Mid-Morning Look: October 05, 2023

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Mid-Morning Look

Thursday, October 05, 2023





DJ Industrials




S&P 500








Russell 2000






U.S. stocks choppy out of the gate before pushing lower, tracking moves initially in the bond market following better trade data and in-line jobless claims, and ahead of nonfarm payroll data tomorrow. Soaring Treasury yields have slammed the brakes on stock buying the last 2-months after hitting highs of 4.89% on Wednesday, but down around 4.73% now. Slowing consumer spending fears given the rise in rates, rising oil prices (until the last week), and the student loan forgiveness period being over has dented leisure/discretionary sectors. Given the move in yields and rate hike expectations following “hawkish” Fed speak (“higher for longer”), the S&P 500 is on track for a 5th down week in a row, the Dow is tracking for 3rd straight down week while Nasdaq trying for back-to-back weekly gains. Busy day of commentary with Fed speakers Mester, Kashkari, Barkin, Daly, and Barr all speaking during market hours. Stocks got a good bounce yesterday after a softer ADP number(+89K) seemed to get the rally going, but this morning, only Healthcare, Financials, and REITs are higher.


Economic Data

·     Weekly Jobless Claims rose to 207K in the latest week from 205K prior week (est. 210K); the 4-week moving average fell to 208,750 from 211,250 prior; continued claims fell to 1.664M from 1.665M prior week and consensus 1.675M; Us Insured Unemployment Rate unchanged at 1.1%.

·     International Trade in Goods and Services for July shows deficit narrows to (-$58.30B) vs. (-$62.30B) consensus and (-$64.70B) in July (revised from -$65.00B).






WTI Crude















10-Year Note





Sector Movers Today

·     In Transports: Bernstein lowers 3Q estimate for JBHT to 2% below consensus ahead of earnings, expecting a slight miss for the quarter; Bernstein lowers ests on UNP ahead of earnings on higher-than-expected purchased services and materials from the cleanup of Hurricane Hilary. Mexican airport operators Asur, GAP and OMAB tumble after announcing that the country’s civil aviation regulator had changed the terms of their tariff base regulation.

·     In Food & Beverages: CAG misses Q1 sales estimates ($2.9B vs. est. $2.95B) as multiple rounds of price hikes dampened demand for its ready-to-eat meals, frozen foods and snacks though posted Q1 profit helped by the price hikes (maintained FY organic net sales growth forecast). STZ 2Q EPS of $3.70 tops consensus $3.37 and EBIT a 5% beat, with sales of $2.84B vs est. $2.82B; raises FY EPS to $12.00-$12.02 vs prior $11.70-$12.00 and raised bottom-end of beer sales. LW shares jumped after Q1 beat ($1.63/$1.67B vs. est. $1.08/$1.62B) and raised its FY24 adjusted EPS view to $5.50-$5.95 from $4.95-$5.40 and boosted its year sales outlook as well.

·     In Autos: RIVN files to sell $1.5B of green convertible senior notes due 2030; guided revenue for the three months ended Sept. 30 between $1.29B-$1.33B vs. est. $1.3B (vs. last year $540M). NIO, a Chinese electric car company that competes with TSLA, employs 11,000 people in research and development, but sells a mere 8,000 cars per month and loses $35,000 per car it sells, maintains government backing – the NY Times reported. https://tinyurl.com/3j525v7z . EV charging companies CHPT, BLNK shares weak initially after Hyundai Motor and Kia Corp said they decided to adopt TSLA’s electric vehicle charging technology in the U.S.

·     Solar stocks extend 2023 losses (SEDG, ENPH, FSLR slide): recall yesterday Truist lowered tgts on many names after recent sell-off in the sector due to high interest rates; Truist said residential solar has faced a difficult year as rates and policy changes have hit U.S. growth and the trend could continue into 2024. They added that utility-scale solar firms have also not been protected from the sell off as investors question the impact of higher rates on deployments in large-scale projects (recall they downgraded NOVA, RUN on Wednesday).



·     LW +11%; top leader in the S&P after Q1 beat ($1.63/$1.67B vs. est. $1.08/$1.62B) and raised its FY24 adjusted EPS view to $5.50-$5.95 from $4.95-$5.40.

·     ORTX +97%; to be acquired by Japan’s Kyowa Kirin at $16 per ADS in deal valued at $387.4M; contingent value rights tied to U.S. approval of Orchard’s OTL-200 could add another $1 per ADS, bringing the total value of the deal to $477.6M, or $17 an ADS. https://tinyurl.com/mpd6hcev

·     QURE +9%; announces strategic reorganization to reduce operating expenses; reduction of 28% of workforce not related to hemgenix manufacturing obligations; total cost savings of $180M to extend cash runway into Q2’27; discontinuing investments in more than half of projects.

·     SP +47%; to be acquired by Metropolis Technologies for $54.00 per share in cash, in total deal valued at $1.5B, a 52% premium to yesterday https://tinyurl.com/26j2t9p9

·     SPIR +5% said NASA selects them as one of the contractors to provide earth observation data for the agency’s Commercial Smallsat Data Acquisition (CSDA) program with $476M ceiling.

·     WDC +2%; strength in MU, STX, WDC after UBS comments earlier – the firm said it now foresees a more significant increase in DRAM WFE in ’24 as it believes Samsung and Hynix in particular are moving to ramp technology spending more aggressively. Also note Digitimes out saying Samsung reportedly to raise NAND contract prices in Q4 2023 https://tinyurl.com/e5e3j59v



·     ACCD -9%; posted another strong quarter but shares slid after the full year guidance was not raised despite a beat in the quarter.

·     CLX -8%; guided Q1 EPS loss to (-$0.40-$0.00) vs. estimates $1.36; and Q1 sales are expected to decrease by 28% to 23% y/y and organic sales are now expected to decrease by 26% to 21% (compared to the Company’s prior expectations of mid-single-digits growth).

·     CMBM -40%; cuts Q3 revenue view to $40M-$45M from $62M-$70M, below the consensus $64.18M primarily due to a delay in government defense orders due to U.S. Federal budgetary timing issues impacting the Point-to-Point business.

·     IPHA -10%; said that the U.S. FDA imposed a partial clinical hold on two of its trials for lymphoma candidate lacutamab.

·     MXCT -16%; as guided FY23 revenue to $34M-$36M below consensus $45.07M given the ongoing volatility in customer activity in the life science tools sector.

·     NBTX -11%; after saying 10 deaths occurred within 180 days of enrollment of a dose-expansion trial for its investigational treatment for patients with advanced head and neck cancer.

·     OMAB -32%; as shares in Mexican airport operators Asur, GAP and OMA tumble after announcing that the country’s civil aviation regulator had changed the terms of their tariff base regulation.

·     RIVN -15%; files to sell $1.5B of green convertible senior notes due 2030; guided revenue for the three months ended Sept. 30 between $1.29B-$1.33B vs. est. $1.3B (vs. last year $540M).


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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