Mid-Morning Look: November 15, 2023

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Mid-Morning Look

Wednesday, November 15, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open higher on Wednesday, with the S&P 500 building on its strongest daily gain since April as investors digested another inflation report, along with a fresh reading on retail sales. The S&P 500 is on track to rise for the 11th session in 13 and the SPX hit the 4,513 level, marking a 10% bounce off the October lows. Treasury yields jump as revised retail sales overshadow cooling inflation. The yield on 10-year Treasury note is up 9.1 bps to 4.532%. Overall, retail sales dipped (-0.1%) last month, slightly less than the (-0.3%) estimate, and marked the first decline in 7 months while data for September was revised higher to show sales increasing 0.9%. At the same time, the headline reading of the Producer Price Index (PPI) was down (-0.5%) M/M, its biggest drop since 2020 and well below the estimate of +0.1%, following Tuesday’s reading of lower consumer prices. The Retail sector got a big boost after TGT reported Q3 adj EPS $2.10 easily topping est. $1.48 while revs fell -4.2% to $25.4B (in-line) on a smaller Q3 comp store sales drop, with better margins. All eleven S&P sectors are higher minus a handful of big tech lagging (AMZN, META, MSFT, NVDA) with the rotation into small cap extending as the Russell 2000 outperforms (note the IWM topping its 200-day MA of $181.25 here – off lows of $163.10 on 11/1). The dollar and Treasury yields rebound after tumbling Tuesday post CPI. Goldman Sachs bullish into year-end saying they forecast the S&P 500 index will end 2024 at 4700, representing a 12-month price gain of 5% and a total return of 6% including dividends. Another strong day after a massive surge Tuesday on expectations the Fed is done raiding rates and will likely cut in 2024.


Economic Data

·     The Producer Price Index (PPI) for Oct fell (-0.5%) vs. a rise of +0.1% expected and well below the +0.4% prior (revised from +0.5%) and on a Y/Y basis, rose +1.3% below the +2.0% expected and +2.2% prior. Core PPI, which excludes food and energy, was unchanged vs. a rise of +0.3% expected and +0.2% prior (revised from +0.3%) and Y/Y rose +2.4% vs. +2.7% expected/prior.

·     October Retail sales beat, posting a smaller-than-expected loss of (-0.1%) vs. est. loss (-0.3%) but marked the first decline in seven months, while retail sales ex autos rose +0.1% vs. expected (-0.2%). Oct gasoline sales -0.3% vs Sept +1.0% and Oct cars/parts sales -1.0% vs Sept +1.1%.







WTI Crude















10-Year Note





Sector Movers Today

·     In Consumer Finance: Monthly NCO and delinquency data released: BAC credit card charge-off rate was 2.05% in Oct vs 2.09% in Sept and credit card delinquency rate was 1.37% at Oct end vs 1.30% at Sept end. COF said Oct domestic credit card net charge-offs rate 5.08 % versus 4.16% in Sept and 30+ day performing delinquencies rate for domestic credit card 4.48% at Oct end vs. 4.31% at Sept end. The 30+ day performing delinquencies rate for auto 6.06% at Oct end vs. 5.64% at Sept end and the Oct auto net charge-offs rate 2.26 % versus 1.79% in Sept. DFS credit card delinquency rate 1.47% at Oct end vs 1.63% at Sept end and said the credit card charge-off rate 2.09% at Oct end vs 1.94% at Sept end. JPM credit card charge-off rate 1.65% in Oct vs 1.60% in Sept end and said credit card delinquency rate 0.98% at Oct end vs 0.95% at Sept end.

·     In Business Information Services: in Europe, Experian (EXPGY) reported Q2 organic revs grew 5% YoY (in line w/ 1Q) and the reiterated its organic rev forecast for the FY (peers EFX TRU were active in reaction). Separately, TRU said it plans to reduce its 13,000-employee work force by 10% or, about 1,300, as part of a cost-cutting plan/said will take $355M-$375M of one-time pre-tax expenses, mostly by the end of 2024.



·     ARCT +24%; after Q3 EPS results as loss ($0.61) smaller than est. ($1.69) on revs $45.1Mm vs est. $15.87Mm; expected cash runway extended to end 2026.

·     CHGG +13%; announces $150M accelerated share repurchase with Morgan Stanley Bank.

·     CTLT +10%; posted smaller than expected Q1 loss while revs of $982M fell 4% y/y but beats the $939M est.; recorded a net loss of $715M for Q1, which includes the goodwill impairment charge; sees FY24 revenue $4.300B-$4.500B vs. est. $4.35B and sees FY adj EBITDA $680M-$760M.

·     GNRC +4%; upgraded from Underperform to Neutral at Bank America with $110 tgt noting Q3 results beat expectations, led by better-than-expected execution in resi and C&I

·     GT +4%; after the company unveiled a transformation plan that aims to raise more than $2B in proceeds from portfolio optimization and to generate cost cuts of $1.3B by the end of 2025.

·     SIRI +9%; Few media names active after Warren Buffett’s Berkshire revealed stakes: BATRA new position for Berkshire with $8M stake and buys 9.7M shares of SIRI valued at $43.8M, as per an SEC filing.

·     TGT +16%; reported Q3 adj EPS $2.10 easily topping est. $1.48 while revs fell -4.2% to $25.4B (in-line) on a smaller Q3 comp store sales drop of (-4.9%) vs. est. for a (-5.3%) decline; guides Q4 adj EPS $1.90-$2.60 vs. est. $2.23; said Q3 gross margins rose to 27.4%, from 24.7% a year earlier.

·     VFC +13%; upgraded from Underweight to Neutral at JP Morgan and raise tgt to $19 as they see a profit inflection over the next 12-18 months supported by CEO cost savings program.

·     WIX +5%; upgraded from Equal Weight to Overweight at Barclays and raised its tgt to $130 saying Partners is scaling well; few competitors address this channel effectively.



·     CAH -2%; weakness in healthcare sector with the likes of MCK, CI, LLY lower.

·     DT -2%; after Thoma Bravo said to sell 10M shares, cutting its stake by about 3% to 10.8%, or approx 31.9M shares.

·     ENR -6%; was downgraded at JP Morgan, Morgan Stanley and RBC following Q3 earnings results.

·     TJX -3%; Q3 comp sales +6% topped est. +4.5% with better segment sales as Marmaxx comparable sales +7% vs. +3% y/y and HomeGoods comps +9% vs. -16% y/y; Q3 results ahead but guided Q4 EPS $0.97-$1.00 vs. est. $1.13.

·     ZIM -4%; reported Q3 results that fell short of Wall Street estimates as it incurred a massive net loss of $2.3B for the quarter, compared to net income of $1.17B in the year ago quarter and bottom line was weighed down by a non-cash impairment loss of $2.06B.


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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