Mid-Morning Look: March 08, 2023

Mid-Morning Look

Wednesday, March 08, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks moving higher after weakness on Tuesday, as lower Treasury yields, improving market breadth, and major averages holding around key technical support levels for the S&P 500 offset a steady US dollar and another round of strong jobs data (ADP and JOLTs), which further boosts expectations of a 50-bps rate hike by the Fed in two-weeks. Higher and longer on interest rates going forward to slow the economy/tame inflation remains the key message from the Fed – but still not impacting investor confidence as stocks with an early boost. Fed Chair Powell testifying to the House Financial Services Committee today, second day of testimony after speaking to Senate Banking Committee on Tuesday. ADP private payrolls rose 242K, above ests 200K, while JOLTs Job Openings reported at 10.824M, above ests 10.5M. Nearly all eleven S&P sectors higher today after all eleven fell on Tuesday.


Economic Data

·     ADP Private Payroll data for February reported at +242k vs. estimates for +200k and above prior month upwardly revised reading of 119K from 106K. The ADP report comes two days before the government’s nonfarm payrolls count, which is expected to show a gain of 225,000.

·     JOLTS job openings for Jan at 10.824M above ests 10.5M, below prior month of 11M.

·     U.S. trade deficit for January (-$68.3B) vs. consensus (-$68.9B) and compares to Dec deficit reading of (-$67.2B), which was smallest since September 2020.







WTI Crude















10-Year Note





Sector Movers Today

·     In retail: In research: JWN upgraded from Hold to Buy at Argus with $23 tgt noting it has been hurt by weaker economic conditions, unproductive inventory, and soft sales to lower-income customers…but has also divested unprofitable businesses and reduced unwanted inventory. BBBY said it has received about $135 million in gross proceeds from the exercise of preferred stock warrants that were issued as part of a public equity offering conducted on Feb. 7, and has now produced total proceeds of $360 million. VRA shares jump after Q4 adj EPS $0.16 on revs $147.1M (est. $137.5M) top views as guides year EPS $0.40-$0.50 vs. est. $0.36 and revs sees $490M-$510M vs. est. $507M; said inventory fell -4.6% y/y and margins also down y/y to 40.8% from 50.9%. SFIX reported mixed 2Q results, with active customers and revenue both slightly below consensus while profitability was above expectations.

·     In utilities: CMS upgraded to Buy from Neutral at Bank America arguing that the company’s de-risked, above-average earnings outlook stands out against its utility peer group and warrants a widening relative premium. SWX 3.57M share secondary priced at $60.12 per share. WTRG named as a “short” call by SprucePoint Capital as questions Essential Utilities model and said sees 35%-50% downside.

·     In Transports: UPS backed its prior guidance in a new SEC filing saying it still sees full-year revenue of $97.0B-$99.4B vs. est. $98.3M and guided for a full-year adjusted operating margin of 12.8% to 13.6% vs. 13.3% consensus. In airlines: GOL posted a Q4 profit as demand for air travel continued to recover; posted net income of 230.9 million reais ($44.7 million), or R$0.55 a share. In tankers, Baltic Dry Index rises 2.23% to 1,327 in London, up for a 14th day as the index has risen 120% in the past month. Capesize +5.33% to $12,851; Panamax +0.82% to $12,989; and Supramax 58k tons -0.04% to $12,770. STNG initiated at Overweight and $87 tgt at JPMorgan.



·     CPB +2%; Q2 sales rose 12.6% y/y to $2.49B, topping $2.44B estimates and lifts annual sales forecast to up 8.5%-10% from prior view 7%-9% on higher prices and strong demand for its packaged meals and snacks (also boosted the lower end of 2023 adjusted profit forecast).

·     CRWD +6%; reported a strong F4Q, as ARR growth of 48% Y/Y significantly exceeded the Street’s ~45% forecast while also added record net new logos this quarter, and NRR remained very healthy; guidance also upbeat.

·     DSEY +38%; to be acquired by Solenis for $4.6 billion with shareholders to receive $8.40 per share in cash in “go private” transaction https://bit.ly/3l1XZqv

·     KBAL +68%; to be acquired by KBAL in a cash and stock deal valued at about $485M, expected to close by mid-2023 as combined co will have pro forma annual revenue of about $3.1B https://bit.ly/3L8Dpj0

·     MAXN +33%; after Q4 revs top views ($323.5M vs. $315.7M) and guides Q1 revs above views (but guides year lower) and said its subsidiary enters into a Product Reservation and Performance Agreement with Primergy Solar.

·     MESO +14%; as the FDA agreed to review company’s resubmitted marketing application for its investigational therapy remestemcel-L used for treatment of the graft-versus-host disease in children.

·     OXY +3%; as Berkshire Hathaway bought almost 6 million shares of Occidental Petroleum in recent days, bringing its stake in the big energy company to 200.2 million shares worth $12.2 billion, according to a filing late Tuesday.

·     RIGL +14%; as Q4 EPS $0.01 vs. est. loss (-$0.11); Q4 revs $51.3M vs. est. $27.97M; said as of December 31, 2022, had cash, cash equivalents and short-term investments of $58.2M.

·     YEXT +6%; 4Q results came in above expectations on both revenue and profitability (OM 300 bps ahead), but fiscal 2024 revenue guidance was below expectations with the company guiding revenue to be flattish next year.



·     BF -4%; Q3 EPS misses at $0.21 vs. est. $0.47 while sales rose 4.2% y/y to $1.08B vs. est. $1.01b; gross margin 57.7% down from 60% y/y, and operating margin 15.9% vs. 33.5% y/y.

·     ETSY -6%; follows CFO commentary at investor conference yesterday.

·     EW -3%; downgraded to Equal Weight from Overweight at Wells Fargo on lower tricuspid sales; limited upside to TAVR market growth w/ asymptomatic data likely in late ’24; TAVR share loss.

·     SFIX -14%; mixed 2Q results, with active customers and revenue both slightly below consensus while profitability was above expectations. Average order value held steady y/y; says CFO Dan Jedda to step down, and SVP of Finance David Aufderhaar to succeed.

·     TSLA -2%; cut to Hold at Berenberg and pressured on reports of two incidents in which the wheel detached from the steering column of 2023 Tesla Model Y vehicles while being driven.

·     UNFI -24%; after Q2 adj EPS miss of $0.78 (vs. est. $1.46) while revs better at $7.82B, but gross profit rate fell to 13.7% of net sales, from 14.5% in the same period a year ago; lowers 2023 views for EPS to $3.05-$3.90 from $4.85-$5.15 (est. $5.00).



·     BridgeBio (BBIO) 8.824M share Secondary priced at $17.00.

·     Intelligent Bio (INBS) 569K share Secondary priced at $3.90.

·     Miromatrix Medical (MIRO) 6.25M share Spot Secondary priced at $1.60.

·     Permian Resources (PR) 27.5M share Spot Secondary priced at $11.00.

·     Portillo’s (PTLO) 8M share Secondary priced at $21.05.

·     Shoals Technologies (SHLS) 24.5M share Secondary priced at $24.70.

·     Southwest Gas (SWX) 3.576M share Secondary priced at $60.12.

·     US Foods (USFD) 7.6M share Block Trade priced at $39.00.


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.