Mid-Morning Look: July 31, 2023

Auto PostDaily Market Report

Mid-Morning Look

Monday, July 31, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks starting the week modestly higher initially, ahead of a huge week for earnings with more than 160 S&P companies reporting this week, looking to close out another positive month of returns. On this final trading day of July, the S&P 500 is up +3% MTD, the Russell 2000 +5.9%, the Dow +3% and the Nasdaq Comp +3.8% MTD. Note the S&P 500 index has not seen a 1% decline in over two months as the market rally has continued to broaden out as sectors like Industrials, Materials, and Financials have joined the monster movers of 2023 so far with Technology and Communications (both up over 43% YTD) and Consumer Discretionary (+34% YTD) remaining the leaders. Earnings from Apple and Amazon highlight the busy earnings week that has been well received thus far. @charliebilello notes we have the “best starts to a year for the S&P 500 through 143 trading days” and @ MikeZaccardi tweets: “254 S&P 500 companies contributing 64% of S&P 500 earnings are in; reported companies beat consensus by 4% so far; 73% beat on EPS, 58% on sales and 50% on both, largely better than historical averages of 64%/59%/45%. The dollar is little changed vs most major currencies, even as it strengthens against the yen. Last week, the Bank of Japan softened its yield curve control, instead of a more explicit monetary tightening move. The greenback has strengthened vs the yen since. Manufacturing data was weaker in the US and Chin after Beijing economic activity lost more steam in July with manufacturing contracting again and the services sector weakening.


Economic Data

·     Chicago PMI rose 1.3 points to 42.8 in July from 41.5 but was below the forecast a 43.3 reading marking the 11th straight reading below the 50 threshold that indicates contraction territory. The results mimic other surveys of manufacturers that show tepid growth.

·     Dallas Fed manufacturing index for July -20.0 vs. est. -22.5 and Fed Texas manufacturing output index -4.8 in July vs -4.2 in June.







WTI Crude















10-Year Note





Sector Movers Today

·     In Software: ADBE upgraded from Equal Weight to Overweight at Morgan Stanley and raise tgt to $660 from $510 saying greater clarity on AI-enabled products and the monetization road map increase MSCO’s confidence in reaccelerating the Creative Cloud organic growth engine. CRM downgraded from OW to EW at Morgan Stanley and cut tgt $251 to $278 noting while confident in Salesforce’s longer-term opportunity to further penetrate large enterprises with more vertically oriented solutions, near-term catalysts, including margin expansion and price increases, are now in rear-view mirror. NEWR to be acquired by Francisco Partners and TPG, a leading global alternative asset management firm, for $87.00 per share in cash. The all-cash transaction values New Relic at an equity valuation of approximately $6.5 billion. https://tinyurl.com/3ubhtc2j . BIGC said it would launch New Google Cloud AI-Powered Ecommerce Features.

·     In auto News: Ford (F) has acknowledged in a letter to the National Highway Safety Administration a safety recall of 870,701 F-150 trucks equipped with a single exhaust system. In research, Ford (F) was downgraded from Buy to Hold at Jefferies w/ $15 PT from $17. CVNA downgraded from Hold to Underperform at Jefferies with $30 tgt down from $55) saying consensus appears to overestimate the sustainability of recently elevated profitability, which they believe benefited from transitory tailwinds that will abate. NKLA after announced a deal to sell trucks to JBHT, selling 13 Class 8 trucks to J.B. Hunt subsidiary J.B. Hunt Transport Inc., with the first deliveries expected in August 2023.

·     In Food & Beverages: HEINY cut its 2023 profit growth forecast after an economic slowdown in Vietnam and price hikes squeezed sales volumes, depressing first-half earnings by more than expected. CELH tgt raised to $165 at Stifel as see upside to Q2 and 2023 sales into earnings and raised MNST tgt to $65 as remains comfortable with its slightly below consensus sales expectations and above-consensus EPS estimate. OTLY downgraded to Sector Perform at RBC Capital and cut tgt to $1.80 from $7 after reported underwhelming Q2’23 performance.



·     ALLR +10%; said it entered into a clinical collaboration agreement with privately held FivepHusion to develop FivepHusion’s chemotherapy candidate against solid tumors.

·     BNED +8%; after saying it entered into an agreement with its stakeholders and strategic partners on refinancing terms.

·     HAS +4%; upgraded to Buy at Bank America ahead of earnings – expects Hasbro will report an earnings beat given strong demand for The Lord of the Rings Magic set which released in late June.

·     NEWR +13%; to be acquired by Francisco Partners and TPG, a leading global alternative asset management firm, for $87.00 per share in cash. The all-cash transaction values New Relic at an equity valuation of approximately $6.5 billion https://tinyurl.com/3ubhtc2j

·     ON +4%; latest auto chip maker to report solid results as Q2 revs $2.09B tops $2.02B estimate on better adj EPS of $1.33 vs. est. $1.21 as expenses fell and guided Q3 adjusted earnings of $1.27 to $1.41 per share, above estimates of $1.21 per share.

·     SG +12%; upgraded from Neutral to Overweight at Piper and raised the tgt to $19 from $13 following its 2Q23 earnings report late last week.

·     SOFI +20%; after reported operating EPS of ($0.07), as adjusted net revenues of $489mm and adjusted EBITDA of $77mm were ahead guidance ($470-480mm and $50-60mm) helped by stronger personal loan originations while guidance was raised for 2023.

·     W +4%; upgraded from Neutral to Overweight at Piper and boosted tgt to $97 from $35 saying the home furnishings industry appears to be stabilizing based on its Q2 Furniture Retailer survey.



·     APLS -18%; said it saw positive data from its extension study following 30 months of continuous treatment with Syfovre pegcetacoplan injection. STAT News later reported that five elderly people have been blinded by a severe side effect after receiving injections.

·     BAX -3%; after the FDA said the company issued urgent medical device correction for some infusion pumps.

·     CPRI -1%; downgraded from Overweight to Neutral at Morgan Stanley as sees slowing web traffic for the company’s Michael Kors and Versace brands and sees risk to 2H’23 revenue estimates given the expected acceleration in retail sales growth.

·     DCGO -9%; were weak after the New York Times reported an article criticizing DCGO’s execution of a relocation service contract for asylum seekers sent to New York City.

·     JNJ -3%; after a bankruptcy judge on Friday rejected JNJ’s attempt to resolve lawsuits alleging that its talc-based products caused cancer.

·     XPEV -12%; was upgraded to Neutral at JPMorgan saying story is fundamentally challenged while UBS downgraded to Neutral saying catalysts are priced in.


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