Morning Preview: December 14, 2023

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Early Look

Thursday, December 14, 2023









S&P 500










U.S. stock markets look to build on yesterday’s strong gains, extending the winning streak for the S&P to 6-days as the 10-year Treasury yield hits a low of 3.932% (lowest level since July 31st) after the Fed’s economic projections fuels bets on a fast pivot to rate cutting next year. The Dow Jones industrial average jumped to close at all-time highs above 37,000 while the S&P 500 and Nasdaq near all-time bests in what has been a rally of epic proportions to end the year. Major averages are going on 7-weeks of gains, Apple (AAPL) shares closed at a record of $197.96 and interest rate sensitive sectors (REITs, Utilities, Energy, Financials) that have lagged in 2023 were the biggest gainers on Wednesday. Between a combination of a Fed “pivot” as the FOMC median forecast shows 75 bps of rate cuts in 2024 to 4.6% from the current 5.25%-5.50% range and said they see another four cuts in 2025, seasonal strength into year end, a tumbling dollar and Treasury yields, markets are looking to give Bulls the happy Christmas they had been hoping for. The CME’s FedWatch tool now prices 63% odds of a rate cut just two FOMC meetings from now, in March, up from 40% odds yesterday. Fed-fund futures are pricing at least five 25-basis point interest rate cuts next year, compared to Fed projections of three trims. In Asian markets, The Nikkei Index fell -240 points to 32,686, the Shanghai Index dipped -9 points to 2,958, and the Hang Seng Index rose 173 points to 16,402. In Europe, the German DAX is higher by 113 points to 16,879, while the FTSE 100 surges 161 points o5 2.1% to 7,710.


Market Closing Prices Yesterday

·     The S&P 500 Index jumped 63.39 points, or 1.37%, to 4,707.09.

·     The Dow Jones Industrial Average rose 512.30 points, or 1.40%, to 37,090.24.

·     The Nasdaq Composite spiked 200.57 points, or 1.38%, to 14,733.96.

·     The Russell 2000 Index advanced 66.24 points, or 3.52% to 1,947.51.


Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 220K

·     8:30 AM ET                  Continuing Claims…est. 1.887M

·     8:30 AM ET                  Import Prices M/M for November…est. (-0.8%)

·     8:30 AM ET                  Export Prices M/M for November…est. (-1.0%)

·     8:30 AM ET                  Advance Retail Sales M/M for November…est. (-0.1%)

·     8:30 AM ET                  Retail Sales – Less Autos M/M for November…est. (-0.1%)

·     10:00 AM ET                Business Inventories M/M for October…est. 0.0%

·     10:30 AM ET                Weekly EIA Natural Gas Inventory Data


Earnings Calendar:

·     Earnings Before the Open: JBL

·     Earnings After the Close: COST LEN MESA NX


Other Key Events:

·     Oppenheimer 4th Annual Midwest Industrial Summit, 12/13-12/14

·     Roth MKM 12th Annual Deer Valley Event, 12/13-12/16, in Utah

·     China Industrial Output and Retail Sales for November





















10-Year Note





World News

·     World oil demand will rise faster than expected next year, the International Energy Agency (IEA) said on Thursday, saying world consumption will rise by 1.1 million barrels per day in 2024, up 130,000 bpd from its previous forecast, citing an improvement in the outlook for the United States and lower oil prices.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 32 vs 19.9 last week. Bulls rise to 51.3% from 47.3%, Neutrals rise to 29.4% from 25.3%, Bears fall to 19.3% from 27.4%

·     The 10-year Treasury yield hits a low of 3.932% (lowest level since July 31st), last down 8-bps to 3.95% while the 2-yr yield tumbles 16-bps to 4.32%.


Sector News Breakdown


·     Alaska Airlines (ALK) said it sees Q4 capacity and revenue at high end of guidance amid strong holiday travel demand; raised its revenue guidance to growth of 2.25% to 3.25%, from prior guidance of up 1% to 4%. It expects capacity measured as available seat miles to be up 13% to 14%, compared with prior guidance of 11% to 14%; also said fuel cost per gallon is tracking at the high end of its range at about $3.40, versus prior guidance of $3.30 to $3.40.

·     Toll Brothers Inc. (TOL) board of directors has approved a new 20 mln share repurchase authorization to replace its existing authorization.


Energy, Industrials and Materials

·     Berkshire Hathaway acquired nearly 10.5M shares of Occidental Petroleum (OXY) so far this week for about $588.7 million, according to an SEC filing; the purchases bring Berkshire’s stake in Occidental to about 27%. The company also holds preferred shares and warrants to acquire another 83.8 million Occidental shares for $4.7B.

·     Cenovus Energy (CVE) forecast total upstream production in the range of 770K-810K barrels of oil equivalent per day (boepd), compared with 775K-795K boepd expected this year; expects expenses to be between C$4.5 billion ($3.35 billion) and C$5.0 billion in 2024, higher than its estimated 2023 costs of C$4 billion to C$4.5 billion.

·     Commercial Metals Company (CMC) said beginning with its first quarter of fiscal 2024, the Company will report financial results reflecting a realigned reporting structure, with three reportable segments: North America Steel Group, Europe Steel Group, and Emerging Businesses Group.

·     Mueller Water Systems (MWA) Q4 adj EPS $0.19 vs est. $0.14 on revs $301.4Mm vs est. $284.73Mm, adj EBITDA mgn 18.4%, adj EBITDA $55.4Mm vs est. $46.63Mm; guides FY net sales -8% to -3% vs est. +1%; sees Q1 net sales $245-255Mm vs est. $266.39Mm.

·     Nordson (NDSN) Q4 adj EPS $2.46 vs est. $2.39 on sales $719.313Mm vs est. $706.76Mm, gr mgn 53.4%; sees FY24 sales +4-9% vs est. +8.48% and adj EPS +1-8% vs est. +6.79%.



·     Discover Financial Services (DFS) said credit card charge-off rate 1.79% at November end vs 2.09% at October end and credit card delinquency rate 1.54% at November end vs 1.47% at end October.

·     Green Dot (GDOT) downgraded to Underweight from Equal Weight at Barclays.



·     Biogen (BIIB) and Sage Therapeutics (SAGE) announced Zurzuvae – zuranolone – 50 mg CIV is now available by prescription for the treatment of postpartum depression for adults in the U.S., with product already at specialty pharmacies and delivered to patients.

·     Moderna (MRNA) and Merck (MRK) announced follow-up data from the Phase 2b randomized KEYNOTE-942/mRNA-4157-P201 study, a clinical trial evaluating mRNA-4157, V940, in combination with KEYTRUDA, Merck’s anti-PD-1 therapy, reduced the risk of death or relapse in patients in patients with resected high-risk melanoma.

·     Ocular Therapeutix (OCUL) 30.8M share Spot Secondary priced at $3.25.


Technology, Media & Telecom

·     Adobe Systems (ADBE) Q4 adj EPS $4.27 vs est. $4.14 on revs $5.05B vs est. $5.032B; sees Q1 revs $5.1-5.15B vs est. $5.19B and adj EPS $4.35-4.40 vs est. $4.26; guides FY revs $21.3-21.5B vs est. $21.733B and adj EPS $17.60-18.00 vs est. $18.00.

·     Alibaba (BABA) invested additional $634M in Singapore-based e-commerce subsidiary Lazada, the Nikkei reported late yesterday; Lazada issued a placement of stock to Alibaba’s Singapore subsidiary.

·     Amtech Systems Inc (ASYS) said it sees Q1 revenues in range of $21-$24M, down from Q4 revs of $27.7M, with EBITDA nominally negative saying the overall near-term outlook for revs/earnings is challenging; said experienced continued softness in demand across several of our end markets during 4Q.


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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