After Hours Summary: Busy earnings night; DASH +5.9%, DKNG +5.6%, AMAT +1.4% higher on earnings; AMN -9.7%, CGNX -8.1%, BIO -8%, TXRH -4.9% lower on earnings; OTTR +7.4% as it will join S&P SmallCap 600After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: HUBS +12.4%, PCOR +6.5% (also names new CFO), CMBM +6.2%, PDFS +6.1%, DASH +5.9% (also authorizes new $750 mln share repurchase program), DKNG +5.6%, SWAV +5.6%, KNSL +4.9%, MNTV +3.3% (also announces 14% workforce reduction), HTGC +3.1%, TSLX +1.8% (also hikes dividend; announces supplemental dividend), PACB +1.5%, AMAT +1.4%, CHUY +0.9%, AL +0.7%, GLOB +0.7%, LOPE +0.5%, BFAM +0.1%, ELME +0.1%, AZZ +0.1%
Companies trading higher in after hours in reaction to news: OTTR +7.4% (to join S&P SmallCap 600), FTI +3.2% (awarded a significant contract for subsea production systems by Equinor), HLIT +2.6% (CFO to step down), EXR +1.8% (increases dividend), OUST +1.4% (workforce reduction), PDCE +1% (increases dividend and announces $750 mln increase to share buyback authorization), LSI +0.6% (LSI rejects unsolicited proposal from PSA), RUM +0.4% (federal court halts enforcement of a NY law related to social media), CMCSA +0.4% (FCC aiming to investigate broadband providers over coverage claims, according to Bloomberg), NPO +0.1% (increases dividend), MTH +0.1% (initiates dividend)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: AMN -9.7%, XP -9.7%, CGNX -8.1%, BIO -8%, STEM -7.1%, BJRI -6.6%, TXRH -4.9%, AEL -4.2%, RMAX -3.8%, RDFN -3.4%, MERC -3.1%, AEM -2.6%, INDI -2%, APPN -1.9%, COHU -1.6%, DBX -1.5%, HASI -0.7% (also names new CEO and CFO), NWE -0.3%, DLR -0.2%, ED -0.1%, EIG -0.1%, OIS -0.1% (also authorizes new $25 mln share repurchase program)
Companies trading lower in after hours in reaction to news: VNRX -17.6% (stock offering), MRNA -6.6% (announces interim phase 3 results for MRNA-1010), UFPI -3.5% (to move to S&P MidCap 400 from S&P SmallCap 600), JSPR -2.7% (announces data from study of Briquilimab), EPRT -1.7% (commences 7 mln share offering), V -0.1% (CFO to step down), JOBY -0.1% (begins testing at the National Full-Scale Aerodynamic Complex), PSA -0.1% (LSI rejects unsolicited proposal from PSA)
Closing Stock Market SummaryThe stock market started, and ended, today's session on a decidedly downbeat note. The negative bias was in response to a higher-than-expected Producer Price Index (PPI) number for January, paired with another remarkably low level of weekly initial jobless claims, which fueled concerns that the Fed will not pause its rate hikes in the near future.
The main indices sank shortly after the open, but there was a fairly strong recovery effort taking place throughout most of the session. The recovery coincided with buyers stepping in when the S&P 500 breached the 4,100 level, along with Treasury yields backing down from their post-data release highs.
There was a sharp reversal in the last hour of trading that had the major indices close the session at or near their worst levels of the day, which took the S&P 500 below 4,100 again. The late afternoon plunge was precipitated by St. Louis Fed President James Bullard (not an FOMC voter) saying that he wouldn't rule out supporting a 50-basis point rate hike at the March FOMC meeting, adding that he advocated for a 50-basis point rate hike at the February 1 meeting, according to Bloomberg.
To be fair, the initial recovery effort happened after Cleveland Fed President Mester (not an FOMC voter) said earlier today that she, too, was advocating for a 50-basis point rate hike at the February 1 meeting. Nonetheless, the stock market used Mr. Bullard's position as an excuse to rein in some of its recovery enthusiasm.
The subsequent retreat was broad in nature. Declining issues outpaced advancing issues by a nearly 3-to-1 margin at the NYSE and a 2-to-1 margin at the Nasdaq. All 11 S&P 500 sectors registered losses that ranged from 0.8% (consumer staples) to 2.2% (consumer discretionary).
The weight of the mega cap stocks dragged on the broader market in the final hour of trading. The Vanguard Mega Cap Growth ETF (MGK) was down 2.0% versus a 1.1% loss in the Invesco S&P 500 Equal Weight ETF (RSP).
There was some underlying strength in individual companies that pleased investors with earnings and/or guidance. Twilio (TWLO 75.45, +9.40, +14.2%), Roku (ROKU 70.57, +7.08, +11.2%), and Cisco (CSCO 50.99, +2.54, +5.2%) were standouts in that regard.
The 2-yr note yield, which stood at 4.60% before today's data was released, settled the session up three basis points at 4.63% after hitting 4.68% immediately following this morning's releases. Similarly, the 10-yr note yield went from 3.79% to 3.86% following the data and settled the session up three basis points at 3.84%. Yields continued to creep higher following today's settlement and stood at 4.67% and 3.86%, respectively, as of this writing.
- Nasdaq Composite: +13.3% YTD
- Russell 2000: +10.3% YTD
- S&P Midcap 400: +9.9% YTD
- S&P 500: +6.5% YTD
- Dow Jones Industrial Average: +1.7% YTD
Reviewing today's economic data:
- January Housing Starts 1.309 mln (consensus 1.355 mln); Prior was revised to 1.371 mln from 1.382 mln; January Building Permits 1.339 mln (consensus 1.350 mln); Prior was revised to 1.337 mln from 1.330 mln
- The key takeaway from the report was the lack of growth in both single-family starts (-4.3%) and permits (-1.8%), which is a reflection of the adverse impact of rising interest rates and ongoing inflation pressures that are crimping builders' willingness to build new homes and buyers' willingness to purchase new homes due to affordability constraints.
- January PPI 0.7% (consensus 0.4%); Prior was revised to -0.2% from -0.5%; January Core PPI 0.5% .com consensus 0.3%); Prior was revised to 0.3% from 0.1%
- The key takeaway from the report for the market is that headline inflation was hotter than expected on a monthly basis. That will stoke worries about inflation pressures persisting at higher levels for longer than expected -- and the Fed keeping rates higher for longer -- even though there was improvement on a year-over-year basis.
- Weekly Initial Claims 194K (consensus 203K); Prior was revised to 195K from 196K; Weekly Continuing Claims 1.696 mln; Prior was revised to 1.680 mln from 1.688 mln
- The key takeaway from the report is that the persistence of initial claims below 200,000 reflects a very tight labor market, and a reluctance on the part of most companies to cut their workforce, which will continue to drive worries at the Fed about tight labor market conditions feeding into stickier wage-based inflation pressures.
- February Philadelphia Fed Index -24.3 (consensus -8.0); Prior -8.9
AMC Networks (AMCX), AutoNation (AN), and Deere (DE) will headline the earnings reports ahead of tomorrow's open.
Looking ahead to Friday, market participants will receive the following economic data:
- 8:30 ET: January Import Prices (prior 0.4%), Import Prices ex-oil (prior 0.4%), Export Prices (prior -2.6%), and Export Prices ex-agriculture (prior -2.7%)
- 10:00 ET: January Leading Indicators (consensus -0.3%; prior -1.0%)
Research Calls
- Upgrades:
- Activision Blizzard (ATVI) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $90
- Adecoagro S.A. (AGRO) upgraded to Outperform from Neutral at Grupo Santander; tgt $13
- Algonquin Power & Utilities (AQN) upgraded to Buy from Underperform at BofA Securities; tgt raised to $9
- Avient (AVNT) upgraded to Outperform from Perform at Oppenheimer; tgt $50
- Baker Hughes (BKR) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $43
- Fastly (FSLY) upgraded to Buy from Neutral at DA Davidson; tgt raised to $17
- Generac (GNRC) upgraded to Buy from Hold at Canaccord Genuity; tgt raised to $175
- Grifols, S.A. (GRFS) upgraded to Equal Weight from Underweight at Barclays
- Iris Energy (IREN) upgraded to Buy from Neutral at H.C. Wainwright; tgt raised to $8
- Israel Discount Bank (ISDAY) upgraded to Overweight from Equal Weight at Barclays
- Marathon Oil (MRO) upgraded to Buy from Hold at The Benchmark Company; tgt $32
- Pagaya (PGY) upgraded to Buy from Hold at Canaccord Genuity; tgt raised to $3
- Restaurant Brands Int'l (QSR) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $76
- Roblox (RBLX) upgraded to Hold from Sell at The Benchmark Company
- Roku (ROKU) upgraded to Neutral from Underweight at Atlantic Equities; tgt $76
- Scotts Miracle-Gro (SMG) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $100
- Sea Limited (SE) upgraded to Conviction Buy from Buy at Goldman; tgt raised to $132
- Seagen (SGEN) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $175
- Seagen (SGEN) upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $175
- Downgrades:
- ACV Auctions (ACVA) downgraded to Neutral from Overweight at Piper Sandler; tgt $11
- Banco Bradesco (BBD) downgraded to Neutral from Buy at Goldman; tgt $2.70
- Cambridge Bancorp (CATC) downgraded to Neutral from Buy at Janney; tgt $87
- CarGurus (CARG) downgraded to Underweight from Neutral at Piper Sandler; tgt $12
- Check Point Software (CHKP) downgraded to Underperform from Neutral at SMBC Nikko; tgt lowered to $120
- Coinbase Global (COIN) downgraded to Neutral from Buy at DA Davidson; tgt $60
- Criteo (CRTO) downgraded to Underweight from Overweight at Huber Research; tgt $32
- Electronic Arts (EA) downgraded to Hold from Buy at Deutsche Bank; tgt $125
- FLEX LNG (FLNG) downgraded to Hold from Buy at Danske Bank
- Floor & Decor (FND) downgraded to Market Perform from Outperform at Telsey Advisory Group; tgt $90
- Hello Group (MOMO) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $12
- Invitation Homes (INVH) downgraded to In-line from Outperform at Evercore ISI; tgt lowered to $32
- Kornit Digital (KRNT) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $28
- Livent (LTHM) downgraded to Neutral from Buy at BofA Securities; tgt raised to $29
- NVIDIA (NVDA) downgraded to Sell from Buy at DZ Bank; tgt $195
- Planet Fitness (PLNT) downgraded to Neutral from Buy at DA Davidson
- RingCentral (RNG) downgraded to In-line from Outperform at Evercore ISI; tgt $40
- SiteOne Landscape Supply (SITE) downgraded to Hold from Buy at Jefferies; tgt $170
- TripAdvisor (TRIP) downgraded to Mkt Perform from Outperform at Bernstein; tgt lowered to $26
- TuSimple Holdings (TSP) downgraded to Hold from Buy at HSBC Securities; tgt $2.20
- Others:
- Custom Truck One Source (CTOS) initiated with a Buy at DA Davidson; tgt $12
- Dutch Bros (BROS) initiated with a Neutral at Guggenheim; tgt $37
- Eve Holding (EVEX) initiated with a Neutral at Cantor Fitzgerald; tgt $7
- TechTarget (TTGT) initiated with an Underweight at JP Morgan; tgt $41
- Tractor Supply (TSCO) initiated with a Market Perform at Cowen; tgt $245
- Vitesse (VTS) initiated with an Outperform at Evercore ISI; tgt $22
Gapping down
In reaction to earnings/guidance:
- QS -14%, SAM -12.4%, NUS -12.1% (also increases dividend), TOST -11.8%, RNG -10.7%, SHOP -10.2%, UPWK -8%, AMPL -8% (also names new CFO), PARA -8%, EPAM -7.5%, DDOG -7.5%, AMED -7% (also to divest its Personal Care division), RCM -5%, FARO -4.6%, ZD -4.4%, CVE -4.1%, LH -3.4%, TRUP -3%, SNPS -3%, VMC -2.8%, OGN -2.6%, VECO -2.2%, REZI -2.1%, TROX -1.9%, WELL -1.9%, HCC -1.7%, EQT -1.7%, INVH -1.7%, ROG -1.6%, ET -1.5%, SYNH -1.4%, HSIC -1.4%, LXP -1.3%, AEE -1.2%, CEG -1.2%, H -1%, SCL -0.9%
Other news:
- SNCY -4.9% (prices secondary offering of 5.25 mln shares of common stock by managed by affiliates of Apollo Global Management)
- KNSL -2.6% (increases dividend)
- REAL -1.7% (announced a savings plan intended to reduce operating expenses; reducing 7% headcount and rationalizing its real estate footprint)
- ALVR -1.6% (stock offering by selling shareholders)
- DINO -1.3% (names new CEO)
Analyst comments:
- CARG -5.4% (downgraded to Underweight from Neutral at Piper Sandler)
- LTHM -1.6% (downgraded to Neutral from Buy at BofA Securities)
- CHKP -1.1% (downgraded to Underperform from Neutral at SMBC Nikko)
- FLNG -1.1% (downgraded to Hold from Buy at Danske Bank)
- EA -0.8% (downgraded to Hold from Buy at Deutsche Bank)
Gapping up
In reaction to earnings/guidance:
- CYH +18.1%, TWLO +14.2% (also authorizes new $1 bln share repurchase program), ROKU +12.6%, SGEN +8.8%, RPT +8.5%, PEGA +8.4%, CROX +8.4%, PBF +7.7%, BOWL +7.4%, ORAN +6.2%, TXG +5.9%, WST +5.7%, ALKS +5.6%, BLMN +5.6%, CPA +5.2%, NEX +4.3%, SHAK +4.3%, ZG +4.1%, DOCN +3.6%, CSCO +3.3% (also increases dividend), IRDM +3.3%, FSLY +3.1%, ZBRA +3.1%, PLMR +3%, HST +3%, KBR +2.9%, QDEL +2.6%, ALB +2.5%, KGC +2.5%, SPWR +2.2%, RS +1.9%, PGRE +1.5%, MSA +1.5%, MFC +1.5% (also increases dividend and launches normal course issuer bid), FUN +1.4%, DNOW +1.4%, DTM +1.4%, CF +1.3%, RGLD +1.2% (also increases dividend), ATHM +1.2%, SO +1.1%, ALSN +1%, IDA +1%, ARCH +1%, TSEM +1%
Other news:
- EBS +16.6% (FDA Committee votes unanimously in favor of NARCAN for OTC use)
- ZEUS +5% (increases dividend)
- AMCX +3.3% (names new CEO)
- RPAY +1.6% (sells Blue Cow Software also reaffirms FY22 guidance)
- FMX +1.4% (approves series of actions and divestitures)
- HOOD +0.9% (reports January metrics)
Analyst comments:
- FSLY +3.2% (upgraded to Buy from Neutral at DA Davidson)
- AQN +3% (upgraded to Buy from Underperform at BofA Securities)
Early premarket gappers
- Gapping up:
- CYH +21.7%, TWLO +14.7%, EBS +14.6%, ROKU +11.4%, PEGA +8.4%, SGEN +6.7%, BOWL +6.5%, RGLD +6.4%, ORAN +6.2%, ALSN +5.1%, ZEUS +5%, ZG +4.6%, EQIX +4.5%, CSCO +4.1%, TXG +3.8%, WE +3.5%, AMCX +3.3%, SPWR +3.1%, ALB +3.1%, PLMR +3%, HST +3%, KGC +2.8%, FSLY +2.7%, FMX +2.5%, QDEL +2.1%, RSG +2.1%, HOOD +1.9%, BYND +1.7%, RPAY +1.6%, CPA +1.6%, NEX +1.6%, PGRE +1.5%, MSA +1.5%, MFC +1.5%, FUN +1.4%, VICI +1%, MRO +0.9%
- Gapping down:
- QS -13.5%, RNG -12.6%, NUS -11.8%, SAM -10.4%, SHOP -10.2%, UPWK -8.8%, AMPL -7.4%, AMED -7%, SNCY -6.2%, TROX -4.9%, ZD -4.4%, TRUP -3.1%, SNPS -3.1%, INVH -3.1%, KNSL -2.6%, KBR -2.4%, TYL -2.3%, HCC -2.2%, VECO -2.2%, EPAM -2.1%, NTR -1.8%, CVE -1.8%, RIG -1.6%, ALVR -1.6%, ET -1.5%, SYNH -1.4%, LXP -1.3%