Morning Preview: March 24, 2023

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Early Look

Friday, March 24, 2023









S&P 500










After finishing higher on Thursday, U.S. futures are looking lower with the S&P (Spuz) down -0.7% at 3,950, trading just above the 200-day moving average of 3,940, a key level. The U.S. dollar rebounds after a 6-day losing streak, bouncing off seven-week lows as nervousness over banks kept investors skittish and traders assessed the Federal Reserve’s chances of a pause to interest rate hikes. Meanwhile the safe-haven yen remains in demand. Elsewhere foreign investors made a record weekly purchase of Japanese government bonds last week, after the Bank of Japan maintained its ultra loose policy. This has also fueled demand for the yen. Treasury yields are on their lows with the benchmark 10-year down another 10-bps to 3.295% and the 2-yr plunging 20-bps to 3.6% (yield curve inversion narrows to 30-bps from over 100-bps early last week). Treasury Secretary Janet Yellen said yesterday regulators would be prepared to take further steps to protect the banking system if warranted, further confusing markets as it somewhat contradicted her comments Wednesday. The Fed remains in a very precarious position, having to juggle raising rates to fight high inflation (which has shown signs of continued deceleration but still historically very high), which they say remains their main goal, and a potential economic pitfall as confidence in the banking sector worsens each day about liquidity fears. Powell said on Wednesday that the base case for the Fed is no rate cuts this year despite futures pointing to at least 2 cuts by year end and calls on Wall Street for more even sooner (Gundlach echoed same comments last night). In Asian markets, The Nikkei Index slips -34 points to 27,385, the Shanghai Index falls -21 points to 3,265, and the Hang Seng Index drops -133 points to 19,915. In Europe, the German DAX is down -300 points or 2% to 14,900, while the FTSE 100 is down -133 points or 1.77% to 7,365. Reminder St. Louis Fed President Jim Bullard will be the first post-Fed meeting speaker at 930 ET today.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 11.75 points, or 0.30%, to 3,948.72.

·     The Dow Jones Industrial Average rose 75.14 points, or 0.23%, to 32,105.25.

·     The Nasdaq Composite jumped 117.44 points, or 1.01%, to 11,787.40.

·     The Russell 2000 Index declined -7.07 points, or 0.41% to 1,720.29.


Economic Calendar for Today

·     8:30 AM ET           Durable Goods for February…est. +0.6%

·     8:30 AM ET           Durable Goods Ex: Transportation for Feb…est. +0.2%

·     9:45 AM ET           S&P Global Manufacturing PMI, Mar-F…est. 47.0

·     9:45 AM ET           S&P Global Services PMI, Mar-F…est. 47.5

·     9:45 AM ET           S&P Global Composite PMI, Mar-F

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





















10-Year Note





World News

·     Moody’s Investor Service said, “despite quick action by regulators and policy makers, there’s a rising risk that banking-system stress will spill over into other sectors and the U.S. economy, “unleashing greater financial and economic damage than we anticipated.”

·     Ex-FDIC chief Sheila Bair said regional banks get the attention, but worries are more widespread, says “This is a risk confronting all banks,” she said. “All examiners need to be on alert for how interest-rate risk is being managed. If there is a run, they will need to sell these securities. Those are the kinds of things all-size banks, and all examiners should be worried about.”- MarketWatch.

·     Australia March manufacturing PMI 48.7 vs 50.5 previous, lowest since May 2020.

·     Japan national CPI YoY rose 3.3% in February, as expected vs 4.3% prior. National CPI Ex fresh food YoY rose 3.1%, as expected, vs 4.2% prior. CPI ex fresh food, energy YoY rose 3.5% vs 3.4% expected and 3.2% prior, the fastest annual rise since January 1982.

·     UK GfK consumer confidence rose to a 12-month high in March of -36 as per expectations and improving from -38 prior.


Sector News Breakdown


·     Altria (MO) holds investor day; introduces 2028 enterprise goals; provides updates on product development efforts; reaffirms 2023 full-year earnings guidance; goal is to deliver mid-single digits adjusted diluted EPS growth on a compounded annual basis through 2028.

·     Oxford Industries (OXM) Q4 adj EPS $2.28 vs. est. $2.14; Q4 revs $382M vs. est. $378.7M; sees Q1 sales $405M-$425M and EPS $3.60-$3.80 vs. est. $4.10; for the year sees PES $10.86-$11.26 vs. est. $10.75 and sales $1.62B-$1.66B vs. est. $1.41B.

·     Schoalstic Corp. (SCHL) Q3 EPS loss (-$0.57) on revs falling to $324.9M from $344.5M y/y; announces $50M stock buyback; cuts FY23 adj ebitda view to $175M-$185M from $195M-$205M; lowers FY23 revenue up about 4%, compared to up 8%-10% previously.

·     Torrid Holdings (CURV) Q4 EPS loss (-$0.04) vs. est. loss (-$0.08); Q4 revs $301.2M vs. est. $295.5M; sees Q1 revenue $305M-$313M vs. est. $315.6M and Q1 adj EBITDA of $35M-$40M; sees year sales $1.265B-$1.32B vs. est. $1.26B.


Energy, Industrials and Materials

·     U.S. Energy Secretary Granholm walked back refill plans and said refilling SPR will be difficult and likely to take years. She added that the White House wants to buy oil back at under $72 per barrel, and that sales and maintenance at two of the reserve’s four sites will make it difficult to buy back oil this year.



·     Deutsche Bank (DB) shares fall -9% after a sharp jump in the cost of insuring its bonds against the risk of default; shares of other European banks also slide (UBS).

·     Credit default swaps on Deutsche Bank debt, which allow an investor to pay a regular premium to insure their debt holdings against default, jumped the most on record Friday as shares extended their slump for a third consecutive sessio

·     Fed loans to FDIC bridge banks rise to $179.8b from $142.8b; Fed bank term funding loans rise to $53.7b from $11.9b week ago; Fed discount-window loans fall to $110.2b from $152.9b w/w.

·     The Swiss authorities and UBS Group AG (UBS) are racing to close the takeover of Credit Suisse Group AG (CS) within as little as a month; But could take longer, potentially months, because it will need approvals by regulators across the globe – Reuters.

·     LPLA Financial (LPLA) reported total brokerage and advisory assets for February of -1.5%; Brokerage, advisory assets $1.15 trillion, +0.3% y/y.

·     Nelnet (NNI) announced a staffing reduction to address lower pricing and reduced servicing volume for the company’s federal servicing contracts as well as to align with the company’s strategic consolidation and sunsetting of select loan servicing systems.



·     Glaxo (GSK) said it disagreed with a California state court ruling on Zantac, or ranitidine, and its links with cancer. “Following the 13 epidemiological studies conducted looking at human data regarding the use of ranitidine, the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer,” the pharmaceutical said. It added the decision relates only to the question of whether the plaintiff’s experts can testify at trial.


Technology, Media & Telecom

·     Walt Disney Co. (DIS) and unions representing Walt Disney World workers said they have reached a tentative agreement that will raise the minimum wage to $18 an hour this year.

·     Ouster Inc. (OUST) Q4 EPS loss (-$0.23) vs. est. loss (-$0.18); Q4 revs $11M vs. est. $15.84M; sees Q1 revenue $15M-$17M vs. est. $20.1M.


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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