Market Review: March 09, 2023

Closing Recap

Thursday, March 09, 2023





DJ Industrials




S&P 500








Russell 2000





Equity Market Recap

·     An ugly day on Wall Street as significant financial/banks weakness led to broader selling pressure heading into the key monthly jobs report tomorrow morning. US equities found a nice early bounce as jobless claims came in above expectations and hit a ten-week high. The market took advantage of the gains and reverted to fear the Fed, especially after SIVB added fear to regional banks’ ability to manage NIM. One could say the market remains generally confused and unsure whether good is good or good is bad and the Fed speakers continue to do their best to stoke the fear and lower expectations. AAII individual investor bullish sentiment came in below 25% for the third consecutive week, so perhaps it is working. Note SPY is down pretty much the exact same amount from highs that it was down from highs. Huge losses in banks/brokerage names SIVB, SCHW, SBNY, SI led to broader regional banks weakness (more below). The broad pullback in the S&P 500 also pushed it back below its 200-day moving average (3,940 SPX).

·     On the theme of confusion, @KobeissiLetter highlights, “The Fed said next week’s CPI/PPI data will drive their decisions. This comes after November/December CPI was “revised” higher. Then the CPI calculation changed in February. What happens if CPI comes in lower but gets “revised” higher in a month? Confidence in data is gone.” In other data points, @DataTrekMB notes the Nasdaq Comp just finished a 50-day stretch where it outperformed the S&P500 by more than five percentage points and that this has only occurred 12 times since 2010. Unfortunately, each time, the outperformance reversed so maybe it is time to reduce large-cap tech exposure. Similarly disconcerting, @BespokeInvest points out that if this were the 2000-2002 bear market, we’d have another year and a half left before the lows and right now.

·     Sector-wise, as we headed into the final hour, Financials (XLF, -3.95%) and Materials (XLB, -2.35%) paced the way lower, but all sectors were in the red. Utilities (XLU, -0.74%) and Consumer Staples (XLP, -0.83%) fared the best. Breadth was more than 3.5:1 in favor of decliners and Growth (-1.2%) outperformed Value (-1.7%). Today turned into a general washout day, for sure.


Economic Data:

·     Weekly jobless claims rose to 211K in latest week vs. est. 195K and 190K last week; the 4-week moving avg rose to 197K from 193K; continued claims rose to 1.718M in latest week from 1.649M prior week (es.t 1.659M) and insured unemployment rate rose to 1.2%.

·     U.S. based employers’ job cuts hit 77,770 in February, highest YTD since 2009; U.S. based employers’ job cuts in February down 24% from January; technology cos cut most jobs in February with 21,387, 28% of all cuts for the month.



·     April gold settled +$16.00, or +0.88%, at $1,834.60/oz. Gold continues to be yanked around a bit by Fed comments and expectations, with more volatility likely as we see payrolls data tomorrow and CPI next week. If we see strength in those reports, expectations for more aggressive Fed action on rates will continue to tick higher and pressure gold again. Bitcoin dropped over 7%, falling below the $20,500 level in broad crypto weakness.

·     WTI April crude futures slipped $0.94, or -1.23% to settle at $75.72/bbl, while Brent fell $1.07, or 1.29% to finish at $81.59/bbl. The WTI settlement marked the third consecutive daily loss after Fed Chairman Powell warned on rates and fear of recession expanded. WTI and Brent have both slipped by nearly 5% so far this week. More economic data coming tomorrow and next week likely will also add to recent volatility here and steer the direction near-term.






WTI Crude















10-Year Note





Sector News Breakdown



·     BMWYY results weigh on other autos early (F, GM), as automotive EBIT margin of 8.5% missed expectations and auto revenue €34.6bn, +38% y/y.

·     GM announced a voluntary separation program (VSP) that is expected to lead to an employee separation charge of $1.5 billion.


Consumer Staples & Restaurants:

·     Cowen on Restaurants: tgt changes for BROS $39 (Prior $43) DRI $165 (Prior $155) JACK $95 (Prior $87) in restaurants as YUM remains #1 pick, CMG #2 and move WING up to #3 while bottom three names where they grapple with near term upside are Market Perform SHAK, SG, and DPZ. Said they continue to monitor employment data to help determine the direction of industry sales that have trended favorably through 4Q22 and into 2023.

·     Grocers, RBC Capital raised estimates on ACI, KR after the most recent IRI release (data through 2/26) gives them a full look at food channel trends throughout ACI’s F4Q (12 weeks ended 2/26).

·     NAPA beats by $0.01, beats on revs; guides FY23 EPS above consensus, revs in-line.

·     NDLS Q4 results generally above expectations on top-line and restaurant level margins, guided for 1Q23 same-store sales of HSD% (vs. consensus of +5.9%) and expects FY23 restaurant level margins of 16%-17% (vs. consensus of 17.1%).



·     ARHS shares slide on guidance as sees FY 2023 net revs of $1.24B-$1.3B vs. est. $1.38B and sees 2023 net income of $95M-$110M vs. est. $120.7M.

·     BJ Q4 Comps better at 9.8% vs est. 8%, EPS beat, with FY EPS guide of flat, comps to increase 4% to 5% y/y and membership fee income to increase 5% to 6% y/y.

·     BBW said its revenue exceeded estimates in Q4 and declared a special cash dividend.

·     DLTH rises as posts mixed Q4 results, but FY guidance tops views.

·     DTC rises after better Q4 results as revs rise 11.8% y/y to $197.2M vs. est. $156.4M on better earnings, though rev forecast for year misses mid-point ($520M-$540M vs. est. $538M).

·     FOSL Q4 EPS loss (-$0.18) as sales fell -17% y/y to $499.1M; Q4 gross margins 47.2% vs. 50.1% y/y; sees FY23 worldwide net sales to decline about 5% to net sales growth of 1% and expects full year 2023 adjusted operating income margin in range of about 0% to 3%.

·     GCO Q4 results mixed (EPS beat, revs miss), but guidance pressures shares as sees FY24 adjusted EPS $5.10-$5.90, below consensus $6.83.

·     PTON slips after the ITC banned imports of video-streaming fitness devices made by Peloton Interactive Inc and iFit Inc after a judge found they infringed DISH patents.


Leisure, Gaming & Lodging:

·     In ride hailing/food delivery: UBER is exploring whether to spin off its Uber Freight logistics unit in a sale or as a separate publicly traded firm, Bloomberg News reported on Wednesday night.

·     In lodging: HLT was upgraded to Overweight at Barclays and up tgt to $168 from $151 saying it has "underappreciated" net unit growth prospects in a slowing macro backdrop, while firm downgraded Hyatt (H) to EW from OW after strong share price performance.

·     In gaming REITS: KeyBanc upgraded VICI to Overweight, and downgraded GLPI to Sector Weight saying they see potential for an improving internal growth outlook for VICI materializing given a higher inflationary backdrop, as well as potential for a higher level of accretive investment activity—both could put upward pressure on 2023 and 2024 estimates, which should lead to relative outperformance vs. GLPI and Triple Net Lease REIT peers.


Energy, Industrials and Materials

·     Metals down with broader economic concerns, though precious metal prices held up well; Uranium stocks bounced (UUUU, UEC, CCJ) after Bloomberg headlines Senators present bipartisan bill to ban Russian uranium imports.

·     In Industrials: GE reaffirmed 2023 financial guidance while offering a long-term growth outlook for its aviation business for the first time; maintained 2023 guidance for revenue growth in the high single digits, adjusted EPS of $1.60-$2, and free cash flow (FCF) of $3.4 billion-$4.2 billion. MEI cuts FY23 EPS guidance to $2.50-$2.60 from $2.70-$2.90 after missing Q4 top and bottom-line results and cuts FY23 revs to $1.155B-$1.180B from $1.170B-$1.200B below est. $1.28B.



Banks, Brokers, Asset Managers:

·     Regional banks tumbled after SIVB results and news: the KRE hitting lowest levels in 2-years – Feb 2021 down over 4%. SIVB shares tumble after files to sell $1.25B of common stock, $500M of depositary shares; said It expects net interest margins (NIM) will fall to between 1.45-1.55% this year, below its January forecast for 1.75-1.85%; also liquidated most of its securities portfolio, raising $21 billion, which it plans to re-invest in shorter-term debt (raised capital concerns in the regional bank sector, with big losses in FRC Key and others).

·     Online brokerage SCHW slides after 8.5M share secondary offering; Raymond James noted both Schwab and Silicon Valley Bank (SIVB) had roughly 60% of their interest-earnings assets in their respective securities portfolios as of Q4 2022, with an average securities yield around 1.8%. Furthermore, both have seen deposit outflows in recent quarters.

·     Credit Suisse Group (CS) said it would delay its 2022 report due to a request from U.S. market regulators for more information on restated cash-flow statements in 2019 and 2020.

·     Crypto banks and related stocks (COIN, MARA, RIOT) tumble after SI announced last night it will wind down operations and liquidate its crypto-friendly bank in an orderly manner as plan includes full repayment of all deposits.

·     Asset manager CNS preliminary assets under management of $83.5 billion as of February 28, 2023, a decrease of $3.8 billion from assets under management at January 31, 2023.

·     Office REITs: HIW downgraded to EW at Morgan Stanley citing slowing Sun Belt fundamentals, noting leasing slowing with supply elevated; also lowered price tgts for BXP, PGRE, SLG and VNO.


FinTech, Finance, and Payments:

·     AXP approved repurchase of up to 120 mln common shares and board authorizes share repurchase plan, announces 15% dividend increase.

·     LDI downgraded Market Perform at William Blair after reported mixed results last night as origination volumes came in better than expectations, but revenues and earnings were below expectations as gain-on-sale margins have been slower to recover.

·     Subprime consumer finance, Stephens likes FCFS as best idea, OMF and warming up to ENVA – notes in contrast with deterioration at prime consumer finance companies, many of their subprime consumer lender and Lease-To-Own names are showing stable-to-accelerating loan/lease growth. 2023 guidance implies loan growth at stronger unit profitability for unsecured lenders, while LTOs are recovering.



Biotech & Pharma:

·     AZN announces AEGEAN trial demonstrated statistical significance.

·     CLNN said its lead candidate being developed to treat amyotrophic lateral sclerosis (ALS) significantly delayed time to clinical worsening in a platform trial.

·     GSK said it expects to launch its respiratory syncytial virus (RSV) vaccine in the U.S. this year without supply constraints.

·     LLY said a study showed its experimental drug solanezumab failed to slow the progression of cognitive decline for people at risk for Alzheimer’s disease


Healthcare Services & MedTech movers:

·     Life Science Tools & Diagnostics recap at Citigroup as they upgrade EXAS to Buy with a tgt of $90 and downgrade GH to Neutral with $33 tgt while add positive catalyst watches on TECH due to more reasonable expectations and an improving outlook on China/Europe, PKI as they see potential upside from China diagnostics recovery and compelling valuation, and DHR as M&A news flow has been digested and bioprocessing / inventory destocking headwinds in 1H are well understood given the pullback.

·     FIGS shares rise early after filing showed CEO Catherine Spear buys 790,000 shares between 3/7-3/8 at $6.30, valued at $4.9M.

·     Digital Health co OPRX slides after reported mixed 4Q results, with sales modestly shy of expectations, but GMs and EPS topping consensus forecasts; management introduced 2023 guidance that was shy of expectations.



Internet, Media & Telecom

·     US listed Chinese stocks extend losses; BABA falls a 6th straight day; JD slips after results.

·     DIS revealed some details of his plan to achieve profitability in the company’s streaming business, hinting that Disney could raise prices further and begin licensing its streaming content to competitors, the WSJ reported.

·     ETSY double- downgraded to underperform from buy at Jefferies citing the stock’s premium valuation and troubling buyer trends that could put pressure on growth.

·     META tgt raised to $235 from $220 at Oppenheimer on higher advertising estimates as AI investments are beginning to drive improved targeting and SKAN 4.0 reaches critical mass.

·     TTD downgraded to Sell from Hold at Benchmark which reflects untenable ’23 buyside expectations; unhealthy non-CTV growth with recent checks indicating ‘23E US digital ad spend flat-to-down 5%; data/signal loss risk over the next 18 mos. from Apple and Google.


Hardware & Software movers:

·     ORCL earnings expected after the close tonight.

·     ASAN shares rise as EPS and revs beat with Q1 EPS above consensus, revs in-line; guides FY24 EPS above consensus, revs in-line – but shares surged after the CEO announced plans to buy 30M shares, leading shares higher.

·     MDB shares slip over -10% after the co EPS beat $0.50, beats on revs; guides Q1 EPS above consensus, revs below consensus; guides FY24 EPS above consensus, revs below consensus; mgmt noted consumption trends weakened in the quarter and are expected to stay subdued.

·     ROKU expands live TV, sports, and more for its 70 million active accounts; plus, CBS sports,, NBA app, and NBC sports will join roster of supported channel partners of sports experience.



·     Strength in semiconductors continued early, pacing gains in broader Nasdaq as the Philly semi-index (SOX) jumps again. Straight upside momentum over the last month, but as markets unraveled late morning, so did the tech space.

·     For TSM, Bank America said they view as key beneficiary of generative AI and estimate base/bull-case rev upside to be 1-2%/8%. Reit Buy; PO to NT$670 – believe the pursuit of advanced nodes will not decelerate & advanced packaging demand will grow on rising computing power.

·     In European Semis: Bank America reiterates bullish stance (STM), raising WFE demand estimates on (1) lower decline in Memory WFE and (2) higher growth overall in Foundry/Logic/IDM; cutting CY23/24E global semis demand: weaker Memory, Industrial and Datacenter chip demand.


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.