Morning Preview: August 11, 2023

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Early Look

Friday, August 11, 2023









S&P 500










US equity futures are little changed as the S&P and Nasdaq look to snap a two-week losing streak, though both are slightly lower coming into Friday. Concerns over local government debt in China weigh on Asian markets while hawkish remarks by a US central banker Daly sours the mood. Cooling inflation boosted investor optimism on Thursday, as markets ended higher on the likelihood of the Federal Reserve pausing its interest-rate increases, but major averages settled near the lows of the day as another early rally failed to hold. Traders are pricing in a roughly 90% probability that the Fed leaves rates unchanged in its September meeting, up from 72% a month ago, according to federal-funds futures. In the bond market, the benchmark 10-year U.S. Treasury yield inched up to 4.081%, from 4.011% Wednesday. Next up later this morning, the Producer Price Index (PPI) for July where M/M headline for July est. to rise +0.2% (prior 0.1%) and headline y/y est. to rise +0.7% (and up from prior 0.1%). Core PPI (ex: Food & Energy) M/M for July est. +0.2% (prior 0.1%) and y/y +2.3% (prior 2.4%). In Asian markets, The Nikkei Index was closed, the Shanghai Index tumbled -65 points to 3,189, and the Hang Seng Index fell -173 points to 19,075. In Europe, the German DAX is lower by -50 points to 15,944, while the FTSE 100 is down -73 points or roughly 1% to 7,545. In energy news, the International Energy Agency (IEA) said OPEC+ supply cuts could erode inventories in the rest of this year, potentially driving prices even higher, before economic headwinds limit global demand growth in 2024. The IEA said if OPEC+ current targets are maintained, oil inventories could draw by 2.2 million barrels per day (bpd) in the third quarter and 1.2 million bpd in the fourth, “with a risk of driving prices still higher”.


Economic Calendar for Today

·     8:30 AM ET           Producer Price Index (PPI) M/M headline for July…est. +0.2% (prior 0.1%)

·     8:30 AM ET           Producer Price Index (PPI) Y/Y headline for July…est. +0.7% (prior 0.1%)

·     8:30 AM ET           PPI Ex: Food & Energy (core) M/M for July…est. +0.2% (prior 0.1%)

·     8:30 AM ET           PPI Ex: Food & Energy (core) Y/Y for July…est. +2.3% (prior 2.4%)

·     10:00 AM ET         University of Michigan Confidence, July-P

·     10:00 AM ET         University of Michigan 1-yr and 5-yr inflation expectations

·     1:00 PM ET            Baker Hughes Weekly rig count data


Market Closing Prices Yesterday

·     The S&P 500 Index edged higher 1.12 points, or 0.03%, to 4,468.91.

·     The Dow Jones Industrial Average rose 52.39 points, or 0.15%, to 35,175.75.

·     The Nasdaq Composite gained 15.97 points, or 0.12%, to 13,737.99.

·     The Russell 2000 Index declined -8.15 points, or 0.42% to 1,922.62.





















10-Year Note





World News

·     US mortgage delinquency rates fall to 3.37% at the end of the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey, their lowest since the MBA began collecting data in 1979 and down from 3.64% year-on-year.

·     President Biden calls China a “ticking time bomb” as the country faces economic challenges and said they were in trouble because of weak growth. “They have got some problems. That’s not good because when bad folks have problems, they do bad things,” Biden said.

·     Chinese stocks fell on Friday, as investors were disappointed by authorities’ latest stimulus measures, amid fresh data showing that the post-pandemic recovery is continuing to lose steam. Shanghai and Shenzhen stock exchanges said late Thursday they would study measures to lower investors’ trading costs and improve liquidity to further stimulate the market.


Sector News Breakdown


·     Flowers Foods (FLO) Q2 adj EPS $0.33 vs est. $0.28 on sales $1.228B vs est. $1.197B, adj EBITDA $133.1Mm; guides FY sales $5.095-5.141B vs prior $5.086-5.141B and est. $5.109B, adj EBITDA $503-528Mm vs prior $494-528Mm and est. $508.38Mm, adj EPS $1.18-1.25 vs prior $1.15-1.25.

·     Spectrum Brands (SPB) Q3 adj EPS $0.75 vs. est. $0.40; Q3 revs $735.5M vs. est. $787.11M; said for FY23, continues to expect reported net sales to decline by mid-single digits, with foreign exchange expected to have a negative impact based upon current rates.


Energy, Industrials and Materials

·     Archer Aviation (ACHR) and Boeing (BA) announced that they have reached a settlement to resolve the federal and state court litigation between the parties on undisclosed terms.

·     Enterprise Products Partners LP (EPD) files for shelf of up to $2.54 bln of common units.

·     Maxeon Solar (MAXN) shares fall -20%; Q2 revs rose 46% y/y to $348.4M vs. est. $374.3M; guides Q2 revs $280M-$3320M, below consensus of $394.8M; selects Albuquerque, New Mexico as site for new 3-gigawatt solar cell and panel manufacturing facility as total investment of project is expected to be over $1 bln; sees year shipments 700 to 740 Mw.

·     Virgin Galactic (SPCE) CEO Branson says expect next flight in early September – CNBC reported.



·     AllianceBernstein L.P. (AB) preliminary assets under management increased to $704 billion during July 2023 from $692 billion at the end of June. The 2% increase was driven by market appreciation, offset by firmwide net outflows.

·     Nikkei reported late yesterday that Japan’s big life insurance companies are poised to buy more ultra long-term Japanese government bonds because they see the BOJ’s policy adjustment, which allows 10-year JGB yields to rise above 0.5%.

·     Medical Properties (MPW) downgraded to Underperform from Strong Buy at Raymond James.

·     Medical Properties Trust (MPW) downgraded to Underperform from Neutral at Bank America and cut tgt to $8 from $9 after quarterly earnings.



·     Amylyx Pharmaceuticals (AMLX) Q2 EPS $0.31 vs est. $0.10 on product revs $98.2Mm vs est. $92.14Mm; cash & investments $357.3Mm.

·     AVITA Medical (RCEL) Q2 EPS ($0.41) vs est. ($0.32) on revs $11.75Mm vs est. $11.32Mm; guides Q3 commercial revs $13-14Mm vs est. $12.98Mm and FY revs $51-53Mm vs est. $50.59Mm.

·     Cano Health (CANO) plunges 44% after worse-than-expected quarterly results and said it’s pursuing a potential sale amid “substantial doubt about the company’s ability to continue as a going concern within one year.”

·     Ventyx Biosciences (VTYX) Q2 EPS ($0.91) vs est. ($0.71); cash & equivalents 332.3Mm, expected to fund planned operations into 2025.

·     Y-mAbs Therapeutics (YMAB) Q2 EPS ($0.14) vs est. ($0.24) on revs $20.8Mm vs est. $20.35Mm; reiterates FY23 guide.

·     Zymeworks (ZYME) Q2 adj EPS ($0.75) vs est. ($0.47); says cash resources expected to fund planned operations through at least end of 2026 and potentially beyond.

·     Late yesterday, the US Supreme Court agreed to consider scuttling Purdue Pharma’s $6 billion opioid settlement, taking up a Biden administration appeal.


Technology, Media & Telecom

·     Arlo Technologies (ARLO) Q2 adj EPS $0.06 vs est. $0.04 on revs $115.076Mm vs est. $110.18Mm, adj gr mgn 37.3%; guides Q3 adj EPS $0.04-01.0 vs est. $0.07.

·     Evolv Technologies (EVLV) Q2 adj EPS loss (-$0.10) vs. est. loss (-$0.11); Q2 revs $19.8M vs. est. $14.3M; boosts FY23 revenue view to $70M-$75M from $60M-$65M and raises FY23 adjusted EBITDA loss view to ($56M)-($52M) from ($58M)-($53M).

·     IonQ Inc. (IONQ) Q2 EPS loss (-$0.22) vs. est. loss (-$0.13); Q2 revs rose 111% y/y to $5.5M vs. est. $4.35M; raises FY23 revenue view to $18.9M-$19.3M from prior $18.8M-$19.2M (est. $19.3M); Cash, cash equivalents and investments were $509.2 million as of June 30, 2023.

·     News Corp. (NWSA) Q2 adj EPS $0.14 vs. est. $0.08; Q4 revs fall -9% y/y to $2.43B vs. est. $2.49B; said 4Q revs reflects absence of the extra week in the prior year and the negative impact from forex; says for the first time, digital accounted for over 50% of revs for FY; Q4 segment Ebitda was $341M vs. est. $305.1M

·     Shutterstock (SSTK) Q2 EPS ($0.50); says believes cash and equivalents & investments sufficient to fund ops through 2024.

·     Viavi Solutions (VIAV) Q4 EPS $0.10 vs. est. $0.08; Q4 revs $263.6M vs. est. $263.6M; sees Q1 EPS $0.09-$0.11 vs. est. $0.12 and revs $240M-$260M below consensus $268.53M; Q4 adj operating margins 11.7% and adj gross margin 58.2%.


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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