Market Review: November 22, 2023

Closing Recap

Wednesday, November 22, 2023





DJ Industrials




S&P 500








Russell 2000













U.S. stocks remain on track for a 4th straight week of gains as November is turning out to be the best month since July 2022 for the S&P 500 heading into the seasonally best time of the year (+8.5% MTD while the Nasdaq up over 10% so far). Volumes were light and volatility contained (VIX drops under 13), ahead of the Thanksgiving Day holiday tomorrow, with nearly all eleven S&P sectors finishing higher (energy outlier to downside on lower oil prices). Stocks pared gains late day on reports of an explosion on the “rainbow bridge” bordering the U.S. and Canada, raising fears heading into the holiday. Mixed economic data lifted the dollar while stocks stayed strong all day. Technology stocks benefitted from another beat and raise by NVDA, though shares slipped on profit taking while retailers slipped on results from JWN, GES, and URBN. Oil prices tumbled over 5% early as OPEC+ delayed their meeting this week but finished well off the lows. Overall, a quiet day as expected into the holiday, and markets remain strong into the Christmas holiday season.


Economic Data

·     Weekly Jobless Claims fell to 209K from 233K prior week and below consensus 226K as data pushed up a day from normal Thursday release due to Thanksgiving Day holiday; the 4-week moving average fell to 220K from 220,750 prior week and continued claims fell to 1.840M from 1.862M prior week and consensus 1.875M.

·     Durable goods orders for October fell (-5.45) to $279.4B, compared with the (-3.2%) decrease expected and the prior month +4.6%; excluding transportation, core durable goods orders flat vs. +0.1% consensus and +0.5% prior.

·     University of Michigan surveys of consumers sentiment final Nov 61.3 above consensus 60.6 and vs preliminary Nov 60.4 and final Oct 63.8; current conditions index final Nov 68.3 vs prelim Nov 65.7 and final Oct 70.6; expectations index final Nov 56.8 vs prelim Nov 56.9 and final Oct 59.3.

·     University of Michigan surveys of consumers 1-year inflation outlook final Nov 4.5% vs prelim 4.4% and final Oct 4.2% and the 5-year inflation outlook final Nov 3.2% vs prelim 3.2% and final Oct 3.0%.

·     The UK forecasts GDP to grow 0.6% this year vs. -0.2% previously and forecasts GDP to grow 0.7% next year vs. 1.8% previously.



·     Oil prices pared losses, with WTI crude falling -$0.67 or 0.86% to settle at $77.10 per barrel (after hitting lows of $73.79 earlier) after OPEC+ meeting scheduled for weekend was delayed to November 30th as talks hit turbulence as Saudis agitate over output levels. Oil prices are on track for their 5th straight weekly loss for the first time since December 2021. Oil inventory data bearish as well as crude-oil stockpiles excluding the Strategic Petroleum Reserve, rose by 8.7 million barrels to 448.1 million barrels in the week, while Cushing, rose by 900,000 barrels to 25.9 million. Gold prices slip -$8.80 to settle at $1,992.80 an ounce. The dollar index (DXY) bounced off 2 ½ month lows on better jobless claims data while yields were mixed.


Thanksgiving Day stats: Add it all up and the typical American consumes about 3,150 calories and 159 grams of fat in a Thanksgiving meal, according to the Calorie Control Council; but can push that calorie count to 4,500, after adding in caloric beverages, large portion sizes and high-fat desserts." The FDA normal recommended daily calorie intake tops out at 2,200 and 2,800.






WTI Crude















10-Year Note





Sector News Breakdown


Retail, Consumer Staples & Restaurants:

·     Heading into Black Friday and Cyber Monday: growth in holiday spend is expected to slow to 3% to 4%, according to the NRF; that’s down from 2020 when holiday spend was up 9.1% from the year prior, according to the National Retail Federation. In 2021, spending was up 12.7% year over year, and in 2022, it was up 5.4%.

·     In Consumer Staples: CLX upgraded to Neutral from Underweight at JP Morgan and raised price tgt to $145 from $124 as sees improvement in tracked channel demand and expects Clorox to beat analyst consensus estimates for profit margin and earnings per share next quarter. IPAR forecast for sales of around EUR800M this year, an increase of 12% to 13% from 2022, which remains unchanged. It also expects an operating margin of 18% to 19% for the year.

·     In Retailers: GES top and bottom line missed (Q3 adj EPS $0.49/$51.47M vs est. $0.61/$655.6M and guides FY24 adj EPS $2.67-$2.74, missing est. $2.96 and lowers FY revenue growth forecast to 1.8%-2.4% from 2.5%-4%; JWN reaffirmed FY23 revenue guidance and tightened the adj. EBIT range after Q3 adj EPS beat, but sales missed; FL downgraded to Sell from Hold at Williams Trading with $15 tgt; URBN posted Q3 revenue above analysts’ estimates, on strong demand for its brands like Free People and Anthropologies and revs of $1.28B topped the $1.26B estimate, but guided Q4 revenue growth in the mid-single digits.

·     In Restaurants: JACK 4Q comp was below while EBITDA was above, reported 4Q earnings below estimates ($1.09 vs. Street $1.14), and comps fell short of projections at namesake (3.9% vs. est. 4.5%) and Del Taco (-1.5% vs. Street 1.0%).

·     In travel and Leisure: shares of transportation and cruise stocks saw sharp gains as oil prices tumbled over 4% on OPEC+ headlines, delaying their meeting this weekend; shares of airlines AAL, DAL, JBLU, UAL and cruise lines CCL, RCL, NCLH as well as truckers bounced.


Homebuilders, Building Products, Home Furnishing:

·     Mortgage demand jumps to six week high as interest rates continue to drop as the 30-yr rate decreased to 7.41% from 7.61%. Applications to refinance a home loan increased 2% for the week and were 4% lower than the same week one year ago. Applications for a mortgage to purchase a home increased 4% week to week but were still 20% lower than one year ago.


Energy, Industrials and Materials

·     In Industrials: DE reported Q4 EPS $8.26 vs. est. $7.46; Q4 sales fell about -1% y/y to $15.41B vs. est. $13.64B; Q4 production and precision agriculture sales fell 6% and small agriculture and turf sales declined 13%; forecast 2024 net income between $7.75B-$8.25B vs. ests $9.33B; said rising dealer inventories have investors worried that demand for farming equipment might have peaked; sees 2024 production & precision ag net sales down 15 to 20%;

·     In Aerospace & Defense: BA shares spiked on headlines the Federal Aviation Administration has cleared Boeing to begin certification flight tests of 737 Max 10 and granted type inspection authorization for the 737 max 10 this week (shares of supplier SPR moved higher as well).

·     In Energy: APA downgraded at Citigroup while broader energy complex lower as WTI crude and Brent fell over 4% OPEC+ producers unexpectedly delayed a meeting on output planned for Sunday; shares of XOM, CVX, SLB, EOG, MRO all pressured. OPEC+ meeting scheduled for this weekend could be delayed for an unspecified period as Saudi Arabia expressed dissatisfaction with other members about their oil production levels.

·     In Solar: SOL downgraded to Market Perform at Northland after SOL reported a Q3 miss and weak Q4 guide as Q4 pushouts are expected to land in Q1’24 and set up 2024 for an overall strong year. Solar overall was mixed with ENPH high, while MAXN, SEDG slide.



Banks, Brokers, Asset Managers:

·     In Consumer Finance: Shares of Dow component Visa (V) traded to new all-time highs.

·     In Insurance: Citigroup initiated five names with Buy ratings on AFG, RNR, neutral ratings on ACGL and a Sell rating on MKL Sell saying reinsurance is its 2nd favorite sub-sector along w/personal lines (behind brokers), though it acknowledges crowding risk. Among the reinsurers, Buy-rated EG remains CITI’s top pick for its longer-term insurance growth story, followed by RNR,



Biotech & Pharma:

·     FRLN to be acquired by Syncona for $6.50 per share in cash, in a deal valued at $28.3M.

·     GDRX agreed to repurchase 12M shares from Spectrum at a discount as part of its existing authority; terms called for the repurchase of Class A common shares at a price of $5.47 a share, a discount from Monday’s closing price of $5.76, according to a regulatory filing.

·     TRDA said the FDA declined to lift the clinical hold on a planned study of ENTR-601-44 as a potential treatment of Duchenne muscular dystrophy (DMD) despite providing additional data, after the hold was implemented late last year.

·     In Managed Care (UNH, CI, HUM, ELV), the WSJ reported Sen. Elizabeth Warren (D., Mass.) and Sen. Mike Braun (R., Ind.) sent a letter to the U.S. Department of Health and Human Services’ Office of Inspector General requesting an investigation into the high drug prices and any role played by health insurers’ shared ownership with the pharmacies that often fill the prescriptions.



Internet, Media & Telecom

·     In Cable (CHTR, CMCSA, DISH): The Federal Communications Commission announced a proposed rule to ban early termination fees for cable and satellite services. The Commission will vote on whether to adopt the proposal and begin formal rulemaking at a Dec. 13 open meeting. The proposal is part of the Biden administration’s initiative to eliminate excessive “junk fees.”

·     In Internet: Jack Ma reverses plan to trim stake after BABA shares tumble Bloomberg reported; he earlier planned to sell 10 million shares this week. GDDY upgraded to Outperform at RBC Capital and raise tgt to $124 from $90 as likes its structurally hedged customer acquisition model, have rising confidence in margin expansion coming out of its conference. BIDU shares outperformed in China names, upgraded at Nomura.


Hardware & Software movers:

·     OpenAI reached an agreement in principle for Sam Altman to return as CEO while a new 3-person board will now oversee the non-profit and has been tasked w/ investigating the alleged conduct that led to Altman’s dismissal in the first place.

·     In Software: ADSK posted better than feared Q3 results but preliminary FY25E revenue growth guidance (9%+ y/y) was below expectations (Street: ~11% y/y) and overshadowed otherwise solid F3Q24 (October) results; mgmt raised FY24E revenue, FCF, and EPS outlook on EBA renewal strength. ADSK will embark on another license transition entering FY25.

·     In Hardware: HPQ revs fell last quarter but said sales have improved in recent months and that expects the PC market will grow over the next year (boosting shares); reported Q3 revenue declines in both its personal systems and printing divisions; guided F1Q EPS below.

·     Other news items: MSFT to invest $500M in expanding its hyperscale cloud computing and AI infrastructure in Quebec over the next 2Y.



·     NVDA delivered another strong quarter, beating revenue estimates with Data Center generating another impressive quarter of $14.5B in revenue, rising 279% y/y; reported Q3 EPS $4.02 vs est. $3.37 on revs $18.12B vs est. $16.182B guides Q4 revs $20B +/- 2% vs est. $17.86B; regarding China, sees minimal impact to Q3 FY24 revs, but sees sales to China to significantly decline in Q4.

·     Wedbush provided read-thrus from NVDA results saying for SMCI seen a positive as stronger NVDA shipments (particularly without any product going to China) should be seen as bullish for SMCI. For TSM slight Positive as benefits from NVDA’s growth even if the revenue contribution is moderated by NVDA’s elevated Data Center GPU margins.


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.