Morning Preview: January 30, 2023

Early Look

Monday, January 30, 2023









S&P 500










S&P futures are looking down -1% or 40 points to 4,044, trading at the overnight lows and giving back a portion of last week’s gains as attention turns to rates and the FOMC policy meeting this Wednesday. A huge week for central bank meetings coming up, with the FOMC expected to hike 25-bps Wednesday to 4.50-4.75% while on Thursday the Bank of England expected for 50-bps hike and the European Central bank (ECB) also expected for a 50-bps hike to 2.5%. Federal Reserve officials are set to shift down the pace of interest-rate hikes again in the coming week amid signs of slowing inflation, while Friday’s jobs report may show steady demand for workers that improves the chances of a soft landing for the world’s largest economy. In Asian markets, The Nikkei Index rose 50 points to 27,433, the Shanghai Index gains 4-points to 3,269, and the Hang Seng Index drops -619 points or 2.7% to 22,069. In Europe, the German DAX is down -150 points to dip below 15K, while the FTSE 100 is down -15 points to 7,750. The stock market in mainland China opened on the first trading day after the new year holiday.


Stocks advanced on Friday, with major averages climbing and pushing past key technical levels on the week to move to their best trading levels in months amid resilient economic data ahead of this week’s Federal Reserve monetary policy meeting, while earnings/guidance results this quarter remain mixed (not as good historically but better than many feared). With two days left in January, the Nasdaq 100 index is on track for its best start toa year since 1999, rising over 11%. Just last week alone the NASDAQ 100 rose 4.7% in five sessions, best week since November. For the week, the S&P 500 added 2.46% while the Nasdaq climbed 4.32% and the Dow rose 1.80%. The S&P and the Dow posted their third weekly gains in four, while the tech-laden Nasdaq notched its fourth straight weekly advance. Heading into Monday, 143 of the companies in the S&P 500 have reported, with Refinitiv noting 67.8% have beaten Street expectations, slightly better than the 66% long-term average, but well below the 76% beat rate over the past four quarters. Huge week of earnings with AAPL, AMZN, CAT, GOOGL, PFE.


Market Closing Prices Yesterday

·     The S&P 500 Index climbed 10.13 points, or 0.25%, to 4,070.56.

·     The Dow Jones Industrial Average rose 28.67 points, or 0.08%, to 33,978.08.

·     The Nasdaq Composite jumped 109.30 points, or 0.95%, to 11,621.71.

·     The Russell 2000 Index advanced 10.49 points, or 0.55% to 1,913.44.


Economic Calendar for Today

·     10:30 AM ET         Dallas Fed Manufacturing for January


Earnings Calendar:

·     Earnings Before the Open: ARE ARLP BEN CODA DX GEHC SBT SOFI



Other Key Events:

·     China NBS Manufacturing for January

·     International Builders Show 2023, 1/31-2/2 in Las Vegas.





















10-Year Note





World News

·     WSJ reports that stubbornly high inflation is finally easing as supply chain disruptions fade and interest rates at 15-year highs put the brakes on demand. Now, Federal Reserve officials have voiced unease that prices could reaccelerate because labor markets are so tight.

·     One quarter of people said they would rely on credit cards and must gradually pay off $1,000 in unanticipated costs for something like a car repair or a medical problem, according to a survey. the biggest percentage saying they would need to finance the un-budgeted $1,000 expense through credit cards since Bankrate began asking about topic in 2014.

·     The German economy unexpectedly shrank in the fourth quarter, data showed as Gross domestic product decreased 0.2% quarter on quarter in adjusted terms, the federal statistics office said.


Sector News Breakdown


·     Home improvement company Lowe’s Cos. (LOW) mentioned positively in Barron’s saying shares may have dropped 21% from its record high, but the stock now looks like a buy. The company is continuing to grow in higher-margin and more-stable contractor business, and it’s also narrowing the gap with rival Home Depot Inc. (HD).

·     Barron’s notes China’s Big Comeback Is Just Getting Started. The country’s stocks are up 50% since officials eased Covid restrictions. Alibaba (BABA), Yum China (YUMC), and other names stand to gain. Money managers see further gains ahead in select consumer-oriented companies, internet giants that are getting a reprieve from regulatory scrutiny, and companies aligned with Beijing’s longer-term priorities – Barron’s

·     Bed Bath & Beyond (BBBY) is closing an additional 87 of its flagship stores and its entire Harmon chain of drugstores, as the retailer struggles to find financial support to keep its operations funded – WSJ reports.

·     Colgate-Palmolive (CL) upgraded to overweight from equal weight at Morgan Stanley citing a good entry point and saying company’s robust long-term organic sales growth is not fully reflected in discounted valuation against peers.

·     Lulu’s Fashion Lounge (LVLU) downgraded to Sector Weight from Overweight at KeyBanc.

·     Unilever (UL) announced the appointment of Hein Schumacher as its new CEO, following an extensive, global search process.

·     Renault SA (RNLSY) agreed to lower its stake in Nissan Motor Co. (NSANY), moving to finalize protracted negotiations to solve longstanding frictions in their two-decade alliance and paving the way to better compete in a rapidly shifting auto industry. – Bloomberg


Energy, Industrials and Materials

·     Alliance Resource Partners (ARLP) boosted its quarterly distribution 40% to $0.70 per unit.

·     Axalta Coating (AXTA) upgraded to Buy from Hold at Deutsche Bank and raise tgt to $40.

·     Old Dominion (ODFL) downgraded to Underperform from Neutral at Credit Suisse



·     Visa Inc. (VISA) said the US Department of Justice deepened its probe into its debit practices.



·     Ginkgo Bioworks (DNA) files to sell 7.28M shares of Class A common stock for holders.

·     GE Healthcare (GEHC) Q4 EPS $1.21 and adjusted EPS $1.31 vs. $1.36 y/y as reaffirmed 2023 guidance disclosed earlier this month; Q4 revs rose 8% to $4.9B


Technology, Media & Telecom

·     ASML Holding NV (ASML) said this weekend it understood progress had been made towards an agreement among several governments on new restrictions on semiconductor manufacturing equipment exports to China. ASML has been restricted from selling its most advanced tools to China since 2019.

·     Baidu (BIDU) is developing an AI-powered chatbot similar to OpenAI’s ChatGPT and plans to integrate it into its main search engine in March – WSJ

·     Google (GOOGL) spent the better part of two decades building the world’s most powerful digital advertising machine. Breaking it up would send shock waves through the $500 billion online-ad market. – WSJ

·     Okta (OKTA) upgraded to Buy from Hold at Stifel and raise tgt to $90 from $60.


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.