Morning Preview: October 20, 2023

Early Look

Friday, October 20, 2023









S&P 500










U.S. futures are looking lower, adding to the prior two-day declines as Treasury yields pull back after the 10-yr yield briefly topped 5% overnight while oil prices resume their upward momentum above $90 per barrel amid fears the Israel-Hamas conflict may escalate over the weekend or expand into other regions of the Middle East. The CBOE Volatility Index (VIX) (or fear index) closed above the 21 level for the first time since March and is still holding above that level as US futures look to open lower. Stocks were volatile on Thursday after Federal Reserve chairman Jerome Powell suggested the US central bank is likely to hold interest rates steady at its next meeting, but also left open the possibility of another hike later if policymakers see further signs of resilient economic growth. In Asian markets, The Nikkei Index dropped -171 points to 31,259, the Shanghai Index dropped -22 points to 2,983, and the Hang Seng Index declined -123 points to 17,172. In Europe, the German DAX is lower by -180 points to 14,860, while the FTSE 100 is down -64 points to 7,435. Investors flocking to haven assets early as gold, bonds and Bitcoin (moves near the $30K level) are looking higher to start the day.


Market Closing Prices Yesterday

·     The S&P 500 Index dipped -36.60 points, or 0.85%, to 4,278.00.

·     The Dow Jones Industrial Average fell -250.91 points, or 0.75%, to 33,414.17.

·     The Nasdaq Composite slumped -128.13 points, or 0.96%, to 13,186.18.

·     The Russell 2000 Index declined -26.11 points, or 1.51% to 1,702.70.


Economic Calendar for Today

·     9:00 AM ET                  Fed’s Harker Speaks on Economic Outlook

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


Earnings Calendar:

·     Earnings Before the Open: AXP BHLB EEFT CMA HBAN IPG RF SLB SXT WRLD





















10-Year Note





Sector News Breakdown


·     Autoliv (ALV) Q3 adj EPS $1.66 vs. est. $1.80; Q3 revs $2.596B vs. est. $2.58B; updated full year 2023 indications as sees around 17% organic sales growth (above prior view of +15%); around 1% positive FX effect on net sales; around 8.5%-9.0% adjusted operating margin; and around $900M operating cash flow.

·     General Motors Co. (GM) and the United Auto Workers are moving toward a tentative agreement that would put an end to a major strike that’s dragged on for more than a month, according to a top union negotiator – Bloomberg reports.

·     Toyota Motor (TM) North America announced it has reached an agreement with Tesla (TSLA) to adopt the North American Charging Standard, NACS, on its battery electric vehicles, BEVs, beginning in 2025.


Energy & Solar

·     SolarEdge (SEDG) shares tumble -25% as cuts Q3 revenue view to $720M-$730M from $880M-$920M (est. $909.0M) and cuts Q3 gross margin view to 20.1%-21.1% from 28%-31% saying experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors; installation rates for the third quarter were much slower at the end of the summer (solar names slide overnight ENPH, FSLR, ARRY, SPWR on guidance).

·     SLB (SLB) Q3 adj EPS $0.78 vs. est. $0.77; Q3 revs $8.31B vs. est. $8.33B; Q3 cash flow from operations $1.68B; free cash flow $1.04B; Compared to the same quarter a year ago, international revenue grew 12%, outpacing North America, which increased 6%.



·     Bank OZK (OZK) Q3 EPS $1.49 vs. est. $1.42; Q3 credit loss provision $44M; Q3 net interest income (NII) $367.26M; annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders were 2.13%, 14.81% and 17.33%, respectively, compared to 1.97%, 11.85% and 14.02%, respectively.

·     Regions Financial (RF) Q3 EPS $0.49 vs. est. $0.58; Q3 revs $1.858B vs. est. $1.89B; Net interest income rose 2.4% to $1.304B below est. $1.325B; Q3 non-interest income declined 6.4% to $566M; total loans grew 4.3% to $98.79B, while allowance for credit losses increased 9.0% to $1.68B and total deposits dropped 6.8% to $126.20B.

·     Western Alliance Bancorp (WAL) Q3 adj EPS $1.97 vs. est. $1.91; Q3 Total deposits $54.29B up 6.4% and above est. $53.56B, Tangible book value per share $43.66 (est. $44.54), Net interest margin (NIM) 3.67% increased from 3.42% and Net interest income (NII) $587.0M, an increase of $36.7M, or 6.7% from Q2 and vs. est. $565.9M; Provision for credit losses $12.1M.

·     Stocks exposed to cryptocurrencies, including CleanSpark (CLSK), Coinbase Global (COIN), Riot Platforms (RIOT) rise, tracking the Bitcoin price as the digital asset inches closer toward the closely watched $30,000 level.

·     In the week ending October 18th: The Federal Reserve’s total balance sheet decreased by $18.9 billion and now stands at $7.93 trillion.



·     Merck (MRK) and Daiichi Sankyo agreed to jointly develop and commercialize three potential cancer treatments in a deal worth up to $22 billion. Merck will pay Daiichi Sankyo $4 billion up front and $1.5 billion in continuation payments over the next two years. If certain sales milestones are met, Merck will contribute up to $16.5 billion down the line.

·     Arcutis Biotherapeutics (ARQT) announces $100M common stock offering and said sees preliminary total revenues of about $38.1M for quarter ended September 30, 2023, and expects to report about $228.1M of cash, cash equivalents, restricted cash, and marketable securities.

·     Intuitive Surgical (ISRG) Q3 EPS $1.46 vs. est. $1.41; Q3 revs $1.74B vs. est. $1.77B; said Q3 Worldwide da Vinci procedures grew approximately 19% y/y; placed 312 da Vinci surgical systems, compared with 305 y/y; said that growth rate in bariatric procedures in US had slowed given patient interest in weight loss drugs in Q3.

·     Jazz Pharmaceuticals (JAZZ) said to explore options including sale according to reports saying the company speaking with advisers to gauge potential interest

·     Invitae (NVTA) appointed David Sholehvar chief operating officer, effective Nov. 13; said Sholehvar most recently served as president, clinical services division, at oncology diagnostics company NeoGenomics.


Industrials & Materials

·     CSX Corp. (CSX) Q3 EPS in-line at $0.42 on revs $3.57B vs. est. $3.55B; said merchandise business remained solid, and our coal operations delivered strong volume growth in qtr; sees low single digit revenue ton-mile growth for the full year 2023, driven by merchandise and export coal.

·     Knight-Swift (KNX) shares soar 17%; Q3 adj EPS $0.41 vs. est. $0.36; Q3 revs $2.0B vs. est. $1.89B; narrows FY23 adjusted EPS view to $2.10-$2.20 from $2.10-$2.30 (est. $2.07).

·     WD-40 (WDFC) Q4 EPS $1.21, in-line with ests and revs $140.5M vs. est. $138.21M; sees FY24 EPS $4.78-$5.15 vs. est. $5.30; sees FY24 revenue $570M-$600M vs. est. $563.4M.


Technology, Media & Telecom

·     Hewlett-Packard Enterprises (HPE) guiding 2024 EPS below street, with non-Gaap $1.82-$2.02, below street at $2.14; forecasts its revenue growth to be 2% to 4%, in constant currency; operating profit growth is forecasted to be 15% to 21%.


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.