In today’s briefing:
- Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?
- Vitesse Energy, Inc. – Estimate Update
Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?
- More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.
- Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.
- 1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).
Vitesse Energy, Inc. – Estimate Update
- We are updating our 4Q23 and FY24 estimates to reflect actual 4Q23 reference prices and lower estimated FY24 natural gas prices.
- Our 4Q23 NYMEX reference prices averaged $78.32/bbl for oil and $2.92/MMBtu for natural gas compared with our $85.00 and $3.00/MMBtu estimates.
- We have lowered our average FY24 natural gas price estimate to $2.66/MMBtu from $3.44/MMBtu. We are currently modeling average FY24 oil prices of $80/bbl.
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