Mid-Morning Look: September 15, 2023

Mid-Morning Look

Friday, September 15, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks pulling back to pare weekly gains after another busy morning of economic data in the US and China, with ten of the eleven S&P sectors in the “red” to start. The 10-yr yield hit intraday highs around 4.335% before paring gains, oil rises again on track to close above $90 per barrel and gold prices rise. U.S. consumer sentiment edged lower for a second straight month in September, but their economic outlook brightened, and near-term inflation fell to the lowest in more than a year. Manufacturing, import prices, industrial production all come in above consensus views as economy stays strong. European equities rallied after better-than-expected economic data in China fueled hopes stimulus measures are paying off. Semiconductors are weak, leading the decline in tech (more below). Shares of ADBE and LEN declined despite generally better results in software and housing respectively. Reminder that volatility in markets increased given quadruple witching option expiration and as the S&P, Russell and Nasdaq’s US indexes will rebalance on the close. Quadruple witching is the expiration of four derivative contracts: stock index futures, stock index options, single stock options, and single stock futures. Goldman Sachs said they “estimate that over $3.4 trillion of notional options exposure will expire this Friday including $555 billion notional of single stock options.”


Economic Data

·     NY Fed’s Empire State current business conditions index +1.9 in September (consensus -10.0) vs -19.0 in August; new orders index +5.1 in September vs -19.9 in August; prices paid index +25.8 in September vs +25.2 in August; employment index at -2.7 in September vs -1.4 in August and six-month business conditions index +26.3 in September vs +19.9 in August.

·     Aug export prices rose +1.3% vs. consensus +0.4% and vs July +0.5% while Aug import prices rose +0.5% (biggest gain since May 2022) vs. consensus +0.3% and vs July +0.1%. Aug y/y import prices -3.0%, export prices -5.5%; Aug non-petroleum import prices unchanged, y/y -1.1%.

·     Industrial Production for August rose +0.4% vs. est. +0.1% and July +0.7% as Aug mining output +1.4%, utilities output +0.9%; Capacity utilization rate 79.7% vs. consensus 79.3% and July 79.5%. U.S. Aug motor vehicle assembly rate fell to 10.74 mln units/y from July 11.77 mln units per year.

·     University of Michigan surveys of consumers sentiment prelim Sept 67.7 vs. consensus 69.1 and vs final Aug 69.5; current conditions index prelim sept 69.8 (consensus 75.3) vs final aug 75.7 and expectations index prelim sept 66.3 (consensus 66.0) vs final aug 65.5.

·     University of Mich surveys of consumers 1-year inflation outlook prelim September 3.1% vs final August 3.5%; the 5-year inflation outlook prelim September 2.7% vs final August 3.0%.







WTI Crude















10-Year Note





Sector Movers Today

·     Thousands of UAW members went on strike at plants owned by GM, Ford (F) and Stellantis (STLA). The walkouts, the first to hit all three Detroit automakers simultaneously, affected factories in Michigan, Ohio, and Missouri. They came after the union and the car companies failed to reach a new labor deal for about 146,000 U.S. factory workers by the deadline. UAW President Shawn Fain said more sites could go down if talks with the automakers stall. Auto suppliers ADNT, BWA, VC, AXL, LEA, MGA, also moved on the strike headlines.

·     Semiconductor group was weak from the start after an overnight Reuters report saying TSM asked its chip making suppliers to delay their deliveries. Suppliers currently expect the delay to be short-term, the sources said, said the report https://tinyurl.com/mvh2urr9 . Shares of semi-equipment stocks declined the most (AMAT, ASML, KLAC, LRCX).

·     In Homebuilders: LEN reported adj Q3 EPS of $3.91, well ahead of consensus of $3.51 amid better-than-expected deliveries and gross margin, as well as well-controlled SG&A expenses while home sales revenue decreased 2% YoY. Bank America noted Q4 guide implies some slowdown (also noted adjusted home sales gross margin fell about 480bps YoY). In Home Improvement retail: LOW estimates lowered at Morgan Stanley but remains OW rated and $255 tgt saying weaker demand backdrop persisting; tone balanced/cautious. Lowering 2H’23 estimates to reflect slightly weaker sales.



·     EL +2%; upgraded to Neutral from Sell at Redburn saying current valuation offers some support if Estee’s short-term earnings downgrades have ended.

·     IOVA 14%; after its Lifileucel’s PDUFA had been pushed back by the FDA to Feb 24, 2024, a three-month delay, but analysts positive noting the FDA reiterated that there are no major review issues, there are no plans for an AdCom meeting, and all pre-approval inspections of clinical sites, internal & external manufacturing and testing facilities have been successfully completed.

·     MSOS +6%; In Cannabis: sector with early strength on reports the Secure and Fair Enforcement (SAFE) Act, will be voted on in committee by the end of the month and should have enough votes to pass the U.S. Senate, according to a report by NBC-TV https://tinyurl.com/2s4k3bz4

·     PARA +4%; amid jump in media sector (WBD also +3%) after recent news in DIS after reports that Byron Allen makes $10 Billion Bid for ABC, Other Disney Networks; Disney said it hasn’t made any decisions on sale of properties https://tinyurl.com/2s4s2stp ; Yesterday it was reported today that Disney has been in preliminary talks with NXST on potentially selling the ABC Network



·     ADBE -4%; delivered slight FQ3 rev upside and inline FQ4 rev guide, with beat in net new ARR (FQ3 $54M, FQ4e ~$60M), with better Q4 EPS outlook but guides Q4 revs $4.98B-$5.03B vs. est. $5.0B. Citigroup noted that despite the Q4 DM NNARR guide beat consensus, it looks softer than typical seasonality (also notes shares +64% YTD).

·     ARM -1%; rose as much as 10% pre-mkt and opened higher after rallying 25% in its highly anticipated trading debut on Thursday, but shares volatile today.

·     DASH -3%; as MoffettNathanson downgraded to market perform from outperform and cut tgt to $93 from $110 citing reduced spending among DASH’s young consumer base.

·     HOG -2%; after UBS noted the co offered $1,000 in credit to customers that are new leads. Says it’s very unusual for Harley to offer coupons or discounts of any kind other than financing offers.”

·     KMPR -6%; as announced the appointment of Bradley T. Camden, its Senior Vice President and Treasurer, as Interim Chief Financial Officer, effective immediately.

·     LNN -7%; downgraded to Hold from Buy at Stifel saying survey of 50 domestic irrigation dealers shows dealers don’t expect demand ramp in the Fall.

·     NUE -3%; after guided Q3 EPS $4.10-$4.20 vs. est. $4.65; said expect earnings for the steel mills segment to decline in Q3 vs. Q2 primarily due to lower pricing, and to a lesser extent, volumes; said largest impact on earnings is expected to occur at sheet mills.

·     PLNT -13%; after Board decision to transition to new leadership, resulting in Chris Rondeau’s departure as the Company’s CEO.

·     PTCT -32%; after saying the European Medicines Agency’s Committee for Medicinal Products for Human Use has recommended against converting the conditional marketing authorization of the co’s Translarna treatment for nonsense mutation DMD to full approval.

·     SCHW -3%; after August data showed average interest-earning assets in August were down 23% from the year-ago period to $449.5 billion and were down 4% from July; Total client assets were $8.09 trillion as of month-end August, up 14% from a year ago but down 2% m/m.


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.