Morning Preview: December 19, 2023

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Early Look

Tuesday, December 19, 2023









S&P 500










Another day, another record for the Dow Jones Industrial Average, making it a 4th straight day of all-time highs, while the Nasdaq Composite rose +0.6% on Monday, above 14,900 to an all-time high and rising for an 8th straight session led by mega caps (AMZN, GOOGL, META, NVDA). US futures overnight were quiet and steady. It was a good start to the week as major averages look to make it an 8th straight week of gains, though equity markets are looking a bit stretched here but has shown no signs of slowing into year-end. Several Federal Reserve officials have attempted to tone down market expectations for rate cuts by the central bank next year in recent days after the dovish commentary from Fed Chair Powell last Wednesday boosted stock markets. Investors have largely priced in the first rate cut by the Fed in March, with expectations increasing after the central bank’s policy announcement last week. Atlanta Federal Reserve President Raphael Bostic and New York Fed President John Williams said last week, and Cleveland President Loretta Mester and Chicago Fed President Austan Goolsbee on Monday indicated the market may be getting too aggressive in pricing in rate cuts. Still, stocks finished higher (again) on Monday led by Communications, Technology, Consumer Staples, and Energy. US Treasury yields hold near multi-month lows (10-yr 3.90%) as the Bank of Japan maintains negative rate policy. In Asian markets, The Nikkei Index jumped 450 points or 1.4% to 33,219, the Shanghai Index edged higher one point to 2,932, and the Hang Seng Index dropped -124 points to 16,505. In Europe, the German DAX is up 64 points to 16,715, while the FTSE 100 is down slightly at 7,613. The yen tumbled, with dollar-yen up 1.43% at 144.75 while the Nikkei rose and Japanese government bonds yields fell.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 21.37 points, or 0.45%, to 4,740.56.

·     The Dow Jones Industrial Average rose 0.86 points, or 0.00%, to 37,306.02.

·     The Nasdaq Composite gained 90.89 points, or 0.61%, to 14,904.81.

·     The Russell 2000 Index declined -2.71 points, or 0.14% to 1,982.52.


Economic Calendar for Today

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:30 AM ET                  Housing Starts M/M for November…est. 1.36M

·     8:30 AM ET                  Building Permits M/M for November…est. 1.465M

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     12:30 PM ET                Fed’s Bostic Speaks on US economy and business outlook.

·     4:00 PM ET                   Net Long-term TIC Flows for October

·     4:30 PM ET                   API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: FCEL FDS

·     Earnings After the Close: ARKR EPAC FDX KNW SHIM SCS WOR


Other Key Events:

·     Truist Government Services Bus Tour – VVX, ICFI, LDOS, CACI, PSN, 12/19





















10-Year Note





World News

·     The Bank of Japan maintained ultra-loose policy settings as expected move, waiting for more more evidence on whether wages and prices would rise enough to justify a shift away from massive monetary stimulus. At the two-day meeting that ended on Tuesday, the BOJ kept its short-term rate target at -0.1% and that for the 10-year government bond yield around 0%. It also left unchanged a pledge to ramp up stimulus “without hesitation” if needed.

·     The number of private-equity deals targeting technology companies has tumbled about 44% y/y Dealogic reports. The total value of tech deals has also declined at roughly the same rate, the data show. So far this year, there have been 229 entry transactions by private-equity firms into U.S. technology companies, with a total value of about $77.16B. By comparison, the respective figures came to 410 deals valued at $138.89B last year, the research provider said. During the boom year of 2021, PE firms notched 496 tech deals with an aggregate value of about $173.25B, Dealogic said – WSJ.


Sector News Breakdown


·     PepsiCo (PEP) downgraded to Neutral from Overweight at JP Morgan and cut tgt to $176 from $185.

·     Jefferies initiates coverage on several pet-related stocks with Chewy (CHWY) and PetIQ (PETQ) at buy, with Freshpet (FRPT), Bark (BARK), and Petco (WOOF) at hold.


Energy, Industrials and Materials

·     Enphase Energy Inc (ENPH) said it decided to reduce our global workforce by approximately 10%, impacting approximately 350 contractors and employees; streamlining operations by ceasing operations at contract manufacturing locations in Timisoara, Romania and Wisconsin, United States.

·     Heico (HEI) Q4 EPS $0.74 vs. est. $0.68; Q4 sales $936.4M vs. est. $908.3M; Q4 Ebitda $234.2M vs. est. $205.7M; Q4 Operating income $189.4M vs. est. $172.5M.

·     Permian Resources (PR) files to sell 39.4M shares of Class A common stock for holders.

·     Rockwell Automation (ROK) upgraded to Overweight from Equal Weight at Wells Fargo.

·     Several container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen’s Iran-aligned Houthis on the world’s main East-West trade route – Reuters.



·     American International Group (AIG) was upgraded to outperform from market perform at BMO Capital, as lower protection limits and more reinsurance protection lift worries over reserves.



·     Amgen (AMGN) was upgraded to Outperform from market Perform at BMO Capital and raise tgt to $326 from $286.

·     Bluebird Bio (BLUE) announces $150M common stock offering.

·     Kenvue (KVUE) gained overnight after a court ruled in its favor in a class action lawsuit alleging prenatal exposure to Tylenol may contribute to autism in children.

·     uniQure (QURE) downgraded to Neutral from Buy at Mizuho and slash tgt to $10 from $52 as it believes the current stock price fairly reflects the value for Hemgenix gene therapy for hemophilia B and is cautious about ATM-130 gene therapy in Huntington’s disease.

·     Wave Life Sciences (WVE) upgraded to Outperform from Market Perform at Leerink.


Technology, Media & Telecom

·     Alphabet’s (GOOGL) Google has agreed to pay $700 million and to allow for greater competition in its Play app store, according to the terms of an antitrust settlement with U.S. states and consumers disclosed on Monday in a San Francisco federal court.

·     Taiwan Semi (TSM) said its board had recommended current CEO and Vice Chairman C.C. Wei succeed Mark Liu who will be retiring next year as chairman, offering continuity to the major Apple supplier.


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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