After Hours Report

The stock market started the day in rally-mode, but finished the day with sharp losses. The Nasdaq Composite lost 1.4% and the Dow Jones Industrial Average shed more than 500 points.

Some participants pointed to comments from Minneapolis Fed President Kashkari (not an FOMC voter), who said it's possible the Fed might not cut rates this year if progress on inflation stalls, as the reason for the afternoon deterioration. Others indicated increased geopolitical tensions in the Middle East related to potential retaliation by Iran against Israel as the key factor driving the afternoon sell-off.

The latter concern also drove afternoon gains in oil prices and defense-related stocks. WTI crude oil futures climbed 1.3% to $86.57/bbl. Lockheed Martin (LMT 454.04, +6.14, +1.4%) and RTX (RTX 99.31, +1.76, +1.8%) were winning standouts from the defense space.

There is an overall lingering sense among some participants that stocks are due for a more meaningful pullback after a stellar start to the year, which also contributed to the afternoon retreat. 

Just about everything came along for the late sell-off. The equal weighted S&P 500 dropped 1.0% and all 11 S&P 500 sectors closed with declines. Six of them fell more than 1.0%. 

The early positive bias today was partially related to a buy-the-dip trade following a soft start to the quarter, which was helped by favorable price action in Treasuries following this morning's economic data. The weekly jobless claims report reflected some softening in the labor market. This followed yesterday's softer than expected ISM Services PMI. 

Buying picked up further in the Treasury market around the same time that stocks started their descent. The 10-yr note yield fell five basis points to 4.31% and the 2-yr note yield declined four basis points to 4.64%. 

• S&P 500: +7.9% YTD
• Nasdaq Composite: +6.9% YTD
• S&P Midcap 400: +6.6% YTD
• Dow Jones Industrial Average: +2.4% YTD
• Russell 2000: +1.3% YTD

Reviewing today's economic data:

• Initial jobless claims for the week ending March 30 increased by 9,000 to 221,000 (Briefing.com consensus 214,000). Continuing jobless claims decreased by 19,000 to 1.791 million.
  • The key takeaway from the report is the element of softening seen in the initial claims number; however, initial claims continue to run well below levels associated with a truly weak labor market and a contracting economy.
• The trade deficit in February widened to $68.9 billion (Briefing.com consensus -$66.0 billion) from a downwardly revised -$67.6 billion (from -$67.4 billion) in January. The widening was the result of exports being $5.8 billion more than January exports and imports being $7.1 billion more than January imports.
  • The key takeaway from the report, though, is that both exports and imports increased in February, reflecting a pickup in global trade.
• Weekly EIA Natural Gas Inventories showed a draw of 37 bcf versus a draw of 36 bcf last week

Friday's economic calendar features:

• 8:30 ET: March Nonfarm Payrolls (Briefing.com consensus 200,000; prior 275,000), Nonfarm Private Payrolls (Briefing.com consensus 160,000; prior 223,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.1%), Unemployment Rate (Briefing.com consensus 3.8%; prior 3.9%), and Average Workweek (Briefing.com consensus 34.3; prior 34.3)
• 15:00 ET: February Consumer Credit (prior $19.5 bln)

Overseas:

• Europe: DAX +0.2%, FTSE +0.5%, CAC flat
• Asia: Nikkei +0.9%, Hang Seng closed for holiday, Shanghai closed for holiday

Commodities:

• Crude Oil +1.13 @ 86.57
• Nat Gas -0.07 @ 1.77
• Gold -5.80 @ 2309.10
• Silver +0.15 @ 27.24
• Copper +0.04 @ 4.24

After-Hours Spotlight:

• CCC Intelligent Solutions (CCCS) announces proposed secondary offering of 20 million shares of common stock... CCCS down 1.2%
• Caribou Biosciences (CRBU) expands clinical development of CB-010 with FDA Clearance of IND in Lupus... CRBU up 2.9%
• Duke Energy (DUK) to sell stake in Pioneer Transmission joint venture to John Laing... DUK down 0.1%
• GameStop (GME) announces departure of COO Nir Patel effective on April 4... GME down 2.0%
• Kura Sushi (KRUS) misses by $0.06, beats slightly on revs; guides FY24 revs in-line... KRUS up 3.8%
• Nucor (NUE) introduces weekly report on hot-rolled coil spot pricing... NUE down 0.4%
• TD Synnex (SNX) announces proposed secondary offering of 5.3 mln shares of common stock currently held by certain entities managed by affiliates of Apollo Global Management (APO)... SNX down 1.1%
• Valaris' (VAL) joint venture in Saudi Arabia received a notice of suspension from Aramco for one of its 19 contracted rigs... VAL up 0.2%
• Vimeo (VMEO) announces appointment of Philip Moyer as Chief Executive Officer and member of the Board of Directors, effective April 8, 2024... VMEO up 1.8%

Fair Value for Friday, April 5:

• S&P 500: 5,197
• Nasdaq 100: 18,076
• DJIA: 38,917

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • AbbVie (ABBV) revises its adjusted EPS forecasts lower due to acquired IPR&D and milestones expense of $164 million
  • BlackBerry (BB) beats by $0.07, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY25 EPS in-line, revs below consensus
  • Broadstone Net Lease (BNL) provides Q1 business update; company invested $40.1 mln during the quarter and it sold 37 clinically-oriented healthcare properties for gross proceeds of $251.7 mln
  • Conagra (CAG) beats by $0.04, reports revs in-line; reaffirms FY24 EPS guidance
  • Exxon Mobil (XOM) details items that will impact Q1 results; changes in gas prices negatively impacting Q1 upstream earnings by $0.2-0.6 bln
  • Lamb Weston (LW) misses by $0.25, misses on revs; guides FY24 EPS and revs below consensus; co cites its transition to a new ERP system, which hurt results
  • Levi Strauss (LEVI) beats by $0.05, reports revs in-line; raises FY24 EPS guidance, reaffirms FY24 revs guidance
  • LGI Homes (LGIH) reports March and Q1 home closings
  • Lindsay Corp (LNN) beats by $0.08, misses on revs
  • Niu Technologies (NIU) reports Q1 sales volume increased 37% yr/yr
  • Radius Recycling (RDUS) beats by $0.05, reports revs in-line
  • Resources Connection (RGP) beats by $0.15, reports revs in-line
  • RPM Inc (RPM) beats by $0.06, reports revs in-line; guides Q4 revs below consensus
  • Scotts Miracle-Gro (SMG) expects to achieve Q2 net leverage ratio around 7 times adjusted EBITDA - below Q1 net leverage ratio and its Q2 maximum of 7.75 times
  • Simply Good Foods (SMPL) beats by $0.02, misses on revs; lowers FY24 net sales growth outlook
  • Simulations Plus (SLP) beats by $0.01, beats on revs; reaffirms FY24 EPS guidance, revs guidance
  • Sportsman's Warehouse (SPWH) beats by $0.11, reports revs in-line, comps of -12.8%; guides FY25 revs below consensus
  • STAAR Surgical (STAA) issues upside Q1 revenue guidance
  • Ulta Beauty (ULTA) discloses that it discussed moderating growth trends in the U.S. Beauty category and potential impacts during Q1; reaffirmed FY25 (Jan) guidance
• General News
  • Israel has scrambled GPS signals as it prepares for possible retaliation by Iran or one of its proxies, according to The Wall Street Journal
  • Treasury Secretary Janet Yellen tells reporters that she would "not rule out" imposing additional trade barriers/tariffs on solar and EV imports from China
  • Fed Governor Adriana Kugler says "if disinflation and labor market conditions proceed as I am currently expecting, then some lowering of the policy rate this year would be appropriate"
  • Minneapolis Fed President Neel Kashkari (not a voting FOMC member) said that it's possible Fed might not cut rates this year if inflation decline stalls
  • Richmond Fed President Barkin (FOMC voter) thinks it is smart for the Fed to take its time
  • White House announces historic $20 billion in awards to expand access to clean energy and climate solutions and lower energy costs for communities across the nation
  • Colorado State University predicts active hurricane season
  • Achilles Therapeutics (ACHL) Provides Interim Phase I/IIa Update on Clonal Neoantigen Reactive T Cells in Advanced NSCLC and Melanoma Including First Patients Dosed with Enhanced Host Conditioning
  • ADC Therapeutics (ADCT) Announces Updates on LOTIS-7 Clinical Trial Evaluating ZYNLONTA in Combination with Glofitamab or Mosunetuzumab in Patients with Relapsed/Refractory B-cell Non-Hodgkin Lymphoma
  • AerCap (AER) announced its major business transactions during the first quarter 2024
  • Alphabet (GOOG) considering charging for AI-powered search, according to FT.com
  • Alphabet (GOOG) looking at possibly acquiring HubSpot (HUBS), according to Reuters
  • Amazon (AMZN) sellers see increase in scam returns, according to the Wall Street Journal
  • Amylyx Pharmaceuticals (AMLX) announces formal intention to remove RELYVRIO®/ALBRIOZA from the market
  • Apple (AAPL): Suppliers suggesting new iPad models have been "repeatedly postponed", according to MacRumors
  • AngioDynamics (ANGO) receives 510(k) clearance for AlphaVac F18 system in treatment of PE
  • ASML (ASML): White House wants ASML to stop servicing some tools in China, according to Reuters
  • AT&T (T) commitment to help close the digital divide increases to $5 billion
  • Augmedix (AUGX) announced its go-to-market partnership with SADA, an Insight company, a leading cloud business and technology consultancy
  • Barrick (GOLD): NevGold (NAUFF) stakes highly prospective Zeus Copper Project within The Hercules Copper Trend, Washington County, Idaho
  • Bit Digital (BTBT) announces that it produced 136.4 BTC, a 6% increase compared to the prior month; Treasury holdings of BTC and ETH were 956.6 and 16,032.0 with a fair market value of approximately $68.2 mln and $58.5 mln, respectively, on March 31, 2024
  • Boeing (BA) and Airbus (EADSY) working toward coordination deal to split up operations of Spirit Aerosystems (SPR), according to Reuters
  • Cboe Global Markets (CBOE) reports monthly trading volume for March 2024; Average daily trading volume for index options increased 4.9% yr/yr, futures -19.2% yr/yr, U.S. equities on exchange down 10.1%
  • Charter Comm (CHTR): Diamond Sports Group reaches multi-year renewal of its distribution agreement with Charter to carry its portfolio of regional sports networks
  • Coinbase Global (COIN) confirmed it obtained registration as a Restricted Dealer in Canada
  • CureVac (CVAC) announces 'promising' Phase 2 interim data from seasonal influenza vaccine development program in collaboration with GSK
  • enCore Energy Corp (EU) Provides Q1 ATM sales update; suspends ATM Program
  • FuelCell Energy (FCEL) and ExxonMobil (XOM) amend joint development agreement
  • Grifols, S.A. (GRFS) receives CE Mark for Procleix ArboPlex Assay
  • Haemonetics (HAE) receives FDA Clearance for new TEG 6s Global Hemostasis - HN Cartridge
  • Howard Hughes Holdings (HHH): Scot Sellers to Be named Chairman of the Board of HHH at company’s upcoming annual meeting
  • ICON plc (ICLR) CFO Brendan Brennan to depart; reaffirms FY24 outlook
  • Intuitive Machines (LUNR) selected by NASA to advance capabilities for a lunar terrain vehicle Artemis astronauts will use
  • JPMorgan Chase (JPM) reorganizes leadership structure in global banking business, according to Reuters
  • KBR (KBR) appoints Shad E. Evans, current Chief Accounting Officer, to CFO role, effective May 1
  • Kratos (KTOS) announces new director as part of ongoing board refresh and augmentation process
  • Lockheed Martin (LMT): Lunar Outpost teams with Lockheed Martin and Industry to develop a human-rated Moon rover as part of the agency's Artemis campaign
  • MacroGenics (MGNX) Provides Phase 2 TAMARACK Study Early Interim Safety Data and Plans for Future Disclosures
  • Merck (MRK) initiates Phase 3 clinical trial of MK-1084, an investigational oral KRAS G12C Inhibitor, in combination with KEYTRUDA for first-line treatment of certain patients with metastatic non-small cell lung cancer
  • Mitek Systems (MITK): Nasdaq Hearings Panel Grants Mitek’s Request for Continued Listing Pending Compliance with Filing Requirement
  • MSG Sports (MSGS) appoints Executive VP and General Counsel Jamaal Lesane as interim COO, effective today
  • Nomura (NMR) wants to increase US credit portfolio to $50 bln over the next decade, according to Reuters
  • Ocwen Financial (OCN) announces intention to rebrand as Onity Group
  • Olin (OLN) among US epoxy resin producers filing trade cases against five countries
  • Opera (OPRA) announces that its current Google search commercial agreement has been extended
  • Orla Mining (ORLA) confirms strong carlin-type gold mineralization at north bullion deposit and defines new drill targets across the south railroad project
  • Parsons (PSN) awarded a position on multiple award task order contract by National Nuclear Security Administration’s Office of Nuclear Smuggling Detection and Deterrence
  • Patterson-UTI (PTEN) reports March 2024 drilling activity; average of 120 drilling rigs operating in the U.S. during the month
  • QIAGEN (QGEN) strengthens its portfolio for cancer research, showcasing latest product launches at AACR Annual Meeting 2024
  • Red Violet (RDVT) approved an additional $5.0 million available under the Stock Repurchase Program
  • Riot Platforms (RIOT) announces March 2024 production and operations updates; March Bitcoin Produced of 425 versus 418 last month
  • Roblox (RBLX): judge allows illegal gambling lawsuit to proceed, according to The Verge
  • SandRidge Energy (SD) promotes Dean Parrish to COO effective April 1, 2024
  • Sanofi (SNY) agrees to settle about 5,000 Zantac Cancer Suits in US, Bloomberg
  • Sanofi (SNY): NEJM releases study trial of Lixisenatide in Early Parkinson’s Disease
  • Sigma Lithium (SGML) CEO Grota do Cirilo says she will not sell the company at current lithium prices, according to Reuters
  • Spotify (SPOT)  names Christian Luiga as CFO
  • Standard BioTools (LAB) enters into multi-year agreement with Bristol Myers Squibb for use of the SomaScan Platform as a tool for clinical trials in multiple therapeutic areas through 2026
  • Summit Therapeutics (SMMT) CFO Ankur Dhingra resigned on April 2; appoints COO Manmeet Soni to additional role of CFO
  • Thermon Group (THR) CFO Kevin Fox to step down, effective April 12; Corporate Controller Greg Lucas to serve as interim CFO
  • Tradeweb Markets (TW) reports March 2024 total trading volume of $36.2 trillion and average daily volume of $1.81 trillion
  • Twilio (TWLO) Announces Retirement of Byron Deeter and Board Declassification
  • U.S. Steel (X): Japanese Prime Minister Fumio Kishida will not address US Steel/Nippon (NPSCY) deal at upcoming summit meeting, according to Nikkei
  • Vale S.A. (VALE) confirms Pará State Court's decision about the Onça Puma Mine
  • Viatris (VTRS): UK CMA found that Theramex's proposed purchase of Femoston and Duphaston could reduce competition and choice for hormone replacement therapy treatments
  • Vodafone PLC (VOD): UK CMA referred the anticipated joint venture between VOD and CK Hutchison Holdings Limited concerning Vodafone Limited and Hutchison 3G UK Limited for an in-depth investigation
  • Volaris Aviation (VLRS) reports March traffic declined 14.5% yr/yr
  • Westlake Corporation (WLK) files petitions with the Dept. of Commerce and the U.S. ITC requesting initiation of antidumping investigations regarding imports of certain epoxy resins from China, India, S.K., Taiwan, and Thailand

(see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Avis Budget (CAR) upgraded to Neutral from Sell at Goldman; tgt raised to $130
  • BOK Financial (BOKF) upgraded to Outperform from Mkt Perform at Raymond James; tgt $103
  • Bread Financial (BFH) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $48
  • Capital One (COF) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $189
  • Eversource Energy (ES) upgraded to Buy from Neutral at UBS; tgt raised to $67
• Downgrades:
  • Ball Corp (BALL) downgraded to Equal Weight from Overweight at Barclays; tgt raised to $71
  • Bank of America (BAC) downgraded to Neutral from Buy at UBS; tgt raised to $40
  • BrightView (BV) downgraded to Sell from Neutral at Goldman; tgt raised to $10
  • Bumble Inc. (BMBL) downgraded to Mkt Perform from Outperform at Raymond James
  • Celanese (CE) downgraded to Equal Weight from Overweight at Barclays; tgt $170
  • Celanese (CE) downgraded to Underweight from Neutral at JP Morgan; tgt raised to $160
  • Chubb (CB) downgraded to Hold from Buy at HSBC Securities; tgt lowered to $270
  • Hertz Global (HTZ) downgraded to Sell from Neutral at Goldman; tgt lowered to $7
• Others:
  • Azenta (AZTA) initiated with a Hold at Jefferies; tgt $64
  • BioLife Solutions (BLFS) initiated with a Buy at Jefferies; tgt $22
  • Cadence Design (CDNS) initiated with a Neutral at Piper Sandler; tgt $334
  • Certara (CERT) initiated with a Mkt Perform at JMP Securities
  • Chesapeake Energy (CHK) initiated with a Sector Weight at KeyBanc Capital Markets
  • Cryoport (CYRX) resumed with a Buy at Jefferies; tgt raised to $21
  • DoorDash (DASH) initiated with a Buy at The Benchmark Company; tgt $165
  • Evergy (EVRG) initiated with a Neutral at Ladenburg Thalmann; tgt $51
  • Flutter Entertainment (FLUT) initiated with an Equal Weight at Wells Fargo; tgt $210
  • Grindr (GRND) initiated with an Outperform at Raymond James; tgt $14
  • HealthEquity (HQY) initiated with a Mkt Outperform at JMP Securities; tgt $101
  • LPL Financial (LPLA) initiated with an Underperform at Raymond James
  • Standard BioTools (LAB) initiated with a Buy at Jefferies; tgt $3.25

• Econ Data (Friday):
  • 08:30 ET: March Nonfarm Payrolls (Briefing.com consensus 200,000; prior 275,000)
  • 08:30 ET: Nonfarm Private Payrolls (Briefing.com consensus 160,000; prior 223,000)
  • 08:30 ET: Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.1%)
  • 08:30 ET: Unemployment Rate (Briefing.com consensus 3.8%; prior 3.9%)
  • 08:30 ET: Average Workweek (Briefing.com consensus 34.3; prior 34.3)
  • 15:00 ET: February Consumer Credit (prior $19.5 bln)
• Earnings:
  • Monday (Apr 1)
    • Pre-Market: None
      After-Hours: PVH
  • Tuesday (Apr 2)
    • Pre-Market: PAYX
    • After-Hours: CALM PLAY
  • Wednesday (Apr 3)
    • Pre-Market: AYI
    • After-Hours: BB LEVI RGP SLP SPWH
  • Thursday (Apr 4)
    • Pre-Market: CAG LW LNN RDUS RPM SMPL
      After-Hours: None
  • Friday (Apr 5)
    • Pre-Market: GBX
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike