Early Look

Tuesday, December 5, 2023

Futures	Up/Down	%	Last
Dow	-101.00	0.28%	36,167
S&P 500	-19.25	0.43%	4,557
Nasdaq	-104.50	0.66%	15,764

 

 

Following general weakness on Monday, U.S. futures are looking lower for a second day, following weakness in China after Moody’s cut China’s credit outlook, sending the Shanghai below the 3,000 level. Stocks were mostly lower on Monday as the Dow Jones Industrial Average and S&P 500 index each pulled back from 2023 highs as small caps outperformed with the Russell 2000 rising over 1%. In Asian markets, The Nikkei Index tumbled -455 points to 32,775, the Shanghai Index fell -50 points to 2,972, and the Hang Seng Index plunged -318 points to 16,327. In Europe, the German DAX is up 30 points to 16,436, while the FTSE 100 is down nearly -50 points to 7,465. Moody’s Investors Service cut its outlook on China’s government credit ratings to negative from stable, citing concerns about slowing economic growth, local government debt and the country’s embattled property sector. Treasury yields are lower, the dollar and gold prices flat with modest weakness in oil prices yet again.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -24.85 points, or 0.54%, to 4,569.78.

·     The Dow Jones Industrial Average fell -41.06 points, or 0.11%, to 36,204.44.

·     The Nasdaq Composite dropped -119.54 points, or 0.84%, to 14,185.49.

·     The Russell 2000 Index advanced 19.37 points, or 1.04% to 1,882.02.

 

Economic Calendar for Today

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     9:45 AM ET                  S&P Global Composite PMI Nov-Final…prior 50.7

·     9:45 AM ET                  S&P Global Services PMI Nov-Final…prior 50.8

·     10:00 AM ET                ISM Non-Manufacturing PMI for November…est. 52.0

·     10:00 AM ET                JOLTs Job Openings for October…est. 9.3M (prior 9.553M)

·     4:30 PM ET                   API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AZO CNM CRMT DAKT DBI GIII HOV JILL LE SIG SJM

·     Earnings After the Close: ASAN AVAV BOX HQY MDB OOMA PHY PLAY POWL RENT S SFIX SKIL TOL YEXT

 

Other Key Events:

·     Goldman Sachs 15th Annual Industrials Week, 12/4-12/7, in London

·     Goldman Sachs First Annual “Year-Ahead” Catalyst Clinic, 12/4-12/8 (virtual)

·     Goldman Sachs Financial Services Conference, 12/5-12/6, in New York

·     JMP Securities Hematology and Oncology Summit, (Virtual), 12/5

·     Mizuho Power, Energy & Infrastructure Conference, 12/4-12/5 in New York

·     Mizuho Medical Device and Healthcare Services Conference, 12/4-12/5, in New York

·     Raymond James TMT Conference, 12/4-12/6, in New York

·     RBC Capital Forest Products Conference 12/5, in Toronto

·     San Antonio Breast Cancer Symposium, 12/5-12/9, in San Antonio, TX

·     UBS Global Technology, Media and Telecom Conference, 12/4-12/5, in New York

 

 

Macro	Up/Down	Last
Nymex	-0.12	72.92
Brent	0.12	78.15
Gold	-0.10	2,042.10
EUR/USD	-0.002	1.0816
JPY/USD	-0.16	147.04
10-Year Note	-0.047	4.239%

 

 

World News

·     China Caixin November Services PMI 51.5 above est. 50.5 and vs. previous 50.4; the China Caixin November Composite PMI 51.6; Services Operating index and New Order Index rise to a 3-month high despite being lower than the long-term average.

·     Moody’s Investors Service cut its outlook on China’s government credit ratings to negative from stable, citing concerns about slowing economic growth, local government debt and the country’s embattled property sector.

·     U.S. large-cap ETFs had 14th consecutive weekly inflow (nearly $13 billion) while government bond ETFs had outflows of nearly $4 billion (up from prior week’s outflows of nearly $1 billion) as per @DataArbor.

 

Sector News Breakdown

Consumer

·     Designer Brands (DBI) Q3 adj EPS $0.24 vs. est. $0.48; Q3 revs $786.33M vs est. $829.18M and said Q3 total comparable sales decreased by (-9.3%); cuts FY23 EPS view to 40c-70c from $1.20-$1.50 and lowered FY23 rev view to down high-single digits from down mid- to high-single digits.

·     Nio (NIO) posted a Q3 loss of 4.56B Chinese renminbi, wider than the 4.11B y/y while revenue more than doubled to 19.07B renminbi as vehicle sales rose 46%. On an adjusted basis, the EV maker said it lost 2.28B per share, vs. est. loss of 2.49B renminbi on revenue of 19.3B; margin was 11%, versus 16.4% in the year-earlier quarter.

·     Signet (SIG) forecasts FY adj EPS $9.55 to $10.18, vs. prior forecast $9.55 to $10.14.

·     The Buckle (BKE) announces $2.50 per share special cash dividend.

 

Energy, Industrials and Materials

·     Abcam (ABCM) acquisition by Danaher (DHR) was approved by the High Court of Justice of England and Wales; closing of transaction is expected to occur on December 6.

·     Albemarle (ALB) and Livent (LTHM) downgraded to underweight from neutral at Piper to reflect a significant deterioration of global lithium markets.

·     Kinder Morgan (KMI) forecasts 2024 adj. EBITDA $8.0B; forecasts 2024 DCF/share $2.21; said it expects 5% growth in 2024 in adjusted EBITDA.

 

Financials

·     BMO Capital initiated/assumed coverage of 15 Fintech Stocks noting while Fintech stocks have been rallying in recent weeks, BMO is still bullish on the setup for its coverage for the year ahead. The firm rates SQ, FLT, ADYEN, NVEI, FI, IMXI, MA, and V at Outperform, and RELY, GPN, RPAY, IIIV, AVDX, WU, and PYPL Market Perform. Top Picks (SQ, FLT, and ADYEN).

·     Comerica (CMA) Q3 quarterly average deposits $65.9B vs $74B in Q3 last year, per 8K.

·     Keycorp (KEY) sees Q4 loans as down 1% – 3% vs Q3’23; deposits as relatively stable vs Q3; sees FY 2023 loans up 6% – 9% and deposits flat to down 2%; sees FY23 noninterest income down 7%-9%; sees FY23 net interest income: down 12%-14%.

·     Nasdaq (NDAQ) November equity options volume 254M contracts, -6.3% y/y and European options and futures volume 6.2M contracts, +8.8% y/y.

·     Robinhood Markets Inc (HOOD) said in November 2023, customers contributed roughly $1.4B of net deposits to Robinhood; equity notional trading volumes and options contracts traded were roughly in line with October 2023 levels; November crypto notional trading volumes were roughly 75% above October 2023 levels.

 

Healthcare

·     CRISPR Therapeutics (CRSP) provided an update on its immuno-oncology pipeline of CRISPR/Cas9 gene-edited allogeneic chimeric antigen receptor (CAR) T cell product candidates. The company discontinued its first-gen CAR-T therapy candidates CTX110 and CTX130 to focus and expand on its next-gen candidates CTX112 and CTX131.

·     CVS Health (CVS) back FY23 adjusted EPS view $8.50-$8.70, vs. consensus $8.58 and reaffirmed its FY23 revenue view $351.5B-$357.3B (est. $353.74B) and backs FY23 adjusted operating income view $17.2B-$17.6B; also said it sees 2024 EPS at least $8.50 in-line w/ est. $8.51.

·     EyePoint (EYPT) announces $175M common stock offering.

·     Immunogen (IMGN) said the FDA grants priority review of its Supplemental Biologics License Application for ELAHERE in platinum-resistant ovarian cancer.

·     Merit Medical (MMSI) announces private placement of $550M convertible senior notes.

·     SpringWorks Therapeutics (SWTX) 9.483M share Spot Secondary priced at $29.00.

 

Technology, Media & Telecom

·     GitLab (GTLB) Q3 EPS $0.09 vs. est. loss (-$0.01); Q3 revs $149.67M vs. est. $141.49M; guides Q4 EPS $0.08-$0.09 vs. est. loss (-$0.01) and revs $157M-$158M vs. est. $150.24M

·     AT&T Inc. (T) said it will collaborate with Ericsson (ERIC) to build “a more robust ecosystem of network infrastructure providers and suppliers” in the U.S. The company estimates its spending could be nearly $14 billion over the five-year duration of its contract with Ericsson. Shares of ERIC competitor Nokia (NOK) are sliding pre-mkt after the news.

·     Comcast (CMCSA)said its Peacock service has reached 30 million paid subscribers and the platform saw $2.8 billion in losses this year (coming in under the $3 billion projected by the company back in January) and expects that figure to be the peak loss heading into 2024.

·     Take-Two Interactive (TTWO) shares fall -5% after the company’s Rockstar Games unit released the first trailer for the highly anticipated Grand Theft Auto VI video game, which will be released in 2025, without an exact release date seen as a source of disappointment.