Mid-Morning Look: April 19, 2023

Mid-Morning Look

Wednesday, April 19, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks slip overnight, holding modest losses but major averages continue to hold up well despite calls for another 25-bps rate hike from the Fed in May and after higher inflation readings in Europe and UK raise fears the ECB will continue its rate hike efforts. Two Fed speakers today, but after the market close, while economic data takes a break. All about earnings this morning as barrage of bank/financial earnings continues (WAL, MCB, TRV rise on results, CFG, FULT slip). Consumer finance names/auto lenders (ALLY/COF) rebound off morning lows after earnings misses. In tech NFLX recovers from losses of more than 10% overnight, paring losses on mixed results (Q1 subs miss, Q2 revs lower – but raises ’23 FCF view). The U.s Dollar little changed, Treasury yields higher but off best levels (10-yr hit 3.64%) and gold prices slip along with oil in commodity space. Defensive Utilities and Healthcare early leaders, while Energy, Technology. Communications biggest S&P drags. Bitcoin remains volatile this week, swinging -3% lower back under $30k at $29,400 and Ethereum -4.7% at $1,995.







WTI Crude















10-Year Note





Sector Movers Today

·     In P&C insurance, TRV authorizes an additional $5.0B of share repurchases and raises dividend after results that topped views with core EPS $4.11 vs. est. $3.58. BMO Capital lowered estimates for ALL, HIG, and CINF saying for ALL change is driven by a higher catastrophe loss ratio as now estimate an 8.5% ratio for 1Q23, compared to prior 6.5% estimate and Visible Alpha consensus of 6.9%. Our higher CAT loss estimate follows recent preannouncements and results reported by HIG, CINF, and PGR, which all included CAT losses above consensus.

·     Consumer services/auto lending: ALLY profit fell more than analysts expected as it made fewer auto loans and put aside additional provisions to cover mounting consumer defaults; Q1 EPS $0.82 missed the $0.87 estimate and revs of $2.05B below est. $2.07B; SYF Q1 EPS $1.35 vs. est. $1.46; total deposits $74.4 billion, +3.7% q/q; deposit growth +17.1% vs. +15.2% q/q; net interest income $4.05 billion, -1.3% q/q; qtrly net interest margin decreased 58 basis points to 15.22%. SYF said in 1Q, loans that were at least 30 days past due rose to $3.47B, or 3.81% of total loan receivables at the end of the quarter, up from $2.19B, or 2.78% of loan receivables y/y.

·     In Media: FOXA and Dominion reportedly reach agreement to settle litigation over 2020 election claims; Fox to pay $787.5M to settle; note the co. still faces a $2.7B defamation lawsuit from Smartmatic; in advertising OMC Q1 EPS $1.56 vs. est. $1.39; Q1 revs $3.44B vs. est. $3.38B; for DIS, Bloomberg reports Disney will kick off previously announced layoffs next week as it begins to cut its headcount by thousands.

·     In auto suppliers: MGA downgraded to Sector Perform from Outperform at RBC Capital and lower price target to $52 from $58 as believe more meaningful margin and FCF improvements may not occur until 2025+ as the company accelerates investment in its core growth initiatives. Deutsche Bank said with overall LVP better in Q1, they expect most suppliers to meet or beat Street estimates, with the notable exceptions AXL and perhaps DAN and see APTV, ADNT, ALV, BWA, and VC as best positioned to outperform.



·     IMRX +4%; upgraded at Mizuho to Buy ($20 tgt) and Morgan Stanley to EW ($14 tgt) as the company accelerated timelines for its Phase 1 study with a recommended Phase 2 dose expected by early 2024.

·     ISRG +8%; posts Q1 procedure growth beat (+26% vs 14% street) supported by a sharp reversal in OUS back to +28% Y/Y growth (+25% last year); raised procedure guide by more than Q1 street/internal beat; also put up a $100mn/$0.02 headline beat.

·     LEGN +15%; shares jumped as STAT news noted leaked study results show a CAR-T from JNJ providing big benefit for patients with multiple myeloma. TDCowen noted CARTITUDE-4 hit with an incredible 0.26 HR at interim analysis.

·     LUNR +15%; after saying the National Aeronautics and Space Administration awarded a contract for work on the Joint Polar Satellite System to a joint venture led by Intuitive with KBR.

·     TRV +4%; authorizes an additional $5.0B of share repurchases and raises dividend after results that topped views with core EPS $4.11 vs. est. $3.58, though revs miss at $9.70B vs. est. $9.81B.

·     UAL +2%; reported a narrower-than-expected Q1 EPS loss (-$0.63), which came in better than consensus mean loss per share of (-$0.73) while reiterated its full year EPS outlook.

·     WAL +17%; Q1 adj EPS $2.30 vs. est. $2.09; qtrly net rev $551.9M, down 0.7%; total deposits of $47.6 billion at end of March; said immediately available liquidity exceeds uninsured deposits, with a coverage ratio of 158% as of April 14; Q1 NII $609.9M and NIM 3.79% vs. est. 3.7%.



·     ASML -3%; Q1 net income of EU1.96 billion ($2.14 billion) compared with EU695.3 million for the same period a year earlier and above est. EU1.66B; Q1 net sales rose to EU6.75 billion compared with EU3.53 billion for the same period a year earlier, but bookings weaker.

·     CDW -12%; shares slip as sees prelim Q1 revenue roughly $5.1B below consensus $5.56B citing intensifying economic uncertainty that led customers to spend more cautiously; shares of CSCO, NSIT, PLUS among names moving lower in sympathy)

·     CENT -8%; guides Q2 EPS to be approximately $0.90, below estimates $1.18 and sees FY23 EPS to be $2.35 or better, driven largely by late start of garden season (est. $2.65).

·     ELV -5%; posts Q1 beat and raise in manage care space, but CFO comments that health cost “trends are slightly elevated from what cost trends were pre-pandemic.” likely weighing.

·     FOUR -9%; after “short” report from Blue Orca saying they think its gross profit, EBITDA, and cash flow are inflated by hyper-aggressive maneuvers https://bit.ly/3MSbCUL

·     NFLX -3%; added fewer subscribers than had been anticipated in Q1 and lower Q2 guidance but shares pare overnight losses as the company raised its full-year free cash flow forecast. UBS upgraded to buy from neutral.

·     TSLA -2%; cut prices for the 6th time this year, cutting on the Model 3 and Model Y once more ahead of the company’s first-quarter results.


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.