Notes from the markets

  • Stocks start new week with muddy trading
  • Monday’s economic numbers solid, yields rise
  • All quiet on news front, but MORF rallies more than 20%

Stocks kicked off the new week in somewhat tepid fashion, with the S&P 500 (SPX) lingering in negative territory for much of the day before pushing into positive territory late in the session. A possible sign of the stagnation that has followed some other instances of the Cboe Volatility Index (VIX) falling to consecutive 52-week lows? Small caps were more robust, with the Russell 2000 (RUT) closing up more than 1%.

Bond prices followed through on last week’s pullback as yields continued to rebound. The 10-year T-note yield jumped to a two-week high of 3.6% on Monday.

Meanwhile, the week’s first two economic data points met or exceeded expectations. The Empire State Manufacturing Index’s 10.8 reading was a complete surprise given analyst expectations for a -18.3 print, while the NAHB Housing Market Index came in at 45, matching estimates and up from 44 in March.

LiveAction hits: Morphic (MORF), a modestly traded biopharma stock, landed on the LiveAction scan for largest percentage gainers on Monday, gaining more than 20% in early trading (and as much as 26% later in the session):

Chart 1: LiveAction scan: Percentage price gainers, 4/17/23. Big rally, no news.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Interestingly, there wasn’t any news crossing the wire on MORF. (It’s next earnings release is currently due in three to four weeks.) The stock, which on Friday was down roughly 29% from its early March highs around $49, has also been a recent fixture on the unusual open interest (OI) scan, with more than eight times its average number of open trades. On Monday, the two largest positions were 1,800 contracts in the April $60 calls and 2,000 contracts in the May $50 calls.

Market Mover Update: After tagging a five-month high of $83.38 last week, June WTI crude oil (CLM3) fell more than 2% intraday on Monday, trading as low as $80.46 (see “Tapping into the oil surge”). June gold (GCM3) also started the week to the downside, falling below $2,000 intraday before bouncing back above $2,005. Knight-Swift Transportation (KNX) fell more than 1.5% intraday, with earnings due on Thursday (see “Options in high gear before earnings”).

Morgan Stanley research: China’s reopening has been central to discussions about the global economy’s prospects this year, but Morgan Stanley analysts think some market watchers may be misinterpreting its implications (see “China’s Impact on Global Growth”).

Today’s numbers include (all times ET): Housing Starts and Building Permits (8:30 a.m.).

Today’s earnings include: Bank of America (BAC), Bank of New York Mellon (BK), Goldman Sachs (GS), Johnson & Johnson (JNJ), Lockheed Martin (LMT), Prologis (PLD), Netflix (NFLX), United Airlines (UAL).


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