Mid-Morning Look: March 16, 2023

Mid-Morning Look

Thursday, March 16, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are trading lower, with the S&P 500 and Russell 2000 underperforming due to exposure in energy and financials, the two biggest sector decliners, while the Nasdaq is flattish, led by strength in mega-cap tech (GOOGL, AMZN) and semis yet again (AMD, NVDA, INTC). REITs another weak sector, falling over 1% along with materials on global growth concerns. This morning, the European Central Bank (ECB) kept up the aggressive rate hikes by raising its main refinancing rate by 50bps to 3.50%, hikes marginal lending facility rate by 50bps to 3.75% and hikes deposit facility rate by 50bps to 3.0%. These were the forecasts earlier in the week, but lower hikes (of 25-bps) were seen as a possibility the last 2-days following the concerns at Credit Suisse. They did not as the news was yet another signal that central banks are not backing off the inflation fight. Overnight, euro banks bounced after Credit Suisse said it would borrow as much as 50 billion Swiss francs from the Swiss National Bank to stem liquidity concerns. Economic data continues to show a strong U.S. economy as U.S. housing starts grew more than expected in February, rising 9.8% in February to a seasonally adjusted annual rate of 1.450 million, above ests of 1.31M, a sign confidence among residential house builders is growing despite a subdued outlook for housing sector. Weekly jobless claims fell more than expected as payroll data remains tight. Import Prices dipped while exports rose thought manufacturing data was weak. The 10yr yield falls to overnight lows below 3.4%, down 9.5bps and the 2-yr also down about 10-bps to 3.87% after the ECB statement (and into next week FOMC meeting). So far, more blood in the regional bank sector on contagion concerns after SIVB/SBNY closures last week and energy stocks stumble further as oil remains in sharp downtrend (nearly 50% off last year peak levels).


Economic Data

·     Weekly jobless claims fell to 192K vs. 205K estimate and prior week reading of 212K; the 4-week moving average fell to 196,500 from 197,250 prior; continued claims fell to 1.684M from 1.713M prior week and the insured unemployment rate unchanged at 1.2%.

·     February Housing Starts rose +9.8% m/m to 1.450M, well above the 1.315M expected and 1.321M in January while Building permits jumped +13.8% m/m to 1.524M vs. 1.340M expected and 1.339M prior. Feb single-family starts +1.1% to 830K unit rate; multifamily +24.0% to 620K.

·     March Philly Fed Business Outlook declined -23.2 vs. -15.6 consensus (and -24.3 prior) as the employment index fell -10.3 vs. +5.1; futures capital expenditures index was -3.50 vs. prior 7.50 and new orders tumbled to -28.2 vs. prior -13.6.

·     Import prices for February fell (-0.1%) vs. (-0.2%) expected and (-0.4%) prior (revised from -0.2%), while Exports rose +0.2% vs. (-0.1%) consensus and +0.5% in January (revised from +0.8%).







WTI Crude















10-Year Note





Sector Movers Today

·     Banks: Credit Suisse (CS) said it would borrow as much as 50 billion Swiss francs from the Swiss National Bank to stem liquidity concerns. Credit Suisse also announced an offer by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to about CHF 3 billion. In regional banks: FRC shares slide after Bloomberg reported late Wednesday it was exploring strategic options including a sale https://bit.ly/3JHltLi – the weakness seen in a handful of regional banks again today early, as volatility remains high (WAL, PACW, CMA, ZION, FITB).

·     Semis outperform: Susquehanna upgraded INTC to neutral from negative and both QCOM and SWKS to Positive from Neutral saying they believe the acute portion of the semiconductor downcycle for the handset, PC and Consumer end markets has passed. Industrial and Auto semis yet to correct. Noted Asian checks suggest Chinese handset sell-through was better for both January and February, the first positive surprises in their data for over a year.



·     ADBE +3%; delivered a strong 1Q as DM net new ARR beat guide by 9%, above the ~5% beat last qtr, while DX was in line. 2Q DM ARR guide was above Street & FY was raised by $50m; boosts FY23 adjusted EPS view to $15.30-$15.60 from $15.15-$15.45 (est. $15.31).

·     OXY ; Berkshire Hathaway (BRKA) purchased nearly 8-million shares of OXY in recent days, bringing its stake to 208 million shares, or 23% of the big energy company, according to a regulatory filing late Wednesday.

·     PATH +14%; after Q4 beat consensus ARR by $28M / ~2% and revenue by $30M / 11%, driving 4Q operating margin of 22% above expectations.

·     PD +16%; as beat for both the top and bottom lines in Q4 as revenue grew 29% YoY and NRR remained in the 120% range; sees Q1 adjusted EPS $0.09-$0.10 vs. est. $0.03 and revs $102M-$104M vs. est. $104.82M.

·     SNAP +3%; after the WSJ reported overnight the Biden Administration is demanding that Chinese-owned TikTok be sold or spun-off from its parent company ByteDance or could face a ban in the US given security concerns.

·     SQ +1%; upgraded to Buy from Neutral at Mizuho and raise tgt to $93 from $80 saying detailed fixed vs. variable cost analysis shows up to 30% potential upside to SQ’s 2023 EBITDA guide.



·     ESPR -55%; after saying Co says partner Daiichi Sankyo does not agree on the $300M milestone payment, based on heart drug data released earlier this month, citing ambiguity within the contract – the payment was expected in early 2024.

·     FRC -31%; shares slide after Bloomberg reported late Wednesday it was exploring strategic options including a sale https://bit.ly/3JHltLi (WAL, KEY, TFC, PACW lower in regional banks).

·     GRWG -12%; as reported mixed fourth quarter results and gave mixed guidance for 2023.

·     HNST -26%; reported an unexpected Ebitda loss in Q4 and forecast for annual revenue implies a shortfall vs consensus estimate.

·     LPSN -49%; missed 4Q estimates and guided 1Q and year well below the Street as it reduces non-core revenue streams and said expects to be EBITDA positive in 2Q and beyond; sees Q1 revs $106M-$109M vs. est. $132.5M and year revs $395M-$410M vs. $550.5M est.

·     PTRA -45%; posts wider Q4 loss of $81M vs loss of -$45.1M last year saying margins were impacted by manufacturing inefficiencies and underutilization related to parts shortages.


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.