Morning Preview: September 27, 2023

Early Look

Wednesday, September 27, 2023









S&P 500










U.S. futures are trading higher, helped by a small sell-off in Treasury yields, as the 10-year slips 6 bps off yesterday highs back to 4.5% while investors keep a close eye on the risk of a government shutdown. The U.S. is on track for an Oct. 1 government shutdown despite incremental progress late Tuesday in the House and Senate on rival spending bills. House Republicans voted nearly unanimously to start debate on four government funding bills; but the package of bills does nothing to prevent a shutdown set to start at midnight on Saturday and doesn’t guarantee any of the legislation will pass (see below).


U.S. stocks closed sharply lower Tuesday, with the Dow Jones Industrial booking its worst daily drop since the March banking crisis, falling 1.1% to below its 200-day moving average support of 33,810, as the rout in equities resumed. The Dow last broke below the same support level on May 25. Losses were even sharper for the S&P 500 index, and Nasdaq each falling over -1.5%. Stocks have been under pressure in September, with volatility climbing since last week when the Federal Reserve indicated its policy rate could stay above 5% through the end of next year, a surprise to investors.


The silver lining perhaps after another dreadful September is; as per @bespokeinvest – “Last four Septembers for the S&P: 2020: -3.92%, 2021: -4.76%, 2022: -9.34%, 2023: -5.19% (thru 9/26). The Last three Q4s: 2020: +11.69%, 2021: +10.65, 2022: +7.08%, 2023: ?”


In Asian markets, The Nikkei Index gained 56 points to 32,371, the Shanghai Index edged higher 5 points to 3,107, and the Hang Seng Index advanced 144 points to 17,611. In Europe, the German DAX is down -35 points to 15,220, while the FTSE 100 is down -20 points to 15,220.


Overnight in Washington, the Senate pushed ahead with a bipartisan stopgap measure to keep offices funded temporarily, through Nov. 17, to buy time for Congress to finish its work. The Senate advanced the bill late Tuesday on an overwhelmingly bipartisan vote, 77-19, though it still needs to go through a final vote. Then it would go to the House, where passage may be difficult. The Senate bill would fund the government at current levels and include about $6 billion supplemental funding for Ukraine and $6 billion in U.S. disaster assistance.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -63.91 points, or 1.47%, to 4,273.53.

·     The Dow Jones Industrial Average fell -388.00 points, or 1.14%, to 33,618.88.

·     The Nasdaq Composite tumbled -207.71 points, or 1.57%, to 13,063.61.

·     The Russell 2000 Index declined -22.63 points, or 1.27% to 1,761.61.


Economic Calendar for Today

·     7:00 AM ET                  MBA Mortgage Applications Data

·     8:30 AM ET                  Durable Goods M/M for August

·     8:30 AM ET                  Durable Goods Ex: Transports for August

·     10:30 AM ET                Weekly DOE Inventory Data

·     1:00 PM ET                   US Treasury to sell $46B in 5-year notes.


Earnings Calendar:

·     Earnings Before the Open: PAYX

·     Earnings After the Close: CNXC FUL JEF MU NAPA WOR


Other Key Events:

·     BMO Capital San Francisco & Silicon Valley Property Tour, 9/26-9/28, in San Francisco, CA

·     Cantor Global Healthcare Conference, 9/26-9/28, in New York

·     RBC Capital Global Communications Infrastructure Conference, 9/27-9/28, in Chicago, IL





















10-Year Note





World News

·     Sentiment among German consumers is set to fall in October, as the institute’s consumer sentiment index fell to -26.5 heading into October from a slightly revised -25.6 in September, below expectations of analysts polled by Reuters of -26.0.

·     @charliebilello tweeted: “The US Money Supply fell 3.7% over the last year, a record 9th consecutive month with a YoY decline.”


Sector News Breakdown


·     Costco (COST) Q4 EPS $4.86 vs. est. $4.79; Q4 revs rose 9.4% y/y to $77.43B vs. est. $77.9B; Q4 total company comparable sales up 1.1% vs. est. +1.8%; Q4 US comp sales ex gas +3.1% vs. est. 3.3%; said members will be eligible for online primary care visits for $29 and mental health visits for $79.

·     MillerKnoll (MLKN) Q1 adj EPS $0.37 vs. est. $0.21; Q1 revs $917.7M vs. est. $899.6M; Q1 Organic order growth of 2.1% for the Americas Contract segment over the prior year; Q1 operating margin was 4.4% compared to 4.7% y/y; guides Q2 adj EPS $0.52-$0.58 vs. est. $0.51 and revs $950M-$990M vs. est. $983.8M; sees FY24 adjusted EPS $1.85-$2.15 vs. est. $1.83.

·     Marriott International (MAR) said it expects RevPAR to grow at a compound annual growth rate of 3% to 6% from 2023 to 2025, down from 12% to 14% expected in 2023 as the post-pandemic travel boom cools off; plans to add 230,000 to 270,000 net rooms over three years, representing a compound annual growth rate of 5% to 5.5%; comments ahead of analyst event later today. Marriott is targeting y/y adj EPS growth of 25%-29% this year.

·     Peloton (PTON) co-founder and Chief Product Officer Tom Cortese is leaving the company.

·     Burlington Stores (BURL) and Macy’s (M) downgraded to Hold at Gordon Haskett and Tractor Supply (TSCO) downgraded to accumulate.


Energy, Industrials and Materials

·     AAR Corp. (AIR) Q1 adj EPS $0.78 vs est. $0.71 on sales $550Mm vs est. $508.5Mm, adj op mgn $7.3%; 1Q parts supply sales up 40% over the prior year.

·     NextEra Energy (NEP) said it is revising its growth rate to better position the partnership to continue to deliver long-term value for unitholders; revising its limited partner distribution per unit growth rate to 5%-8% per year through at least 2026, with a target growth rate of 6%.

·     China’s oil products exports are set to rise in October as state-owned refiners capitalize on lucrative margins and some western demand, while international flights recover, industry sources – Reuters reported.

·     XPO, Inc (XPO) upgraded to Outperform from In Line at Evercore ISI.



·     Commerce Bancshares (CBSH) upgraded to Equal Weight from Underweight at Morgan Stanley.

·     Valley National (VLY) downgraded to Underweight from Equal Weight at Morgan Stanley.

·     Zions Bancorp (ZION) downgraded to Underweight from Equal Weight at Morgan Stanley.



·     Immunovant (IMVT) announces $300M offering of common stock.

·     Pfizer (PFE), Ginkgo (DNA) sign R&D deal worth up to $331M to develop RNA drugs according to Endpoint News. In its latest Big Pharma deal, Ginkgo Bioworks will work with Pfizer to develop new RNA drugs


Technology, Media & Telecom

·     Progress Software (PRGS) Q3 adj EPS $1.08 vs est. $1.00 on adj revs $175.8Mm vs est. $173.44Mm, ARR $577Mm, adj op mgn $39%; guides FY adj revs $692-698Mm vs prior $690-698Mm and est. $692.53Mm, adj op mgn 38-39% no change vs prior, adj EPS $4.20-4.26 vs prior $4.16-4.24 and est. $4.20.

·     Palo Alto Networks (PANW) in advanced talks to buy Talon and Dig in a $1B security sweep according to TechCrunch

·     Hollywood writers’ union leaders “voted unanimously to lift the restraining order and end the strike as of 12:01 am PT/3:01 am ET on Wednesday, September 27th”. The deal will last until May 2026 and includes a 5% minimum pay increase upon the ratification of the contract.


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.