer level coming in a bit hotter than expected. However, the pullback was shallow and short-lived with dip buyers stepping in quickly. The momentum from yesterday’s rally appears likely to continue today, with early indications pointing toward a broader buying effort beyond just mega-cap tech although there are concerns a rally excluding tech or semiconductors is unsustainable.
⛵ When you’re ready…
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