Mid-Morning Look: November 08, 2023

Mid-Morning Look

Wednesday, November 08, 2023






DJ Industrials




S&P 500








Russell 2000






Stocks are pulling back after a strong open, as markets have been in full blown rally mode recently, with the S&P 500 and Dow Jones Industrials rising for an 8th straight day and the Nasdaq attempting a 9th straight gain in what has been a strong rebound off October weakness. Since its Oct 26 low, the Nasdaq is up about 9% during its win streak as Treasury yields have eased and investors rotate into mega tech (note it’s the longest daily winning streak since an 11-day run of gains that ended in November 2021). Bond markets have rebounded with latest Fed speakers leaning more dovish and markets pricing in only slim probability of another rate hike (and rate cuts in 2024). Eyes closely fixed on the US Treasury auction of $40B in 10-year notes at 1:00 PM and then $24B in 30-year bonds on Thursday following a modest reaction to a 3-yr auction on Tuesday. No major economic data today in US in what is a quiet week. Oil prices extend losses, down to more than 3-month lows, gold extends its pullback this week. Technology, Staples, and REITS leading early while Utilities, Discretionary, and Energy fall. Comments from Federal Reserve Chair Jerome Powell had been highly anticipated as he provided opening remarks at a speech but did not comment on monetary policy or the economic outlook. Highlights of some of the top advancers/decliners post earnings detailed below.


Economic Data

·     Sept wholesale sales +2.2% above consensus +0.8% and vs Aug +2.0%; Sept wholesale inventories revised to +0.2% (consensus unchanged) from unchanged; U.S. Sept stock/sales ratio 1.33 months’ worth vs Aug 1.36 months.

·     Weekly mortgage data from Mortgage Bankers Assoc (MBA) showed weekly home applications rose +2.5% in latest week, purchase index climbs 3.0%, refinance index climbs 1.6% as the 30-year mortgage rate falls 25 bps to 7.61% in Nov 3 week (lowest rate since end of July).







WTI Crude















10-Year Note





Sector Movers Today

·     In Solar: more weakness after earnings results as: 1) ARRY cut its revenue guidance for the full year – lowers FY revenue to $1.53B-$1.58B from $1.65B-$1.73B and lowers top end of year adj EBITDA to $280M-$290M from $280M-$295M; 2) FTCI CEO Steve Hunkler and CFO Phelps Morris to leave by December this year and reports larger Q3 EPS loss of (-$0.08) and revs $30.5M while sees Q4 revs down from the third quarter ($18M-$24M) with gross margin reflecting lower cost absorption and said Q3 expenses rose 44% to $13.22M from $9.15M y/y. Adds to long line of weak results this quarter for the industry (SEDG, RUN, ENPH).

·     In Electric Vehicles: EVGO boosted its revenue guidance for the full year as forecasts FY rev. $148M to $158M, from prior forecast $120M to $150M. FSR delays the release of Q3 earnings and conference call to Nov 13 from Nov 8 citing a delay in completion of financial statements and related disclosures on departure of former COO 10/27. LCID downgraded from Buy to Neutral at Cantor and cut tgt to $6 from $10 after Lucid revised its FY23 annual production guidance to 8,000-8,500 (vs. prior guidance of >10,000) and said produced/delivered 7,180/4,369 vehicles, respectively, above guidance of 6,000-7,000 vehicles. RIVN boosted its production guidance for the full year and ended an exclusivity agreement to sell battery-electric vans to AMZN.

·     In Media: TKO reported Q3 revenues at $685M and AEBITDA at $298M, exceeding forecasts. WBD reported a wider-than-expected Q3, while revs topped expectation; said Barbie was the highest grossing film in the history of Warner Bros (generating ~$1.5B in the global box office), but FXN revenue in the Studio unit rose only 3% while EBITDA in the division fell 6%; said DTC subscribers totaled 95.1 million, which was down 700,000 from the end of Q2. NXST and NYT also movers on earnings results in broadcasting and news respectively. NYT Q3 EPS $0.37 vs est. $0.29, revs $598.3M vs $589.5M, +9.4%. Sees Q4 subscription revenue +9.5% mid-point.



·     AMR +6%; will replace Avid Technology in the S&P SmallCap 600 index on Nov. 10.

·     AXON +5%; Q3 EPS of $1.02 tops consensus $0.76 on revenue of $414.0M, up 33% y/y (consensus $391.2M on an improved FY23 outlook, exceeded expectations on adj. EBITDA.

·     ENVX +12%; shares rose after reported a narrower Q3 EPS loss and upbeat rev guidance, prompting Cantor to raise its price tgt to $30.

·     RBLX +16%; shares jump as Q3 net bookings of $839.5M top ests of $830.2M and said bookings growth strong in western Europe and East Asia; U.S. and Canada account for majority of bookings.

·     TH +19%; shares jumped after Q3 beat as net income more than doubled and backed its Ebitda ($346M-$365M) and revenue ($500M-$580M) projections for the year.

·     TTWO +8%; on a report its unit Rockstar Games plans to announce the next highly anticipated Grand Theft Auto (GTA) game as early as this week, Bloomberg News reports.

·     UPWK +7%; reported a beat and raise quarter as Q3 revenue came in 3% above the high end of guidance, while EBITDA was $14M above the high end of guidance.



·     BIIB -4%; trades 52-week lows after quarterly results and cuts year profit view.

·     EBAY -5%; reported 3Q results largely in line with expectations on the top and bottom line but Q4 guidance came in below consensus citing macro-driven softness in consumer demand with softness more pronounced in Europe, leading the co to anticipate a more muted holiday.

·     HOOD -12%; Q3 revs $467M vs. est. $478.9M (up from $361M y/y); total operating expenses for full-year 2023 to be in the range of $2.399B-$2.439B; Q3 transaction-based rev decreased 11% y/y to $185M; monthly active users decreased 16% y/y to 10.3M.

·     LCID -6%; downgraded from Buy to Neutral at Cantor and cut tgt to $6 from $10 after Lucid revised its FY23 annual production guidance to 8,000-8,500 (vs. prior guidance of >10,000).

·     SPR -12%; after announced a public offering of $200 million of its Class A common stock.

·     SNBR -26%; after significantly lowering its 2023 EPS guidance, below consensus estimate and announced incremental cost reduction initiatives.

·     TOST -19%; after narrowing FY rev view to $3.83B-$3.86B from $3.81B-$3.87B as midpoint slightly below estimates and guides Q4 rev mid-point below views despite Q3 re beat.

·     UPST -26%; on miss and lower guidance; Q3 adj EPS loss (-$0.05) vs. est. loss (-$0.02); Q3 revs fell -14% y/y to $135M vs. est. $140M; sees Q4 revenue about $135M below consensus $157.0M; Q3 total fee revenue was $147M, a decrease of 18% y/y.

·     WBD -15%; reported a wider-than-expected Q3, while revs topped expectation; said DTC subscribers totaled 95.1 million, which was down 700,000 from the end of Q2.


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.