Mid-Morning Look: April 25, 2023

Mid-Morning Look

Tuesday, April 25, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks slip, but so far just another day of major averages going nowhere, stuck inside a tight trading range for the last week (month actually) as markets await key GDP, inflation data later this week and the FOMC policy meeting next week (25-bps hike widely expected). Today was the first barrage of earnings results with several Dow components out with numbers (MMM, MCD, VZ, DOW) and await results from MSFT tonight. Other high-profiles earnings results early include UPS which missed and guided lower, falling over 8% and dragging the Dow Transport index lower by 3%. Tonight, in tech we see GOOGL, JNPR, and TXN in semis. GM, GE, PHM, PCAR strong results in industrials while banks pressured following massive deposit outflows for FRC in the quarter, weighing on SMID banks. Treasury yields extend losses with 10-yr lows at 3.415%, down about 10-bps. Energy stocks among worst in the S&P as oil prices fall over 2% while the U.S. dollar rebounds. More “wait and see” action though NYSE market breadth decisively negative early while the VIX bounces 6.5% above 18, a different look of late, exhibiting early signs of caution (also seeing several stocks bouncing from positive to negative after earnings beats).


Economic Data

·     Consumer Confidence index for April reported at 101.3 vs. 104.0 consensus and 104.0 prior (revised from 104.2); the Present Situation Index: 151.1 vs. 148.9 prior (previous 151.1) and consumer expectations index 68.1 in April vs March revised 74.0 (previous 73.0).

·     New Home Sales for March rose +9.6% M/M to 683K vs. 630K consensus and 623K prior (revised from 640K); the median sales price of new houses sold in March was $449.8K and average sales price was $562.4K; March new home supply 7.6 months’ worth at current pace vs Feb 8.4 mos.

·     Richmond Fed Manufacturing reported -10 vs. est. -8; and shipments index -7 in April vs +2 in March; services revenues index -23 in April vs -17 in March.

·     U.S. Home prices +0.5% in February from January; U.S. Home prices index 394.8 in February – U.S. Home prices +4.0 pct in 12 months through February.

·     U.S. February 20-metro area home prices +0.4% from year ago vs revised +2.6% in January—S&P CoreLogic Case-Shiller reported; February home prices in 20 metro areas +0.1% seasonally adj vs -0.4% in January- and 20-metro area home prices non-adjusted +0.2% vs -0.6% in January.







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10-Year Note





Sector Movers Today

·     In transports: in package delivery, UPS shares slide as reports Q1 adj EPS $2.20 vs. est. $2.21; Q1 revs $22.9B vs. est. $23.01B; lowers FY23 revenue view to about $97B from $97B-$99.4B (est. $98.13B); sees FY23 consolidated adjusted operating margin at low end of around 12.8%; in airlines, JBLU posts smaller Q1 EPS loss (34c vs. 38c) on in-line revs of $2.33B, while guides Q2 EPS above views but reaffirms year saying demand trends remain robust in Q2; in tankers, Stifel upgraded EURN to buy noting shipping markets are in various stages of the cycle. Tankers are performing very well, aided by inefficient Russia-related voyages and tight supply.

·     Hospital operators: THC Q1 EPS $1.42 vs. est. $1.16 on better revs $5.02B vs. est. $4.84B noting strong sales, core earnings in company’s ambulatory care segment and raises year outlook; UHS was upgraded to equal-weight from underweight at Barclays citing several positives ahead of the hospital operator’s first- quarter results.

·     In industrials: GE raises low-end of full-year adj. profit per share forecast to $1.70-$2.00 from its prior outlook of $1.60-$2.00 citing strong demand for jet engine spare parts and services spurred by recovery in air travel (also posted Q1 top/bottom line beat); MMM to cut about 6,000 jobs globally; expects annual pre-tax savings of $700 mln to $900 mln while reported Q1 EPS and sales beat; in heavy duty trucking, PCAR Q1 EPS $2.25 tops $1.81 on better revs $8.47B vs. est. $7.71B saying demand remained strong, boosted by customers looking to replace ageing fleets.

·     In software: TENB shares slide as guides FY23 revenue in the range of $775M-$785M, below ests $788M on lower Q2 guide as well (Q1 results just topped views while billings went from 23% in Q4 to 13% in Q1; Total Def Revs 25% to 22%); ZBRA upgraded from Neutral to Outperform at UBS/Credit Suisse ahead of Q1 results, driven by strength in the EMEA region, and better FX; SAP upgraded to Buy from Neutral at Citigroup citing consistent FY outlook, and greater confidence in credibility of upcoming medium-term roadmap refresh; DOCN downgraded at Needham.



·     BRO +3%; among leaders in the S&P after better earnings results.

·     KMB +2%; said Q1 gross margin rise by 340bps to 33.2%, as EPS and revs topped consensus and raises 2023 profit to rise +6%-10%, compared with its prior forecast of 2%- 6% but maintains its annual net sales and organic sales growth expectations.

·     MEDP +15%; Q1 results came in significantly better than expected, highlighted by 31% y/y growth in net new business awards and the company also raised guidance for 2023.

·     MORF +15%; shares jumped after posting promising results from a mid-stage clinical trial of MORF-057, an ulcerative-colitis treatment candidate.

·     NVS +4%; Q1 sales +8%, core income +15%; expects to grow mid-single digits from low to mid-single digits; raised FY guidance.

·     PEP +2%; raised its sales and profit outlook after Q1 core EPS $1.50 tops est. $1.39; Q1 revs $17.85B vs. est. $17.22B; Q1 Organic Rev +14.3% (vs. est. +9.47%).

·     PHM +2%; Q1 results were ahead of consensus expectations on both the top and bottom line; homes closed increased 6% YoY (down 8%E consensus) while ASP grew 7%.

·     SPOT +5%; after adding 5 mln premium subs in quarter, crushing ests of 2.23M and ended with 210Mm subs worldwide; also had 515Mm monthly active users (MAUs) vs. est. 500Mm.



·     ABUS -8%; after the company said the FDA placed a clinical hold on its application to study its lead candidate AB-101 in patients with chronic hepatitis B virus.

·     CDNS -5%; after posting an in line/better Q but tweaked the FY guide only in line with consensus – did not raise FY by the beat.

·     DHR -4%; lowered views saying it now expects full-year adjusted core revenue growth of mid-single digit, vs high-single digit rise forecast previously (Q1 adj EPS also missed by 4c).

·     FRC -26%; shares tumbled after Q1 deposits tumbled 40% to $104.5B but said have stabilized since while the bank also said it is “pursuing strategic options to expedite its progress while reinforcing its capital position.

·     PKG -5%; reported 1Q results below expectations with EBITDA of $405M below consensus at $409M; EPS of $2.20 missed consensus at $2.26, as well as guidance of $2.23 and Q1 box shipments fell -12.7% y/y, below DBAB estimate of a 7% decline.

·     TENB -21%; as guides FY23 revenue in the range of $775M-$785M, below ests $788M on lower Q2 guide as well (Q1 results just topped views while billings went from 23% in Q4 to 13% in Q1; Total Def Revs 25% to 22%).

·     UPS -8%; as reports Q1 adj EPS $2.20 vs. est. $2.21; Q1 revs $22.9B vs. est. $23.01B; lowers FY23 revenue view to about $97B from $97B-$99.4B (est. $98.13B); sees FY23 consolidated adjusted operating margin at low end of around 12.8%.


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.