Mid-Morning Look

Tuesday, November 29, 2022

U.S. stocks are flat early, with gains in Energy, Materials, and REITs, while defensive utilities are down the most. Today appears more of a waiting game ahead of Fed Chair Powell first comments since the Fed meeting tomorrow morning, as well as a heavy dose of market moving economic data with GDP data including PCE, along with Chicago PMI, and employment data ADP private payrolls/JOLTS job openings. Then Personal Income/Spending and PCE inflation Thursday and the jobs data on Friday. Energy stocks rebound along with the price of oil while gold bounces. Earnings in the tech space watched closely tonight ahead of CRWD, WDAY, HPE, NTAP and INTU results. Strength across US listed China stocks this morning (BABA, PDD, BIDU) amid speculation that unrest in China over Covid restrictions would force authorities to move faster in loosening curbs. Bitcoin prices bounce, the dollar slips and Treasury yields are modestly higher with 10-yr at 3.72%.

Economic Data

·     Consumer Confidence for November reported at 100.2 vs. 100.0 est. and previous 102.5; the Present Situation index at 137.4 vs. previous 138.9 and expectations at 75.4 vs. prior 78.1

·     US September 20-metro area home prices +10.4% from year ago vs +13.1% in August—S&P CoreLogic Case-Shiller. Sept 20-metro area home prices non-adjusted -1.5% vs -1.6% in August

·     U.S. Home prices +0.1 pct in September from August; U.S. Home prices index 392.3 in September; U.S. Home prices +11.0 pct in 12 months through September

Stock GAINERS

·     AMR +2%; announced its operational guidance for the 2023 calendar year

·     APEN +64%; after BSX to acquire company for $10 per share or $615M total

·     AZEK +4%; Q4 adj EPS $0.16 missed the est. $0.17 on better revs $304.6M vs. est. $288.41M and guides Q1 revenue $200M-$215M vs. est. $238.31M and sees Q1 adjusted EBITDA $8M-$12M

·     BIGC +14%; Merchants see 31% GMV increase on Black Friday

·     BILI +18%; Q3 revenue rose 11% at 5.8B yuan ($809.66M) topping est. of 5.72B yuan; says added more paying users and raked in higher advertising sales during the quarter; net loss narrows

·     HSBC +4%; Royal Bank of Canada to acquire HSBC Canada for C$13.5B in cash

·     KWEB +6%; strength across US listed China stocks (BABA, PDD, BIDU) amid speculation that unrest in China over Covid restrictions would force authorities to move faster in loosening curbs

·     NXST +5% to replace SABR in the S&P MidCap 400 index

·     WYNN +2%; strength in Macau gaming names on China stock rebound

Stock LAGGARDS

·     AMZN -1%; early weakness in large cap mega tech (AAPL, AMZN, GOOGL, MSFT)

·     CC -1%; said it is tracking slightly below low end of FY Adjusted EBITDA guidance $1.40-1.45B vs est. $1.43B coming from 8-K

·     ROKU -1%; downgraded to Sector Weight at Keybanc saying elements of thesis: outsized growth in connected TV (CTV) advertising, and critical platform for media partners – have not manifested

·     STZ -2%; weakness early in consumer staple stocks (HRL, CLX) after recent outperformance