Mid-Morning Look: November 09, 2023

Mid-Morning Look

Thursday, November 09, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are looking to build on the recent long winning streak as the Nasdaq comes into the day up 9-straight days and the S&P 500 with an 8-day streak as market sentiment which was so incredibly weak in October, has turned on a dime from negative to positive. The weekly bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 15.4 vs -26 last week as Bulls rise to 42.6% from 24.3% and Bears tumble to 27.2% from 50.3% – per BTIG strategist Jonathan Krinksy, the drop in AAII Bears from 50.3 to 27.2 was the largest one week drop in 20 years.” So, we went from near extreme fear to greed in a matter of a week. Riskier assets have been snatched up, with crypto no exception as Bitcoin prices rise around 6% at $37,70, 18-month highs and Ethereum hits 2K on growing optimism that the launch of an ETF tracking the Cryptocurrency is imminent; shares of COIN, MARA, RIOT, MSTR and other crypto related stocks jumped in sympathy. On the flip side, defensive gold prices have been trading lower after strength last week. Small Caps look to bounce after falling all 3-days this week while the S&P and Nasdaq rise each day. In the lone piece of economic data, weekly jobless claims fell to 217K in latest week from 220K prior and vs. est. 218K; the 4-week moving average climbed to 212,250 from 210,750 prior week; continued claims climbed to 1.834M Oct 28 week from 1.812M prior. Oil prices rebounding from near 4-month lows this morning and yields edge higher.







WTI Crude















10-Year Note





Sector Movers Today

·     In Aerospace & Defense: SPR was upgraded from Peer Perform to Outperform at Wolfe Research noting the company has been through a lot of challenges dating back to 2019’s MAX crash and since then has burned FCF moving them from ~1x leverage to north of 10x as debt climbed and earnings. SPCE Q3 net loss ($104.6M) vs. est. loss (-$137.3M) and Q3 revs $1.73M, vs. est. $1.14M; guides Q4 revs about $3M above prior view $1M and est. $2.7M and slashes 18% of workforce. TDG said it agreed to buy the Electron Device Business from TJC L.P.’s Communications & Power Industries for $1.39B in cash; declares a special cash div of $35.00 per share; also reported Q3 EPS and sales that topped consensus with upbeat guidance. TGI was upgraded to Outperform at TDCowen and raise tgt to $14 from $10 as the firm says they don’t see things getting worse, and there’s lots of upside if they make it to solid ground and sees ramping FY24-25 FCF with potential debt reduction initiatives.

·     Software Movers: APP reported Q3 results that beat consensus and guidance, driven by another record quarterly revenue for Software Platform, which benefited from having a full quarter of AXON 2.0; issued Q423 guidance that was better-than-expected. HUBS Q3 revs $558M (+26%/+24% CC) beat by 4% and Q4 revs guided in line at the midpoint at $557M (+19%/+17%CC), with no change in macro expected for 2H or early 2024 vs 1H. TTWO reported Q2:F24 bookings at the high end of guidance in the video game software sector, while adjusted EBIT solidly beat estimates due to lower opex. Management left FY24 bookings guidance unchanged. TWLO reported Q3 beat/raise with a sizable beat/raise on the bottom line as cost optimizations in Twilio Communications (TC) business continue to reap better-than-expected profits with increased guidance in operating profit for CY23.

·     In Retail: DDS Q3 EPS $9.49 vs est. $7.06 and revs $1.48B vs est. $1.52B; Q3 comps fell (-6%) vs est. (-1.9%); said the sales environment remained challenging in the third quarter with weakness beginning in September. HBI Q3 EPS and sales fall just short of consensus and forecasts Q4 net sales from cont ops about $1.36B, vs. est. $1.47B and cuts year EPS and rev outlook – FY23 adj EPS view to $0.12-$0.16 from $0.16-$0.30 and revs view to $5.7B from $5.8B-$5.9B. TPR Q1 profit beats estimates on lower freight costs and improved operations and said GM’s improved by 250-bps and maintains outlook, but lowered its FY rev view to about $6.7B, down from $6.9B estimated previously which followed a Q1 sales miss. WWW Q3 EPS $0.07 missed est. $0.08 while revs $527.7M beat $514.2M est.; said accelerating a transformation plan that’s expected to generate $215M in annualized savings; guides 2023 EPS $0.05-$0.10 vs. est. $0.50.



·     AFRM +22%; Q1 revs $497M tops ests $444M amid higher gross merchandise value (GMV) and volume (produced 28% growth vs 20% estimated this quarter as per Piper) while guides Q2 revs $495-$520M vs. est. $502M.

·     BE +14%; as reported above consensus 3Q, product margins reached 40%. Service margins improved sequentially, matching management’s guide that 2Q was a bottom.

·     CDNA +28%; after smaller EPS loss than est. and higher revs $67.2M while boosted FY23 revenue view to $274M-$278M from $240M-$260M (est. $255M).

·     DIS +6%; after better results as Q4 adj EPS $0.82 vs. est. $0.69; Q4 revs rose 5.4% y/y to $21.24B vs. est. $21.4B; Q4 Disney+ subscribers 150.2M, vs. est. 147.07M; continue to aggressively manage cost base, increased annualized efficiency target to $7.5B vs. $5.5B prior.

·     DUOL +11%; as DAU, ending paid subscribers, and bookings growth all accelerated, topping views while cash OpEx growth continues to slow, with guidance suggesting cost discipline.

·     RAMP +19%; Q2 results exceeded expectations across the board with notably strong bookings conversion (highest in 7 qtrs.) aided by a stronger-than-expected macro env’t and both Marketplace (+19% y/y) and Usage revenue 15% of total subscription (vs. ~12.5% guide) strong.

·     TDG +19%; said it agreed to buy the Electron Device Business from TJC L.P.’s Communications & Power Industries for $1.39B in cash; declares a special cash div of $35.00 per share; also reported Q3 EPS and sales that topped consensus.



·     AMC -17%; reported earnings but shares fell following a $350M stock offering announcement.

·     AMLX -27%; shares fall as Q3 sales $102.7M miss the $113.6M; increased its research-and-development expenses to $30M from $24.9M.

·     ARM -7%; reported its first earnings results post IPO as forecast revenue of between $720mn-$800mn for the quarter fell short of analyst expectations.

·     EBIX -27%; on delay in completing qtrly report disclosures.

·     EVA -51%; after withdrawing previous sales price per mt, net loss, adjusted ebitda, and total capital expenditures guidance and warned Q4 results could be weaker than Q3 and expecting a significantly lower sales price per mt for wood pellet in Q4.

·     MODG -16%; mixed quarter (sales miss on softer SVS, adj. EBITDA beat), with forward quarter guidance below expectations; lowers FY23 EPS view to $0.39-$0.43 from $0.63-$0.69 and cuts FY23 rev view to $4.24B-$4.26B from $4.42B-$4.47B

·     VEEV -10%; shares slide after cutting the higher end of FY24 revs view by $15M to $2.36B and cuts FY25 outlook by $50M.



·     AMC Entertainment (AMC) files prospectus supplement for offering up to $350M of stock.

·     Amicus Therapeutics (FOLD) files prospectus related to resale of up to 2.5 M of stock.

·     CCC Intelligent Solutions (CCCS) 65M share Spot Secondary priced at $10.50.

·     Chesapeake Utilities (CPK) announces $330M offering of common stock.

·     LegalZoom (LZ) 15.1M share spot secondary priced at $10.90.

·     Myriad Genetics (MYGN) 6.47M share Spot Secondary priced at $17.00.

·     Spirit AeroSystems (SPR) 9.09M share Secondary priced at $22.00.


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.