Mid-Morning Look: September 26, 2023

Mid-Morning Look

Tuesday, September 26, 2023





DJ Industrials




S&P 500








Russell 2000






S&P 500 makes a new monthly low (SPX falls below 4,300), back to worst levels since June as U.S. stocks erase yesterday’s advance amid rising interest rate fears. Stocks careening lower after JP Morgan CEO Jamie Dimon, in an interview with the Times of India, commented that the world may not be prepared for a worst-case scenario of fed funds hitting 7% along with stagflation adding that the economic pain going from 5%-7% would be greater than it was going from 3%-5%. “If they are going to have lower volumes and higher rates, there will be stress in the system,” Dimon said. The CBOE Volatility index (VIX spikes nearly 9% above yesterday’s highs around 18.40 given the drop in stocks. Treasury yields are mostly steady today but remain elevated with the 10-year holding above 4.51%. All eleven S&P sectors are trading lower while one bright spot early is Biotech (XBI), bouncing off 52-week lows the day prior following several positive updates in the SMID biotech space (see below ICPT, IMVT, PLRX, ROIV, SLNO).


Economic Data

·     The Consumer Confidence index softened to 103.0 in September from 108.7 in August and below consensus 105.5 as the present situation index 147.1 in Sept vs Aug revised 146.7 and the expectations index 73.7 in Sept vs Aug revised 83.3 (previous 80.2).

·     New Home Sales for Aug fell -8.7% to 675K, worse than the expected 700K view and below July of 739K; home sales in the Northeast +6.7%, Midwest -17.2%, South -7.5%, West -9.4% as new home supply 7.8 months’ worth at current pace vs July 7.0 months; the Aug median sale price $430,300, -2.3% from Aug 2022 ($440,300)

·     Richmond Fed composite manufacturing index +5 in Sept vs -7 in Aug as shipments index +7 in Sept vs -5 in Aug and revenues index +4 in Sept vs +4 in Aug

·     July FHFA House Price Index: +0.8% vs. +0.5% consensus and +0.4% in June (revised from +0.3%). July S&P CoreLogic Case-Shiller Home Price Index composite for 20 cities, seasonally adjusted, climbed 0.9% M/M, surpassing the +0.7% expected and matching 0.9% increase in June. The HPI composite for 20 cities, not seasonally adjusted, rose 0.6% M/M, compared with the -0.3% est.






WTI Crude















10-Year Note





Sector Movers Today

·     In Autos: TSLA will be investigated by the EU as part of its probe into China’s state subsidies for electric vehicles, Bloomberg reported citing people familiar. BLNK said it has entered into an agreement with Parkopedia to integrate more than 4,000 of its electric vehicles charging stations onto the Parkopedia platform in North America. Ford (F) said it has halted work on a $3.5 billion battery factory in Michigan, just days after the carmaker made concessions to its striking workers. FSR said it expects to reach its target of deliveries of 300 vehicles a day later this year; said it has manufactured 5,000 Fisker Ocean all-electric SUVs, up from 3,123 as of Sept. 7.

·     In Industrials: Jefferis with three rating changes: CSL downgraded to Hold from Buy as continues to see LT earnings potential from the re-roofing/insulation exposure but believe there are NT headwinds from a deteriorating end market outlook. FLS was upgraded to Buy as sees margin improvement through ’25, driven by cost initiatives/stronger volumes and believes can capitalize on strong aftermarket demand. NDSN was downgraded to Hold as remain constructive L-T but do not expect good entry points NT citing macro headwinds.



·     DKNG +2%; upgraded to Overweight from Neutral at JP Morgan and raise price tgt to $37 from $26, taking advantage of sluggish share price performance since late July.

·     FSR +15%; after announces it built 5,000 Fisker Ocean SUVs and expects to ramp deliveries to 300 vehicles/day later this year; to date, FSR says delivered over 900 vehicles in European and US.

·     ICPT +78%; to be acquired by Alfasigma for $19.00 per share in cash, in a deal valued at about $794M as it adds a leader in rare and serious liver diseases. https://tinyurl.com/3a75nhfa

·     IMVT +72%; said its experimental antibody drug showed reduction in levels of IgG antibodies that cause inflammation and disease; shares of ROIV which is IMVT’s top holder jumped in sympathy.

·     LSXMA +6%; as Liberty Media Corp. proposed splitting off the business that houses SIRI and combine it with the rest of Sirius XM Holdings Inc. https://tinyurl.com/4nf6vfe9

·     PLRX +15%; after the company said a mid-stage trial of its drug candidate for chronic liver disease met its primary and secondary endpoints.

·     SLNO +362%; after reported positive study results that it said would support a regulatory filing for its proposed treatment for the genetic disorder Prader-Willi syndrome.

·     WING +2%; was upgraded from Hold to Buy at Stifel and raised tgt to $200 as believes the company is poised to successfully lap difficult comp comparisons in 2H23.



·     AMZN -3%; as large cap tech/communications names among biggest laggards in S&P with AAPL, GOOGL, META leading lower.

·     MDGL -2%; disclosed in an 8-K last night that its Chief Commercial Officer would be departing.

·     NDSN -2%; downgraded to Hold at Jefferies as remain constructive L-T but do not expect good entry points NT citing macro headwinds.

·     OLN -2%; downgraded from Overweight to Equal Weight and reduces estimates as believes the company lacks a catalyst until a new CEO is found.

·     OMGA -6%; after it announced preliminary clinical data from a trial of its drug candidate for liver cancer.

·     SIRI -3%; as holder LSXMA proposes combination to form new public company. Minority holders of the company would collectively own approximately 16% of New SiriusXM, and the former holders of LSXM common stock would collectively own approximately 84% of New SiriusXM

·     THO -1%; reported Q4 beat as EPS $1.68 tops consensus $0.96 and while Q4 revs fell -28.4% y/y to $2.74B, they topped the $2.42B estimate; however, guides FY EPS $6.25-$7.25 as mid-pint below $7.12 estimate and said is still cautious on the global economic outlook.

·     UNFI -21%; Q4 sales $7.42B miss est. $7.46B on smaller-than-expected Q4 EPS loss of (-$0.25) but guidance weighs on shares as sees 2024 adj EPS loss (-0.88-$0.38) vs. est. +$2.28 and sees 2024 adj. EBITDA $450M-$550M below est. $617.2M.


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.