Mid-Morning Look

Friday, December 23, 2022

U.S. stocks volatile and choppy on this trading day, with S&P futures ranging between 3,820 lows and 3,870 highs (but off the 3,788.50 lows Thursday) after a flood of mixed economic data. Inflation data points were mixed as core PCE for Nov came in above views y/y (down from prior month), while University of Michigan sentiment inflation expectations slipped. Personal income for Nov rises above views while savings rate ticks up, but still off normal highs. Durable Goods weakened, but New Home Sales came in better – truly a mixed bag of data on this high volatility trading day. Energy the early S&P leader, up over 2% while consumer discretionary (behind more TSLA weakness) and technology the early sector losers. NYSE breadth shows advancers narrowly topping decliners.

Economic Data

·     U.S. Personal Spending for Nov (m/m) rises +0.1% vs 0.8% previous and below est. +0.2% while Personal Income for Nov (m/m) +0.4% vs +0.7% previous and above est. +0.3%; the personal saving rate for Nov rises +2.4% vs. Oct 2.2%

·     November headline PCE inflation +5.5% y/y, in-line with ests +5.5% and +6.1% in prior month while core PCE y/y rises +4.7% vs. +4.6% est. but down from +5% prior. On a m/m basis, PCE price index rises +0.1% (in-line with ests) and PCE core +0.2% m/m (also in-line)

·     Durable Goods Orders for Nov fell (-2.1%) vs. est. decline (-0.6%) and core durable goods orders +0.2%, versus +0.1% expected.

·     University of Michigan Sentiment consumers sentiment Dec-F reported at 59.7 vs. est. 59.1 and Final Nov 56.8; current conditions index final Dec 59.4 final Nov 58.8; expectations index final Dec 59.9 vs final Nov 55.6

·     University of Michigan surveys of consumers 1-year inflation outlook final December 4.4% vs preliminary 4.6% and final November 4.9% and University of Michigan surveys of consumers 5-year inflation outlook final December 2.9% vs preliminary 3.0% and final November 3.0%

·     New Home Sales for November rose 5.8% to 640,000 annual rate, better than the expected decline of -5.7% and 600K estimate

Stock GAINERS

·     ACCD +6%; TRICARE Awards T5 Contracts awarded – Truist noted after speaking with ACCD that it is a good outcome, given it subcontracts with one of two contract winners

·     CHTR +1%; upgraded at Wells Fargo noting investor day outlined the network evolution including DOCSIS4.0, leaning into mobile solutions + Spectrum One and significant line extension plans to grow the subscriber base into rural America

·     COP +3%; energy early S&P winners – HES PXD APA among top gainers

·     GNRC +1%; given the attention focused on the massive winter storm that is battering the US, bringing with it heavy snow, brutal winds, and dangerously low temperatures

·     LMNR +1%; posted a wider-than-expected 4Q loss – Q4 adj EPS loss (-$0.32) vs. est. loss (-$0.10), but quarterly revenues topped views

·     NWSA +2%; after Axios reported Michael Bloomberg is interested in acquiring either Wall Street Journal parent company Dow Jones or The Washington Post, a source familiar with his thinking told Axios. https://bit.ly/3PN0CYi

Stock LAGGARDS

·     AMC -5%; after falling -7% Thursday as proposes 1 for 10 reverse stock split and said would raise $110 million in new equity capital through the sale of its preferred stock

·     AMTI -54%; after issued mixed results for AMT-101 for patients with ulcerative colitis and chronic pouchitis saying it is disappointed in the top-line results for its trial of AMT-101 for patients with UC, and that it is seeking to better understand the high placebo rate of clinical remission

·     BIIB -1%; after Japan drug making partner Eisai’s reported a 3rd death in Alzheimer’s trial

·     MMM -2%; after judge ruled the company barred from shifting liability in earplug litigation

·     NTNX -4%; drops after report HPE interest in acquisition wanes, talks end https://bit.ly/3hKUbsj

·     PARA -1%; downgraded to Sell from Hold and cut tgt to $14 at Loop Capital as do not see a buyer willing to pay a premium for the entire company, nor do they see a near-term change in the company’s streaming strategy and believe EBITDA and FCF estimates for 2023 are too high

·     TSLA -2%; downside momentum continues, falling for the 9^th time in last 10-sessions (shares remain down -65% YTD)