Morning Preview: October 05, 2023

Early Look

Thursday, October 5, 2023









S&P 500










U.S. futures are looking lower, on track for slight losses on the week as soaring Treasury yields and a US dollar on strong economic data have boosted concerns of additional rate hikes by the Fed this year and push out rates cuts to late next year. It has been a rough go for U.S. markets the last 2 months as Bespoke Investment noted that the SPY has made lower lows on 33 of the last 50 trading days. That’s tied for the most in the ETF’s history. Oil prices tumbled further overnight after dropping -5.61% on Thursday, posting their biggest one-day drop since September 2022. The recent ousting of House speaker Kevin McCarthy has also renewed fears of the possibility of a government shutdown in 6 weeks after a temporary bill passed this last weekend. In Asian markets, The Nikkei Index jumped 548 points to 31,075, the Shanghai Index remained closed this week and the Hang Seng Index gained 18 points to 17,213. In Europe, the German DAX is up 22 points to 15,122, while the FTSE 100 rises 40 points to 7,452. This morning, Treasury yields slightly (10-yr at 4.72% off yest high 4.89%) and the dollar eases.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 34.30 points, or 0.81%, to 4,263.75.

·     The Dow Jones Industrial Average rose 127.17 points, or 0.39%, to 33,129.55.

·     The Nasdaq Composite spiked 176.54 points, or 1.35%, to 13,236.01.

·     The Russell 2000 Index advanced 1.86 points, or 0.11% to 1,729.01.


Economic Calendar for Today

·     7:30 AM ET                  Challenger Layoffs for September

·     8:30 AM ET                  Weekly Jobless Claims

·     8:30 AM ET                  Continuing Claims

·     8:30 AM ET                  International Trade for August

·     9:00 AM ET                  Fed’s Mester Speaks at Chicago Payments Symposium

·     10:30 AM ET                Weekly EIA Natural Gas Inventory Data

·     12:00 PM ET                Fed’s Daly Speaks at Economic Club of New York


Earnings Calendar:

·     Earnings Before the Open: CAG LW STZ

·     Earnings After the Close: AEHR CAMP LEVI


Other Key Events:

·     JMP Securities Internet Forum, 10/5, in New York





















10-Year Note





World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -11.5 vs -13.1 last week. Bulls rise to 30.1% from 27.8%, Neutrals fall to 28.3% from 31.3%, Bears rise to 41.6% from 40.9%.


Sector News Breakdown


·     Clorox (CLX) guided Q1 EPS loss to (-$0.40-$0.00) vs. estimates $1.36; and Q1 sales are expected to decrease by 28% to 23% y/y and organic sales are now expected to decrease by 26% to 21% (compared to the Company’s prior expectations of mid-single-digits growth); said Q1 gross margin is now expected to be down y/y vs. prior view for gross margin to be up.

·     Costco Wholesale Corp (COST) reported net sales of $22.75 billion for the retail month of September, the five weeks ended October 1, 2023, an increase of 6.0% from $21.46B last year; Sept. total comp sales +4.5% and US comp sales ex-gas, FX +2.7%.

·     Chinese electric vehicle companies like NIO (NIO) are pulling ever further ahead, partly through government support but also rapid technological advances. Nio, a Chinese electric car company that competes with Tesla (TSLA), employs 11,000 people in research and development, but sells a mere 8,000 cars per month – the NY Times reported.

·     Resource Connections (RGP) Q1 adj EBITDA $7.071Mm vs est. $9.211Mm on revs $170.169Mm vs est. $170.14Mm, gr mgn 39.4%; sees Q2 revenue $160M-$165M, below consensus $177.93M, and sees Q2 gross margin 39.2%-39.7%.

·     Rivian Automotive (RIVN) files to sell $1.5B of green convertible senior notes due 2030; guided revenue for the three months ended Sept. 30 between $1.29B-$1.33B vs. est. $1.3B (vs. last year $540M).

·     The Buckle (BKE) said that comparable store net sales, for stores open at least one year, for the 5-week period ended September 30, 2023, decreased 11.1% from comparable store net sales for the 5-week period ended October 1, 2022. Net sales for the 5-week fiscal month ended September 30, 2023 decreased 10.7% to $103.1 million.


Energy, Industrials and Materials

·     Alstom SA (ALSMY) significantly cut its full-year outlook for free cash flow, now expecting the figure to be negative; said it now sees a full-year negative free cash flow in a range of 500M-750M euros vs. prior guide for it to be “significantly positive”. Posted preliminary sales of 8.3 billion euros in the half-year, up slightly on the 8.0 billion recorded a year earlier.

·     Carrier Global (CARR) downgraded to Underperform from Neutral at Bank America and the firm upgraded Parker-Hannifin (PH) to Buy from Neutral in industrials.

·     Gasoline demand in the US has plummeted to its lowest seasonal level in 25 years, after recent high prices sparked a pullback in consumption – Bloomberg.

·     Suncor Energy (SU) said it has agreed to purchase TotalEnergies EP Canada Ltd., which holds a 31.23% working interest in the Fort Hills oil sands mining project for $1.468B, adding 61K barrels per day of net bitumen production capacity and 675M barrels of proved and probable reserves.



·     Bit Digital (BTBT) said it produced 130.2 Bitcoin in September, down -7% compared to the prior month primarily driven by an increase in network difficulty and a reduction in active hash rate that occurred towards the end of the month.

·     Riot Platforms Inc (RIOT) said it produced 362 Bitcoin in Sept 2023; upon full deployment of this initial order by mid-2024, riot’s total self-mining hash rate capacity is expected to reach 20.1 eh/s



·     Accolade (ACCD) Q2 adj EBITDA $(8.8)Mm vs est. $(12.3)Mm on revs $96.9Mm vs est. $94.09Mm, adj gr mgn 44.2%; sees Q3 revs $95-97Mm vs est. $96.57Mm and adj EBITDA $(8)Mm – $(5)Mm vs est. $(3.65)Mm, sees FY revs $410-414Mm vs est. $412.52Mm and adj EBITDA $(12)Mm – $(6)Mm vs est. $(8.64)Mm.

·     Innate Pharma (IPHA) said that the U.S. FDA imposed a partial clinical hold on two of its trials for lymphoma candidate lacutamab.

·     MaxCyte Inc. (MXCT) guided FY23 revenue to $34M-$36M below consensus $45.07M given the ongoing volatility in customer activity in the life science tools sector.

·     Orchard Therapeutics (ORTX) agreed to be acquired by Japan’s Kyowa Kirin at a rich premium for $16 per ADS in deal valued at $387.4M, nearly double yesterday’s closing price. Contingent value rights tied to U.S. approval of Orchard’s OTL-200 could add another $1 per ADS, bringing the total value of the deal to $477.6M, or $17 an ADS.


Technology, Media & Telecom

·     Belgian officials are looking into risks around the presence of China’s Alibaba Group Holding (BABA) at a cargo airport in the city of Liege, the country’s intelligence service VSSE said.

·     Cambium Networks (CMBM) shares tumble as cuts Q3 revenue view to $40M-$45M from $62M-$70M, below the consensus $64.18M primarily due to a delay in government defense orders due to U.S. Federal budgetary timing issues impacting the Point-to-Point business.


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.