Morning Preview: December 13, 2023

Early Look

Wednesday, December 13, 2023









S&P 500










Stock markets remain at 52-week highs heading into the FOMC Meeting at 2:00 PM ET today! Equities rallied on Tuesday, finishing at highs for a second consecutive session as investors waited for the Federal Reserve policy meeting on Wednesday. There remain zero concerns about the Fed and the outlook on interest rates, with stock/bond markets making up their own mind that the Fed will cut in 2024 (and substantially) with futures markets calling for at least 100-bps of cuts in 2024. That, however, is ultimately the call of the Fed, which has seen inflation decelerate and the economy stay strong, but to this point given no indication that rate cuts are on the horizon. There are no changes expected today by the Fed, but Chairman Powell comments at 2:30 PM can either push this market back near all-time highs or give the market a much-needed breather after a 7-week surge since the end of October has pushed major averages to 52-week highs. The Dow Jones Industrial Average is nearing its record close of 36,799.65 set on Jan. 4, 2022. While the S&P 500, Nasdaq 100, also closed at highest levels since January 2022. The CBOE Volatility index (VIX) sunk to a 3-year low sub 12 level on Tuesday, while haven assets such as gold and defensive assets such as utilities lagged broader markets. Another precipitous decline in oil prices sunk energy stocks as well on Tuesday. The tech index rallied 0.8%, bringing its gain in 2023 to ~52%, putting it on track for its strongest year since 2009, led by semis this week. In Asian markets, The Nikkei Index gained 82 points to 32,926, the Shanghai Index fell -34 points to 2,968, and the Hang Seng Index dropped -145 points to 16,228. In Europe, the German DAX is up 10 points to 16,802, while the FTSE 100 rises 20 points to 7,564.


Economic Calendar for Today

·     7:00 AM ET              MBA Mortgage Applications Data

·     8:30 AM ET              Producer Price Index (PPI) Headline M/M for November…est. +0.1%

·     8:30 AM ET              Producer Price Index (PPI) Headline Y/Y for November…est. +1.0%

·     8:30 AM ET              PPI Ex: Food & Energy (core) M/M for November…est. +0.2%

·     8:30 AM ET              PPI Ex: Food & Energy (core) YoY for November…est. +2.2%

·     10:30 AM ET            Weekly DOE Inventory Data

·     2:00 PM ET               FOMC Policy Meeting – no change in rates is expected.

·     2:30 PM ET               Fed Chairman Powell Press Conference


Earnings Calendar:

·     Earnings Before the Open: ABM JCI PLAB REVG

·     Earnings After the Close: ADBE MIND NDSN OPTT STRM ZDGE


Other Key Events:

·     DA Davidson East Coast Bank Summit, 12/12-12/13 (virtual)

·     Evercore/ISI 2023 IT Hardware & Networking Equipment Virtual IR Summit, 12-12/12-13

·     Oppenheimer 4th Annual Midwest Industrial Summit, 12/13-12/14

·     Piper Indiana Bank Tour, 12/12-12/13 (virtual)

·     Roth MKM 12th Annual Deer Valley Event, 12/13-12/16, in Utah


Market Closing Prices Yesterday

·     The S&P 500 Index gained 21.26 points, or 0.46%, to 4,643.70.

·     The Dow Jones Industrial Average rose 173.01 points, or 0.48%, to 36,577.94.

·     The Nasdaq Composite gained 100.91 points, or 0.70%, to 14,553.40.

·     The Russell 2000 Index declined -2.41 points, or 0.13% to 1,881.27.





















10-Year Note





World News

·     Japanese manufacturers rose to the highest level since March 2022 as the main index for sentiment among large manufacturers was +12, compared with +9 in September, according to the Bank of Japan’s quarterly Tankan corporate survey.

·     A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.


Sector News Breakdown


·     Airbnb Inc. (ABNB) said that Airbnb Ireland, its European headquarters, has signed an agreement with the Italian tax authorities to settle a tax assessment of 576M euros ($620.56M) relating to the 2017 to 2021 tax years. The company said it signed the deal without admitting any liability.

·     Cal-Maine (CALM) reported that one of the company’s facilities in Kansas tested positive for highly pathogenic avian influenza, affecting approximately 684,000 laying hens, or approximately 1.6% of the company’s total flock.

·     Copa Holding CPA) said that its capacity (ASMs) for November rose 11.9% year-over-year to 2,327.4 million; system-wide passenger traffic (RPMs) was 2,034.5 million in November, up 12.4% from last year; system load factor for the month was 87.4 %, 0.4% higher than November 2022.

·     Tesla (TSLA) stands to lose up to $7,500 federal tax credit for its Model 3 Rear-Wheel Drive and Long-Range vehicles from Dec. 31, as per new guidance under the U.S. Inflation Reduction Act.

·     Tesla (TSLA) recalls 2 million cars to fix autopilot safety flaws; US regulator finds system doesn’t do enough to prevent misuse; agency will keep defect investigation open, monitor remedies – Bloomberg reports.


Energy, Industrials and Materials

·     Southwest Airlines (LUV) said 4Q travel demand, yields remain healthy; now sees 4q unit revenue down 9%-10%; had seen down 9%-11%; now sees 4q economic fuel costs $3.00-$3.10/gallon; had seen $2.90-$3.00; continues to expect Q1 capacity to increase in the 10%-12% range and sees FY24 capacity to increase in the range of 6%-8% y/y.

·     XPO Inc. (XPO) said it got approval from the U.S. bankruptcy court for the district of Delaware to buy 28 service centers previously operated by Yellow Corp., which filed for bankruptcy in August.



·     Amgen (AMGN) raises the dividend to $2.25 from $2.15.

·     C4 Therapeutics (CCCC) shares rise after saying its experimental therapy, CFT7455, to treat a type of blood cancer was well tolerated and showed promising signs of anti-myeloma activity in phase 1 portion of its early-to-mid stage study.

·     Pfizer (PFE) provides full-year 2024 guidance as sees 2024 revenue guidance range of $58.5 to $61.5B includes expected contribution from Seagen acquisition; expects full-year 2024 operational revenue growth of 8%-10% and EPS of $2.05 to $2.25.

·     Tandem Diabetes (TNDM) announces full U.S. launch of tandem source, a new diabetes management platform for customers and healthcare providers.

·     Vertex (VRTX) announces positive results from phase 2 study of vx-548 for the treatment of painful diabetic peripheral neuropathy; said VX-548 was generally well tolerated and plans to advance vx-548 into pivotal development in diabetic peripheral neuropathic pain.


Technology, Media & Telecom

·     Elon Musk’s “X”, the social network formerly known as Twitter, is on track to bring in roughly $2.5 billion in advertising revenue in 2023 — a significant slump from prior years.

·     Photronics (PLAB) Q4 adj EPS $0.60 vs. est. $0.53; Q4 revs rose 8% y/y to $227.5M vs. est. $224M; sees Q1 revenue $217M-$225M vs. est. $220M.

·     TE Connectivity (TEL) said it had approved an increase in its share repurchase program by an additional $1.5B and raised its annualized dividend by 10% to $2.60 per share.

·     Take-Two Interactive Software, Inc. (TTWO) will be added to the Nasdaq-100 Index and Seagen, Inc. will be removed as part of the annual reconstitution after being acquired by Pfizer.


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.