Market Review: November 28, 2023

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Closing Recap

Tuesday, November 28, 2023





DJ Industrials




S&P 500








Russell 2000













U.S. stocks bounced early on dovish Fed comments (Waller), only to slip late later hawkish comments not long after (Bowman), as major averages finished little changed to up slightly. Stocks got a boost late morning after Fed Governor Christopher Waller said "If you see this (lower) inflation continuing for several more months, I don’t know how long that might be—3 months? 4 months? 5 months? — you could then start lowering the policy rate because inflation’s lower." On the flip side Fed Governor Michelle Bowman offset the rate cut enthusiasm that Waller provided earlier, saying the U.S. central bank will likely need to raise borrowing costs further to bring inflation back down to its 2% target over a reasonable period. "My baseline economic outlook continues to expect that we will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2% target in a timely way," Bowman said in prepared remarks. Outside of a few Fed comments and mixed economic data, news flow was very quiet with a few tech earnings after bell likely grabbing investors attention. With today’s small late-day gain, the S&P avoided its first 2-day losing streak since the end of Oct (10/25-10/27). Gold jumped, nearing its all-time highs alongside a bounce in crude oil, while the dollar and Treasury yields stumbled on growing expectations the Fed is done with the rate hike cycle and the market is looking to rate cuts early 2024.


Economic Data

·     Richmond Fed composite manufacturing index -5 in Nov vs +3 in October and Richmond Fed manufacturing shipments index -8 in Nov vs +9 in Oct.

·     Consumer Confidence index for Nov at 102.0 vs. consensus 101.0 and vs Oct 102.6; the present situation index 138.2 in Nov vs Oct revised 138.6 (previous 143.1) and the expectations index 77.8 in Nov vs Oct 72.7; 1-year consumer inflation rate expectations 5.7% in November.

·     U.S. home prices +0.6% in September from August and U.S. home prices +6.1% in 12 months through September.


Commodities, Currencies & Treasuries

·     Given the less hawkish/more dovish commentary from the Fed today (Waller), the dollar sunk along with Treasury yields as the euro rose to a 3.5-month high above 1.10 vs. the greenback, the Dollar Index (DXY) fell to 3.5-month low of 102.74 and the British Pound rose to a 3-month high of 1.27. The 10-year yield fell around -4 bps to 4.348% while the 2-yr yield fell over -11bps to 4.73%. Hawkish Fed commentary later (from Bowman) did impact stocks slightly. Also, the US Treasury sold $39B in 7-year notes at high yield 4.399% vs. 4.378% when issued prior, with the bid-to-cover ratio 2.44, as primary dealers take 20.29% of U.S. 7-year notes sale, direct 15.85% and indirect 63.86%.

·     In commodities, gold extends gains to fresh 6-month higher, rising $27.60 to settle at $2,040 an ounce, helped by a weaker dollar and Treasury yields. WTI crude rose $1.55, or 2.1%, to settle at $76.41 a barrel on the Nymex while Brent Crude settled at $81.68/bbl, up $1.70, 2.13%, bouncing on the possibility that OPEC+ will extend or deepen supply cuts. The group of major oil producers are expected to announce their latest decision on oil production quotas. U.S. natural gas futures fell about 3% to a fresh 2-month low on forecasts for less cold weather/lower heating demand.






WTI Crude















10-Year Note





Sector News Breakdown



·     In Autos: GM will scale back spending on its self-driving unit Cruise, after a pedestrian accident last month, the Financial Times reported. In Auto Suppliers: AXL was downgraded from Neutral to Underperform at Bank America and trim tgt to $8 from $9 as updates its sector view post Q323 results as doesn’t foresee any positive catalysts for the stock until well into 2024.

·     In the Electric Vehicle sector: This Thursday, November 30 in the afternoon TSLA will have the long-awaited delivery event for its Cybertruck at its Austin Gigafactory. CHPT downgraded from Buy to Neutral at UBS and cut tgt to $2.25 from $9 noting CHPT is the share leader in the U.S. for Level 2 (L2) charging ports, but says as deliveries slow, expects CHPT to see more material impact than other comps that have lower L2 mkt share.


Retail, Consumer Staples & Restaurants:

·     Adobe notes US consumers spent a total of $12.4B on Cyber-Monday, up 9.6% YoY; notes on Cyber Monday, ‘buy now pay later’ (BNPL) usage hit an all-time high in US, contributing $940M in online spend, up 42.5% YoY; Adobe notes cyber week brought in $38B overall in US, up 7.8% YoY. U.S. shoppers spent about $70.8 billion online during the five days from Thanksgiving through Cyber Monday this year, data from Salesforce showed. The sales figures for the Thanksgiving weekend, surpassed its earlier projections of $68.1 billion online sales in the United States.

·     BABA did not participate with the broader mkt – hit fresh 52-week lows today of $74.68.

·     CROX was upgraded to Strong Buy from Outperform at Raymond James and adding it to Analyst Current Favorites list (replaces LULU), raising price target to $115 from $98 on increasing confidence in the 2024 setup.

·     EL shares strong after HSBC initiated with a Buy rating and tgt $180 TP saying with Q2 announcement a likely catalyst and downside now relatively limited in their view.

·     SHOP was downgraded to underweight from neutral at Piper Sandler saying the current shares hold an “untenable valuation.”


Energy, Industrials and Materials

·     In Utilities/Power: AEP tgt to $87 from $93, OGE to $35 from $34 at Mizuho as believes the OCC’s modification of the non-unanimous settlement reached in PSO’s latest rate case has led investors to believe that Oklahoma utility regulation is becoming more challenging. However, Mizuho’s analysis of the past five electric rate cases shows the circumstances of this PSO rate case were different from those of the past. CWEN will replace VRTV in the S&P SmallCap 600. Clayton, Dubilier & Rice, LLC is to acquire Veritiv Corporation.

·     In Aerospace & Defense: BA was upgraded from Sector Perform to Outperform at RBC Capital and raise tgt to $275 from $200 saying after another year of supply chain disruptions and lowered expectations, the firm believes the set-up into 2024 is favorable. SPR announced the departure of Sam Marnick, Executive Vice President and COO, President, Commercial from the Company; Spirit is making organizational changes to strengthen its focus on quality/performance.

·     In Paper & Packaging: Truist noted that yesterday, PKG $70/ton linerboard and $100/ton medium price increase positive for IP and WRK noting it was the first price increase since March 2022 and believes that PKG announced this price increase given improving demand, lower supply, and declining inventories.

·     In Metals and Materials: U.S. Steel (X) shares rose after CNBC’s David Faber reported this morning that five parties are expected to bid ahead of Friday deadline and that CLF and MT are expected to make final bids for the entire company. ; gold miners NEM, AEM, GOLD another strong day as gold prices extend gains.



Banks, Brokers, Asset Managers:

·     In Crypto: COIN surges for the 6th time in 7-days to highest levels since May 2022; Bitcoin overall +2.5% around $38,000 in another massive “risk-on” day for crypto.

·     Financial Services: CG will replace ICUI in the S&P MidCap 400; ICUI will replace PACW in the S&P SmallCap 600, which is being acquired by BANC

·     FinTech/Payments: AFRM was upgraded to Hold from Underperform at Jefferies and raise tgt to $30 from $9.50 saying many of the factors driving the Underperform rating have played out.

·     REITs: WPC will replace WOR in the S&P MidCap 400; WOR will replace AVTA in the S&P SmallCap 600 as Aretec Group, Inc. is acquiring Avantax. WELL was downgraded from Outperform to Sector Perform at RBC Capital, still encouraged by WELL’s growth prospects and believe the company has both a strong organic and external growth outlook, but says positive outlook is likely already reflected in the stock’s valuation.

·     Banks: Canadian bank BNS missed Q4 profit estimates as the company set aside more money than expected for potentially souring loans; provisions for credit losses totaled C$1.26 billion ($925 million), more than the C$870 million analysts had expected.



Biotech & Pharma:

·     ALDX receives complete response letter from the U.S. FDA for the reproxalap new drug application for the treatment of dry eye disease; said additional trial required to demonstrate positive effect on the treatment of ocular symptoms in dry eye disease.

·     ARGX announced the ADVANCE SC trial failed to meet the primary or secondary endpoints in patients with advanced immune thrombocytopenia (ITP).

·     CABA, GRCL, LEGN, ACLX shares tumbled after reports the FDA is investigating reports of T-cell malignancies, including chimeric antigen receptor (CAR) positive lymphoma, in patients who received treatment with BCMA- or CD19-directed autologous CAR T-cell immunotherapies

·     EBS receives $75M contract option from Barda to procure doses of cyfendus™ (anthrax vaccine adsorbed, adjuvanted).

·     IMVT announced initial data from 600 mg MAD cohort of a Phase 1 clinical trial of IMVT-1402 in healthy adults.

·     NVAX said its protein-based COVID-19 vaccine had been granted emergency-use listing by the World Health Organization. The move means that all 194 of the agency’s member states can use the Novavax vaccine for individuals aged 12 and older.

·     RNA shares spiked after BMY said it will take a stake in the company as part of a broader licensing and research deal focused on the development and commercialization of multiple cardiovascular targets. Bristol will pay Avidity $60M in cash and buy about $40M of its stock at a price of $7.88 a share as part of the deal.

·     SWTX said the FDA approved nirogacestat, the biotech’s oral treatment for desmoid tumors.



·     ADBE shares active after the U.K.’s Competition & Markets Authority said the company’s proposed $20B deal to buy design tools maker Figma was expected to result in a “substantial lessening of competition” in several markets. The CMA also found that the merger isn’t expected to result in an SLC for the video editing software and motion design software markets.

·     LASR was upgraded to Speculative Buy and $17 tgt at Benchmark after a $34.5M contract award that will be executed over approximately 18 months to provide a High Energy Laser in support of the U.S. Army’s Rapid Capabilities Critical Technologies Office Directed Energy Maneuver-Short Range Air Defense prototyping effort.

·     MU updated its revenue, gross margin, operating expense, and EPS guidance for Q1 as previously guided revenue of $4.4B plus or minus $200M and non-GAAP gross margins of (4.0%) plus or minus 2% – now sees Q1 revs $4.7B.

·     PDD shares rise after earnings as the Temu owner reported Q3 net income of RMB15.5B ($2.1B), or RMB10.60 per ADR, whereas it recorded net income of RMB10.6B, or RMB7.34 per ADS y/y. Revenue surged 94% to RMB68.8 billion, while analysts had been looking for RMB55.2B.

·     TWLO shares moved higher after The Information reported hedge fund Anson builds stake in co, pushes for sale 

·     ZS Q1 results exceeded consensus estimates on revenue, billings, operating income, EPS, and free cash flow, but Guggenheim noted the 34% billings growth (vs. 30% guidance) was likely below buy-side expectations of 35-36% growth. In addition, management did not pass through the billings beat (relative to guidance) to annual guidance, sending shares lower.


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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