Morning Preview: September 19, 2023

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Early Look

Tuesday, September 19, 2023









S&P 500










U.S. futures are looking slightly higher after finishing mixed to higher on Monday, as the waiting came continues into tomorrows FOMC interest rate meeting (2:00 PM ET) and Fed Chairman Powell press conference (2:30). Markets are still widely anticipating no changes to rates in the US tomorrow despite the recent bounce in economic data and inflationary readings. There are also roughly 10 other central bank meetings in the next three days that could impact currency and Treasury markets, including the BOE, BOJ, and SNB. Brent crude surged to a 10-month high, topping $95 a barrel as OPEC+ supply cuts tightened the market. Treasury yields edged are flattish and a gauge of dollar strength slipped. U.S. stock indexes eked out slight gains in volatile trade on Monday. Traders are pricing in a 99% chance that the Federal Reserve will keep rates unchanged at a range of 5.25%-5.50% on Wednesday, according to the CME FedWatch Tool. Meanwhile, the chance of a 25-basis-point rate hike to a range of 5.50%-5.75% at the subsequent meeting in November is priced at 30%. In Asian markets, The Nikkei Index dropped -290 points to 33,242, the Shanghai Index was down -1 point to 3,124, and the Hang Seng Index rose 66 points to 17,997. In Europe, the German DAX is down a few points to 15,722, while the FTSE 100 is up 16 points to 7,669. Overnight, the highly anticipated new issue, Instacart (CART), priced its IPO at $30 a share, at the upper end of its expected range.


Market Closing Prices Yesterday

·     The S&P 500 Index climbed 3.21 points, or 0.07%, to 4,453.53.

·     The Dow Jones Industrial Average rose 6.03 points, or 0.02%, to 34,624.27.

·     The Nasdaq Composite gained 1.90 points, or 0.01%, to 13,710.24.

·     The Russell 2000 Index declined -12.73 points, or 0.69% to 1,834.30.


Economic Calendar for Today

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:30 AM ET                  Housing Starts M/M for August

·     8:30 AM ET                  Building Permits M/M for August

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     1:00 PM ET                   US Treasury to sell $16B in 20-year notes.

·     4:30 PM ET                   API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: APOG AZO

·     Earnings After the Close: SCS


Other Key Events:

·     Northland Institutional Investor Conference 2023 (virtual), 9/19

·     Oracle Cloud World 2023, 9/18-9/21

·     Truist West Coast Bus Tour (In Person – San Francisco), 9/19-9/21





















10-Year Note





World News

·     U.S. business optimism about China outlook falls to record low according to Reuters survey as the percentage of surveyed U.S. firms optimistic about the five-year China business outlook fell to 52%, the lowest level of optimism reported since the AmCham Shanghai Annual China Business Report was first introduced in 1999.

·     The Organization of Economic Cooperation and Development (OECD) raised its forecast for global growth in 2023 but cut its outlook for economic activity next year. The OECD forecast world growth of 3% this year, which represents a slowing from last year’s 3.3% but an improvement from the group’s previous estimate of 2.7% growth but lowers ’24 growth to 2.7% from 2.9%.

·     U.S. July net overall capital flow +$140.6B vs +$137.9B in June and U.S. July net long-term flow (ex-swaps/other) +$8.8B vs +$186.0B in June; U.S. July net official capital flow -$8.8B vs +$21.4B in June; China’s U.S. Treasury securities holdings $822B, down from $835B in June.

·     RBA Sept meeting minutes showed they considered a 25bp rate hike or on hold alternatives; considered raising rates by 25 bps or holding steady at the September meeting; Some further tightening may be required should inflation prove more persistent than expected; Case to hold was stronger, recent data did not materially alter the economic outlook.


Sector News Breakdown


·     Instacart (CART) priced its IPO at $30 a share, at the upper end of its expected range, raising $660 million with a fully diluted valuation of around $10 billion.

·     StitchFix (SFIX) Q4 EPS loss (-$0.24) vs. est. loss (-$0.22); Q4 revs -22% y/y to $375.8M vs. est. $371.3M; Q4 adj Ebitda $10.4M vs. loss $31.8M y/y; Q4 active clients of 3,297,000, a decrease of 498,000 or 13% y/y; net revenue per active client (RPAC) of $497, a decrease of 9% y/y; guides Q1 revs $355M-$365M and FY revs $1.3B-$1.37B.

·     NIO Inc. (NIO) announces proposed offering of US$1 billion convertible senior notes.

·     Starbucks (SBUX) downgraded to Market Perform from Outperform at TD Cowen and cut its price tgt to $107 from $117 citing worrisome macro and competitive pressures that will challenge Starbucks’ China same-store-sales.

·     Airbnb (ABNB) listings in NYC plunged 77% after City crackdown reported the NY Post. The controversial regulations for Airbnb’s largest market limit all short-term rentals to just two guests and require the hosts to be present for stays of less than 30 days.

·     The United Auto Workers union said it would announce on Friday more U.S. plants to strike if no serious progress was made in talks with the Detroit Three automakers (GM, F, STLA).

·     Carnival (CCL) upgraded to Hold from Sell at Truist; also in cruise lines, Reuters reported China’s Transport Ministry said it is fully resuming from Tuesday International Cruise Ship transport to and from ports in the country.


Energy, Industrials and Materials

·     U.S. Steel (X) said it sees 3q adj EPS $1.10-$1.15, above est. $0.92 and sees Q3 adj EBITDA to be approximately $550M vs. est. $485.6M; said expect to end Q3 with cash on hand of approximately $3B.

·     Rocket Lab (RKLB) shares -17% after saying its 41st mission ends after the rocket experienced an issue minutes after launch and that it is working with FAA to investigate root causes; the company said its next mission, scheduled before the end of Q3, will be postponed.

·     Apogee Enterprises (APOG) Q2 adj EPS $1.36 vs. est. $1.10; Q2 sales $353.7M vs. est. $370.7M; raises FY24 adj EPS view to $4.35-$4.65 from $4.15-$4.45 (est. $4.28); says including the extra week of operations, the company continues to expect flat to slightly declining net sales vs. FY23, consensus for FY24 revenue is $1.44B.

·     Norfolk Southern (NSC) said it launched an interim program to compensate homeowners around East Palestine, Ohio who have had to sell their properties at a reduced value following a Feb. 3 train derailment that spilled toxic chemicals.



·     Block Inc. (SQ) CEO Alyssa Henry will depart Oct. 2 after nine years at the payments company.

·     Synovus (SNV) said it sees increase in Q3 charge-offs arising from a 10.75% participation in a $218.5 mln nationally syndicated credit; sees Q3 charge-off of approximately $23M; says inclusive of charge-off, ex impact of sale of medical office loan portfolio, sees h2 net-charge-offs/avg loans at or near high end of forecast.



·     Ampio Pharmaceuticals (AMPE) files for mixed shelf offering of up to $50Mm.

·     BeiGene (BGNE) said it would regain rights to develop and manufacture its cancer drug after termination of a deal with Swiss drugmaker Novartis (NVS). Under the agreement of the deal, signed in 2021, the companies were jointly developing the drug Tevimbra.

·     CVS Health (CVS) upgraded to Outperform from In Line at Evercore ISI.

·     Merck (MRK): the FDA accepts for priority review Merck’s supplemental new drug application for WELIREG® (belzutifan) in certain previously treated patients with advanced renal cell carcinoma.


Technology, Media & Telecom

·     Rackspace Technology (RXT) upgraded to Outperform from Market Perform at Raymond James, saying its turnaround plan is gaining traction.


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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