Morning Preview: July 07, 2023

Early Look

Friday, July 7, 2023









S&P 500










After a day of losses for US equities, futures are pointing slightly lower ahead of the monthly Nonfarm Payrolls report at 8:30 AM ET. Wall Street’s main indexes ended lower on Thursday in a broad selloff after data showing a strong labor market boosted bond yields and raised fears the Federal Reserve will be aggressive in raising U.S. interest rates. The 10-year Treasury yield is at 4.06%, its highest in about 4-months while the 2-year yield is holding just above 5%, rising yesterday after ADP reported payrolls more than double estimates, showing the US economy continues to remain strong. Energy and consumer discretionary were among the biggest declining S&P 500 sectors, as market breadth was firmly negative. In Asian markets, The Nikkei Index fell -384 points to 32,388, the Shanghai Index dipped -8 points to 3,196, and the Hang Seng Index dropped -167 points to 18,365. In Europe, the German DAX is up 64 points to 15,592, while the FTSE 100 is down -17 points to 7,262.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -35.23 points, or 0.79%, to 4,441.59.

·     The Dow Jones Industrial Average fell -366.38 points, or 1.07%, to 33,922.26.

·     The Nasdaq Composite slumped -112.61 points, or 0.82%, to 13,679.04.

·     The Russell 2000 Index declined -30.67 points, or 1.64% to 1,842.23.


Economic Calendar for Today

·     8:30 AM ET             Nonfarm Payrolls for June…est. 225K (prior 339K)

·     8:30 AM ET             Private Payrolls for June…est. 200K (prior 283K)

·     8:30 AM ET             Manufacturing payrolls for June…est. 0K (prior -2K)

·     8:30 AM ET             Unemployment rate for June…est. 3.6%

·     8:30 AM ET             Average Hourly Earnings for June…est. +0.3%

·     8:30 AM ET             Average Weekly Hours for June

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





















10-Year Note





Sector News Breakdown


·     Costco (COST) June US comp sales ex-gas, FX +2%, vs. est. +2.3%; June total comp sales -1.4%, below est. -0.4%.

·     Levi Strauss (LEVI) 2Q adj EPS $0.04 vs est. $0.03 on revs $1.34B vs est. $1.34B; guides FY revs +1.5-2.5% vs prior +1.5-3.0% and est. +2.56%, see FY adj EPS $1.10-1.20 vs prior $1.30-1.40 and est. $1.29, sees inventory below prior year by year-end.


Energy, Industrials and Materials

·     First Solar (FSLR) gets a $1B revolving credit line.

·     Exelon (EXC) upgraded to Buy from Neutral at Guggenheim.

·     Edison International (EIX) downgraded to Neutral from Buy at Guggenheim.

·     Mercury Systems (MRCY) named interim president and chief executive officer Bill Ballhaus as the chairman of the board in the latest executive move at the technology company.



·     EverQuote (EVER) announced plans to implement a structural reduction of over 15% in its non-marketing operating expenses, excluding non-cash items; said layoffs to result in charges of $2M-$3M in 2Q.

·     Fed discount window borrowing at $3.4 billion on July 5 vs.$3.2 billion on June 28th; Fed ‘other credit’ at $164.8 billion on July 5 vs. $168.3 billion on June 28.



·     Biogen Inc. (BIIB) and Eisai (ESALY) received full FDA approval for its Alzheimer’s drug Leqembi. The Centers for Medicare and Medicaid Services (CMS) said in January it would cover much of the cost of Leqembi for patients if it received full approval from the FDA.

·     Mallinckrodt PLC (MNK) said it was open to proposed transactions as it keeps delaying payments under an opioid settlement.

·     Simulations Plus (SLP) 3Q adj EBITDA $6.5Mm vs est. $6.367Mm on revs $16.2Mm vs est. $16.34Mm, gr mgn 82%; guides FY revs $59.3-62.0Mm vs est. $61.04Mm and EPS $0.63-0.67 vs est. $0.65.


Technology, Media & Telecom

·     Alibaba (BABA) shares rise overnight after reports Chinese authorities are likely to announce a fine of at least 8 billion yuan ($1.1 billion) on Ant Group, sources with direct knowledge of the matter said, bringing an end to the company’s years-long regulatory overhaul.

·     Samsung Electronics (SSNLF) said it expects its Q2 operating profit to fall 96% on year, which would be its weakest performance in more than 14 years; said it Q2 estimates operating profit at 600 billion won ($458.2 million) vs. an operating profit of KRW14.100 trillion y/y.

·     Global semiconductor chip sales fell -21.1% in May to $40.7 billion, from April 2022’s $51.7 billion, according to the trade group Semiconductor Industry Association late Thursday. SIA expects chip sales to fall 10.3% in 2023, with a rebound of 11.9% growth in 2024.

·     Apple Inc. (AAPL) is planning a retail launch of its Vision Pro headset with appointments and in-store promotion in select US markets early next year, underscoring the niche and complex nature of the mixed-reality device.

·     KLA Corp.’s (KLAC) downgraded to sector weight from overweight at KeyBanc as the semiconductor capital equipment maker’s stock price exceeded the brokerage’s prior target.

·     Paramount (PARA) downgraded to Underperform from Peer Perform at Wolfe Research in the media sector and Warner Bros. (WBD) downgraded to Peer Perform from Outperform.

·     Gorilla Technology Group Inc (GRRR) shares jump pre-mkt after signs contract with Government of Egypt to implement Smart Government Security Convergence solution in the country; contract is worth more than $270 mln.


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.