Market Review: September 11, 2023

Closing Recap

Monday, September 11, 2023





DJ Industrials




S&P 500








Russell 2000













U.S. stocks with a nice start to the trading week as stocks bounced after last week’s declines after rising yields, dollar, and oil prices sunk stocks. Strength in the S&P came from Consumer Discretionary (XLY) and Communications (XLC), up 2.7% and 1.5% respectively while ten of the eleven sectors closed higher. Tesla (TSLA) up over 10% after Morgan Stanley positive comments and raised price target and Amazon (AMZN) +3.5% also on positive analyst commentary were mostly responsible for the XLY gains. The Communications sector benefited from media stocks after Disney (DIS) and Charter (CHTR) said they reached a deal with Disney to restore ESPN and other Disney-owned stations to Charter’s Spectrum cable TV service. The deal helped alleviate concerns in other media players such as WBD, PARA, NWS advanced. Energy was the lone big laggard in the S&P 500 despite steady oil prices. Oil prices were down slightly while the dollar eased along with Bitcoin heading into the consumer price index (CPI) data tomorrow and after Bank of Japan comments overnight. Tomorrow’s attention turns to tech as Apple (AAPL) holds its annual product launch where a new iPhone is expected to be unveiled at a higher price point and as the first of two major DOJ cases against Google goes to trial Tuesday. In Staples, food sector consolidates as JM Smucker buys Twinkie maker Hostess (TWNK) in $5.6b deal.


Commodities, Currencies and Treasuries

·     U.S. WTI crude oil futures settle at $87.29 per barrel, down 22 cents, or 0.25% on the day while Brent crude prices were little changed at $90.64 per barrel. Diesel’s front-month contract ends up 1.9% at $3.3622 a gallon, the highest closing price since January 26. Note inventory data mid-week is expected to show the first weekly increase in US crude-oil inventories in the past five weeks amid a potential for stronger imports, weaker exports and slowing refinery activity.

·     Gold prices rose +$4.50 or 0.2% to settle at $1,947.20 an ounce as the dollar retreated before this week’s key U.S. inflation on Wednesday. The move higher followed a -1.2% decline last week. Silver prices added 21 cents, or 0.9%, at $23.38 an ounce, after suffering a 5.7% drop last week while copper settled at $3.81 a pound, up 2.4%.

·     The US dollar rally from last week stalled as the Japanese yen strengthened nearly 1% to 1.4645 (off best levels around 145.91 overnight) following remarks by Bank of Japan Gov. Kazuo Ueda, who hinted that the country’s long-running negative interest rate policy could be nearing an end. He said they can’t rule out the possibility of having sufficient data by year end to determine if we can end negative rates.

·     Treasury yields edged higher on Monday as investors await key inflation data this week, with the 10-yr up a few bps to 4.28%. The US Treasury sold $44B in 3-year notes at a yield of 4.66% vs. when issued yield of 4.65% prior, as the bid-to-cover ratio 2.75 vs. 2.9 prior as primary dealers take 20.25% of U.S. 3-year notes sale, direct 22.08% and indirect 57.67%.






WTI Crude















10-Year Note





Sector News Breakdown


Consumer Staples & Restaurants:

·     In Food sector: TWNK to be acquired by SJM, confirming a report overnight in the WSJ, in a cash and stock deal valued at $5.6B as Hostess shareholders will receive $30.00 in cash and 0.03002 J.M. Smucker shares valuing TWNK at $34.25 each. ; Kellogg (K) board of directors approves separation into two companies, Kellanova and WK Kellogg Co; USFD announced $B private offering of senior unsecured notes.



·     AMZN shares jumped to Aug 2022 highs as UBS noted they think Amazon can see NA retail margins expand to double-double digit retail margins vs consensus of 5.4% in ’25 as the company unveils efficiency drives like regionalizing its fulfillment network, pulls levers to recoup cost inflation Prime subscriptions, FBA pricing, SFP fees, etc., and reduces investment levels in moonshots (E.G. Alexa, healthcare, etc.).

·     Instacart (CART) said it plans to offer 22 million shares at an estimated price of $26 to $28 a share with lead underwriters Goldman Sachs and J.P. Morgan in a bid to raise about $594 million in its upcoming initial public offering (IPO). Including the overallotments stock provided to the underwriters, the grocery store app will have about 279.33 million shares outstanding, giving it a market capitalization of about $7.5 billion.


Leisure, Gaming & Lodging:

·     In Autos: TSLA shares surge after being upgraded to Overweight from Equal-Weight at Morgan Stanley and raised its price target by 60% to $400 per share from $250 calling it their "Top Pick" as believe that Dojo can add up to $500B to Tesla’s enterprise value, expressed through a faster adoption rate in Mobility (robotaxi) and Network Services (SaaS)." A matter of days before the union is threatening to strike at Ford (F), GM, STLA, the United Auto Workers union lowered its demand for pay raises over the next four years to the mid-30% range – Automotive News.

·     In Boating/RV: BC downgraded to Neutral from Overweight at JPMorgan and cut tgt to $79 from $109 as expects flattish retail boat demand in FY24 and says is cautious due to high interest rates impacting consumer demand and sentiment of marine dealers.

·     In ride sharing/delivery: DASH upgraded from Underperform to Hold at Jefferies and raised tgt to $90 from $70 saying its profit decomposition suggests consensus underappreciates tailwinds to EBITDA from further advertising penetration and enhancements to underlying unit economics.

·     In theme parks, SIX shares outperformed after Oppenheimer earlier positive saying It appears the balance of August enjoyed attendance that was similar to what management pointed to for QTD (through the first week of August)—E.G., +11%.


Energy, Industrials and Energy

·     In Energy: energy stocks were among the weakest in the S&P on the day overall; FANG said it would get a $500 million payment and retain a 30% equity interest as part of the formation of a new joint venture entity, Deep Blue Midland Basin LLC, with Five Point Energy LLC, a private-equity firm; OVV 15M share Spot Secondary priced at $45.65.


Aerospace & Defense

·     RTX shares pressured after warning it will take a roughly $3B charge in Q3 to reflect the costs of fixing a "rare condition in powder metal" used to make engine parts on its geared turbofan that powers Airbus A320 jets; now sees FY sales $67.5B-$68.5B, down from prior $73.0B-$74.0B view.

·     AIR mentioned positively in Barron’s saying this airplane parts company isn’t a household name, but every airline knows it because it sells used, repaired, and overhauled engine/airframe parts.

·     BA shares active on reports this weekend that Vietnam Airlines JSC will sign an initial agreement to buy about 50 Boeing (BA) 737 Max jets in a deal valued at $10B – Bloomberg reported.

·     SAIC was awarded $574 mln contract with United States space force and named LHX as exclusive team member on contract.



Banks, Brokers, Asset Managers:

·     AVTA to be acquired by financial advisor Cetera Financial Group in an all-cash transaction, valuing it at about $1.2 billion, including net debt.

·     TFC is planning "sizable reductions" for its workforce from Q3 to Q1 of next year to trim costs, the bank disclosed in a regulatory filing; the layoffs are expected to save $300M and along with tech optimization and organizational simplification, it will yield a combined $750M 12-18 month.



Biotech & Pharma:

·     The FDA announced Monday that it had greenlit two updated Covid-19 booster shots in people as young as 6 months old, triggering a process that could see the MRNA and PFE vaccines become available in doctors’ offices, clinics, and pharmacies later this week.

·     AZN and Daiichi Sankyo said cancer drug datopotamab deruxtecan, combined w/ Imfinzi cancer treatment—w/ or w/o chemo – showed disease control rates of 92% and 93% respectively in patients with previously untreated advanced or metastatic non-small cell lung cancer.

·     BLCO is offering $1.4 billion in debt and is looking to secure an incremental term loan facility to help finance the planned acquisition of a dry-eye drug from Novartis.

·     BLRX said the FDA approved Aphexda motixafortide in combination with filgrastim to mobilize stem cells to treat patients with multiple myeloma, which they plan to have available this month.

·     BMY said its six-year outcomes from phase III Checkmate-227 trial showed durable, long-term survival with Opdivo (nivolumab) plus Yervoy (ipilimumab) in the first-line treatment of patients with metastatic non-small cell lung cancer.

·     CRNX said its oral, once-daily investigational compound Paltusotine achieved positive results by meeting the primary endpoint and all secondary endpoints of the Phase 3 study.

·     IMTX said it formed a collaboration with MRNA to develop new therapies for cancer patients.

·     NVAX shares tumbled after the FDA authorized for emergency use Moderna and Pfizer’s updated COVID-19 vaccines earlier.

·     Cannabis stocks extend a recent run of gains on renewed hopes that the SAFE Act on cannabis banking will move forward in Congress soon.



Internet, Media & Telecom

·     In social media: META rises after the WSJ reported the company was working on a more powerful artificial-intelligence system; said Meta’s new AI could be as capable as ChatGPT’s most advanced offering GPT-4

·     In Internet: BABA’s former chairman Daniel Zhang stepped down as head of the Chinese tech giant’s cloud computing arm, less than three months after he said he would relinquish the company’s top jobs to focus on the unit. Zhang’s resignation also came on the same day he handed over his Alibaba Group CEO and chairman titles to his successors. The first of two major antitrust lawsuits brought by the Justice Department against Alphabet -owned Google is set to go to trial in Washington, D.C., this week. It represents the biggest tech monopoly action to see the inside of a courtroom in more than two decades.

·     In media: DIS and CHTR announce transformative agreement for distribution of Disney’s linear networks and direct-to-consumer services; Disney+ basic ad-supported offering to be included in spectrum tv select video packages as part of arrangement between two companies; Charter will make Disney’s DTC services available for purchase by its broadband-only customers.

·     In telecom: CASA said its outdoor device for wireless home internet, AurusLINK, was selected by cell carrier UScellular to help with the expansion of USM’s fixed wireless access product.


Semiconductors, Hardware & Software movers:

·     QCOM shares rise after disclosing a three-year deal to supply AAPL with the modem chips for smartphone launches in 2024, 2025 and 2026.

·     ORCL earnings expected out after the close.


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.