Morning Preview: January 03, 2023

Early Look

Tuesday, January 3, 2023









S&P 500










Stock futures rise as the New Year kicks off in full “risk-on-mode” early! After ending 2022 with one of the worst yearly totals in decades for major averages, US futures are pointing to a strong open, with major averages looking higher by about 1% thus far (though averages have since pared gains). The U.S. is up over 1% while Treasury yields fall (10-year at 3.75%), but not denting gold as prices track higher. In Asian markets, The Nikkei Index was closed for holiday, the Shanghai Index gained 27 points to 3,116, and the Hang Seng Index jumps 363 points to 20,145. In Europe, the German DAX is up 184 points or 1.3% to 14,253, while the FTSE 100 gains roughly 2% or 150-points to 7,600. Gold prices looking at a higher open, on track to open at 6-month highs. A quiet day of economic data and Fed speakers and earnings don’t begin to pick up until next week.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -9.78 points, or 0.25%, to 3,839.50

·     The Dow Jones Industrial Average slid -73.55 points, or 0.22%, to 33,147.25

·     The Nasdaq Composite slipped -11.61 points, or 0.11%, to 10,466.48

·     The Russell 2000 Index declined -5.00 points, or 0.28% to 1,761.25


Economic Calendar for Today

·     7:45 AM ET          ICSC Weekly Retail Sales

·     9:45 AM ET           S&P Global Manufacturing PMI, Dec-F

·     10:00 AM ET         Construction Spending M/M for November





















10-Year Note





World News

·     Chinese Caixin manufacturing PMI actual 49.0 (forecast 49, previous 49.4). Businesses were optimistic about the future though, with confidence in the 12-month outlook climbing to a 10-month high

·     The House speaker vote is set for midday and comes after Mr. McCarthy spent the weekend scrambling to get the votes necessary from House Republicans to win the gavel. He acquiesced on requested rules changes that give rank-and-file members more power, but several GOP lawmakers said they remained opposed to the Californian’s bid.

·     The BOJ is now considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024, according to the Nikkei.

·     Russia confirmed 63 dead when a ‘temporary deployment point’ was hit by four Himars missiles, with 100’s injured according to press reports


Sector News Breakdown


·     Tesla (TSLA) announced Q4 production of 439,701 vehicles, 4% of which are subject to operating lease accounting, and delivered 405,278 vehicles (below est. 420K). In 2022, vehicle deliveries grew 40% year-over-year to 1.31M while production grew 47% year-over-year to 1.37M; Model S/X deliveries 17,147 and Model 3/Y deliveries 388,131 

·     Tesla Inc. (TSLA) is starting 2023 as it ended 2022: with incentives aimed at propping up sales in China. The carmaker is offering Model 3 sedan and Model Y sport utility vehicle buyers as much as 10,000 yuan ($1,450) if they take delivery by Feb. 28, according to Tesla’s website

·     NIO (NIO) said it delivered 15,815 vehicles in December, representing an increase of 50.8% year-over-year; delivered 40,052 vehicles in Q4, representing an increase of 60.0% year-over-year, and 122,486 vehicles in 2022 in total, increasing by 34.0% year-over-year

·     XPeng (XPEV) said it delivered 11,292 Smart EVs to customers in December, representing a 94% increase over November; total vehicle deliveries for Q4 reached 22,204. As of December 31, 2022, year-to-date deliveries were 120,757, representing a 23% increase year-over-year

·     Li Auto (LI) said it delivered 21,233 vehicles in December 2022, representing an increase of 50.7% year over year. This brought the company’s Q4 deliveries to 46,319, up 31.5% year over year. Total deliveries in 2022 increased by 47.2% year over year to 133,246

·     Watch Coco-Cola (KO) and Pepsi (PEP) after Bill Ackman tweeted this weekend “@CocaCola and @PepsiCo have caused more harm to global health than likely any other company. Just look at the correlation between diabetes/obesity and soft drink consumption. It is remarkable that the plaintiffs’ bar has not yet won a massive judgment against them.

·     Mondelez International (MDLZ) downgraded to sector perform from outperform at RBC Capital Markets saying that it is now difficult to justify further upside to EPS estimates as the macro environment weakens


Energy, Industrials and Materials

·     Brenntag SE (BNTGF) ended preliminary talks to acquire rival chemical distributor Univar Solutions Inc. (UNVR)

·     SpaceX is raising $750 million in a new round of funding that values the rocket and satellite company at $137 billion from investors, including Andreessen Horowitz, CNBC reported late Monday.



·     Ally Financial (ALLY) and Capital One Financial (COF) downgraded to Equal Weight from Overweight at Barclays

·     BGC Partners Inc. (BGCP) said it now sees 4Q revenue and pre-tax adjusted earnings above the midpoint of the range of its previously stated outlook

·     Keefe Bruyette with several ratings changes in the private equity sector, downgrading Apollo Global (APO) to Market Perform from Outperform with a $77 price target as recommends a cautious approach to the alternative managers in 2023. Also downgraded Blue Owl Capital (OWL) and Carlyle Group (CG) to Market Perform while KKR (KKR) is top pick



·     Molina Healthcare (MOH) said it won some Medi-Cal contracts from the California Department of Health Care Services starting Jan. 1, 2024

·     CVS Health (CVS) downgraded to in-line from outperform and tgt cut to $100 from $120 at Evercore/ISI

·     Gilead (GILD) downgraded to Sector Perform from Outperform at RBC Capital saying it will take time to gain more definitive visibility on the next sets of potential drivers.


Technology, Media & Telecom

·     On Semiconductor Corp. (ON) mentioned positively in Barron’s saying the growth of electric vehicles is one of the most exciting investing themes for the next decade, and Brian Demain, who co-manages the Janus Henderson Enterprise fund, favors ON Semiconductor, which gets 34% of its revenues from the auto market, as well as TE Connectivity Ltd. (TEL) and Flex Ltd. (FLEX).

·     Take-Two Interactive Software Inc. (TTWO) mentioned positively in Barron’s saying the video-game maker best known for Grand Theft Auto is a top pick of Stifel analyst as the company is betting big on game demand in the coming years and has sequels and reboots coming up

·     InterDigital, Inc. (IDCC) announced that the company has signed an HEVC and VVC patent license with LG Electronics, a leading Korean-based manufacturer of various consumer electronics products. The license covers a range of LG products such as TVs and PCs.


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.