Morning Preview: August 21, 2023

Early Look

Monday, August 21, 2023









S&P 500










A good start overnight for U.S. futures, pointing to a strong open after last week’s declines while Asia was mixed after China’s one-year loan prime rate (LPR) was lowered by 10 basis points to 3.45% from 3.55% previously, less than expected while the five-year LPR was left at 4.20%, raising doubts over the country’s commitment to support the property sector. Stocks looking to rebound after the Dow Jones Industrial Average fell -2.2% last week, the S&P was down -2.1%, and Nasdaq declined -2.6% on rate hike concerns. The yield on the 10-year note was up at 4.30% on Monday and a breach above 4.338% would take it to levels not seen since 2007. Yields may stay steady until late this week when Fed Chair Jerome Powell speaks at a meeting of central bankers at Jackson Hole in Wyoming that begins Friday. In Asian markets, The Nikkei Index rose 114 points to 31,565, the Shanghai Index fell -38 points or 1.24% to 3,092, and the Hang Seng Index dropped -327 points to 17,623 (lowest since November). In Europe, the German DAX is up 100 points to 15,679, while the FTSE 100 gains 45 points to 7,308. In stock news, shares of Internet security software maker Palo Alto (PANW) jumped over 10% after earnings results after the bell Friday. Oil prices look to rebound after sliding last week.


Market Closing Prices Yesterday

·     The S&P 500 Index dipped -0.65 points, or 0.01%, to 4,369.71.

·     The Dow Jones Industrial Average rose 25.83 points, or 0.07%, to 34,500.66.

·     The Nasdaq Composite slipped -26.16 points, or 0.20%, to 13,290.78.

·     The Russell 2000 Index advanced 9.36 points, or 0.51% to 1,859.42.


Economic Calendar for Today

·     No Major Economic Data!


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: FFIE FLXS MSGM NDSN TPCS ZM


Other Key Events:

·     DA Davidson Western Bank Summit (virtual), 8/21-8/22





















10-Year Note





World News

·     The Peoples Bank of China (PBoC) cut the 1y LPR to 3.45% from 3.55%; 5Y LPR left unchanged at 4.2%, which was a major surprise. This implies less stimulus for the housing market from interest rates, with most mortgages tied closely to the 5-year loan prime rate.

·     Tropical Storm Hilary is dumping two years or more worth of rain in California’s desert areas.


Sector News Breakdown


·     California’s autos regulator said on Friday it is investigating “recent concerning incidents” involving autonomous vehicles operated by General Motors (GM) unit Cruise in San Francisco and asked the company to take half its robotaxis off the roads – Reuters.

·     VinFast Auto (VFS) mentioned cautiously in Barron’s noting that the stock shot off the starting line after going public this past week, but the electric-vehicle start-up is likely to stall as shares as just too expensive.

·     Xpeng (XPEV) was upgraded to Buy from Neutral at Bank America on expectation that stronger cost controls and a pact with Volkswagen can enable the company to turn a profit in 2025.



·     Citigroup (C) considers plan to split Institutional Clients Group in overhaul – FT reports.

·     Re/Max Holdings (RMAX) announced a reduction in force and reorganization intended to streamline company’s operations; reorganization will reduce company’s overall workforce by approximately 7%; reaffirms guidance.

·     Bank credit at all U.S. commercial banks slides to $17.23 trln in week ending aug 9, vs $17.25 trln in prior week: Fed data, not seasonally adjusted.

·     Boaz Weinstein and several other high-profile investors including William Ackman and Marc Lasry have made a rival offer for Sculptor Capital Management (SCU), a hedge–fund firm that already agreed to sell itself to another investment firm – WSJ.



·     Exelixis (EXEL) and Ipsen said a phase 3 clinical trial evaluating a combination of drugs cabozantinib and atezolizumab in metastatic castration-resistant prostate cancer met its primary goal of progression-free survival but didn’t achieve statistical significance for overall survival.

·     iKena Oncology (IKNA) files to sell 5.95M shares of common stock for holders.

·     Neurocrine Biosciences (NBIX) announced the U.S. FDA approved INGREZZA capsules for the treatment of adults with chorea associated with Huntington’s disease.

·     Regeneron Pharmaceuticals Inc. (REGN) said late Friday the FDA approved Eylea HD injection 8 mg, which is jointly developed with Bayer AG.

·     Johnson & Johnson’s (JNJ) offer to its shareholders to exchange their shares of Johnson & Johnson common stock for shares of Kenvue (KVUE) common stock owned by Johnson & Johnson was oversubscribed. 8.0324 shares of Kenvue common stock will be exchanged for each share of Johnson & Johnson common stock accepted in the exchange offer.


Technology, Media & Telecom

·     Palo Alto Networks (PANW) shares rise over 12% after Q4 EPS $1.44 vs. est. $1.28; Q4 revs $2.0B vs. est. $1.96B; Q4 Billings $3.16B, +18% y/y, vs. est. $3.17B; guides Q1 EPS $1.15-$1.17 vs. est. $1.11 and sees Q1 revenue $1.82B-$1.85B below consensus $1.93B; sees 2024 billings $10.9B-$11.0B vs. est. $10.77B.

·     UK CMA panel clears Broadcom (AVGO)/VMware (VMW) $61B deal following in-depth phase 2 investigation; confirms final decision that deal doesn’t reduce UK competition.

·     Napco Security (NSSC) said it would restate financials for the prior three quarters saying its previously issued unaudited interim financial statements should no longer be relied upon.

·     Liberty SiriusXM (LSXMA) upgraded to Buy from Neutral at Seaport Research.


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.