Mid-Morning Look: August 29, 2023

Mid-Morning Look

Tuesday, August 29, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks on cruise control higher as Treasury yields tumble alongside the dollar and investors push the S&P 500 back near its 50-day MA as traders look to pare August losses with three trading days left to the month. The 10-year Treasury yield fell to 4.13% from 4.21% and dollar slips, pushing gold prices higher after economic data this morning (JOLTs, Consumer Confidence, Housing). In the healthcare sector, the White House released its list of 10 prescription medicines that will be subject to the first-ever price negotiations by the U.S. Medicare health program that covers 66 million people (details below). Hurricane Idalia strengthened as it approached Florida’s Gulf Coast, where officials ordered evacuations and urged millions of residents to brace for a possible major Category 3 landfall. Chinese stock markets rallied a second day overnight after Beijing ushered in more stimulus measures boosting capital markets. A good start to the day with breadth nearly 3:1 advancers leading decliners as nearly all eleven S&P sectors are higher on the day.


Economic Data

·     JOLTS job openings fall to 8.827M in July vs. June 9.165M and consensus of 9.5M.

·     The Consumer Confidence index for August 106.1 vs. consensus 116.0 and vs July 117.0.

·     U.S. Home prices rose for 4th straight month in June, Case-Shiller data shows as seasonally adjusted HPI Composite for 20 cities: +0.9% M/M vs. +1.1% consensus and +1.0% in May. HPI composite for 20 cities, not seasonally adjusted: +0.9% M/M vs. +0.8% consensus and +1.5% in May. Y/Y, -1.2% vs. -1.1% expected and -1.7% prior.

·     FHFA House Price Index: +0.3% vs. +0.2% expected and +0.7% prior (unchanged).







WTI Crude















10-Year Note





Sector Movers Today

·     The US named 10 drugs subject to Medicare price negotiations between manufacturers and Medicare: 1) BMY’s Eliquis used to prevent blood clotting to reduce the risk of stroke; 2) Boehringer Ingelheim’s Jardiance used to lower blood sugar for people type 2 diabetes; 3) JNJ’s Xarelto used to prevent blood clotting to reduce the risk of stroke; 4) MRK’s Januvia used to lower blood sugar for people with type 2 diabetes; 5) AZNs Farxiga used to treat type 2 diabetes; 6) NVS Entresto used to treat certain types of heart failure; 7) AMGN’s Enbrel used to treat rheumatoid arthritis; 8) ABBV’s Imbruvica used to treat different types of blood cancers; 9) Janssen’s Stelara used to treat Crohn’s disease and 10) NVO’s Fiasp, Fiasp FlexTouch, PenFill, NovoLog insulins. The new prices will be announced on Sept. 1, 2024 and will go into effect on Jan. 1, 2026. The drugs were chosen from a list of 50 drugs. https://tinyurl.com/mr2tstfn

·     In Internet/AI: Google Cloud CEO Kurian to announce ai enhancements for corporate Gmail customers for $30 a month, the WSJ reported. OpenAI: launched a new enterprise-version of its ChatGPT tool (ChatGPT Enterprise) that put it in direct competition w/ MSFTUS listed Chinese Internet names (BABA, BIDU, NTES) also rise behind better PDD earnings and after Beijing ushered in stimulus measures boosting capital markets.

·     In other retailers: BBY rises on beat and better guide; JOAN Q2 adj EPS ($1.44) vs est. ($1.15) on sales $453.8Mm vs est. $437.4Mm; sees FY net sales down 1-3% vs est. -2.95% and adj EBITDA $85-95Mm vs est. $82.4Mm; SCVL Q2 EPS $0.71 misses est. $0.84; Q2 revs $294.6M vs. est. $286.35M; Q2 comp store sales fell (-6.5%); lowers FY23 EPS view to $3.10- $3.25 from $3.60-$3.85 (est. $3.12) and lowers FY23 revenue view to $1.19B-$1.21B from $1.23B-$1.25B. CHS rises after results top estimates.



·     BBY +5%; beats by $0.16, reports revs in-line; guides FY24 EPS in-line, revs in-line; narrows FY24 comp sales decline to (-4.5-6.0%) from prior decline (-3%6%) while raises FY adj EPS $6.00 to $6.40, from prior $5.70 to $6.50 – said it expects this year to be the “low point” in tech demand.

·     BIG +25%; reported Q2 revenue of $1.14B topping the $1.1B estimate on smaller EPS loss of (-$3.24) vs. est. (-$4.12) loss and sees Q3 comparable sales to be down in the low-teen percentage range, which is a modest improvement vs Q2 comps (-14.6%).

·     COIN +11%; after early strength in crypto sector; MSTR rising after Bloomberg reported US court paves way for first bitcoin ETF in Grayscale ruling.

·     CTLT +6%; announced a cooperation agreement with activist investor Elliott Investment Management LP, as it will appoint four new independent directors.

·     GSHD +17%; will replace NUVA in the S&P SmallCap 600. S&P MidCap 400 constituent GMED is acquiring NuVasive in a deal expected to close soon pending final conditions.

·     FUTU +7%; along with strength in US listed China stocks after Beijing ushered in stimulus measures boosting capital markets and follow thru after Bank America upgrade.

·     JXN +10%; will replace NexTier Oilfield Solutions (NEX) in the S&P SmallCap 600.

·     ORCL +2%; upgraded to Buy from Neutral at UBS while raising its PT to $140 from $120 saying independent checks corroborated the notion that Oracle is benefiting from outsized allocations of Nvidia GPUs relative to its size. We could be sitting in front of 6-12 months of GPU shortage noise, and we haven’t even seen the $2b in AI start-up commitments converted to OCI usage.

·     PDD +15%; reported Q2 FY23 revenue growth of 66% year-on-year to $7.21 billion, beating the consensus of $6.07 billion; non-GAAP earnings per ADS of $1.44 beat the consensus of $1.01.

·     SJM +1%; boosted its annual profit forecast to $9.45-$9.85 from prior view $9.20-$9.60 citing higher prices of its jams, jellies, and pet food products after Q1 adj EPS topped views; also reported Q1 gross margin rose to 36.3% from 29.5% a year earlier.

·     VZ and T +2%; after Citigroup upgraded both to Buy ratings saying the wireless competitive environment is showing positive signs of stabilization that should help operating performance.



·     CE -1%; downgraded to Underweight from Neutral at Piper saying that many of the actions the company is undertaking to raise cash will prove detrimental to future growth and earnings.

·     FTCH -1%; downgraded from OW to EW and tgt cut to $5 at Morgan Stanley citing high volatility, a wider range of potential outcomes, and a limited catalyst path.

·     HEI -4%; Q3 EPS $0.74 vs est. $0.73 on sales $722.9Mm vs est. $701.7Mm; net sales were driven by organic commercial aerospace growth and a reengaged M&A cycle; however, increasing costs as well as Wencor integration weighed on margins.

·     NIO -7%; after posting Q2 revenue of 8.77 bln yuan vs est. 9.25 bln yuan and said it expects Q3 total revenue between $2.61B-$2.92B vs. est. $2.47B; said Q2 vehicle deliveries were 23,530 and sees Q3 deliveries 55K-57K.

·     SCVL -2%; Q2 EPS $0.71 vs. est. $0.84; Q2 revs $294.6M vs. est. $286.35M; Q2 comp store sales fell (-6.5%); lowers FY23 EPS view to $3.10- $3.25 from $3.60-$3.85 (est. $3.12) and lowers FY23 revenue view to $1.19B-$1.21B from $1.23B-$1.25B.


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.