Morning Preview: August 18, 2023

Early Look

Friday, August 18, 2023









S&P 500










Stocks are looking lower to end the week, on track for a 4th straight day of losses, with major averages all on track for declines of more than -2% this week amid surging Treasury yields and rising rate hike expectations ahead of next weeks Jackson Hole annual Fed meeting. Today could see more increased volatility as “Triple Witching” option expiration takes place. U.S. stock option contracts with a notional value of $2.2 trillion are set to expire, according to Rocky Fishman, a former head of index derivatives strategy at Goldman Sachs Group. The S&P 500 comes into Friday with its worst 3-day stretch since March and fell to its lowest level since late June after breaking below its 50-day moving average earlier this week in what has been continued selling pressure. Consumer discretionary was down most among S&P 500 sectors along with Technology and healthcare while energy was the sole gainer. The 10-year Treasury yields surged with the 10-year above 4.32% and the 30-year yield scaled a decade high on bets that Fed would leave restrictive policies in place for longer than expected, boosted by another round of strong economic data. In Asian markets, The Nikkei Index dropped -175 podeclined31,450, the Shanghai Index declines -31 points to 3,131, and the Hang Seng Index tumbled -375 points or 2% to settle at 17,950. In Europe, the German DAX is lower by nearly -100 points to 15,581, while the FTSE 100 is down -57 points to 7,252. Oil headed for its first weekly loss since June as concerns remain over tight monetary policy in the US and China’s economic weakness.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -34.18 points, or 0.78%, to 4,370.15.

·     The Dow Jones Industrial Average fell -291.84 points, or 0.84%, to 34,473.90.

·     The Nasdaq Composite slumped -157.70 points, or 1.17%, to 13,316.93.

·     The Russell 2000 Index declined -21.46 points, or 1.15% to 1,850.06.


Economic Calendar for Today

·     1:00 PM ET            Baker Hughes Weekly rig count data


Earnings Calendar:

·     Earnings Before the Open: BKE DE EL





















10-Year Note





Sector News Breakdown


·     Bloomin’ Brands (BLMN) shares rise after the Wall Street Journal reported that activist investor Starboard Value has built a more than 5% stake in the owner of Outback Steakhouse.

·     Estee Lauder (EL) Q4 adj EPS $0.07 vs est. loss (-$0.04); Q4 sales rose 1.8% y/y to $3.63B vs. est. $3.48B; Americas net sales $1.07B, -0.5% y/y, while Asia Pacific net sales $1.30B, +29% y/y; sees FY24 sales up 5%-7% and organic sales up 6%-8%.

·     Express Inc. (EXPR) Q2 prelim net sales and EPS expected to be in range of previously announced, outlook; authorizes 1-for-20 reverse stock split; announces more actions to deliver $200M in annualized savings by 2025.

·     Farfetch (FTCH) Q2 adj EPS loss (-$0.21) vs. est. loss (-$0.42); Q2 revs $572.09M v. est. $649.17M; cuts FY23 group GMV view to roughly $4.4B from $4.9B and lowers FY23 adjusted EBITDA margin growth to 1% from 1%-3%; Q2 gross margin 42.5% and adj Ebitda margin -6.4%.

·     Red Robin Gourmet (RRGB) Q2 adj EPS ($0.24) vs est. ($0.54) on revs $298.6Mm vs est. $289.95Mm, comps +1.5%, adj EBITDA $15.5Mm vs est. $12.87Mm; sees FY revs at least $1.3B vs est. $1.285B, comps +1-3% vs prior +2-4%, restaurant level operating margin at least 13.5%, adj EBITDA $72.5-82.5Mm vs prior $70-80Mm and est. $72.87Mm.

·     Ross Stores (ROST) Q2 EPS $1.32 tops consensus $1.16; Q2 revs $4.93B above est. $4.75B; Q2 comparable store sales were up 5% versus down 7% y/y; raising 2H sales and earnings outlook, now planning comparable-store sales for Q3 and Q4 up 2% to 3% and up 1% to 2%, respectively; raises FY23 EPS view to $5.15-$5.26 from $4.77-$4.99 prior (est. $4.97).


Energy, Industrials and Materials

·     Deere Inc. (DE) Q3 EPS $10.20 beats consensus $8.20; Q3 revenue $14.28B vs. est. $14.25B; Q3 Worldwide net sales and revenues increased 12% to $15.801B; raises FY23 net income view to $9.75B-$10B from $9.25B-$9.5B.

·     Hawaiian Electric (HE) said it is suspending bills for 18,000 customers in affected areas; said power restored to more than 80% of Maui customers; said is seeking advice from various experts as part of prudent scenario planning; said goal is not to restructure company but to endure as financially strong utility.

·     Hawaiian Electric (HE) upgraded to Equal Weight from Underweight at Wells Fargo.

·     Portland General Electric (POR) upgraded to Buy from Neutral at Guggenheim.



·     Alexandria Real Estate (ARE) CFO steps down for family health reasons September 15th.

·     Medical Properties Trust, Inc. (MPW) announced that it has sold $105 million of its interest in Steward Health Care System’s new syndicated asset-backed credit facility to a leading global asset manager with more than $100 billion in assets under management.

·     WeWork (WE) to proceed with 1-for-40 reverse stock split.


Technology, Media & Telecom

·     Applied Materials (AMAT) Q3 adj EPS $1.90 vs est. $1.74 on sales $6.51B vs est. $6.16B; guides Q4 sales $6.11-6.91B vs est. $6.85B and adj EPS $1.82-2.18 vs est. $1.61.

·     Bill Holdings (BILL) Q4 adj EPS $0.59 vs est. $0.41 on revs $296Mm vs est. $281.7Mm; sees Q1 revs $295.5-298.5Mm vs est. $300.22Mm and adj EPS $0.48-.050 vs est. $0.41; sees FY revs $1.289-1.307B vs est. $1.301B and adj EPS $1.82-1.97 vs est. $1.82.

·     Globant SA (GLOB) Q2 adj EPS $1.36 vs. est. $1.35; Q2 revs rose 15.9% y/y to $497.5M vs. est. $496.5M; sees FY23 adjusted EPS at least $5.72 vs. est. 45.71 and revs up 17.6% or at least $2.094B vs. $2.07B estimate.

·     Keysight Technologies (KEYS) Q3 EPS $2.19 vs. est. $2.04 while Q3 revenue of $1.38B was in-line with consensus; sees Q4 EPS $1.83-$1.89 below consensus $1.99 and guides Q4 revenue $1.29B-$1.31B, below consensus $1.39B.

·     AppFolio Inc (APPF) announced a plan to reduce its workforce by nearly 9%, or 149 employees.


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.