Morning Preview: October 06, 2023

Early Look

Friday, October 6, 2023









S&P 500










S&P 500 futures are edging slightly higher ahead of the monthly payrolls report, while the dollar is little changed and Treasury yields are also steady with the 10-yr around 4.73%. In corporate news, the WSJ reported last night that Exxon Mobil (XOM) is nearing its largest takeover in more than two decades with an acquisition of Pioneer Natural Resources (PXD). Markets await the September jobs report at 8:30 am with estimates for Nonfarm Payrolls for Sept est. +170K, Private Payrolls est. +160K, Manufacturing Payrolls est. +5K and the unemployment rate est. 3.7% (prior 3.8%). Tesla (TSLA) shares dip after the electric vehicle maker cut prices on several models. In Asian markets, The Nikkei Index fell -80 points to 30,994, the Shanghai Index remained closed for its week-long holiday, and the Hang Seng Index rose 272 points to 17,485. In Europe, the German DAX is up 132 points to 15,202, while the FTSE 100 is up 35 points to 7,487. JPM strategist Marko Kolanovic is bracing for a 20% sell-off to hit the S&P 500, as believes the weakness isn’t a strong sign a monster move lower is already here (more below).


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -5.56 points, or 0.13%, to 4,258.19.

·     The Dow Jones Industrial Average fell -9.98 points, or 0.03%, to 33,119.57.

·     The Nasdaq Composite slipped -16.18 points, or 0.12%, to 13,219.83.

·     The Russell 2000 Index advanced 2.50 points, or 0.14% to 1,731.51.


Economic Calendar for Today

·     8:30 AM ET             Nonfarm Payrolls for Sept…est. +170K (prior 187K)

·     8:30 AM ET             Private Payrolls for September…est. +160K (prior 179K)

·     8:30 AM ET             Manufacturing Payrolls for September…est. +5K (prior 16K)

·     8:30 AM ET             Unemployment Rate fort September…est. 3.7% (prior 3.8%)

·     8:30 AM ET             Average Hourly Earnings M/M for Sept…est. +0.3% (prior +0.2%)

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

·     3:00 PM ET             Consumer Credit for August…est. $11.7B





















10-Year Note





World News

·     JPMorgan’s Marko Kolanovic is bracing for a 20% sell-off to hit the S&P 500. “I’m not sure how we’re going to avoid it [recession] if we stay at this level of interest rates,” the firm’s chief market strategist and global research co-head told CNBC.

·     Factory orders in Germany increased 3.9% in August over the previous month, beating consensus of 1.8%. The biggest upward contribution came from the manufacture of computer, electronic and optical products sector which soared 37.9%.


Sector News Breakdown


·     Levi Inc. (LEVI) Q3 adj EPS $0.28 vs. est. $0.27; Q3 revs $1.51B vs. est. $1.54B; Q3 adjusted gross margin 55.6%; CFO says taking a more cautious approach to Q4 outlook; says reviewing business for savings oppty in 2024; said expects FY adj EPS at low end of its range; cuts FY23 revenue view to “flat to up 1%” vs. prior forecast of up 1.5%-2.5%.

·     Elf Beauty (ELF) was upgraded to buy from Hold at Jefferies saying it sees a buying opportunity following the recent valuation pullback in the cosmetics company.

·     Tesla (TSLA) cut prices of its Model 3 compact sedan and Model Y SUV in the U.S. by about 2.7% to 4.2% to boost demand for its electric vehicles, after deliveries missed estimates this week. The Model 3 sedan is cheaper by $1,250 to $38,990, while prices of the Model Y long-range variant were cut by $2,000 to $48,490, the car company’s website showed.


Energy, Industrials and Materials

·     Exxon Mobil (XOM) is closing in on a deal to buy Pioneer Natural Resources (PXD) in a takeover that could be worth roughly $60 billion, the WSJ reported. A deal could be sealed in the coming days, assuming the talks don’t hit a last-minute snag,

·     Diesel prices rise as Russia’s government said on Friday it had lifted a ban on pipeline diesel exports via ports, removing the bulk of restrictions installed on Sept. 21. The restrictions for gasoline exports are still in place.

·     Vale (VALE), Rio Tinto (RIO), and BHP Group (BHP) upgraded to Neutral from Sell at UBS.

·     Shoals Technologies (SHLS) upgraded to Overweight from Neutral at Piper Sandler.

·     Apogee Enterprises (APOG) raises share repurchase authorization by 2M shares.



·     PayPal (PYPL) introduces Gift Cards on Venmo saying customers can now send and receive gift cards from popular brands through the Venmo app.



·     Royal Philips (PHG) shares fell after the FDA said it is unsatisfied with the status of the company’s recall of devices to treat sleep apnea and asked for additional testing. The FDA doesn’t believe the testing and analysis that Philips has shared to date are adequate to fully evaluate the risks posed to users from the recalled devices,


Technology, Media & Telecom

·     Aehr Test Systems (AEHR) Q1 EPS $0.18 vs. est. $0.16; Q1 revs $20.62M vs. est. $19.23M; Q1 bookings were $18.4M and backlog as of August 31 was $22.3M; backs FY24 revenue view at least $100M.

·     Calamp (CAMP) Q2 GAAP EPS loss (-$0.11) vs. est. $0.03; Q2 revs $61.71M vs. est. $70.35M; said generated positive Cash Flow from Operations of $7.1M.

·     Taiwan Semi (TSM) said its 9-month revenue fell 6.2% y/y to NT$1.536T; saw revenue of NT$1.638T for January through September 2022; Sept revs fell -13.4% y/y to about NT$180.43B; said revs dipped -4.4% m/m and generated NT$188.69B in revenue in August 2023.

·     ChipMOS (IMOS) said its Q3 revenue increased 6.2% y/y to $173.1M, and 2.5% q/q; revenue for September was $59.3M, up 4.3% m/m and 20.2% y/y.

·     Google (GOOGL) stopped Samsung from installing search app – ex-executive says as per Reuters. A former executive at Samsung Electronics’ venture capital arm who proposed that mobile app developer Branch Metrics’ software be installed in Samsung smartphones faced pushback due to pressure from Google, he said on Thursday.

·     Microsoft (MSFT) is aiming to close its $69 billion deal for “Call of Duty” publisher Activision Blizzard (ATVI) on Oct. 13 if it gets approval from Britain’s antitrust regulator, the Verge reported on Friday, citing a source.

·     Britain’s data watchdog said Snapchat (SNAP) had been issued with a preliminary enforcement notice over a possible failure to properly assess the privacy risks of its generative AI chatbot to users, including teenagers.


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.