Morning Preview: August 23, 2023

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Early Look

Wednesday, August 23, 2023









S&P 500










US futures are looking higher early ahead of key earnings results in the technology sector, with NVDA expected after the close. Stocks mostly finished lower on Tuesday as weak retail earnings spurred concerns about the economy ahead of the Jackson Hole symposium later this week and Chair Powell’s address on Friday. Shares of Macy’s and Dick’s Sporting Goods dropped sharply after reporting weaker quarterly earnings and providing tepid forecasts for the remainder of the year – this morning its Foot Locker that plunges on a lower outlook. Supporting equities on Wednesday, the yield on the 10-year U.S. Treasury note slipped from near 16-year highs hit in the previous session amid lingering concerns over higher-for-longer rates. In Asian markets, The Nikkei Index gained 153 points to 32,010, the Shanghai Index fell -41 points to 3,078, and the Hang Seng Index gained 54 points to 17,845. In Europe, the German DAX is up 60 points to 15,765, while the FTSE 100 rises 65 points to 7,336. Few economic data points expected today but NVDA earnings tonight and The Fed meeting tomorrow remain key.


Market Closing Prices Yesterday

·     The S&P 500 Index dipped -12.22 points, or 0.28%, to 4,387.55.

·     The Dow Jones Industrial Average fell -174.86 points, or 0.51%, to 34,288.83.

·     The Nasdaq Composite climbed 8.28 points, or 0.06%, to 13,505.87.

·     The Russell 2000 Index declined -5.18 points, or 0.28% to 1,850.84.


Economic Calendar for Today

·     7:00 AM ET              MBA Mortgage Applications Data

·     9:45 AM ET              S&P Global Manufacturing PMI, Aug-Flash…est. 49.3

·     9:45 AM ET              S&P Global Services PMI, Aug-Flas…est. 52.2

·     10:00 AM ET            New Home Sales M/M for July…est. 705K

·     10:30 AM ET            Weekly DOE Inventory Data

·     1:00 PM ET               US Treasury to sell $12B in 20-year notes.


Earnings Calendar:

·     Earnings Before the Open: AAP ADI ANF BBWI DY FL KSS LANC PTON RGS WSM



Other Key Events:

·     Mizuho U.S. Investor Tour, 8/22-8/23

·     Needham 4th Annual Semiconductor & Semi Cap Conference (virtual), 8/22-8/23

·     Rosenblatt Technology Summit (virtual) “The Age of AI”, 8/22-8/24

·     Seaport Global 12th Annual Summer Investor Conference (virtual), 8/22-8/23





















10-Year Note





World News

·     Japan manufacturing activity remained in contraction in August for a third month easing to though the pace of decline slowed as the PMI rose 0.1 to 49.6. While Japan’s services PMI rose to 0.5 to 54.3, its 16th consecutive month of expansion.


Sector News Breakdown


·     Advance Auto Parts (AAP) Q2 EPS $1.43 vs. est. $1.66; Q2 revs $2.69B vs. est. $2.66B; Q2 comparable store sales fell (0.6%); company announces strategic review; cuts FY23 EPS view to $4.50-$5.10 from $6.00-$6.50 while boosts year sales and comp sales outlook.

·     Foot Locker (FL) shares fall after cutting guidance and suspends dividend; Q2 Comparable sales fell (-9.4%) vs. (-10.3%) y/y; Q2 adj EPS $0.04 in-line and sales -9.9% y/y to $1.86B vs. est. $1.88B; said pausing dividend beyond recently approved October payout; lowers year FY sales to down -8%-9% from prior view down -6.5%-8% and cuts FY EPS to $1.30-$1.50 from prior $2.00-$2.25.

·     Toll Brothers (TOL) Q3 EPS $3.73 vs est. $2.83 on revs $2.688B vs est. $2.49B, home sales revs $2.7B, home sales adj gross margin 29.3%; guides Q4 deliveries 2,650-2,750 units, avg delivered price/home $1.005-1.025Mm, adj homes sales gross margins 28.5%; says demand remains solid as start Q4.

·     Urban Outfitters (URBN) Q2 EPS $1.10 vs est. $0.89 on sales $1.272B vs est. $1.249B, total inventory decreased by $111Mm (-15.9%) y/y; said Q2’s sales strength has continued into Q3.

·     La-Z-Boy (LZB) Q1 adj EPS $0.62 vs est. $0.55 on sales $482Mm vs est. $474.58Mm, adj op mgn 7%; guides Q2 sales $490-510Mm vs est. $507.08Mm and op mgn 6.5-7.5%.

·     Stellantis (STLA) weighs tie-up with EV maker to expand in China, Sources say, Bloomberg reported; the carmaker has explored partnership with firms such as Leap Motor.

·     Nikola (NKLA) files to sell 10.27M shares of common stock for holders.


Energy, Industrials and Materials

·     Dycom Industries (DY) Q2 EPS $2.03 vs. est. $1.66; Q2 adj EBITDA $130.8M vs. est. $119.6M; Q2 revs rose 7.1% y/y to $1.04B vs. est. $1.03B; approves new $150M share repurchase program; sees Q3 revenues in line with Q3 of FY22.

·     UPS Inc. (UPS) employees approved a new five-year union contract with the delivery giant Tuesday, about a month after reaching a tentative deal that averted a strike of 340,000 United Parcel Services workers. The Teamsters said 86.3% of members voted for the “historic” deal, saying it was “the highest vote for a contract in the history of the Teamsters at UPS.”

·     The American Petroleum Institute said weekly crude oil inventories fell -2.42M barrels, Cushing fell -2.21M barrels, gasoline rose +1.9M and Distillates fell -153k.

·     Louisiana-Pacific (LPX) upgraded to Buy from Neutral at DA Davidson.



·     Bristol Myers Squibb (BMY) receives European Commission approval for Opdivo (nivolumab) as an adjuvant treatment for patients with completely resected stage IIb or IIc melanoma.

·     Roche Holding (RHHBY) shares rise after the company released interim results from a late-stage clinical trial of a combination of two of its drugs that showed a benefit for overall survival in patients with lung cancer.

·     Johnson & Johnson (JNJ) accepted an aggregate of 190,955,436 shares of Johnson & Johnson common stock in exchange for 1,533,830,450 shares of Kenvue (KVUE) common stock. As a result, Johnson & Johnson now owns 9.5% of the outstanding shares of Kenvue common stock. The exchange offer was 4.2x subscribed.


Technology, Media & Telecom

·     Qualcomm Inc. (QCOM) reportedly faces scrutiny from the Federal Trade Commission over the proposed acquisition of a chip maker that specializes in auto safety products. According to a report late Tuesday from Politico, the FTC plans to open an in-depth probe of Qualcomm’s purchase of Israel-based Autotalks, according to two unnamed sources.


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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