Morning Preview: April 16, 2024

Early Look

Tuesday, April 16, 2024

Futures

Up/Down

%

Last

Dow

133.00

0.35%

38,126

S&P 500

-2.25

0.04%

5,102

Nasdaq

-19.50

0.11%

17,857

 

 

U.S. futures are mixed, with Dow futures pointing to a higher open following better earnings result from UNH that topped consensus, lifting shares of 6% pre mkt though JNJ shares dip following their results. The S&P 500 is flattish and Nasdaq futures down slightly after major averages tumbled on Monday. The Dow Jones Industrial Average posted its 6th straight down day on Monday and 10 of last 11 falling from highs of 39,889 on 3/21 but looks to get on track today. The S&P 500 and Nasdaq 100 each closed below their respective 50 day moving averages since November 2, 2023, on yesterday’s slide with the Smallcap Russell breaking below its 50dma and 100dma. Overall, global markets remain on edge over potential geopolitical concerns after late yesterday Israeli military leaders reiterated their stance that Israel must respond to Iran’s recent drone and missile attack. In Asia overnight, China data came in mixed, while headline Q1 GDP was stronger than expected, underlying details were a lot worse or at best mixed as both industrial production and retail sales both missed estimates. The U.S. dollar rose for a 5th straight day on Monday as the dollar index (DXY) trades around 106.30 and the 10-year benchmark Treasury yield topped 4.65%. In Asian markets, The Nikkei Index dropped -761 points to 38,471, the Shanghai Index fell -50 points to 3,007, and the Hang Seng Index declined -351 points to 16,248. In Europe, the German DAX tumbles -250 points to 17,775, while the FTSE 100 is down -108 points to 7,857.

 

Market Closing Prices Yesterday

  • The S&P 500 Index dropped -61.59 points, or 1.20%, to 5,061.82.
  • The Dow Jones Industrial Average fell -248.13 points, or 0.65%, to 37,735.11.
  • The Nasdaq Composite dropped -290.08 points, or 1.79%, to 15,885.02.
  • The Russell 2000 Index declined -27.47 points, or 1.37% to 1,975.41.

Economic Calendar for Today

  • 7:45 AM ET                  ICSC Weekly Retail Sales
  • 8:30 AM ET                  Housing Starts M/M for March…est. 1.487M
  • 8:30 AM ET                  Building Permits M/M for March…est. 1.515M
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 9:00 AM ET                  Fed’s Jefferson Speaks at Monetary Policy Forum
  • 9:15 AM ET                  Industrial Production M/M for March…est. +0.4% (prior +0.1%)
  • 8:30 AM ET                  Capacity Utilization for March…est. 78.5%
  • 4:30 PM ET                   API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: BAC BK CBSH ERIC JNJ MBWM MS NTRS PNC UNH
  • Earnings After the Close: EQBK FULT HWC IBKR JBHT OMC OTRK UAL

Other Key Events:

  • American Academy of Neurology (AAN), 4/13-/18 in Denver, CO
  • Piper Spring Biopharma Symposium, 4/16-4/17, in Boston, MA

 

 

Macro

Up/Down

Last

Nymex

-0.30

85.11

Brent

-0.23

89.86

Gold

4.70

2,387.70

EUR/USD

0.0003

1.0625

JPY/USD

0.30

154.57

10-Year Note

+0.021

4.649%

 

World News

  • China’s GDP in the first quarter beat expectations as the world’s second-largest economy expanded at a 5.3% annual pace in January-March, beating analysts’ forecasts of about 4.8%, official data show and compared to the previous quarter when growth was up 1.6% vs. est. 1.5%.
  • China Industrial output for the first quarter was up 6.1% compared to the same time last year, and retail sales grew at an annual pace of 4.7%. Fixed investment for Q1 grew 4.5% compared to the same period a year ago. China Retail Sales for March rose 3.1% y/y vs. est. 4.8%.
  • Chinese new home prices were down -0.34% MoM in March (prev. -0.36%) having fallen for the 11th consecutive month, and for the 25th time in the last 30 months.
  • Israeli military vows response to Iran attack as calls for restraint mount; "This launch of so many missiles, cruise missiles, and drones into Israeli territory will be met with a response," he said, Reuters reported.

Sector News Breakdown

Consumer

  • Ibotta (IBOT), the digital marketing company backed by Walmart (WMT), said on Tuesday it was looking to raise about $551 million in an upsized initial public (IPO) offering in the United States; they now plan to sell a combined 6.56M shares, nearly one million more than its previous offering seeking a valuation of $2.5B and to price the stock between $76-$84 per share.
  • The European Union is set to fine Mondelez International (MDLZ) for blocking cross-border sales, the Financial Times reported on Tuesday, citing people familiar with the matter. The fine could be worth millions of euros and come as early as next month. The European Commission will also order Mondelez to stop blocking the sale of its products between EU member states.
  • Gildan Activewear (GIL) reconfirms 2024 full year guidance and announced preliminary Q1 revenue; preliminary Q1 2024 net sales are expected to come in at approximately $695M.
  • Rivian Automotive (RIVN) upgraded to Neutral from Sell at UBS with an unchanged $9 price target.
  • Dr. Martens (DRMTY) shares tumble after CEO Wilson plans to step down and warned of that its outlook for fiscal 2025 is challenging, and that earnings could plummet from what it expects to report for the year ended March 31; said it could envision a worst-case scenario of pretax profit coming in at around a third of fiscal 2024’s level.

Energy, Industrials and Materials

  • International Paper (IP) agreed to all-share deal to buy British packaging firm DS Smith in a deal valued at 5.8 billion pounds ($7.22 billion); on closing of the deal, DS Smith shareholders would own ~33.7% of the combined company and IP shareholders will own the rest.
  • Gold Resource (GORO) reports Q1 gold sales 3,557 oz. vs. 6,508 oz. last year and reports Q1 silver sales 216.5K oz vs. 294.8K oz last year.
  • Honeywell (HON) downgraded to Hold from Buy at Deutsche Bank.

Financials

  • Bank of America (BAC) Q1 adj EPS $0.83 vs. est. $0.77; Q1 revs $25.82B vs. est. $25.46B; net interest income (NII) — the difference between what it earns on loans and pays for deposits — slid 3% to $14 billion; took a $700 million charge in the reported quarter to replenish a government deposit insurance fund.
  • Bank of New York (BK) Q1 adjusted EPS $1.29 vs. est. $1.19; Q1 revs $4.53B vs. est. $4.39B; Q1 tangible book value per share $25.44; Assets under custody or administration jumped 5%, to $48.8 trillion; noninterest expenses grew 2%, to $3.18 billion; announces new $6B share repurchase program.
  • PNC Financial (PNC) Q1 adjusted EPS $3.36 vs. est. $3.02; Q1 revs $5.15B vs. est. $5.19B; Q1 tangible book value per share $85.70; said sees Q2 net interest income down about 1% vs. q1 and most recent and sees q2 core noninterest expense up 2%–4% vs Q1 while sees Q2 revs stable.
  • Wintrust Financial (WTFC) to acquire Macatawa (MCBC) in an all-stock transaction as the aggregate purchase price to Macatawa shareholders is currently estimated to be approximately $510.3M, or $14.85 per share. As of December 31, 2023, MCBC had approximately $2.7Bin assets, $2.4B in deposits and $1.3B in loans.
  • CrossFirst Bancshares (CFB) Q1 EPS $0.36 vs est. $0.35 on NII $56.594Mm vs est. $56.56Mm; ROAA 1.00%, ROCE 10.36%.
  • FB Financial (FBK) Q1 adj EPS $0.85 vs est. $0.70 on NII $99.49Mm vs est. $99.3MM, adj ROAA 1.27%, adj ROATCE 13.5%.

Healthcare

  • Johnson & Johnson (JNJ) Q1 adjusted EPS $2.71 vs. est. $2.64; Q1 revs $21.4B vs. est. $21.4B; raises FY24 adjusted EPS to $10.60-$10.75 from $10.55-$10.75 (est. $10.65) and boosts FY24 operational sales view to $88.7B-$89.1B from $88.2B-$89.0B (est. $88.43B); raises quarterly dividend 4.2% to $1.24 from $1.19.
  • UnitedHealth (UNH) swung to a loss in Q1 after being the target of a cyberattack that will also hit its full-year results, as it suspended some of its care-management activities; Q1 adjusted EPS $6.91 vs. est. $6.62; Q1 revs $99.8B vs. est. $99.29B; medical care ratio, or the ratio of medical costs to premium revenue, rose to 84.3% from 82.2% in the same period a year ago; backs FY24 adjusted EPS view $27.50-$28.00, vs. consensus $27.52.

Technology, Media & Telecom

  • Baidu (BIDU) said the number of users of its Ernie ChatGPT-style chatbot has doubled in recent months to 200 million and more than 85,000 enterprise clients. The CEO said at a conference overnight that users were querying the chatbot 200 million times every day – Reuters.
  • Ericsson (ERIC) Q1 operating profit excluding restructuring charges rose to 4.3B crowns ($394Mm) from 4.0B y/y, despite a 15% sales drop (ests. for a decline in profit to 1.7B crowns; said it expects sales to stabilize in the 2H’24 amid signs some customers are looking to spend again; forecast Q2 gross margin excluding restructuring charges at its Networks division of 42%-44% vs. 44.3% in Q1.
  • Live Nation Entertainment Inc. (LYV) shares fell after hours after the WSJ reported that the Justice Department could soon file an antitrust suit accusing the concert-ticketing giant of stifling competition. The report said that the agency could act as soon as next month, though the exact allegations against the company weren’t yet clear, the Journal said. https://tinyurl.com/46hc2vd7
  • Mitek Systems (MITK) Q1 adj EPS $0.14 vs est. $0.18 on revs $36.9Mm vs est. $39.02Mm; sees Q2 revs $46-47Mm vs est. $45.27Mm; reit FY guide revs $180-185Mm vs est. $181.81Mm and adj op mgn 30.0-31.0%.
  • Skillsoft (SKIL) announces Jeffrey R. Tarr’s decision to retire from his role as Chief Executive Officer and announced that Ronald Hovsepian has been appointed as the company’s Executive Chair and will serve as principal executive officer, effective as of April 16, 2024; forecasts 2025 GAAP revs $530M-$550M vs. est. $579M and 2025 adj. EBITDA $105M to $110M, vs. est. $123.5M.
  • Vuzix Corp. (VUZI) Q4 reported EPS ($0.32) vs est. ($0.14) on revs $1.067Mm vs est. $2.157Mm; says 2024 outlook positive.

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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.