Mid-Morning Look: July 25, 2023

Mid-Morning Look

Tuesday, July 25, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks edging higher to start the trading day as the Dow Jones Industrial Average looks to extend winning streak to 12-straight days. Investors digest the first big day of broad S&P earnings (industrials, tech, staples, energy, and consumer). U.S. stocks opened mostly lower as markets look ahead to the Federal Reserve’s interest-rate decision on Wednesday. The Fed will announce on Wednesday the outcome of its two-day policy meeting, with investors largely expecting the central bank will hike its benchmark rate by a quarter percentage point to a targeted range of 5.25% to 5.5%. Earnings today are seeing upward momentum in CLF, GE, MMM, NXPI, PKG, XRX after earnings while ALK results weigh on airlines, RTX hurts defense sector on engine issues and shares of CDNS, SPOT slide. Economic data showed more confidence in the economy into FOMC meeting. Earnings tonight from likes of GOOGL, MSFT, TXN, SNAP, Visa in tech sector.


Economic Data

·     The Consumer Confidence index for July reported at 117.0 vs. consensus 111.8 and June upwardly revised to 110.1 (previous 109.7); present situation index 160.0 in July vs June 155.3 and expectations index 88.3 in July vs June revised 80.0 (previous 79.3).

·     Richmond Fed services revenues index -2 in July vs -8 in June; Shipments: -6 vs. -5 prior; employment: +5 vs. -1 prior and volume of new orders: -20 vs. -16 prior.







WTI Crude















10-Year Note





Sector Movers Today

·     In Metals: CLF Q2 EBITDA of $775M vs Street’s $771M and revenue was ~$6.0B (vs. its $5.8B and $5.3B in 1Q23) and steel shipments were >4.2M tons (vs. its 4.1M estimate and 4.1M in 1Q23), with the Company citing another record quarter for automotive shipments. NUE Q2 EPS $5.81 vs. est. $5.53; but Q2 revs $9.52B missed est. $9.62B; average sales price per ton in Q2 rose 7% q/q; sees earnings in Q3 to fall vs. Q2. BMO Capital noted U.S. spot HRC prices increased 3.5% over the past two weeks to $890/st, with the increase in BMO’s view driven by some restocking triggered in part by unplanned Sinton outage (expected to restart soon).

·     In Industrials: DOV shares slid after Q2 adj EPS $2.05 missed est. $2.20 on lower revs and cut top end of FY adjusted EPS view to $8.85-$9.00, from $8.85-$9.05. GE shares rise as Q2 adj EPS $0.68 beat est. $0.46 on revs $16.7B vs. est. $15B as Q2 total orders $22B, up 59%; raises FY23 adjusted EPS view, organic revenue growth, and free cash flow of $4.1B-$4.6B, up from $3.6B-$4.2B. MMM raises 2023 adjusted EPS outlook to $9.10 from $8.60, benefiting from higher prices and cost-cutting measures including significant layoffs after Q2 adj EPS $2.17 topped $1.72 estimate. DHR cut annual sales growth to grow by low-single digit compared to previous forecast of mid-single digit growth and said Q3 sales to be down low-single digit y/y.

·     In Autos: GM Q2 adj EPS $1.91 topped est. $1.85 on revs $44.7B vs. est. $42.64B; raised its net income forecast to a range of $9.3B-$10.7B; raises FY23 adjusted EBITDA view to $12B-$14B from $11B-$13B; shares up slightly. In Auto Retail: ABG Q2 adjusted EPS beats estimates at $8.95 vs. est. $8.24 but sales $3.74B below ests $3.8B, said 2Q same-store parts & svc rev growth of 6%.

·     In chemicals: DOW Q2 Operating EPS $0.75 vs. est. $0.69; Q2 revs down -27% y/y to $11.42B vs. est. $11.34B; SHW boosted its profit outlook as its second-quarter profit exceeded analysts’ estimates on higher prices and record revenue while the paint company booked selling price increases in all its segments, as well as higher sales volume in the paint stores group.



·     AMNB +19%; AUB reported earnings and announced to acquire AMNB for $39.23 per share in deal valued at about $417M. https://tinyurl.com/38waeztw

·     FFIV +6%; beat and raise quarter as Software 25% F3Q23 revenue, -3% was much better than -20% expectations and grew 32% q/q on record Subscription software.

·     GE +5%; Q2 adj EPS $0.68 beat est. $0.46 on revs $16.7B vs. est. $15B as Q2 total orders $22B, up 59%; raises FY23 adjusted EPS view, organic revenue growth, and free cash flow.

·     NXPI +5%; 2Q results reflect strength in core-industrial, mobile, and comm infra, with auto largely in line; 3Q revenue is expected to increase 3% q/q, above the consensus (flat q/q).

·     PKG +10%; among top gainers in S&P after earnings results; lifting IP shares in sympathy; Q2 adj EPS $2.31 vs. est. $1.93; Q2 revs $1.95B vs. est. $1.99B; sees Q3 EPS $1.88 vs. est. $1.75.



·     ALK -11%; said it sees FY23 total rev growing 8-10% vs est. 11.1% increase and FY23 EPS in $5.5-$7.5 range, vs. midpoint of consensus forecast $6.6 after Q2 beat.

·     IRBT -13%; as AMZN announced it now plans to pay $51.75 a share to acquire IRBT, down from the previously agreed-upon price was $61 a share. https://tinyurl.com/zzhax63y

·     LVLU -7%; guides Q2 below views; guides prelim 2q adj. EBITDA $3.4M-$4.2M vs. est. $9.72M and net revs $104.5M-$106.0M vs. est. $116.6M and withdraws full year 2023 guidance.

·     RTX -15%; after the company disclosed it discovered a manufacturing defect in its Pratt & Whitney unit from a rare condition in powered metal used to make certain engine parts; the company also reported better Q2 results and guidance.

·     SPOT -11%; after results as Q2 Revenue EU3.18 billion, +11% y/y vs est. EU3.21 billion; Q2 Premium revenue EU2.77 billion, +11% y/y, vs. est. EU2.79 billion; Q2 Monthly active users 551.0 million, +27% y/y, vs. estimate 529.9M.

·     STOK -27%; after saying its experimental drug, STK-001, shows median reductions in seizure frequency in an early- to mid-stage study for treating Dravet syndrome.

·     VTNR -20%; after operational update saying they expect Q2 capture rate of 30%-35% below previously forecasted range of 50%-54%, negatively impacted by significant price volatility in fuels and refined product markets.


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.