Mid-Morning Look: November 17, 2022

Auto PostDaily Market Report

Mid-Morning Look

Thursday, November 17, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks trading lower as mixed economic data and additional hawkish comments from Federal Reserve officials spurred concerns that the U.S. central bank would not tone down its aggressive stance on interest rate hikes. Benchmark 10-year U.S. Treasuries rose from six-week lows, the dollar index (DXY) rose +0.6% and commodity prices dropped. Stocks have since pared losses, bouncing off lows around 3,900 on the S&P and more than 100-points off lows for Nasdaq. On the macro calendar today, Housing starts fell more than expected at -4.2% vs -2%E to a 1.425M annualized pace vs 1.41M expected. Building permits fell -2.4% vs -3.2%E to a 1.526M annualized pace vs 1.514M expected. Initial Jobless claims fell to 222k vs expectations for a slight increase to 228k vs 226k prior. The catalyst for the renewed focus on Fed tightening started with retail sales data yesterday which indicated that the US economy is still powering ahead. St. Louis Federal Reserve President James Bullard said that rate hikes so far “have had only limited effects on observed inflation,” and even under a “generous” analysis of monetary policy the Federal Reserve needs to continue raising interest rates probably by at least another full percentage point. Several other Fed officials are scheduled to/or have spoken already today including Federal Reserve Bank of Atlanta President Raphael Bostic, Federal Reserve Board Governor Michelle Bowman, Federal Reserve Bank of Cleveland President Loretta Mester, and Federal Reserve Bank of Minneapolis President Neel Kashkari. In stocks news NVDA is higher after data center gains offset chip weakness, CSCO posted solid Q3 earnings and a robust near-term outlook, retailers rebound after Macy’s (M), BABA, KSS, BBWI earnings.


Economic Data

·     Weekly jobless claims fell to 222K from 226K the prior week (est. 225k) as the 4-week moving average rose to 221K from 219K prior week; continued claims rose to 1.507M in latest week from 1.494M prior and US insured unemployment rate unchanged at 1.0%

·     Housing Starts for Oct fell -4.2% to 1.425M unit rate 9est. 1.41M), vs. Sept -1.3% and single-family starts -6.1% to 855,000-unit rate; multifamily -1.2% to 570,000-unit rate; October Housing permits fell -2.4% to 1.526M vs. Sept +1.4%

·     Philadelphia Fed factory index for Nov reported at -19.4 vs. est. -6.0, the future index at -7.1 vs -14.9 prior, employment index at +7.1 vs +28.5, prices-paid index 35.3 vs 36.3, prices-received at 34.6 vs 30.8 and new orders index at -16.2 vs -15.9







WTI Crude















10-Year Note





Sector Movers Today

·     Software movers: Software firm PTC said it will buy cloud-based provider of software ServiceMax for $1.46 billion in cash as it looks to expand its portfolio of product lifecycle management offerings; ATVI’s game development and publishing unit said it would be suspending most Blizzard game services in mainland China, as its current licensing agreements with NTES ends in January; for SPLK, Bank America said channel feedback suggests steady/resilient Q3 activity, driven by resilient security and IT use cases. Believe 17-20% ARR growth is sustainable through a recession, with reacceleration to low 20s exiting recession achievable; GLBE slides on larger Q3 loss and lower guidance – sees FY revs $404.7M-$410.7M from prior $406M-$416M; for WDAY, Bank America said channel suggest a slight uptick in Q3 activity vs. Q2; see potential upside to Q3 cRPO growth of 20% y/y (vs. base of 19% y/y).

·     Hardware, Components & Services: CSCO reported Q1 results, beating consensus by $321 million on the top line and 2c on the bottom line, driven by above-expected product shipments tied to orders received last fiscal year SAIC downgraded from Buy to Hold at Jefferies based on lower growth vs peers, contract loss headwinds, weaker FCF growth and traded at a premium to history; ROKU announced 200 job cuts

·     Auto sector: for UBER, LYFT, Needham noted their 17th Mobility Tracker is highlighted by a significant drop in wait times at LYFT, we believe showing continued improvement in supply which would be consistent with company commentary during earnings two weeks ago, and showing the benefit of the driver-side tech enhancements they are making to the platform; AAP rating and tgt cut by several analyst after yesterday’s earnings results; XPEV upgrade to Buy from Neutral at UBS while lower tgt to $13 from $34; auto retailer CRMT tumbles after Q2 earnings of $0.48 comes in well-below consensus of $2.17



·     ARDX +45%; after its kidney disease therapy won the backing of a majority of a panel of FDA advisers, voting in favor of tenapanor’s risk/benefit profile

·     BBWI +18%; as delivered a very strong 3Q print – beating top-line and doubling their EPS plan ($0.40 vs. $0.10-0.20 guide) on better sales and a ~200bps GM beat which carried into their FY guide (now planning $3.00-3.20 in EPS from $2.70-3.00), implying a reiterated 4Q outlook

·     CSCO +3%; Q1 adj EPS $0.86 vs. est. $0.84; Q1 revs $13.6B vs. est. $13.31B; raises sees FY revs view to +4.5%-6.5% from prior 4%-6% (est. +5.1%) and guides Q2 revs up 4.5%-6.5% vs. est. 4.2%

·     M +10%; Q3 adj EPS $0.52 vs. est. $0.19 and sales fell -3.9% y/y to $5.23B, in-line with ests; Q3 comp sales fell (-3.1%), Gross margin 38.7% vs. 41% y/y; raises FY22 adjusted EPS view to $4.07-$4.27 from $4.00-$4.20 (est. $4.10) and backs FY22 revenue view $24.34B-$24.58B

·     NOC +1%; seeing strength early in defense stocks (LMT) as well as generally defensive sectors like food (CAG) and healthcare (MRK) and out of tech



·     AAP -4%; rating and tgt cut by several analyst after yesterday’s earnings results

·     EDIT -17%; after pauses enrollment for early-to-mid-stage drug trial for Leber congenital amaurosis 10, a genetic eye disorder; said looking for a collaboration partner to advance this program

·     GLBE -13%; slides on larger Q3 loss and lower guidance – sees FY revs $404.7M-$410.7M from prior $406M-$416M

·     KSS-3.8%; as Q3 net and adj. income fall 60%, while comparable sales decrease (-6.9%) and withdraws its FY sales and profit forecasts, blaming macroeconomic uncertainties and the departure of CEO

·     NCLH -8%; downgraded to underperform from outperform at Credit Suisse, seeing downside risk to estimates and preferring the firm’s peers

·     PLCE -7%; after Q3 EPS of $3.33 missed the $3.73 estimate while sales fell -8.8% y/y to $509.1M, which was slightly above ests $500M

·     SI -11%; provided a mid-quarter update that included deposit trends that were worse than expected. Average quarter-to-date digital asset customer deposits, excluding FTX and all related entities, totaled ~ $9.8 billion as of November 15, which compares to $12.0B in Q3


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