Morning Preview: May 22, 2023

Early Look

Monday, May 22, 2023









S&P 500










U.S. futures looking at a flattish open early as investors await President Joe Biden and House Speaker Kevin McCarthy meeting today for face-to-face debt-ceiling talks. The Nasdaq composite and S&P 500 hit 2023 highs, with the Nasdaq 100 setting its best levels in more than a year last week. The S&P 500 added 1.65%, the Dow gained 0.38%, and the Nasdaq climbed 3.04%; both the S&P 500, Nasdaq register biggest weekly gains since week ended March 31. The stock market rally strengthened last week on debt-ceiling deal optimism and easing bank fears, with gains led by AI-infused tech leaders such as Nvidia, Advanced Micro Devices, Google parent Alphabet. In the semiconductor sector (SOX), which was up 7.7% last week and roughly 7% this month (+26% YTD), news of China sanctions vs. Micron Technology (MU) weighed on chip stocks early Monday, AMAT announced $4B research center, and NVDA earnings loom large this week. Stocks slipped on Friday after GOP negotiators suspended debt-ceiling talks, and after a report came out stating that Treasury Secretary Janet Yellen told bank execs that more bank mergers may be needed, hitting regional bank stocks. Time is running short to reach an agreement on the debt ceiling and avert a potential US default, with Goldman Sachs saying this morning the Treasury will likely run out of funds by June 8th. In Asian markets, The Nikkei Index rose 278 points to 21,086, the Shanghai Index gained 12 points to 3,296, and the Hang Seng Index climbed 227 points to 19,678. In Europe, the German DAX is down -46 points to 16,228, while the FTSE 100 is flat at 7.756.


Market Closing Prices Yesterday

·     The S&P 500 Index slipped -6.07 points, or 0.14%, to 4,191.98.

·     The Dow Jones Industrial Average fell -109.28 points, or 0.33%, to 33,426.63.

·     The Nasdaq Composite dropped -30.94.01 points, or 0.24%, to 12,657.90.

·     The Russell 2000 Index declined -11.14 points, or 0.62% to 1,773.72.


Economic Calendar for Today

·     8:30 AM ET              Fed’s Bullard Speaks on US Economy and Monetary Policy.

·     11:05 AM ET            Fed’s Bostic and Barkin speak.


Earnings Calendar:

·     Earnings Before the Open:

·     Earnings After the Close: CSWC HEI MARK NDSN NVGS PETS ZM


Other Key Events:

·     Goldman Sachs Eighth Annual Leveraged Finance Credit Conference, 5/22-5/24, in CA

·     JPMorgan Annual Global Tech, Media & Communications Conference, 5/21-5/24, in Boston, MA

·     UBS Global Energy Conference, 5/22-5/24, in Austin, TX





















10-Year Note





World News

·     Federal Reserve Bank of Minneapolis President Neel Kashkari said bank capital requirements should be lifted significantly to help backstop financial institutions against distress. “Having significantly higher levels of capital is our only chance to build real resilience in our financial system,” Kashkari said.


Sector News Breakdown


·     Ford Motor Co (F) said for full-year 2023, company maintains guidance of $9B-$11B in adjusted Ebit and about $6B in adjusted free cash flow; will announce new battery raw-material definitive agreements, strengthening ford’s sourcing to produce two million EVs by end of 2026/beyond; sees full-year loss of about $3 billion for startup ford Model E.

·     Dillard’s Inc. (DDS) announced a $500 million share buyback plan.

·     DraftKings (DKNG) upgraded to buy from neutral at UBS, based on stronger revenue growth and greater flow through to Ebitda.

·     Hyatt (H) files to sell 9.2M shares of Class A common stock for holders.


Energy, Industrials and Materials

·     Norfolk Southern (NSC) upgraded to Overweight from Equal Weight at Wells Fargo and raised its price target to $250 from $225.

·     Oil production in Iraq’s Kurdistan region continues to drop as export flows to Turkey’s Ceyhan port show few signs of restarting after a stoppage that has lasted almost two months; production of Kurdistan region’s Khurmala oil field drops to around 50,000 bpd – Reuters.

·     Volvo Group (VLVLY) said its unit Volvo Trucks plans to sell 1,000 electric trucks to Swiss building solutions provider Holcim for delivery over the next seven years, the biggest order ever for Volvo electric trucks – Reuters.



·     PacWest Bancorp (PACW) said it entered into an agreement to sell a portfolio of 74 real estate construction loans to a subsidiary of Kennedy-Wilson Holdings Inc (KW); KW or its designees to also assume all remaining future funding obligations under acquired loans of about $2.7B.

·     JPMorgan Chase & Co. (JPM) boosted its outlook for the boon from higher interest rates after its purchase of First Republic Bank; raised its guidance for net interest income this year to $84 billion, excluding its trading business, up from a previous forecast of $81 billion.

·     JPMorgan (JPM) now has more than 13% of the nation’s deposits and 21% of all credit-card spending

·     U.S. bank deposits fell to $17.123t from $17.150t in prior week according to Fed data late Friday. U.S. bank loans & leases fell by $3.3b in week ended May 10 – Fed data.

·     Vornado (VNO): Share prices for some of the largest office landlords have dropped to near historic lows, reflecting a sluggish return-to-office rate and a rise in the number of investors betting that these stocks will keep falling – WSJ



·     Intercept Pharmaceuticals Inc. (ICPT) drug received two unfavorable votes from an FDA advisory committee late Friday (shares resume trading 7:10 AM). The committee reviewed obeticholic acid as a treatment for pre-cirrhotic fibrosis due to nonalcoholic steatohepatitis.

·     Teva Pharmaceutical Industries’ (TEVA) extended-release schizophrenia drug Uzedy (risperidone) reduced the risk of relapse by up to 80%, according to trial data.

·     Oculis (OCLS) announced positive top line results from Stage 1 of its Phase 3 DIAMOND trial of OCS-01 eye drops in Diabetic Macular Edema – DME -, the leading cause of visual loss and legal blindness in patients with diabetes.


Technology, Media & Telecom

·     Apple (AAPL) downgraded to Hold from Buy at Loop Capital with $180 tgt.

·     Applied Materials (AMAT) said it plans to spend up to $4 billion over 7-years on a research center in the heart of Silicon Valley to speed up advances in semiconductor manufacturing; the center will come online in 2026 and create up to 2,000 engineering jobs.

·     Meta (META) fined $1.3 billion for violating E.U. Data Privacy Rules; said it would appeal an order to stop sending data about European Union users to the United States.

·     Micron (MU) has failed a national security review, China’s cybersecurity watchdog said on Sunday, telling operators of “critical information infrastructure” to stop buying its products.


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.