Mid-Morning Look: July 13, 2023

Mid-Morning Look

Thursday, July 13, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks extend weekly gains on more signs of slowing inflation following PPI June report, pushing Treasury yields lower and sending the US dollar down for a 6th day, with the DXY below the 100-level for first time since April 2022. Gold and silver near 1-month highs as U.S. dollar weakens. Stocks strength again mostly across the board as Communications (now up 40.5% YTD) and Technology (YTD +41%) leaders early in S&P and adding to yearly gains into earnings season. NYSE breadth has been positive by more than 2-1 for four straight days coming into Thursday (currently on track for a 5th straight day). The euro rises to fresh 16-month high of $1.1195, last up 0.6% at $1.1191. The June Producer Price Index (PPI) followed suit of CPI yesterday showing inflation decelerated from prior month again, raising hopes the Fed will ease back on any further rate hikes after July (where a hike is still widely expected). Stocks have gone far very fast into an expected weak Q2 earnings season. Is a pullback in the cards? Or more skyrocket gains for US averages with Nasdaq +33% YTD, S&P 500 +16.5% and Smallcap Russell 2000 now up around 10% YTD given its most recent rally. Semis strong today as AI play NVDA makes new all-time highs around the $450 level as semi-index (SOX) also new 52-week highs as Nasdaq tops 14,000.


Economic Data

·     The Producer Price Index (PPI) for June M/M final demand rose +0.1% vs. est. +0.2% and on a Y/Y basis rose +0.1% vs. est. +0.4% (and down from prior +1.1%). Core PPI for June ex food & energy rose +0.1% M/M vs. est. +0.2% and rose +2.4% Y/Y vs. est. +2.6% (prior was +2.8%).

·     Weekly Jobless Claims fell to 237K in the latest week from 249K prior and vs. est. 250K; the 4-week moving average fell to 246,750 from 253,500 prior week; continued claims rose to 1.729M from 1.718 mln prior week and the US insured unemployment rate unchanged at 1.2%.







WTI Crude















10-Year Note





Sector Movers Today

·     In building materials/products: LL was downgraded to Sell from Hold at Loop Capital with an unchanged price target of $3 after the company recently rejected a $5.76 per share cash take-out offer from its founder. Jefferies provided quarterly preview as thinks expectations are highest for the housing names and think OC’s 3Q guide will come in noticeably ahead of consensus and said sees FBIN raising its FY guide by $0.02-0.04 for the ASSA acquisition. Also expects agg & cement names including Franchise Pick MLM to deliver 2Q beats.

·     In Crypto: COIN was downgraded to Underweight and $70 tgt at Barclays saying with volumes and USDC market cap depressed, regulatory overhang likely to last for some time, and a significant recent run-up in shares, see limited n-t drivers. COIN also reiterated Underperform at Bank America citing weak Q2 data (note shares have rallied ~60% since 6/15 on the news of spot Bitcoin ETF applications filed by BlackRock and others). The FTC reaches settlement with crypto platform Celsius Network; charges former executives with duping consumers into transferring cryptocurrency into their platform and then squandering billions in user deposits.

·     In Asset managers: LAZ upgraded to Market perform on valuation at KBW. Monthly assets under management data out: 1) AB reports preliminary AUM $691B as of June 30, up from $670B at the end of May; market appreciation coupled with firmwide net inflows drove the 3% increase. 2) APAM preliminary assets under management, or AUM, as of June 30 totaled $143B. 3) BEN preliminary month-end assets under management of $1.43 trillion on June 30, 2023, compared to $1.40 trillion on May 31, 2023. 4) IVZ reports preliminary AUM $1.54T as of June 30; an increase of 3.4% versus the previous month-end; net long-term inflows of $2.9B in the month. 5) LAZ preliminary assets under management as of June 30, 2023, totaled approximately $239.3 billion. 5) TROW Assets under management $1.40 trillion. 6) VCTR assets under management of $161.6B as of June 30, 2023, and average assets under management for June of $158.7B.



·     AMZN +2%; after reporting record sales during its Prime Day sale. Tuesday, the first day of the event, was the biggest sales day in its history, Amazon said in a release. AMZN said shoppers purchased more than 375 million items during the two-day sale.

·     ICPT +5%; double upgraded from Sell to Buy at HCW and raised tgt to $19 PT saying surprisingly strong interim results from Oca+Beza combo look to breathe new, longer life to the franchise.

·     MGM +3%; continued strength in casinos (WYNN, LVS), as analysts raise price tgts.

·     PEP +2%; Q2 core EPS $2.09 vs. est. $1.96; Q2 revs $22.32B vs. est. $21.73B; raises 2023 organic revenue view to 10%, vs. prior forecast of 8% increase and core EPS of $7.47 vs. prior view of $7.27 citing resilient demand and boost from price hikes.

·     PPC +5%; was upgraded to Outperform at BMO Capital and raised tgt to $28 saying the risk/reward has become more favorable given a growing number of potential catalysts.

·     PRGO +4%; said the FDA approved the over-the-counter use of the co’s contraceptive pill, making it the first non-prescription birth control pill in the United States.

·     SSYS +8%; after DDD raised its offer to acquire the 3D maker after rival bidder NNDM increased its offering for the company; new offer implied a total bid value of $2 billion, or about $28 a share ($7.50 cash and 1.5444 shares of the combined company per share. https://tinyurl.com/4rfhdde2

·     TTD +5%; will replace ATVI in the Nasdaq-100 Index, the Nasdaq-100 Equal Weighted Index, and the Nasdaq-100 Ex-Tech Sector Index prior to market open on Monday, July 17, 2023.



·     CAG -1%; 4Q adj EPS $0.62 vs est. $0.59 on revs $3.0B vs est. $2.99B, adj gr mgn 27%, adj EBIT mgn 14.6%; guides FY revs +1% vs est. +1.96%, adj EBIT mgn 16-16.5% and adj EPS $2.70-2.75 below consensus est. $2.85; expects COGS inflation to continue into FY24.

·     CVNA -9%; downgraded from Neutral to Underweight at JP Morgan with $10 tgt as it believes valuation has once again disconnected materially from fundamentals.

·     CYRX -29%; after lowers FY23 revenue view to $233M-$243M from $270M-$290M and well below the consensus of $274.85M.

·     DAL -1%; Q2 adj EPS $2.68 vs. est. $2.41; Q2 revs rose 19% y/y to $14.61B vs. est. 14.44B; raises FY adj EPS to $6.00-$7.00 from prior high end of $5.00-$6.00 view (shares reversed earlier gains).

·     PGR -8%; after Q2 earnings results fell short of consensus, though as combined ratio 100.4% vs 95.6% last year.

·     VSAT -30%; after saying an unexpected event occurred during reflector deployment that may materially impact the performance of the ViaSat-3 Americas satellite.


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.