Market Review: September 07, 2023

Auto PostDaily Market Report

Closing Recap

Thursday, September 07, 2023





DJ Industrials




S&P 500








Russell 2000













The Dow edged higher despite Apple (AAPL) weakness, Nasdaq posts 4th straight loss and the S&P 500 makes it 3-down days in a row as better economic data renews interest rate worries, weighing on stocks. Technology shares paced the losses in the market amid concerns over China’s Apple iPhone curbs, while a fall in weekly jobless claims stoked worries about sticky inflation. Bloomberg reported overnight that China planned to broaden the iPhone ban to state firms and agencies, which pressured shares of the company into its September 12th new product launch, and weighed on several chip makers SWKS, QRVO, QCOM as the SOX index dropped over 2%. Expectations that the Fed was nearing the end of its rate-hike cycle have been tempered this week following stronger-than-expected U.S. economic data (jobless claims, ISM services). China’s exports and imports fell in August, with sagging overseas demand and weak consumer spending hurting. Oil has rallied to 2023 highs to kick off September, though WTI crude snapped its nine-day winning streak on profit taking. Several potential catalysts next week include inflation data (CPI 9/13, PPI 9/14), as well as Apple’s new product launch on Tuesday 9/12. Utilities, Healthcare, REITs led the gains today while Technology, Materials, and Industrials fell the most.


Economic Data

·     Weekly Jobless Claims fell to 216K from 229K in the prior week and below 234K estimate; the 4-wek moving average fell to 229,250 from 237,750 prior week and continued claims fell to 1.679M from 1.719M prior and vs. est. 1.715M; Insured Unemployment Rate fell to 1.1%.

·     U.S. Q2 non-farm productivity revised to +3.5% vs. est. +3.4% and prior +3.7% as Q2 non-farm unit labor costs revised to +2.2% from 1.6% and above consensus +1.9%.

·     The FDIC reported U.S. bank profits decline -11.3% to $70.8B in Q2, but roughly flat after excluding effects of recent failed bank acquisitions. Said U.S. bank profits up 5.7% over year prior after accounting for failed bank acquisitions and unrealized losses on securities rose 8.3% in Q2 2023 to $558B. U.S. bank deposits declined for fifth straight quarter, falling 0.5% in Q2.



·     Oil prices pulled back from 10-month highs as WTI crude slips -$0.67 or 0.77% to settle at $86.87 per barrel as crude stockpiles hit 1985 lows, snapping its nine-day win streak (longest winning streak in four years). Crude prices have been ripping higher as major producers Saudi Arabia and Russia have been restricting output to ensure a tight market. In data this week, U.S. crude oil and gasoline stockpiles fell more than expected last week, while distillate inventories rose, the Energy Information Administration said. Crude inventories fell by 6.3 million barrels, crude stocks at the Cushing, Oklahoma, delivery hub dropped 1.8 million barrels. U.S. gasoline stocks fell 2.7 million barrels in the week, and Distillate stockpiles rose by 700,000 barrels in the week. Gold prices slip -$1.70 to settle at $1,942.50 an ounce, its 3rd straight session lower given the recent bounce in the dollar and Treasury yields following better economic data.


Currencies & Treasuries

·     The US dollar strengthens back above the 105 level to March highs (DXY) as the US shows resilience to higher interest rates while other major economies sputter. A combination of strong domestic macro data and weak macro news out of China and the EU pushing investors towards the greenback. The dollar/yen briefly lifted to a 10-month high of 147.87 before heading lower while the euro held down around 1.07 vs. the buck. China’s onshore yuan slid to a 16-year low versus the greenback, under pressure from a property slump.

·     Treasury yields briefly spiked this morning following the better jobless claims data as the 10-yr topped yesterday’s highs above 4.3%, but yields were mostly lower the remainder of the day with some haven demand supporting amid the weakness in big tech. The 2-year also found buyers after the yield climbed over the 5% mark, falling 6-bps to 4.95% late day.






WTI Crude















10-Year Note





Sector News Breakdown



·     Ahead of the UAW strike deadline next Thursday, GM said it offers UAW employees 10% wage hike over four years, under offer, for most employees two additional 3% lump sum payments resulting in total increase of 16%. Ford (F) said fast tracks pay increase for 8,000 UAW employees, as average raise could top $10,000 a year. Employees receive an increase of $4.33 per hour on average, or about $9,000 per year.

·     CHPT shares tumble on results as Q2 EPS loss (-$0.35) worse than est. loss (-$0.15) and Q2 revs rose 39% y/y to $150.5M vs. est. $153.1M while guides Q3 revenue $150M-$165M below est. $181.6M and sees FY24 revenue $605M-$630M, below consensus $674.9M.

·     PSNY was downgraded to Underweight at Barclays reflecting demand challenges + dilution concerns and concerns of near-term increasingly challenged amid weakened EV demand /tougher competition; cuts tgt to $3 from $5 on reduced long-term volume.

·     FSR said to ramp up production to an expected 300 units per day in q4 and accelerate U.S. deliveries in September.


Consumer Staples & Restaurants:

·     In Restaurants: MCD was upgraded to Overweight at Wells Fargo saying while Q3 trends are tracking in-line/ahead, sees a wall of worry building into tougher multi-year compares, rising rates/gas prices and looming student loan payments – sees MCD & YUM best positioned. BROS files mixed securities shelf; PLAY mixed Q2 as EBITDA of $140M outpaced consensus by ~$3M as stronger margins more than offset softer comps (-6.3% decline vs -3.3% decline consensus), while Q2 revs fell short of consensus.


·     AEO better Q2 results; sees Q3 revenue up low single digits and expects FY24 sales to be up low single digits y/y, above prior guidance for revs in the range of flat to down low single digits; sees FY24 operating income in range $325M-$350M, up from prior guidance of $250M-$270M.

·     CROX downgraded from Buy to Neutral at B Riley and lower tgt to $101 saying its analysis of public footwear distribution and content companies, it estimates roughly $2.4B or 16% too much footwear inventory in stores, warehouses, and DCs as it entered the BTS and fall selling seasons.

·     CURV Q2 EPS miss and cuts FY23 revenue view $1.08B-$1.115B from $1.095B-$1.145B and lowers FY23 adjusted EBITDA view to $115M-$130M from $90M-$100M.

·     DBI reaffirms outlook after sales and earnings beat in Q2.

·     GIII shares surge as raises annual profit forecast after Q2 beat as sees FY24 EPS $3.20-$3.30, topping prior view of $2.80-$2.90 and sales about $3.30B vs. prior $3.29B view; also entered into a strategic multi-year license agreement with HBI for the design, production, and distribution of outerwear for the Champion and C9 Champion brands in North America

·     GME Q2 adj EPS loss (-$0.03) vs. est. $0.14; Q2 revs $1.16B vs. est. $1.14B; Q2 cash, cash equivalents and marketable securities were $1.195 billion at the close of the quarter.

·     SPWH the latest sporting goods store to disappoint as posts Q2 adj EPS loss (-$0.04) vs. est. $0.08 on revs miss and Q2 comp store sales fell (-16.2%) due to lower demand across all product categories and a decline in traffic; sees 3q net sales $310M-$330M below consensus of $382.3M.


Homebuilders, Building Products, Home Furnishing:

·     In Homebuilders: TPH was upgraded from Perform to Outperform at Oppenheimer, noting shares are down 13% since mid-July, presenting an attractive entry point to own one of the most compelling growth stories in the sector.

·     In Building Products/Construction materials: OC upgraded from Sell to Neutral at Goldman Sachs and raise tgt to $150 from $113, impressed by Owens Corning’s ability to drive incremental productivity and balance production across segments as demand moderates. SUM to combine with Argos USA, creating a materials-led enterprise with national scale proposed deal for $3.2B.


Energy, Industrials and Materials

·     In Oil E&P: CRGY raises FY23 CapEx view to $580M-$630M from $575M-$625M and raises FY23 production view to 146-151 from 143-148 MBoe/d; announces offering of 10M shares of Class A stock; to acquire additional interests in its operated Western Eagle Ford for $250M.

·     In Solar: weaker-than-expected jobless claims data raises concerns about elevated interest rates and pressured shares of solar panel makers FSLR, SPWR & solar equipment makers ENPH, SEDG

·     In Paper sector: WRK rises after the WSJ reported WestRock and Smurfit Kappa (SMFKY) are nearing a deal to combine into a $20B entity, citing people familiar with discussions. The deal could be announced as soon as this week.

·     In Oil Services: Benchmark says PTEN, WFRD, NE are best ideas heading into 4Q23 noting oil services continues to be the best performing energy subsector with all seven subsectors up at least 17% led by SMid cap Diversified (+30%), Equipment (+29%) and Subsea (+29%).

·     In Chemicals: TROX downgraded to Neutral from Buy at UBS and reduce EBITDA estimates in 2024/25 8%/3% saying while believes earnings are at a trough level, it has less confidence in the pace of improvement over the next 12 months. FMC named as “short” call by Blue Orca.

·     In Transports: railcar GBX downgraded to EW from OW at Wells Fargo as production achieves a cyclical peak; firm did raise estimates on the margin opportunity but expect a moderating delivery schedule to limit share price appreciation.

·     In Industrials: TTC falls as Q3 sales $1.08B miss the $1.22B estimate and cuts FY23 EPS view to $4.05-$4.10 from $4.70-$4.80 (est. $4.79) saying experienced a sharp and accelerated reduction in homeowner demand for residential and professional segment lawn care products. Shares of DE, AGCO and other machinery names fell in sympathy early on.



Biotech & Pharma:

·     In diabetes sector: PODD, DXCM, TNDM shares tumble after a report showed GLP-1 drug (semaglutide) led to lack of need for insulin in 7 of 10 people with recent onset Type 1 (autoimmune) diabetes, and the other 3 of 10 had eliminated need for insulin w/ meals . obesity drug makers LLY shares pushed to 52-week highs along with strength in NVO as Jefferies noted the striking NEJM data.

·     ALNY said its experimental therapy, Zilebesiran, for high blood pressure met the main goal in a mid-stage study as it helped reduce the average systolic blood pressure over a 24-hour period after three months of treatment compared to placebo.

·     ARQT announces positive long-term results of roflumilast cream 0.15% showing durable and improved efficacy over time and favorable safety profile in treatment of mild to moderate atopic dermatitis.

·     BSX said it received FDA approval for the latest-generation WATCHMAN FLX™ Pro Left Atrial Appendage Closure (LAAC) Device.

·     CBAY shares jump after released positive results from a late-stage study of seladelpar, its investigational treatment for the rare chronic liver disease primary biliary cholangitis as about 62% of patients treated met the study’s primary endpoint vs. 20% of those on placebo.

·     NTRA 4.55M share Spot Secondary priced at $55.00.

·     PHR guides FY adj Ebitda (-$54M-$49M) which is better than prior view of (-$60M-$55M); Reported a ~26% bottom-line beat with ongoing growth on its multi-pronged platform but provider client growth (+24%) slowing in the quarter from 30-40% LTM.



Hardware & Services

·     AAPL adds to -3.5% drop yesterday after new reports that China moves to widen state employee iPhone curbs. Shares fell Wednesday after the WSJ reported China ordered officials at Central government agencies not to use Apple’s iPhones and other foreign-branded devices for work.

·     AAPL Wedbush also provides preview for next Tuesday (9/12) new iPhone launch: Importantly Wedbush expects a $100 price increase on the iPhone 15 Pro and iPhone 15 Pro Max model for the first price increases from Cupertino in years. Wedbush expects some massive discounts/promotions from US carriers over the coming months which should further catalyze iPhone 15 sales out of the gates and take the sting of a slight price increase away.

·     BB forecast Q2 revenue to fall -21.4% to $132M, below ests $156.8M due to cybersecurity segment lags; BB said expects Q2 cybersecurity revenue of $80 mln; says revenue lower than expected primarily due to certain large government deals not closing in the quarter.

·     DELL downgraded to Underweight from Equal Weight at Barclays after the recent run-up in the stock and sees challenges in the PC and Server/Storage end markets on challenging macro, and don’t think AI will be enough to offset these pressures.


Hardware & Software movers:

·     In AI sector: AI shares tumble as delivered Q1 results featuring top and bottom-line beats which was largely overshadowed by weak gross margin (68.6% vs. 73% estimate) and mixed guidance (solid top-line, softer margins) while noting will no longer be non-GAAP profitable in Q4.

·     In IT Services & Consulting: VRNT shares tumbled as delivered weaker than expected Q2 results featuring misses on the top and bottom lines and gross margins coming in at 69.5% below the Street’s 69.8% estimate and lowered its FY24 guidance. NET was initiated at Underperform and $52 tgt at Bank America as believes that the challenges to address the enterprise market could translate into lower estimates than the Street anticipated.

·     Software: CXM posted beat and raise quarter on top and bottom line as subs revenue beat by $4M and raised FY guide by $8M; operating margin was 12%, beat by $9M; raises FY revenue view to $719M-$721M from $711M-$715M.

·     INTA reported inline Cloud ARR growth of ~36%, driven by 113-117% NRR and solid growth in big customer growth ($100k+, $1M+ customers). FY24 guide is better than Street high revenue on Subscription and Services – remember, SaaS & Support revenue marched up through FY23.

·     PATH Q2 adj EPS $0.09 vs. est. $0.03; Q2 revs $287.3M vs. est. $282.14M; sees Q3 revenue $313M-$318M vs. est. $315.33M and sees Q3 ARR $1.359B-$1.364B; raises FY24 revenue view to $1.273B-$1.278B from $1.267B-$1.272B; announces $500M stock buyback.

·     YEXT tumbles after results/guidance topped views, but analysts note in-line results and revenue growth of 2% from the prior year underwhelmed considering the excitement around AI.



·     AMKR shares fell as priced 10M share Secondary at $24.00.

·     INTC remains outlier to upside in semis, rising a 9th straight day.

·     SMTC files non-timely 10-q with U.S. SEC and is working diligently to complete certain procedures to conclude whether valuation allowance to be recorded against certain deferred tax assets; says requires additional time to complete assessments and finalize the Q2 form 10-Q.

·     STX was downgraded to Equal Weight from Overweight at Barclays saying the nearline recovery continues to take longer than expected; also 5.57M share block priced at $69.50.


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.

Live Trading

Open an Account

Paper Trading