Early Look

Wednesday, April 12, 2023

Futures	Up/Down	%	Last
Dow	85.00	0.25%	33,937
S&P 500	6.25	0.16%	4,143
Nasdaq	1.50	0.01%	13,076

 

 

After days of sideways action for U.S. markets the wait is finally over with the March consumer price index (CPI) data later this morning at 8:30 AM. Currently, Fed Fund Futures are currently predicting a 75% chance of a 0.25% rate hike on May 3 following the recent nonfarm payroll data, but that could change following today’s CPI. S&P futures holding steady overnight into the CPI data at 8:30 AM today where estimates for March headline CPI m/m is +0.2% (after +0.4% prior) and headline CPI y/y to rise +5.2% (vs. prior +6%). On a core basis, or ex: food & Energy, CPI m/m expected to rise +0.4% (vs. prior month +0.5%) and on a y/y basis to rise +5.6% (vs. prior +5.5%). In Asian markets, Japanese stocks climb for a fourth day but Hong Kong shares retreat as the Nikkei Index rises 159 points to 28,082, the Shanghai Index rose 13 points to 3,327, and the Hang Seng Index declined -175 points to 20,309. European stocks are on course for a third consecutive gain with the Stoxx 600 touching a five-week high. The German DAX is up 50 points to 15,705, while the FTSE 100 gains 50 points to 7,835. Next up this week, March PPI tomorrow and weekly jobless claims, then Retail Sales along with big bank earnings. The bar has certainly been set high for earnings season as the S&P 500 just had its highest pre-earnings season 1-month return since 2009!

 

Economic Calendar for Today

·     7:00 AM ET           MBA Mortgage Applications Data

·     8:30 AM ET           Consumer Price Index (CPI) M/M for March…est. +0.2%

·     8:30 AM ET           Consumer Price Index (CPI) Y/Y for March…est. +5.2%

·     8:30 AM ET           CPI Core – Ex: Food & Energy M/M for March…est. +0.4%

·     8:30 AM ET           CPI Core – Ex: Food & Energy Y/Y for March…est. +5.6%

·     9:00 AM ET           Fed’s Barkin Speaks at Conference on the Rural Economy

·     10:30 AM ET         Weekly DOE Inventory Data

·     11:00 AM ET         Cleveland Fed CPI for March

·     1:00 PM ET            U.S. Treasury to sell $32B in 10-year notes.

·     2:00 PM ET            Federal Budget for March

·     2:00 PM ET            FOMC Meeting Minutes from the March 22^nd meeting.

 

Earnings Calendar:

·     Earnings Before the Open: APOG DAL HOFT

·     Earnings After the Close: AGX PCYO RENT SPWH

 

Other Key Events:

·     China Exports, Imports and Trade Balance for March

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -0.17 points, or 0.00%, to 4,108.94.

·     The Dow Jones Industrial Average rose 98.27 points, or 0.29%, to 33,684.79.

·     The Nasdaq Composite dropped -52.48 points, or 0.43%, to 12,031.88.

·     The Russell 2000 Index advanced 14.15 points, or 0.80% to 1,786.59.

 

 

Macro	Up/Down	Last
Nymex	0.05	81.58
Brent	0.17	85.78
Gold	5.40	2,024.40
EUR/USD	0.0016	1.0926
JPY/USD	0.00	133.65
10-Year Note	+0.024	3.458%

 

 

World News

·     Bank of Canada rate decision is expected later, where unchanged rates at 4.50% is widely expected.

·     Japan PPI YoY for March rose 7.2% vs 7.1% expected, and 8.3% prior.

 

Sector News Breakdown

Consumer

·     Apogee Enterprises (APOG) Q4 adj EPS $0.86 vs. est. $0.83; Q4 revs $344M vs. est. $348.18M.

·     Bed Bath & Beyond (BBBY) files to sell 111.75M shares of common stock for holders.

·     In electric vehicles, the U.S. Environmental Protection Agency unveiled significant changes to its guidelines for domestic car emissions over the next decade Wednesday in one of the biggest proposals for domestic transportation on record. The EPA says its new model rules for the years 2027 to 2032 would require carmakers to cut their annual emissions by around 15% a year and effectively mean that two of every three cars sold will be all-electric within the next ten years. The new rules would likely cost American carmakers an extra $1,200 per vehicle while saving owners some $9,000 on repair, fuel, and maintenance costs over an eight-year period.

 

Energy

·     Diamondback Energy (FANG) is considering the sale of its non-core assets in the Permian Basin and is working with a financial adviser to seek a buyer for assets around Pecos County in Texas – Bloomberg

·     EOG Resources (EOG) said for Q1, anticipates a net gain of $376 million on the Mark-to-market of its financial commodity derivative contracts.

·     National Instruments Corp. (NATI) shares rise 7% after Bloomberg report that Emerson Electric Co. (EMR) was nearing a deal to acquire the test and measurement making company in deal worth $60 per share, beating out another suitor, Fortive (FTV) https://on.mktw.net/3KzQPCG

·     API weekly oil inventory data showed a 377k add last week, the market had been expecting a 1.3mn draw. EIA weekly data is released later today.

 

Financials

·     Veritas Capital ended talks with Carlyle Group Inc (CG) to buy a 50% stake in private healthcare technology firm Cotiviti Inc on valuation grounds, Reuters reported.

·     Evercore Inc. (EVR) upgraded to Buy from Sell at UBS saying the firm is executing better than expected despite the challenging M&A backdrop.

·     Goldman Sachs (GS) upgraded to Buy from Neutral at UBS saying shares are attractively priced with de-risked outlook.

 

Healthcare

·     InflaRx (IFRX) 9.41M share Spot Secondary priced at $4.25.

·     Cutera (CUTR) terminates CEO David Mowry and Executive Chair Daniel Plants for cause in dispute over CEO succession plan.

 

Industrials & Materials

·     Core & Main (CNM) announces offering of 5M shares of Class A common stock for holders.

·     In Chemicals: Eastman Chemical (EMN), Dow Chemicals (DOW), Westlake (WLK), LyondellBasell (LYB) all upgraded to Overweight from Neutral at Piper Sandler and upgraded Celanese (CE)m Methanex (MEOH) to Neutral from Underweight.

 

Technology, Media & Telecom

·     Skillsoft (SKIL) Q4 EPS loss (-$0.33) vs. est. loss (-$0.22); Q4 revs $140M v. est. $123.97M; sees FY24 revenue $555M-$585M vs. est. $536.32M and adj EBITDA $100M-$105M.

·     Tencent (TCEHY) shares slip after Prosus said it may sell more shares in Chinese tech giant Tencent. Prosus provided an update on its share repurchase program announced in June 2022, based on gradual sale of the Tencent ordinary shares held by the Dutch group.

·     Acer said consolidated revenues for March 2023 at NT$ 24.15 billion with 64.5% growth m/m.