Mid-Morning Look: March 10, 2023

Mid-Morning Look

Friday, March 10, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open weak and proceed lower as S&P futures took at the overnight low of 3,884.35, falling as low as 3,878.50 before bouncing back to the 3,900 level. A wild end of the week has major averages on pace for their worst weekly performance of 2023 following a banking collapse in SIVB shares on fear of tumbling deposits (dragging other banks lower with contagion fears), while a mixed nonfarm payroll report keeps the Fed outlook on higher rates unclear into next Tuesday’s CPI reading. Nonfarm payrolls were reported at 311k vs est. 225k), as US unemployment rate comes in at 3.6% vs est. 3.4% and US average earnings climb 4.6% y/y vs est. +4.7% (the slowing wages and rise in unemployment overshadowed fears of another jobs beat). The data pushed Treasury yields much lower, as the 10-yr hit new lows below 3.70%, down 22-bps (off weekly highs around 4%); while the shorter term the 2-yr fell -31bps below 4.60% (nearly 50-bps off weekly highs around 4.07%). Fed swaps downgrade odds of 50bp March rate hike to under 50% (after highs around 70% chance earlier this week) following the data and weakness in banks. The S&P dropped below its 200-day MA resistance yesterday around 3,948 and 100-day 3,957. Silicon Valley Bank is racing to prevent a bank run as funds, including Peter Thiel’s Founders Fund, advised portfolio businesses to withdraw their money. It comes after Silvergate Capital Corp.’s (SI) abrupt shutdown and has weighed on banking stocks the last 2-days. On Wednesday, SVB issued mid quarter guidance saying they sold most everything they could (at a substantial loss) to deal with current financial conditions. Defensive assets such as gold, silver and defensive healthcare among early leaders.


Economic Data

·     Nonfarm payrolls for February rose +311K jobs above consensus +205K (10th beat in a row) and below Jan revised data of +504K from 517K. Private sector jobs +265K vs. est. +210K (prior revised to +386K from +443K and Manufacturing jobs fell -4K jobs vs. est. +12K. Feb. Unemployment rate rises to 3.6% vs 3.4% as labor participation rate rises to 62.5% vs. prior 62.4%.

·     Average Hourly earnings all private workers rose +0.2%, below ests. +0.3% and vs. Jan +0.3% to $33.09 vs January $33.01; February year-on-year earnings +4.6% and Average work week all private workers 34.5 hours vs. est. 34.6 hours







WTI Crude















10-Year Note





Sector Movers Today

·     It was all about the banks and the fallout from SIVB after yesterday banking collapse: CNBC reported the company is in talks to sell itself after attempts to raise capital have failed, sources say, David Faber reported. Yesterday SIVB announced ~ $2.25b capital raise after it was forced to sell most of its available-for-sale securities to offset a fall in customer deposits. Wells Fargo said that SVB’s issues appeared to be caused by “a lack of funding diversification”; higher rates, recession worries and a tepid market for IPOs made it harder for startups to raise add ’l capital.

·     SIVB fallout hitting regional banks, among those under the most pressure. KRE hit fresh 2-year lows below the $50 level – no let-up in regional bank pressure following the SIVB tumble on deposit outflows hurting banks – contagion fears running rampant tail end of trading week (BANC, FRC, PACW, SBNY, ZION, WAL, KEY, others down sharp a second day).

·     In asset managers, monthly assets under mgmt data released: AB preliminary assets under management decreased to $665 billion during February 2023 from $680 billion at the end of January; APAM preliminary assets under management as of February 28, 2023, totaled $134.8B; BEN prelim month-end assets under management (AUM) of $1,416.5 billion at February 28, 2023, compared to $1,451.9 billion at January 31, 2023; IVZ preliminary month-end assets under management (AUM) of $1,458.0 billion, a decrease of 1.7% versus previous month-end; LAZ reported assets under management of $224.16 billion vs. $251.57 billion y/y; TROW preliminary month-end assets under management of $1.31 trillion as of February 28, 2023. Preliminary net outflows for February 2023 were $5.9 billion.



·     GE +1%; price tgt raised by a few analysts noting yesterday’s analyst meeting was a positive catalyst for the stock as management surprisingly raised its long-term frameworks for both Aerospace and Vernova.

·     NEM +3%; as gold miners outperform given rotation into gold prices/haven assets.

·     SSYS +11%; as confirms receipt of unsolicited acquisition proposal from Nano Dimension (NNDM) for $18.00 per share in cash.

·     ULTA +2%; posted another beat and raise quarter with sales accelerating, controlled promotions, and positive traffic (4Q EPS $6.68 vs est. $5.68 on sales $3.23B vs est. $3.03B), while comps +15.6% and guides FY23 comps +4-5%, net sales $10.95-11.05B vs est. $10.75B.

·     VRTX +2%; as investors rotate into defensive healthcare stocks (ABBV, AMGN, MCK, MRK up).



·     BIRD -31%; after reported Q4 revs below expectations as well as bottom-line results below and announced the planned departure of CFO Mike Bufano, who will be leaving in mid-May.

·     CAT -2%; downgraded to sell from neutral at UBS, saying its growth momentum is not good enough to justify its valuation.

·     DOCU -19%; as reported better-than-expected 4QFY23 results, though provided roughly in-line 1Q and FY24 revenue guidance highlighting softening demand trends and ongoing NRR pressure (-1pt QoQ to 107%) and said CFO intends to step down in the coming months.

·     GPS -6%; as posted a bigger-than-expected Q4 loss and forecast full-year sales below estimates, signaling a slowdown in demand.

·     KRE -4%; fresh 2-year lows at the $50 level – no let-up in regional bank pressure following the SIVB tumble on deposit outflows hurting banks – contagion fears running rampant tail end of trading week (BANC, FRC, PACW, SCHW, SBNY, ZION, KEY, others down sharp a second day).

·     ORCL -4%; Q3 beat (EPS $1.22/$12.4B vs. $1.20/$12.41B) on better op margin 42% though Q4 cloud license and on-premises license revenues $1.288Bn vs $1.289B as reported last year.

·     SIVB remained halted after shares tumbled pre-mkt – extending losses after a 60% decline Thursday as announced ~ $2.25b capital raise after it was forced to sell most of its available-for-sale securities to offset a fall in customer deposits (among top S&P decliners were banks).


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.