Mid-Morning Look: April 17, 2023

Mid-Morning Look

Monday, April 17, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks with a quiet, but slightly higher open ahead of the first busy week of earnings season, adding to recent stock market gains. A few names in the financial sector moving early with trust bank STT missing earnings and shares plunging, SCHW mixed as EPS beat/revs miss as deposits slid and MTB posts slight EPS beat. Next up in banks tomorrow BAC, BK and GS Tuesday morning. The Biotech sector (XBI +4%) outperforms following M&A news in the sector this weekend (MRK buys RXDX). U.S. equities ended lower on Friday but finished higher for the week with upside leadership from several cyclical pockets of the market. Asian markets higher overnight with Hong Kong up over 1.5% and the Shanghai Composite rallying more than 1%. European markets narrowly mixed. Treasuries were weaker across the curve after a big backup in yields last week with the curve bear flattening. Economic data today stronger, as April Empire Manufacturing Index surged to +10.8 vs. -18 estimate. & -24.6 prior; while new orders jumped from -21.7 to +25.1; shipments went from -13.4 to +23.9; prices paid continued to move lower and the work week is still contracting. Meanwhile confidence among U.S. single-family homebuilders improved for a fourth straight month in April. Very quiet start to the trading day and week as major averages in a tight and narrow range thus far.


Economic Data

·     NY Fed’s empire state current business conditions index +10.8 in April vs -24.6 in March and above the estimate of down -18.0. NY Fed’s empire state new orders index +25.1 in April vs -21.7 in March, prices paid index +33.0 in April vs +41.9 in March, employment index at -8.0 in April vs -10.1 in March, and six-month business conditions index +6.6 in April vs +2.9 in March.

·     April NAHB Housing market index 45 versus 44 in March; index of current single-family home sales 51 versus 49 in March; index of home sales over next six months 50 versus 47 in March; April index of prospective buyers 31 versus 31 in March.







WTI Crude















10-Year Note





Sector Movers Today

·     Semis: TSM reportedly putting the brakes on capacity expansion as local press reports overnight suggests TSMC might cut EUV orders by c40%+ due to slower capacity expansion plans (not confirmed by TSM at this point). The report overnight by Taiwan’s Economic Daily said TSM plans cut its capex to $28B-$32B this year from $32B-$36B earlier, https://bit.ly/43Eiwmz . Shares of semiconductor equipment stocks (AMAT, LRCX, KLAC) slipped following the report as well as some of TSMC’s European suppliers (ASML, STM).

·     In financial brokerage: SCHW Q1 EPS of $0.83 beat by 2c but revs of $5.12B just below $5.15B est.; said it is maintaining capital and liquidity required to support Schwab’s long-term growth remains our primary balance sheet objective; decided to pause active share buyback program. In regional banks: MTB Q1 EPS $4.01 vs. est. $3.99; Q1 total deposits $159.1B at quarter end; provision for credit losses was $120 million, compared with $10 million last year. Net loan charge-offs for the quarter were $70 million, compared with $7 million a year ago. Earnings tomorrow from likes of BAC, BK, CBSH, GS in banks.

·     In PC sector: HPQ was upgraded to Overweight from Neutral at JPMorgan and downgraded shares of DELL to Neutral from Overweight saying they are looking to turn a corner in relation to the headwinds that have plagued the PC end-market with latest datapoints indicating downstream PC shipments in 1Q progressing in line with seasonality (despite a challenging 4Q22) and upstream datapoints from component suppliers as well as ODMs pointing to the likelihood of above seasonal trends in the coming quarters. AAPL sales in India hit a new high of almost $6 billion in the year through March, according to Bloomberg report as CEO Tim Cook arrives in the country to open its first local stores. Revenue in India grew by nearly 50%, from $4.1B y/y.

·     In restaurants: TXRH downgraded to MP at Raymond James citing valuation; Truist Card data supported their largely bullish view of restaurant demand and suggests 1Q23 sales beats at all the companies covered except for PLAY (quarter ends in April) as raises comp store sales to above consensus and see the largest beats at WING (+530bps), MCD (+250bps) and Burger King (+230bps). DIN estimates lowered for FY23/FY24 EPS to $6.57/$7.14 at Keybanc after fine-tuning their interest rate assumptions and trim tgt to reflect slowing SSS trends in March.



·     AMRX +7%; after reports preliminary Q1 net revenue of $550M-$560M, above estimates $530M and reaffirms FY 2023 net revenue outlook of between $2.25B-$2.35B.

·     ENPH +8%; upgraded from Neutral to Overweight at Piper with $255 tgt as sees a path for ENPH’s international business to grow by 150% during 2023 vs previous est. of 75%.

·     PCVX +16%; said it saw positive results from its VAX-24 Phase 2 study in adults aged 65 and older.

·     RXDX +70%; to be acquired by MRK for $200 per share, in a deal valued at $10.8 billion at a roughly 75% premium, in a move that could give the drug­maker promising immune disease treatments. https://on.mktw.net/3ojeSyr

·     TECK +7%; after reports the company has been approached by mining companies including FCX, VALE, and Anglo American to discuss potential deals for its base metals business if Teck goes through with a planned spin-off of its coal assets. https://bit.ly/41AIFkk

·     XPEV +12%; after unveiling on Sunday a new vehicle platform developed in house which the Co said will cut development and manufacturing costs; Smart Electric Platform Architecture (SEPA) 2.0 will help XPEV slash powertrain and battery costs by 25%.



·     AMAT -2%; along with ASML, LRCX, KLAC as TSM plans to cut CAPEX for this year to $28-32B, Taipei-based Economic Daily News reports, citing unidentified people from the industry.

·     GOOGL -3%; after a NYT article reports Google learned in March that Samsung is considering replacing Google w/ Microsoft’s Bing as the default search engine on its devices amid Bing’s recent advances in AI technology, which caused the co. to panic, according to internal messages.

·     RBLX -11%; daily active users for March of 66.2M (+26% y/y), hours engaged 4.80B, while guides bookings $247M-$255M (up 23%-27% y/y) and revs $212M-$213M (up 15%-21% y/y).

·     STT -12%; reported Q1 EPS miss ($1.52 vs. est. $1.64) on mostly in-line revs $3.1B as reports loan loss provisions in Q1 of $44M; pretax margin at 22.2% and 1Q-end investment servicing assets under custody/administration fell 10% (BK, NTRS decline in sympathy).

·     VIAV -11%; lowers Q3 revenue view to $246M-$248M from $256M-$276M (below est. $269.48M) and sees operating margin view is 10.5%-11.5% below prior range of 13.0%-14.2%


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.