Morning Preview: January 04, 2023

Early Look

Wednesday, January 4, 2023









S&P 500










U.S. futures are edging higher as hopes of an economic recovery in China lifted sentiment, while focus was also on minutes from the Federal Reserve’s December policy meeting for clues on the outlook for interest rate hikes, which is expected later this afternoon. Minutes from the Fed’s previous meeting, when it raised interest rates by 50-bps and cautioned rates may need to remain higher for longer, are due to be released at 2:00 PM ET. Oil prices fall over 2%, sliding to their lowest levels since December 2020 on worries about the strength of the global economy and surging Covid-19 infections in China (the moves come after a 4% decline to start the year yesterday). Markets await minutes from the FOMC December meeting later today watching to see whether the committee’s discussions match Powell’s hawkishness. Sliding Treasury yields, now down roughly 20-bps to start the year are also helping sentiment early as well as a sliding dollar, which is boosting precious metal prices for a second day. In Asian markets, The Nikkei Index fell -377 points to 25,716, the Shanghai Index rose 7 points to 3,123, and the Hang Seng Index jumped 647 points to 20,793. In Europe, the German DAX is surging 230 points or 1.6% to 14,412, while the FTSE 100 rises 50 points to 7,604. Several analyst research calls this morning as the sell-side returns to work after the Christmas break, with downgrades of high profile large cap companies (MSFT, HON, PFE).

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.36 points, or 0.40%, to 3,824.14

·     The Dow Jones Industrial Average slid -10.88 points, or 0.03%, to 33,136.37

·     The Nasdaq Composite slipped -79.50 points, or 0.76%, to 10,386.99

·     The Russell 2000 Index declined -10.51 points, or 0.60% to 1,750.73


Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     8:55 AM ET            Johnson/Redbook Weekly Sales

·     10:00 AM ET          ISM Manufacturing PMI for December…est. 48.5

·     10:00 AM ET          JOLTs Job Openings for November…est. 10.0M

·     2:00 PM ET             FOMC Fed Minutes from December meeting

·     4:30 PM ET             API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: UNF

·     Earnings After the Close: RELL RGP SLP





















10-Year Note





Sector News Breakdown


·     Alibaba (BABA) shares rise 6%; leading an advance in US-listed Chinese stocks, with Ant’s approved fundraising plan boosting optimism that China’s regulatory clampdown on its internet sector is easing, said Bloomberg

·     Enovix (ENVX) plunges 41% the company’s Executive Chairman gave a special presentation yesterday, with JPMorgan flagging further delays in the production ramp, which the broker said may disappoint investors, according to Bloomberg

·     Target (TGT) downgraded to Equal Weight from Overweight at Wells Fargo and cut its price target to $142 from $170


Energy, Industrials and Materials

·     CH Robinson (CHRW) was downgraded to Neutral from Buy at Bank America after the company said President and Chief Executive Bob Biesterfeld has departed the company

·     NGL Energy Partners (NGL) boosted its FY23 adjusted EBITDA guidance from $600 million to greater than $630 million; announced that Brad Cooper will be promoted to Executive Vice President and Chief Financial Officer effective January 13, 2023

·     Honeywell (HON) downgraded to Sell from Buy at UBS and cut tgt to $193 from $220



·     Bank of New York (BK) upgraded to Outperform at Wolfe Research saying it appears poised to have a strong ’23 given idiosyncratic NII tailwinds, self-help levers (efficiency, buyback) and limited credit exposure

·     Goldman Sachs (GS) downgraded to Peer Perform from Outperform at Wolfe Research as views valuation on a price-to-earnings basis as “more full” and says Basel IV poses a threat to its returns and multiple

·     Digital Realty (DLR) downgraded to Underperform from Neutral, PT lowered to $81 from $91 at Credit Suisse

·     WeWork (WE) sells $250 million senior secured notes due 2025 to Softbank Vision Fund II



·     GE HealthCare (GEHC) announced that its previously announced spin-off from GE (GE) is complete, and GE HealthCare will begin trading as an independent company on the Nasdaq exchange under the ticker symbol “GEHC” effective at the market opening on January 4

·     Merck (MRK) upgraded to Buy from Neutral at Bank America

·     Pfizer (PFE) downgraded to Neutral at Bank America on COVID-19 uncertainty

·     Immix Biopharma (IMMX) files $250M mixed securities shelf

·     Vera Therapeutics (VERA) announces positive topline results of phase 2B origin clinical trial of atacicept for the treatment of IGA nephropathy


Technology, Media & Telecom

·     Salesforce Inc. (CRM) announced a restructuring plan that it will incur approximately $1.4B-$2.1B in charges in connection with plan which includes a reduction of current workforce by about 10%, select real estate exits and office space reductions within certain markets

·     Microsoft (MSFT) downgraded to neutral from buy at UBS and lowered its price target to $250 from $300 saying Microsoft’s growth engine, Azure, is entering a steep growth deceleration which may be due to maturation and not just a tough macro environment

·     Smart Global (SGH) 1Q adj EPS $0.79 vs est. $0.57 on revs $465Mm vs est. $447.7Mm, gross margin 25.4%, adj op Inc $54.8Mm vs est. $43.3Mm; guides 2Q sales $460Mm vs est. $432.2Mm and adj EPS $0.45-0.75 vs est. $0.49

·     Progress Software (PRGS) said it sees prelim Q4 adj. EPS within or above high end of views after entered into a definitive agreement to acquire MarkLogic (no terms disclosed)

·     Pegasystems (PEGA) announced a reduction in its workforce of approximately 4% of its employees across various geographies; expects to incur a charge of $18.9 million in the fourth quarter of 2022 r


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.