Mid-Morning Look: November 14, 2023

Mid-Morning Look

Tuesday, November 14, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks in massive buy mode, with a perfect storm boosting shares of all eleven S&P sectors, with the biggest spikes in interest rate sensitive sectors after inflation data showed the U.S. consumer price index (CPI) was unchanged in October, and the core rate was up 0.2%, both weaker than anticipated. REITS (XLRE) +4.4% the top S&P sector followed by Consumer Discretionary (XLY) +2% and Utilities (XLU)+2.9%, all interest rate sensitive sectors. A new all-time high for the S&P 500 Tech sector (XLK) this morning as the Nasdaq 100 Index surges most since late July. Everything seeing strength from bonds, to gold, to stocks, to commodity prices on the dollar decline. The CBOE Volatility index (VIX) dropped more than 5% after the data, pushing below the 14 level to its lowest since 9/20 before paring losses. U.S. Treasury yields tumbled after softer-than-expected consumer inflation data in October, suggesting that the Federal Reserve is likely done raising interest rates, while fed fund futures now forecast up to 4 rate cuts in 2024 (implied shows no chance of further rate hikes). The benchmark 10-yr yield declined -16.7 bps to 4.465%, the 5-yr -20-bps to 4.46%, the 30-yr -12 bps to 4.62% and the -2-yr yield -19.2 bps to 4.85%. The euro rises +1.33% to 1.0841, its highest since early September after the “tamer” CPI inflation reading while the dollar index (DXY) falls over 1% to 104.50, its biggest downward move since January. In corporate news, The Russell 2000 playing catch-up, among the biggest movers rising nearly 4%. Home Depot (HD) posts quarterly sales/earnings beat while narrowed forecast. Next up tomorrow, producer price index (PPI) inflation data and earnings from retailers TGT, TJX, AAP and CSCO, PANW in technology.


Economic Data

·     October Consumer Price Index was reported flat m/m, smaller than the expected +0.1% and below the prior month of +0.4% prior while headline y/y CPI rose +3.2% vs. +3.3% expected and +3.7% prior. The core CPI, which excludes food and energy rose a smaller-than-expected +0.2% m/m vs. +0.3% expected and +0.3% prior and y/y rose +4.0% vs. +4.1% expected and +4.1% prior.







WTI Crude















10-Year Note





Sector Movers Today

·     In Autos: FSR shares tumbled after delaying 10-Q filing, Q3 revenue miss late yesterday; RIVN said last night it plans to raise nearly $15B in debt to help build an electric vehicle manufacturing plant in Georgia; TSLA increases price of Model 3 and Y in China from Nov. 14 and China saw record monthly electric-vehicle sales in October despite the end of subsidies – Reuters. WKHS cut its annual revenue outlook to $10-15M vs. prior view $65M-$85M citing HVIP vouchers delays and stalled access of its products in the California market.

·     In Beverages: Citigroup said in takeaways from the 2023 Beer Insights Seminar that overall, U.S. beer industry volumes remain soft YTD, down over -5% Y/Y, with macro impacts on weaker consumer trends and elasticity impacts from price increases, and large market share shifts post the Bud Light controversy continuing (BUD, SAM, STZ, TAP). TD Cowen also said the tone of this year’s Beer Insights Seminar was decidedly cautious, given accelerating industry volume declines and slowing pricing.

·     Homebuilders were one of the biggest movers initially following the softer CPI data, which pushed Treasury yields sharply lower, in turn lowering mortgage rates and boosting expectations for increased demand in housing (BZH, DHI, KBH, LEN, MTH, TOL moved higher). In Building Products: Flooring company LL said it received a new offer to be acquired, this time at $3 a share, from a firm owned by company founder Tom Sullivan. In May, Sullivan said F9 had taken a 9.4% stake in the company and offered to buy the rest at $5.76 a share.



·     BXP +10%; biggest gainers in the S&P are interest rate sensitive sectors such as high dividend paying REITs and banks lifting likes of ZION, KEY, ARE, EXR and others.

·     FSLR +8%; as solar stocks, which have been crushed in recent months amid a surging rate environment, are among the biggest movers in the S&P (ENPH, SEDG).

·     HD +3%; Q3 EPS $3.81 tops consensus $3.77; Q3 revs $37.71B vs. est. $37.63B; Q3 comp sales fell (-3.1%) vs. est. drop (-3.3%) and comp sales in the U.S. dropped (-3.5%) while narrows year EPS, sales, and comp sales view.

·     LEN +6%; broad strength in interest rate sensitive sectors such as home builders (KBH, TOL, PHM) given a sharp roll in the dollar and Treasury yields after the tamer CPI report.

·     SNAP +7%; after the Information reported that AMZN agreed to let its users shop for products directly from ads on the Snapchat app https://tinyurl.com/4naepf92

·     TECK +x%; sold its 77% stake in its steelmaking coal business to Glencore ($GLNCY) for $6.93B in cash as the deal is expected to close in Q3 2024; TECK will also sell 20% of the steelmaking coal business to Japan’s Nippon Steel Corp.

·     XPER +10%; reported Q3 adj. EPS loss of ($0.08) vs. est. loss ($0.11); adj. EBITDA $9.3M vs. est. $7.6M and total revs rose +7.2% y/y to $130.4M vs. est. $127.9M and narrowed F23 guidance.



·     BTAI -33%; after saying the FDA recommends an additional late-stage trial for its Alzheimer’s dementia related agitation treatment BXCL501.

·     CSIQ -5%; the latest solar to disappoint for quarter as Q3 revs $1.85B vs. est. $2.03B; Q3 EPS $0.32 vs. est. $0.82; guides Q4 revenue $1.6B-$1.8B below consensus $2.65B.

·     FSR -13%; after delaying 10-Q filing, Q3 revenue miss late yesterday.

·     ONON -5%; beat earnings and revenue forecasts for Q3 but was notable that sales growth slowed for the third quarter in a row.

·     SE -17%; after reported Q3 EPS loss (-$0.26) vs. est. $0.03, though Q3 revs of $3.3B topped consensus of $3.10B.

·     SKIN -52%; after saying the President and CEO will depart, Q3 sales rose 9.7% y/y to $97.4M below est. $117.2M on lower margins y/y (62.5% vs. 75.1%) and cuts FY23 revs to $385M-$400M from $460M-$480M; shares of other aesthetics companies fell (ESTA, INMD, CUTR, RVNC



·     DoubleVerify (DV) 12.5M share Spot Secondary priced at $30.45.

·     Runway Growth Finance (RWAY) 3.75M share Spot Secondary priced at $12.56.

·     Shimmick (SHIM) 3.575M share IPO priced at $7.00.


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.