Early Look

Wednesday, April 17, 2024

After slipping for a third day on Tuesday, U.S. futures are pointing to a rebound early, helped by gains in Europe and China as earnings season begins to heat up. Chip stocks down early after ASML orders fell short of expectations, while better results from luxury retail LVMH and shoe retailer Adidas helped European markets. In U.S. earnings, airline UAL soars after its earnings results while trucker JBHT dips on its earnings miss in the transport sector. More financial earnings today before big cap tech takes over next week with USB, FHN, CFG, DFS among those reporting. Stocks ended lower in choppy trading on Tuesday as Treasury yields climbed, with investors weighing the likely path of interest rates in a resilient U.S. economy with persistent inflation. Markets were volatile late day after Federal Reserve Chair Jerome Powell said recent inflation data has not given policymakers enough confidence to ease credit soon, noting that the U.S. central bank may need to keep rates higher for longer than previously thought. Note given this latest pullback, the S&P 500 and the Nasdaq are nearly 4% off from record high levels reached last month. WTI crude edges lower amid a continuing focus on Israel’s response to Iran’s weekend attack and a possible rise in US crude inventories. The Dollar Index (DXY) fell for the first time in six sessions while European stocks gain. In Asian markets, The Nikkei Index declined -509 points to 37,961, the Shanghai Index surged 64 points or 2.14% to settle at 3,071, and the Hang Seng Index was little changed at 16,251. In Europe, the German DAX is up 122 points to 17,889, while the FTSE 100 rises 40 points to 7,861.

• The Dow Jones Industrial Average rose 63.86 points, or 0.17%, to 37,798.97.
• The Nasdaq Composite dropped -19.77 points, or 0.12%, to 15,865.25.
• The Russell 2000 Index declined -8.23 points, or 0.42% to 1,967.48.

• 2:00 PM ET                   Federal Reserve Releases Beige Book
• 10:30 AM ET                Weekly DOE Inventory Data
• 1:00 PM ET                   US Treasury to sell $13B in 20-year notes.
• 4:00 PM ET                   Net Long-term TIC Flows for February
• 5:30 PM ET                   Fed’s Mester Gives Update on Fed
• 7:15 PM ET                   Fed’s Bowman Speaks at IIF Global Outlook Forum

• Earnings After the Close: AA BANR BDN CCI CNS CSX DFS EFX FNB FR GSBC KMI LBRT LVS MCRI MMLP OZK REXR SLG SNV WTFC

• Piper Spring Biopharma Symposium, 4/16-4/17, in Boston, MA

• Japan’s Tankan sentiment index for manufacturers stood at plus 9, down from the previous month’s 10; services sector index fell to plus 25 from plus 32 in the previous month.
• Japan exports gained 7.3% in March from a year earlier vs estimated gain of 7% y/y; Imports fell 4.9%, compared with the consensus estimate of a 5.1% decline; Shipments to China saw a 12.6% increase, accelerating from 2.5% in the previous month.
• The latest weekly API report showed crude oil inventories rose by 4.09 million barrels; Gasoline inventories fell by 2.51 million barrels; Distillate inventories fell by 427,000 barrels.

• Auto parts supplier Continental AG (CTTAY) Q1 revenue and profit margin came in below expectations; Q1 sales were 9.8 billion euros ($10.40B), below an analyst consensus of 10 billion euros, while adjusted EBIT margin of 2% was also below consensus forecast of 3.7%; the company confirmed its FY guidance.
• The FTC is preparing to sue to block Tapestry’s (TPR) $8.5B takeover of Capri Holdings (CPRI), The New York Times reported saying according to people two people familiar with the matter, FTC commissioners will meet this week to discuss the case, which could precede a formal vote on whether to file a lawsuit.

• The White House is calling for higher tariffs on Chinese steel and aluminium, to help shore up the American steel sector and woo its workers in this year’s election; Biden proposes raising 301 tariffs on China steel, aluminum – watch shares of STLD, NUE, AA, CENX, FCX, CLF, and others.

• Fulton Financial (FULT) Q1 EPS $0.40 vs. est. $0.39; Q1 revenue $264M vs. est. $216.5M; Q1 net interest margin 3.32% vs. 3.53% last year and Q1 provision for credit losses $10.9M vs. $24.5M last year.
• Hancock Whitney (HWC) Q1 EPS $1.28 ex-items vs est. $1.18 on NII $269Mm vs est. $272.18Mm; credit loss allowance -$340.8Mm.
• Interactive Brokers (IBKR) boosted its qtrly dividend to $0.25 from $0.10; Q1 adj EPS $1.64 vs est. $1.63 on net interest income (NII) $747Mm vs est. $759.6Mm; Q1 revs rose 14% y/y to $1.2B, in-line with estimates; said trading volume was mixed across product types as options contract volume was up 24%, but futures contract and stock share volumes were down 3% and 16%, respectively.
• U.S. Bancorp (USB) Q1 adj EPS $0.90 vs. est. $0.88; Q1 revs $6.72B vs. est. $6.71B; sees Q2 net interest income relatively stable vs. Q1 2024 of about $4.0B; sees FY2024 net interest income $16.1 bln to $16.4 bln.

• Sage Therapeutics (SAGE) announced topline results from PRECEDENT, a double-blind, placebo-controlled Phase 2 study of the investigational oral medicine dalzanemdor, or SAGE-718, in people with mild cognitive impairment or MCI, in Parkinson’s Disease
• Bluebird Bio (BLUE) announced the delay in 10-q filing.
• Ontrack (OTRK) Q4 adj EPS ($0.27) vs est. ($0.21) on revs $3.5Mm vs est. $4.037Mm; sees Q1 revs $2.5-2.9Mm vs est. $4.3Mm.

• Autodesk Inc. (ADSK) shares fell after announced will not file 10-k for year ended Jan 2024 within 15-day extension period due to ongoing internal investigation re free cash flow, non-Gaap operating margin practices.
• HubSpot (HUBS) announces departure of chief customer officer; promotes existing sales, marketing, and customer success leaders.
• Omnicom (OMC) Q1 adj EPS $1.67 vs. est. $1.55; Q1 revs $3.63B vs. est. $3.62B; reported Q1 EBITA of $500.4M and 13.8% margin; Operating expenses increased $54.8 million, or 1.8%; SG&A expenses decreased $3.9 million, or 4.4%.
• Disney (DIS): Plans to expand the Disneyland Resort cleared a major hurdle Wednesday, as local officials endorsed a new blueprint governing the development of Walt Disney’s Southern California theme parks over the next 40 years.