Morning Preview: April 19, 2023

Early Look

Wednesday, April 19, 2023









S&P 500










U.S. stock futures slide early Wednesday after sticky double-digit inflation in the U.K. sparked selling of government bonds as Treasury yields move to their highest level in over a week (10-yr at 3.62% and 2-yr 4.27%). Stocks traded to the upper end of its 5-month trading range yesterday before paring gains as the S&P 500 remains stuck within the 3,800 to 4,200 range. A slew of Fed speakers is set for the rest of this week ahead of the pre-meeting blackout period that begins on the weekend, with Williams and Goolsbee today. Earnings results back in focus as Netflix (NFLX) fell as much as 10% late yesterday after results on a miss, lower guide and softer sub numbers, but stronger free cash flow eased fears as shares recovered. Today on the calendar results from several more banks, with WAL bouncing overnight after good results. In Asian markets, The Nikkei Index fell -52 points to 28,606, the Shanghai Index dropped -23 points to 3,370, and the Hang Seng Index declined -282 points to 20,367. In Europe, the German DAX is down -38 points to 15,844, while the FTSE 100 falls -30 points to 7,878.


Stocks failed to hold initial gains on Tuesday, with major averages finishing little changed after two Fed officials reiterated their views that rates need to keep climbing. Fed Bank of Atlanta President Bostic said on CNBC he favors raising interest rates one more time and then holding them above 5%. St. Louis Fed President Bullard said in a Reuters interview he favors getting federal funds into a range of 5.5% to 5.75% (the current target band is 4.75% to 5%). Calls for higher rates by Fed speakers for months continue, but the stock market remains unphased, holding not far off 2023 highs into the heart of earnings season the next 3-weeks.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 3.55 points, or 0.09%, to 4,154.87.

·     The Dow Jones Industrial Average slid -10.55 points, or 0.03%, to 33,976.63.

·     The Nasdaq Composite slipped -4.31 points, or 0.04%, to 12,153.41.

·     The Russell 2000 Index declined -7.29 points, or 0.40% to 1,795.55.


Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     10:30 AM ET          Weekly DOE Inventory Data

·     1:00 PM ET             U.S. Treasury to sell $12B in 20-year notes.

·     2:00 PM ET             Fed Beige Book Released


Earnings Calendar:

·     Earnings Before the Open: ABT ALLY BKR CFG ELV LAD NDAQ MS SYF TRV USB



Other Key Events:

·     American Association for Cancer Research (AACR), 4/14-4/19, in Orlando, FL

·     Needham 22nd Annual Healthcare Conference (virtual), 4/17-4/20

·     Fed’s Goolsbee Interviewed on Marketplace 5:30 PM ET

·     Fed’s Williams Speaks in New York at 7:00 PM ET





















10-Year Note





World News

·     Eurozone consumer inflation eased to 6.9% from 8.5%, primarily on a rapid fall in energy costs but excluding unprocessed food and fuel, prices accelerated to 7.5% from 7.4% while an even narrower inflation measure that also strips out alcohol and tobacco picked up to 5.7% from 5.6%.

·     UK inflation fell to 10.1% in March, from February’s 10.4%, above expectations for a decline to 9.8%


Sector News Breakdown


·     Rivian Automotive (RIVN) downgraded to Sector Perform from Outperform at RBC Capital.

·     UAL Corp. (UAL) 1Q adj EPS 9$0.63) vs est. ($0.73) on revs $11.4B vs est. $11.42B; guides 2Q adj EPS $3.50-4.00 vs est. $3.65, reit FY guide adj EPS $10-12 vs est. $8.73; says cost trajectory on track for FY flat CASM-EX; sees 2Q total operating revs +14-16%, capacity +18.5%.

·     Tesla (TSLA) cut prices for the 6th time this year, cutting on the Model 3 and Model Y once more ahead of the company’s first-quarter results, due after the market close; has cut U.S. prices of its base Model 3 by 11% so far this year and that of its base Model Y by 20%.


Energy, Industrials and Materials

·     Marten Transport (MRTN) Q1 EPS $0.28 vs. est. $0.27; Q1 revs $298.02M vs. est. $309.89M; Operating expenses as a percentage of operating revenue were 90.3% for the 2023 quarter and 87.5% for the 2022 quarter.



·     Fulton Financial (FULT) Q1 EPS $0.39 vs. est. $0.48; Q1 revs $267.3M vs. est. $228.0M; Q1 provision for losses $24.5M vs. ($7.0M) y/y and net interest margin of 3.53% vs. 2.78% y/y.

·     Hancock Whitney (HWC) 1Q EPS $1.45 vs est. $1.43 on NII $287.6Mm vs est. $283.25Mm, total deposits +2% sequentially.

·     Interactive Brokers (IBKR) 1Q adj EPS $1.35 vs est. $1.41 on revs $1.06B vs est. $1.1B, NII $637Mm vs est. $639.5Mm.

·     Metropolitan Bank Holding (MCB) 1Q EPS $2.25 vs est. $1.79 on NII $58.5Mm vs est. $60.6Mm; ROAE 17.2%.

·     Synchrony (SYF) Q1 EPS $1.35 vs. est. $1.46; Q1 book value per share $29.08. Reports Q1 CET1 capital ratio 12.5%; Total deposits $74.4 billion, +3.7% q/q; deposit growth +17.1% vs. +15.2% q/q; net interest income $4.05 billion, -1.3% q/q; qtrly net interest margin decreased 58 basis points to 15.22%.

·     United Community Bank (UCBI) 1Q operating EPS $0.58 vs est. $0.69 on NII $211.47Mm vs est. $217.63Mm; operating ROA 1.71%, ROCE 7.3%, operating ROTCE 11.6%.

·     Western Alliance (WAL) Q1 adj EPS $2.30 vs. est. $2.09; qtrly net rev $551.9M, down 0.7%, compared to an increase in non-interest expenses of 39.9%; total deposits of $47.6 billion at end of March; said immediately available liquidity exceeds uninsured deposits, with a coverage ratio of 158% as of April 14; Q1 NII $609.9M and NIM 3.79% vs. est. 3.7%.



·     Elevance Health (ELV) Q1 adj EPS $9.46 vs. est. $9.26; Q1 revs $41.9B vs. est. $40.83B; Medical membership totaled approximately 48.1M as of March 31, an increase of 1.3M, or 2.9% y/y; raises FY23 adjusted EPS view to greater than $32.70 per share.

·     Intuitive Surgical (ISRG) Q1 EPS $1.23 vs. est. $1.20; Q1 revs $1.7B vs. est. $1.60B; Q1 Worldwide da Vinci procedures grew approximately 26% and placed 312 da Vinci Surgical Systems, compared with 311 in the first quarter of 2022.

·     Vaxcyte (PCVX) 11.2M share Secondary priced at $41.00.


Technology, Media & Telecom

·     Netflix (NFLX) shares rally after being down as much as -13% initially last night on miss and lower guide – FCF guidance helps shares rebound; 1Q EPS $2.88 vs est. $2.86 on revs $8.16B vs est. $8.18B; says shifting timing of broad launch of paid sharing to 2Q means some expected membership growth, rev benefit will fall in 3q; on track to accelerate share repurchases over course of 2023; streaming paid net change: +1.75m (exp +2.41m); streaming paid memberships: 232.5m (exp 233.0m); guides Q2 revs $8.24B vs. est. $8.47B; said it is planning a broad rollout of paid sharing; Free cash flow in Q1 totaled $2.1B compared with $0.8B in last Q1. Assuming no material swings in F/X, we now expect at least $3.5B of FCF for the full year 2023.

·     ASML Holding NV (ASML) Q1 earnings of 1.96 billion euros ($2.15 billion) on revenues of 6.74 billion euros, besting expectations. Analysts had forecast net profit for the three months ended March 31 of 1.62 billion euros on revenue of 6.31 billion euros.

·     Walt Disney Co. (DIS) is planning to lay off thousands of employees next week, Bloomberg reported citing people familiar with the matter; said to include about 15% of the entertainment division’s workforce.

·     Omnicom (OMC) Q1 EPS $1.56 vs. est. $1.39; Q1 revs $3.44B vs. est. $3.38B; Q1 operating profit margin 10.1%

·     CDW (CDW) sees prelim Q1 revenue roughly $5.1B below consensus $5.56B citing intensifying economic uncertainty that led our customers to spend more cautiously and prioritize mission critical initiatives; sees 2023 non-GAAP EPS on diluted basis to be modestly below FY22.

·     Fox News (FOXA) has agreed to settle Dominion’s defamation lawsuit over the 2020 presidential election; Fox paid more than $787M to settle Dominion case, according to reports.


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.