Mid-Morning Look: December 01, 2023

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Mid-Morning Look

Friday, December 01, 2023






DJ Industrials




S&P 500








Russell 2000






After closing out the month of November on a strong note, with the S&P and Nasdaq posting their best months in over a year and half, stocks are choppy to kick off December following another round of mixed economic data, pushing yields and the dollar lower. Factory activity was sluggish in November according to the latest ISM data (opposite of the Chicago PMI yesterday), remaining in contraction territory though construction spending topped consensus views. The yield on the benchmark 10-yr yield fell below 4.29% following the data. Earnings overnight mixed for tech with shares of DOMO, ESTC, IOT and PATH jumping on results while AMBA, DELL, MRVL following their results. The PC weakness from Dell weighed on some chip makers like INTC. PFE shares fell after a trial study disappointed. For the week, the S&P is flat, the Dow is up 1.7% and the Nasdaq is down -0.7%. Smallcaps outperform as the IWM moves back above its 200-day MA resistance of $180.40. Gold nears all-time highs.


Economic Data

·     ISM U.S. manufacturing activity index for Nov at 46.7 vs. consensus 47.6 and compared to 46.7 in October; prices paid index 49.9 in November vs 45.1 in October; new orders index 48.3 in November vs 45.5 in October; employment index 45.8 in November vs 46.8 in October.

·     Construction Spending for October rose +0.6% above consensus +0.4% and compared to Sept +0.2% (vs. previous +0.4%); Oct private construction spending +0.7%, public spending +0.2%.

·     S&P Global Nov. Manufacturing PMI at 49.4 vs 50 prior.







WTI Crude















10-Year Note





Sector Movers Today

·     In Beverages: STZ upgraded from Buy to Conviction Buy w/ $290 PT at Goldman Sachs as thinks the co is poised to continue to gain share in the US Beer market as it expands distribution into the middle of the country from its coastal strongholds. PEP mentioned positively in Barron’s saying shares have fallen 7% this year, a result that reflects sentiment vs. fundamentals, but thinks as 2023 comes to an end, sentiment might be about to turn.

·     In Chinese EV, monthly delivery figures out: NIO November delivery growth came in below that of its rivals, delivering 15,959 vehicles, up 12.6% y/y as its November deliveries included 10,545 SUVs and 5,414 sedans. XPEV said it delivered 20,041 EVs in November, up 245% y/y while LI said its November deliveries increased 172.9% y/y to 41,030 EVs.

·     In Retail: GCO cuts FY23 adj EPS view to $1.50-$2.00 from $2.00-$2.50 while sees sales view to be down 1% to 2%, compared to prior view of down 2% to 4%. The WSJ reported Saks Fifth Avenue wants to buy rival Neiman Marcus. Neiman is open to a deal. But the two luxury retailers can’t agree on the terms of a marriage. This week, Neiman rejected Saks’s most recent takeover offer, which valued the upscale chain at close to $3B, according to people familiar with the situation. TLYS Q3 sales/EBITDA/EPS of $166.5M/$574k/($0.03) vs consensus of $168.2M/($1.1M)/($0.07) and comps -9%, store sales declined 6.4% to $132.4M, 79.6% of sales, e-comm down 6.2%.



·     ALT +41%; said 391 people enrolled in a trial of its obesity drug pemvidutide lost weight taking the pill in conjunction with diet and exercise; more than 50% of enrollees achieved at least 15% weight loss and more than 30% of people achieved at least 20% weight loss on certain doses.

·     ESTC +35%; after good quarter, as Cloud drove most of the beat accelerating its momentum, was positive on the AI opportunity driven by its vector search driven ESRE offering, and Q3 guide was above Street.

·     IOT +13%; reported a strong Q3 with 40% rev growth above ests 32% and raised FY24 growth guide by 3% at the high-end to 41%.

·     PARA +5%; as the WSJ reported AAPL and PARA have discussed bundling their streaming services at a discount, the latest attempt by rival entertainment giants to team up as they look to make their offerings more affordable and attractive, the WSJ reported https://tinyurl.com/yyhpsmuj

·     PATH +21%; delivered a revenue beat and continued progress in improving profitability while delivered 4% Y/Y net new ARR growth after six quarters of declines, although FX adjusted NRR was 123% vs 125% in FQ2 and UiPath saw low-end customer churn.

·     ULTA +11%; Q3 beat was driven by a slight sales beat (comp +4.5%, Transactions +5.9%, Average Ticket 1.4%) and slightly better-than-expected Gross Margin according to BMO; narrowed year EPS, sales, and comp sales views.

·     WOR +5%; after completing the separation of its steel-processing business, Worthington Steel (WS) into a standalone, publicly traded company, while those shares are down -15%.



·     BNTX -3%; downgraded to Underweight from Neutral at JP Morgan as believes downward revisions to long-term estimates and protracted timelines to meaningful pipeline readouts could hinder the stock’s ability to recover.

·     DELL -5%; reported Q3 mixed results as EPS beat but revs missed as its Client Solutions Group (PC) revenue below guidance and the company guided this segment and its server segment below Consensus for 4QF24.

·     GCO -19%; cuts FY23 adj EPS view to $1.50-$2.00 from $2.00-$2.50 while sees sales view to be down 1% to 2%, compared to prior view of down 2% to 4%.

·     LMND -3%; was downgraded to Perform from Outperform at Oppenheimer citing its 67% rise since late Oct, which they believe has been driven by a short squeeze (34% of float) following better Q3 results/Q4 outlook.

·     MRVL -6%; reported in-line F3Q results and guided F4Q lower, as stronger than expected demand from AI optical DSPs is being offset by weaker trends across other segments including Carrier Infra, Enterprise Networking, and Consumer.

·     PFE -5%; said it was stopping development of a twice-daily oral obesity medication danuglipron after an underwhelming clinical trial.

·     SMCI -3%; as 2.1M share Spot Secondary priced at $262.00.

·     TSLA -2%; slipped after the Cybertruck Delivery Event, which included estimated Cybertruck sticker prices and the fact that the lowest priced model won’t be available until some point in 2025.


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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