Early Look

Friday, December 1, 2023

Futures	Up/Down	%	Last
Dow	49.00	0.14%	36,060
S&P 500	0.25	0.02%	4,576
Nasdaq	-25.50	0.16%	15,960

 

 

S&P futures are flat after a massive late day buy program sent prices to the best levels of the day late Thursday closing at highs to end one of the best months for the index in a long time (rose +8.92% in November). The S&P 500 is roughly 6% away from its all-time highs following yesterday’s jump, the Dow soared over 500 points on Thursday to hit a fresh 52-week high and the Nasdaq Composite posted its best monthly return since July 2022, rising around 11% while the Nasdaq 100 has jumped around 46% so far in 2023. Sentiment is strong, Bulls have been in control, and there remains no fear as evident by the latest AAII Investor Intelligence Poll which showed Bulls stood at 48.8, highest since summer when they were 51 while Bearish sentiment sunk to 19.6, the lowest since June 2021 (those are usually contra indicators). The CBOE Volatility index (VIX) touched its 2nd lowest level since January 2020 at 12.56 midweek (down again overnight at 12.87). The interest rate hike cycle by the by the Fed is over according to Fed Fund futures, which has given life to the bond market (10-yr yield fell a whopping -52 bps in November) and the dollar has eased. Fed futures point to a possible rate “cut” as early as March despite Fed speakers not giving any indication of such an action. It has been full steam ahead for stocks since the October pullback, what changes sentiment remains to be seen. U.S. stocks enjoyed a broad rally this month, with 10 of the 11 S&P 500 sectors finishing higher. Only energy stocks finished November with a loss, dragged down by lower crude-oil prices. In Asian markets, The Nikkei Index slipped -55 points to 33,431, the Shanghai Index edged higher 2 points to 3,031, and the Hang Seng Index fell -212 points to 16,830. In Europe, the German DAX is higher by 113 points to 16,329, while the FTSE 100 rises 40 points to 7,494.

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 17.22 points, or 0.38%, to 4,567.80.

·     The Dow Jones Industrial Average rose 520.47 points, or 1.47%, to 35,950.89.

·     The Nasdaq Composite slipped -32.27 points, or 0.23%, to 14,226,22.

·     The Russell 2000 Index advanced 5.21 points, or 0.29% to 1,809.02.

 

Economic Calendar for Today

·     9:45 AM ET                  S&P Global Manufacturing Nov-Final…est. 49.8

·     10:00 AM ET                Construction Spending M/M for October…est. +0.4%

·     10:00 AM ET                ISM Manufacturing PMI for November…est. 47.6 (prior 46.7)

·     1:00 PM ET                   Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: GCO

 

Other Key Events:

·     Bank America European Tech Fieldtrip, 11/27-12/1 (virtual)

 

 

Macro	Up/Down	Last
Nymex	0.05	76.02
Brent	0.03	80.89
Gold	2.60	2,059.80
EUR/USD	0.0004	1.0890
JPY/USD	-0.09	148.10
10-Year Note	-0.018	4.332%

 

 

World News

·     China Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.7 in November from 49.5 in October and expectations of 49.8.

 

Sector News Breakdown

Consumer

·     Ulta Beauty (ULTA) Q3 EPS $5.07 vs. est. $4.95; Q3 revs $2.49B vs. est. $2.47B; Q3 comp sales rose 4.5% vs. est. 3.3% (down from 14.6% y/y); narrows FY23 EPS view to $25.20-$25.60 from $25.10-$25.60; narrows FY23 comp sales to 5%-5.5% from 4.5%-5.5% and narrows FY23 revenue view to $11.1B-$11.15B from $11.05B-$11.15B (est. $11.16B).

·     American Outdoor Brands (AOUT) Q2 adj EPS $0.25 vs. est. $0.20; Q2 revs $57.9M vs. est. $53.04M; Q2 gross margin 45.7%, down 200 basis points y/y; said Q2 shooting sports category saw a slight decline in net sales compared with the prior year; said continue to believe that our net sales for Fy24 could exceed FY23 net sales by as much as 3.5%.

·     Tilly’s (TLYS) Q3 EPS loss (-$0.03) vs. est. loss (-$0.07); Q3 revs $166.5M vs. est. $167.98M; said total comp sales, including both physical stores and e-commerce, decreased by (-9.0%); guides Q4 EPS loss (-20c-12c) vs. est. loss (-$0.11) and revs $172M-$178M vs. est. $174.78M.

·     Tesla (TSLA) shares slipped overnight after traders digest the Cybertruck Delivery Event including the estimated Cybertruck sticker prices and the fact that the lowest priced model won’t be available until some point in 2025.

·     Fisker (FSR) said it has made a strategic decision to reduce December production to prioritize liquidity to unlock over $300M of working capital, which creates additional business flexibility; Fisker is adjusting production guidance to just over 10,000 units for 2023.

·     Nio (NIO) announced its November delivery results. Nio delivered 15,959 vehicles in November, increasing by 12.6% year-over-year. The deliveries consisted of 10,545 premium smart electric SUVs, and 5,414 premium smart electric sedans.

·     Xpeng (XPEV) delivered 20,041 Smart EVs, representing a 245% increase year-over-year and surpassing monthly deliveries of 20,000 for the second straight month.

·     Li Auto (LI) delivered 41,030 vehicles in November, representing an increase of 172.9% year over year. Cumulative year-to-date deliveries of Li Auto vehicles reached 325,677 as of the end of November, achieving its 2023 target of 300,000 vehicles ahead of schedule.

 

Energy, Industrials and Materials

·     American Woodmark (AMWD) raises FY24 adjusted EBITDA view to $235M-$250M from prior view of $225M-$245M while backed its FY24 revenue outlook to decline low double digits.

·     Chemours (CC) upgraded to Outperform from Sector Perform at RBC Capital.

·     Norfolk Southern (NSC) upgraded to Buy from Neutral at Bank America and raised tgt to $248.

·     Weyerhaeuser Company (WY) announced it has entered into two distinct agreements with Forest Investment Associates to divest approximately 69,600 acres in Upstate South Carolina for $170M, and to purchase approximately 60,700 acres of high-quality timberlands in Coastal North Carolina, South Carolina, and Mississippi for $163M.

 

Financials

·     Bank of Montreal (BMO) Q4 adj EPS C$2.81 vs. C$3.04 last year; Q4 revs C$8.36B vs. C$10.57B last year; Q4 book value per share C$97.17; Q4 CET1 capital ratio 12.5%.

·     Raymond James (RJF) raises dividend to boost yield above 1.7%, sets new $1.5 billion stock buyback program.

 

Healthcare

·     Altimmune (ALT) announced topline results from its 48-week MOMENTUM Phase 2 obesity trial of pemvidutide. The trial enrolled 391 subjects with obesity or overweight with at least one co-morbidity and without diabetes. Subjects were randomized 1:1:1:1 to 1.2 mg, 1.8 mg, 2.4 mg pemvidutide or placebo administered weekly for 48 weeks in conjunction with diet and exercise.

·     AstraZeneca (AZN) said it is calling off two late-stage trials into the potential benefits of its potassium-reduction drug Lokelma in treating a chronic condition called hyperkalemia in people with various heart and kidney diseases.

·     BioNTech (BNTX) downgraded to Underweight from Neutral at JPMorgan.

·     Johnson & Johnson (JNJ) upgraded to Buy at UBS ahead of analyst day.

 

Technology, Media & Telecom

·     Ambarella (AMBA) Q3 EPS loss (-$0.28) vs. est. loss (-$0.39); Q3 revs $50.6M vs. est. $50.01M; guides Q4 revs $50M-$53M vs. est. $50.3M; Q3 adj gross margin 62.6% vs. 63.5% y/y and sees ADJ gross margin 62% to 63%.

·     Dell Inc (DELL) 3Q adj EPS $1.88 vs. est. $1.46; Q3 revs fell -11% y/y to $22.25B vs. est. $22.98B; Q3 cash flow from operations $2.2B; rev miss due to a slower-than-expected recovery in the hardware and software market.

·     Domo Inc. (DOMO) Q3 adj EPS $0.00 vs. est. loss (-$0.12); Q3 revs $79.7M vs. est. $79.02M; said Q3 billings rose 1% y/y to $74.8M as exceeded guidance for key top-line metrics and delivered record operating margin; Q3 sub revs rose 3% y/y to $71.3M; raises FY24 EPS loss to (28c)-(24c) from prior (47c)-(39c) and narrows FY24 rev view to $317.8M-$318.8M from $316M-$320M.

·     Elastic NV (ESTC) Q2 EPS $0.37 vs. est. $0.24; Q2 revs $311M vs. est. $304.1M; guides Q3 above consensus and boosts FY24 EPS view to $1.06-$1.15 from $1.01-$1.11 (est. $1.08) and raises FY24 revenue view to $1.247B-$1.253B from $1.242B-$1.25B.

·     Marvell Technologies (MRVL) Q3 EPS $0.41 vs. est. $0.40; Q3 revs $1.419B vs. est. $1.4B; guides Q4 EPS $0.41-$0.51 vs. est. $0.49 and revs $1.42B below consensus $1.46B; Q3 Gross Margin: 38.9% GAAP gross margin; 60.6% non-GAAP gross margin.

·     PagerDuty (PD) Q3 EPS $0.20 vs. est. $0.14; Q3 revs $108.7M vs. est. $107.3M; Q3 ARR grew 13% y/y to $438.9M, customers with ARR over $100,000 grew 10% to 778; guides FY24 EPS $0.72-$0.73 vs. est. $0.64 and revs $429M-$431M vs. est. $428.4M.

·     Samsara reports (IOT) Q3 adj EPS $0.04 vs. est. $0.01; Q3 revs $237.5M vs. est. $224.73M; raises FY24 EPS view to $0.05-$0.06 from $0.00-$0.02 and boosts FY24 revenue view to $918M-$920M from $896M-$900M (est. $898.76M).

·     UiPath (PATH) Q3 EPS $0.12 vs. est. $0.07; Q3 revs $326M vs. est. $315.6M; Q3 ARR rose 24% y/y to $1.378B; sees Q4 revenue $381M-$386M vs. est. $383.0M.

·     Lattice Semiconductor (LSCC) expanded its stock repurchase program with a new $250M authorization.

·     Salesforce Inc (CRM) files for mixed shelf offering with size not disclosed.

·     Supermicro (SMCI) 2.1M share Spot Secondary priced at $262.00.

·     Dozens of local TV stations owned by Tegna (TGNA), most of them NBC and CBS affiliates, have gone dark on DirecTV in a carriage dispute. The companies failed to reach an agreement before a 5 p.m. PT deadline Thursday. The outage will immediately affect roughly 5 million customers in markets across the U.S.