Morning Preview: October 12, 2023

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Early Look

Thursday, October 12, 2023









S&P 500










U.S. futures are looking higher into the CPI report, tracking big gains in both Europe and Asia overnight as the S&P looks to make it a 5th straight day of gains. The U.S. Dollar Index (DXY) is down -0.1% and earlier touched its lowest in almost two weeks, while Treasury yields edge lower with the 10-year at 4.55%, helping lift gold prices to two-week highs all ahead of the September CPI inflation data at 8:30 AM. Estimates for the Consumer Price Index (CPI) are m/m to rise +0.3% (vs. prior month +0.6%) and y/y to rise +3.6% (vs. prior 3.75). CPI Ex: Food & Energy (core) m/m est. to rise +0.3% (vs. +0.3% prior) and y/y to rise +4.1% (vs. prior 4.3%). Yesterday the Sept PPI index came in “hotter” than expected but failed to dent market sentiment. Oil fell after Saudi Arabia and Russia reaffirmed their close cooperation in the crude market. Earnings this morning thus far from DPZ (missed) and DAL (beat but lower guide) and big banks on Friday. In Asian markets, The Nikkei Index jumped 558 points to 32,494, the Shanghai Index gained 28 points to 3,107, and the Hang Seng Index spiked 345 points to 18,238. In Europe, the German DAX is up about 100 points to 15,560, while the FTSE 100 gains 60 points to 7,681.


As for Wednesday, U.S. stocks eked out a fourth straight day of gains as minutes from the Federal Reserve’s September policy meeting failed to raise eyebrows. It was the fourth straight day of gains for all three stock indexes after the S&P bounced just shy of its 200-day moving average support last week. Likely bolstering stocks was the continued pullback of long-term Treasury yields, with the benchmark 10-year yield retreating by 5.8 basis points to 4.596%, the lowest yield in almost two weeks.


Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 210K

·     8:30 AM ET                  Continuing Claims…est. 1.68M

·     8:30 AM ET                  Consumer Price Index (CPI) headline M/M for Sept…est. +0.3%

·     8:30 AM ET                  Consumer Price Index (CPI) headline Y/Y for Sept…est. +3.6%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) M/M for Sept…est. +0.3%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) Y/Y for Sept…est. +4.1%

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

·     11:00 AM ET                Cleveland Fed CPI for September

·     1:00 PM ET                   US Treasury to sell $20B in 30-year notes.

·     1:00 PM ET                   Fed’s Bostic Delivers Welcoming Remarks

·     2:00 PM ET                   Federal Budget for September


Earnings Calendar:

·     Earnings Before the Open: BYRN CMC DAL DPZ FAST WBA

·     Earnings After the Close: CMTL EDUC IDT ODC SGH


Other Key Events:

·     China Cpi, PPI, Imports, Export data for September

·     2023 AACR-NCI-EORTC (2023 Triple Meeting”) taking place 10/11-15 in Boston, MA

·     Roth MKM 2nd Annual Healthcare Opportunities Conference, 10/12, in New York


Market Closing Prices Yesterday

·     The S&P 500 Index jumped 18.71 points, or 0.43%, to 4,376.95.

·     The Dow Jones Industrial Average rose 65.57 points, or 0.19%, to 33,804.87.

·     The Nasdaq Composite gained 96.83 points, or 0.71%, to 13,659.68.

·     The Russell 2000 Index declined -2.65 points, or 0.15% to 1,773.30.





















10-Year Note





World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 3.5 vs -11.5 last week; Bulls rise to 40% from 30.1%, Neutrals fall to 23.5% from 28.3%, Bears fall to 36.5% from 41.6%.

·     Interesting stats: S&P Global Market Intelligence recorded 62 bankruptcy filings in September, bringing the total for the third quarter to 182, up from 157 during the second quarter. That brings the total for 2023 so far to 516.

·     US warns Israel to ‘uphold laws of war’ as Gaza faces onslaught ‘; President Biden said Israel had a right to respond to the attacks by Hamas but warned its retaliatory action must be “according to the rule of law”. Jens Stoltenberg, NATO’s secretary general, echoed the call on Wednesday, urging a “proportionate” Israeli response that protected “innocent civilian lives”. – Telegraph.


Sector News Breakdown


·     In Auto news: U.S. auto workers are expected to return to talks with Chrysler maker Stellantis (STLA) on Thursday, a tense day after a surprise walkout at Ford’s biggest and most profitable plant in Kentucky which employs 8,700 workers. Nearly a quarter of the 150,000 UAW workers at the Detroit Three automakers are now on strike.

·     Domino’s Pizza (DPZ) Q3 EPS $4.18 vs. est. $4.40 and revs fell -3.9% to $1.03B vs. est. $1.05B; said higher menu prices and delivery charges discouraged inflation-weary consumers; also said higher pizza delivery charges have also been a pain point for customers; Q3 comp sales fell -0.6%.

·     Victoria’s Secret & Co (VSCO) reaffirming previous guidance for FY23 net sales to decrease in low-single digit range compared to last year; guides Q3 EPS loss (-$0.70-$-0.90) vs. est. loss (-$0.79); now estimates adjusted operating loss for Q3 $45M-$65M.

·     International Game Technology Plc (IGT) said its subsidiary, IGT Global Solutions Corporation, has signed a contract amendment for a seven-year extension with the California Lottery, the second-largest lottery in the U.S., to continue as its primary lottery technology provider.

·     Target (TGT) upgraded to Buy from Neutral at Bank America and raise tgt to $135.

·     Beyond Meat (BYND) downgraded to Underperform from Neutral at Mizuho.


Energy, Industrials and Materials

·     Delta Airlines (DAL) Q3 adj EPS $2.03 vs est. $1.94; Q3 revs rose 13% y/y to $14.55B vs. est. $14.55B; sees FY adj EPS $6.00-$6.25, vs. prior $6.00-$7.00 (est. $6.03); said demand for travel within the U.S. has been steady, though revenue per seat flown a mile fell 4% from a year ago.

·     Commercial Metals (CMC) Q4 EPS $1.69 vs. est. $1.82; Q4 sales $2.2B vs. est. $2.12B; Q4 North America segment adjusted EBITDA increased from the prior year period, driven by a solid demand environment, strong margins, and good cost control.

·     Fastenal (FAST) Q3 EPS $0.52 vs. est. $0.50; Q3; Q3 revenue in-line with ests at $1.85B; Daily sales $29.3M, +3.9% y/y, vs. est. $29.2M; Gross profit margin 45.9% vs. 45.9% y/y; said forex cut Q3 sales by about 10-bps; says impact of product pricing on Q3 sales modestly positive.

·     Australia’s Liontown Resources said it has determined to extend the exclusive due diligence period by a week for its proposed A$6.6 billion ($4.23 billion) buyout by U.S. firm Albemarle Corp. (ALB).

·     The American Petroleum Institute said weekly Crude oil inventories rose +12.9M barrels, Cushing fell 500K barrels, Gasoline rose +3.7M barrels and Distillates fell -3.5M barrels.



·     Chinese shares closed higher after a state fund increased its stakes in the country’s biggest banks, following a slew of stimulus measures. China’s “Big Four” state banks said that their controlling shareholder Central Huijin Investment bought their Shanghai-traded shares and plans to further increase its holdings in the next six months.

·     Bitcoin dropped below $27,000 for the first time since September on Wednesday, with traders citing the conflict in the Middle East as weighing on investor sentiment; shares of crypto miners, investors, etc. COIN, MARA, RIOT slumped.



·     Illumina (ILMN) must unwind its $7.1 billion acquisition of cancer-test developer Grail , the European Union’s competition watchdog said. The European Commission, which oversees antitrust regulation for the Bloc, said Thursday that Illumina would have to submit a concrete plan for divesting Grail.


Technology, Media & Telecom

·     Microsoft Corp. (MSFT) said it has received a notice from the Internal Revenue Service that it owes $28.9 billion in back taxes plus interest and fines for the tax years 2004 to 2013.

·     Infosys (INFY) lowered the top end of its full-year revenue growth to 1%-2.5% on a constant currency basis, compared to its prior view of 1%-3.5% after reporting quarterly profit slightly below estimates, hurt by an uncertain demand environment.


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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