Morning Preview: August 25, 2023

Early Look

Friday, August 25, 2023









S&P 500










U.S. futures are edging higher, trading near the top end of the overnight range currently (+0.25% at 4,397 vs. 4,398 hi and 4,379.50 low overnight) ahead of Fed Chairman Powell comments expected later this morning at the annual Jackson Hole event. Treasury yields and the dollar are little changed ahead of Powell’s comments, which is expected to talk about interest rates, the economy, inflation, and the further outlook of the Fed. European Central Bank President Lagarde is also expected to speak today. 4 Central bank speakers are speaking at Jackson Hole (Powell and Lagarde provide full speeches, Ueda and Broadbent appear in a panel). Fed’s Powell, Fed’s Harker, Fed’s Mester, Fed’s Goolsbee, Feds Mester, ECB Lagarde, then BoE’s Broadbent and the BOJ’s Ueda both speak Saturday. In Asian markets, The Nikkei Index tumbled -662 points or over 2% to 31.624, the Shanghai Index fell -18 points to 3,064, and the Hang Seng Index dropped -255 points to 17,956. In Europe, the German DAX is up 74 points to 15,696, while the FTSE 100 rises 30 points to 7,465. Economic data and earnings are light for today, with full attention on Jackson Hole Wyoming macro commentary. Stocks ended sharply lower on Thursday, led by declines in the best sectors of 2023 (Tech, Discretionary, Communications) in a bout of “sell the news” after chip maker NVDA crushed quarterly estimates.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -59.81 points, or 1.35%, to 4,376.31.

·     The Dow Jones Industrial Average fell -373.56 points, or 1.08%, to 34,099.42.

·     The Nasdaq Composite slumped -257.06 points, or 1.87%, to 13,463.97.

·     The Russell 2000 Index declined -23.75 points, or 1.27% to 1,846.28.


Economic Calendar for Today

·     10:00 AM ET           University of Michigan Confidence, Aug-Final

·     10:00 AM ET           UoM 1-yr and 5-yr inflation expectations, Aug-F

·     1:00 PM ET              Baker Hughes Weekly rig count data


Other Key Events:

·     Fed Jackson Hole, Wyoming 2023 Economic Policy Symposium, 8/24-8/26





















10-Year Note





World News

·     Tokyo Aug CPI: 2.9% y/y vs 3% consensus; Aug CPI ex-fresh food: 2.8% y/y vs 2.9% consensus; Aug CPI Core CPI 4% y/y unchanged vs previous and July Services PPI 1.7% vs 1.3% consensus.

·     In a Bloomberg interview at Jackson Hole, the president of the German Bundesbank, Joachim Nagel, says it is much too early to think of a pause in interest rates. He highlights that headline inflation is still running around 5% while the target is 2%.

·     UK consumer confidence improved more than expected, by 5 points in August, to -25 as a decline in UK inflation combined with some strong wage increases improved confidence.


Sector News Breakdown


·     Gap Stores (GPS) Q2 adj EPS $0.34 vs est. $0.09 on sales $3.548B vs est. $3.572B, comps -6%, gr mgn +310bps (merch mgn +410bps), inventory -29% y/y; guides Q3 net sales -low-double-digit % vs est. -6.8%; sees FY net sales -mid-single-digit % vs est. -4.56%, sees gr mgn expansion for FY.

·     Hibbett (HIBB) Q2 EPS $0.85 vs. est. $0.73; Q2 revs $374.9M vs. est. $376.11M; still sees FY24 EPS $7.00-$7.75, vs. consensus $7.18 and still sees FY24 revenue flat to up ~2.0%; said Q2 comp store sales fell (-7.3%) vs. the prior year.

·     Nordstrom (JWN) Q2 adj EPS $0.84 vs est. $0.44 on revs $3.77B vs est. $3.592B; reaffirmed FY guide, sees revs -6% to -4% vs est. -5.2%, adj EBIT mgn 3.7-4.2%, adj EPS $1.80-2.20 vs est. $1.99.

·     Ulta Beauty (ULTA) Q2 EPS $6.02 vs est. $5.85 on revs $2.5B vs est. $2.51B, comps +8%; guides FY net sales $11.05-11.15B vs prior $11.0-11.1B and est. $11.128B, comps +4.5-5.5% vs prior +4-5%, operating margin $14.6-14.8% vs prior 14.5-14.8%, EPS $25.10-25.60 vs prior $24.70-25.40 and est. $25.26.


Energy, Industrials and Materials

·     Hawaiian Electric Industries (HE) said it plans to suspend quarterly cash dividend on common stock, beginning with Q3 Of 2023. Maui County filed a lawsuit Thursday against the utility company alleging that its power lines caused recent wildfires on the island.



·     Affirm Holdings (AFRM) Q4 EPS loss (-$0.69) vs. est. loss (-$0.85); Q4 revs $445.8M vs. est. $406.3M; said Q4 GMV grew 25% y/y to $5.5B and on a two-year basis, GMV grew at a 49% compounded annual growth rate; Q4 active consumer count grew 18% year-over-year to 16.5M; sees Q1 revs $430M-$455M vs. est. $433.8M; sees FY24 GMV above $24B vs. est. $25.1B

·     Intuit (INTU) Q4 EPS $1.65 vs. est. $1.43; Q4 revs $2.71B vs. est. $2.64B; sees Q1 EPS $1.94-$2.00 vs. est. $1.99 and revs up 10%-11% vs. est. $2.93B; sees FY24 EPS $16.17-$16.47 vs. est. $15.95 and guides initial FY24 revenue $15.89B-$16.11B vs. est. $15.99B; FY Credit Karma revenue of $1.6 billion, down 9%.

·     MasterCard (MA) and Visa (V) have stepped back from their card partnerships with Binance Holdings, as the platform is threatened by regulators worldwide – Bloomberg.

·     FactSet (FDS) downgraded to Sector Perform from Outperform at RBC Capital.

·     Stifel Financial (SF) reports July total client assets $426.67B, up 8%.



·     Novo Nordisk’s (NVO) anti-obesity drug Wegovy also eased the symptoms of a common form of heart failure in patients who also have obesity, according to results published online in the New England Journal of Medicine. The patients who took the once-weekly injection for a year reported improvements in fatigue and shortness of breath, and found they could walk longer distances, all while losing an average of 13% of their body weight.

·     Novartis’ (NVS) Sandoz generic-drugs unit has received approval from the U.S. FDA for biosimilar medicine Tyruko to treat relapsing forms of multiple sclerosis.

·     Merck (MRK) and Eisai (ESIAY) provide update on phase 3 LEAP-010 trial evaluating KEYTRUDA(R) (pembrolizumab) plus LENVIMA(R) (Lenvatinib) in patients with certain types of recurrent or metastatic head and neck squamous cell carcinoma.

·     Ardelyx (ARDX) upgraded to overweight from neutral at Cantor Fitzgerald saying that the Street is underappreciating the peak sales potential of Xphozah, Ardelyx’s flagship drug.


Technology, Media & Telecom

·     TikTok plans to ban links to e-commerce sites like Amazon (AMZN) to force users to buy via TikTok Shop, The Information reported. TikTok Shop will lose more than $500M in the U.S. in 2023.

·     American Software (AMSWA) Q1 adj EPS $0.12 vs. est. $0.09; Q1 revs fell -7% y/y to $29.2M vs. est. $29.24M; backs FY24 revenue view $120M-$126M and adjusted EBITDA view $19M-$21M.

·     Credo Technology (CRDO) Q1 EPS loss (-$0.03) vs. est. (-$0.03); Q1 revs $35.1M vs. est. $34M; sees Q2 revenue $42M-$44M vs. est. $40.32M and margins 58%-60%.

·     Domo Inc. (DOMO) Q2 adj EPS loss (-$0.02) vs. est. loss (-$0.09); Q2 revs rose 5.5% y/y to $79.7M vs. est. $78.9M; Q2 billings down 2% y/y at $70.6M; Q2 Subscription revenue $71.2M, +5.6% y/y; sees FY24 EPS loss (47c-39c), vs. est. loss (-$0.35) and revs $316M-$320M vs. est. $325.5M.

·     Marvell Technology (MRVL) Q2 adj EPS $0.33 vs est. $0.32 on revs $1.34B vs est. $1.33B, gr mgn 38.9%; guides Q3 revs $$1.4B +/- 5% vs est. $1.393B, adj gr mgn 60.3-61.3%, adj ops $435-440Mm, adj EPS $0.35-0.45 vs est. $0.40.

·     Workday (WDAY) Q2 adj EPS $1.43 vs est. $1.26 on revs $1.79B vs est. $1.77B; says expects Q3 subscription revs $1.678-1.68B; sees FY revs $6.57-6.59B vs est. $7.213B and FY adj op mgn 23.5%.

·     Trade Desk Inc (TTD) files for mixed shelf; size not disclosed.


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.