Market Review: August 16, 2023

Closing Recap

Wednesday, August 16, 2023





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     US equity futures were flattish overnight after a weak day in the market yesterday. Modestly stronger pre-market Housing Starts and Industrial Production data weighed slightly but buyers stepped in and gave us the summer Friday feel on a Wednesday as indices generally remained flattish through the morning. Late-morning breadth was about even, slightly favoring advancers with the indices modestly positive and only the Communication and Real Estate S&P sector groups in the red, with Healthcare and Consumer Discretionary flat. Utilities was the leading gainer, at +0.58%.

·     In data of note today, @RBAdvisors says we can add building permits (leading indicator) to the list of indicators suggesting recovery/acceleration over landing, while @MTSInsights notes the Atlanta Fed Business Inflation Expectations Survey was 2.5% in August versus 2.8% in July, marking the lowest since April 2021. That said, @CivicScience highlights the @CS_Penta Economic Sentiment Index decreased over the past two weeks, falling 1.4 points to 34, the third largest decline of the year. And, while yesterday was soft for the markets, @RyanDetrick notes the close in the S&P 500 beneath its 50dma for the first time in more than four months is not all bad news. Since 1990, the index has been higher a month later eight of nine times and also higher a year later eight of nine times with an average move of 14.1%.

·     Heading into the final hour of trading, US equity indices were softer following the Atlanta Fed’s boost in its Q3 GDPNOW estimate to 5.8% from 5.0% (on today’s stronger economic data). After a small boost from “something for everyone” Fed Meeting Minutes, Treasury yields gained and indices resumed their declines. Breadth widened out to almost 3:1 in favor of decliners and only the Utilities sector group was holding gains (XLU, +0.5%). Real Estate (XLRE, -1.25%) and Communications (XLC, -1.0%) were the laggards. Growth and Value each declined about 0.7%.

Economic Data:

·     US July Housing Starts +3.9% mo/mo versus forecast +1.1% and June -11.7%. Single-family +6.7%, while multifamily -1.7%

·     US Industrial Production +1.0% mo/mo versus forecast +0.3% and previous -0.5%. Capacity utilization 79.3%, roughly in-line with expectations. July motor vehicle assembly rate rose to 11.87Mm units/yr from 10.91Mm in June.




·     December gold slid another $6.90/oz, or -0.35%, to settle at $1,928.30. The move marked the eighth consecutive down day as US Treasury yields and the US Dollar both continued to gain. Stronger economic data on Housing Starts and Industrial Production added to concerns the economy may require more Fed action to impact demand and rein in inflation.

·     WTI September crude slid $1.61/bbl, or -1.99%, to settle at $79.38. Oil futures slid despite a larger inventory draw as demand concerns continued to dominate the discussion. Brent also retreated again today, slipping $1.44/bbl, or -1.7%, to $83.45.







WTI Crude















10-Year Note





Sector News Breakdown


·     In Electric vehicles: In what is becoming a daily occurrence, TSLA discounted Model S and Y in China by up to $9600, Tesla’s second China cut in 3 days. Shares of TSLA, NIO, LI & GELYY were mostly lower as fears of a price war were kindled.

·     In Electric Vehicles: Y’day’s high-flying de-SPAC VFS saw its shares fall over -20% after yesterday’s massive +255% gaining. Pundits across the street had questioned the Vietnamese EV maker’s closing $86B market cap.

·     In Restaurants: Recent IPO CAVA reported strong earnings on Tuesday night and raised estimates; shares gained amongst multiple price target raises by analysts.

·     In Retail: TGT shares soared over +10% in the pre-mkt, faded but remained higher all day after an earnings report with a big EPS beat, revs miss and “huge 2H guide down.” Investors’ enthusiasm showed their relief the embattled retailer bested lowered expectations.

·     In Retail: TJX beat EPS and revs estimates and raised their forward guidance with investors rewarding them with an over +4% gain as TJX shares soared to yearly and all-time highs.

·     In Retail Dealmaking: Shares of KR faded all day after 7 states’ Secretaries of State wrote to FTC Chair Khan voicing their opposition to Kroger’s proposed $24.6B acquisition of ACI.


Leisure, Gaming & Lodging:

·     In casinos & gaming: Fanatics Sportsbook (private) officially opens for business – moves from beta testing to full speed ahead in four states — Maryland, Massachusetts, Ohio and Tennessee


Energy, Industrials & Materials

·     In Pipeline Transport: Investors cheered news that ET would acquire CEQP in an all-stock transaction valued ~$7.1B with shares of both companies trading modestly higher.

·     In Utilities: HE shares fell sharply after a late day report after Bloomberg reported that they are in talks with restructuring firms. Utilities and Power: HE shares continued their slide, off by -23% after the company’s credit was downgraded to bb- by S&P and placed on creditwatch negative on higher wildfire risk.



·     In Crypto: Investors cheered news that COIN secured approval to bring federally regulated crypto futures trading to eligible US customers. Coinbase will now be the first crypto-native leader to directly offer traditional spot crypto trading alongside regulated and leveraged crypto futures, on an integrated trading solution for our verified customer.

·     In Online Payments: Shares of DLO climbed over +30%, extending Tuesday’s rally after the FinTech reported better-than-expected results and the naming of e-commerce veteran Pedro Arnt as its co-CEO. Susquehanna reiterated their Positive rating, raised their PT to $24 and lauded Arnt’s hiring.

·     In FinTech: JKHY posted an EPS and revs beat but the street was not impressed by the fintech’s margin guidance which was the opposite of JKHY’s bullish outlook in May, shares were punished accordingly, falling roughly -6%


Industrials, Materials , &Transports

·     In eVTOL: Shares of ACHR relinquished (-8%) some of this year’s +200% gains following a negative report by Grizzly Research, calling aircraft company just another overreaching de-SPAC.

·     In Metals: A midday article from Reuters stated that European based MT is weighing a potential bid for X. Shares of MT dropped and X spiked. MT is potentially the 3rd suitor this week after CLF and privately held Esmark made bids for the steel maker.

·     In Aerospace & Defense: COHR faced an onslaught of sell orders following weak FY24 forward guidance as shares lost almost 1/3 of their value.


Technology, Media & Telecom

·     In Semis: INTC and TSEM mutually agreed to terminate the proposed acquisition of Tower as they were unable to get the required regulatory approvals in a timely manner; Intel will pay a termination fee of $353M to TSEM. TSEM shares fell by -11% while INTC shares dropped -3.50%.

·     In Telecom: MXL shares gained over 6% on news that acquisition target SIMO had terminated their merger deal and intended to pursue damages.

·     In online Services: PINS shares rallied after an AMZN corporate blogpost verified last spring’s news that Amazon would begin advertising on platforms such as Pinterest. A midday Piper Sandler note said that the PINS/AMZN partnership may lead to larger opportunities.

·     In AI space: A day doesn’t go by without price target raises by analysts covering NVDA, the white-hot AI chipmaker. Today’s moves included Piper and Raymond James with new $500 PT’s but the street did a collective double-take following Rosenblatt’s new street-high $800 PT, raised from $600. Despite this raise, NVDA shares took a breather, falling slightly.

·     In AI Security: Senator Warner writes GOOGL, META, and MSFT CEOs on AI safety.


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.