Morgans AM: Thursday, 21 September 2023

US equity markets retreated as investors digested the latest interest rate decision and monetary policy pronouncements from the Federal Reserve that saw short dated Treasury yields hit fresh 17-year highs - Dow eased -77-points or -0.22%. Intel Corp (down -4.54%) was the worst performing Dow component for a second straight session after the company’s new artificial-intelligence (AI) chips unveiled overnight on the opening day of the company’s developer conference were overshadowed by management’s tempered expectations for gross margin improvement. Chief Financial Officer (CFO) David Zinsner told the conference that he thinks “year over year, we’ll see gross margin expansion. It may not be hundreds and hundreds of basis points next year. It may be more modest for the reasons I talked about from a headwind perspective. But we do expect margin expansion next year.” Current consensus expectations are for a 550-basis-point improvement in gross margins for calendar 2024.