Early Look

Friday, December 6, 2024

S&P futures (Spuz) are looking lower, down slightly near the overnight lows (6,078.25) as investors await the jobs report at 8:30 AM ET. Payroll data is expected to show a rebound from the weak reading in October (est. 200K after Oct reading of +12K). Markets also get the final slate of Fed speakers today, heading into the quiet period ahead of their Dec. 17-18 meeting as Fed Governor Michelle Bowman, Chicago Fed President Austan Goolsbee, San Francisco Fed President Mary Daly and Cleveland Fed President Beth Hammack are all due to speak or publish remarks through the day. Market expectations are currently for another 25-bps rate cut in two weeks by the Fed, bringing the year total to 100bps of cuts. Despite stocks finishing Thursday lower, S&P futures (SPUZ) still extended its streak to 13 consecutive days of making higher highs (hit high of 6,107.25, topping the 12/4 high of 6,102.75). Futures overnight high is currently 6,089, so it would have to top yesterday’s 6,107.25 to continue to streak. Some big movers to the upside overnight on earnings as retailers LULU and ULTA are looking higher, as well as tech names ASAN, DOCU, GTLB, RBRK. U.S. stocks are mixed on the week as the S&P and Nasdaq look to extend weekly gains while Smallcaps have slipped this week. Year to date, the S&P 500 is up about 27% this year, with the worst peak-to-trough drawdown being just 8.4%, and there have been 56 new all-time highs – that’s a new high 1 out of every 4 trading days! There have also been just 3 down days of -2% or worse in what has been a very impressive rally all year long! In Asian markets, The Nikkei Index declined -304 points to 39,091, the Shanghai Index rose 35 points to 3,404, and the Hang Seng Index jumped 305 points to 19,865. In Europe, the German DAX is up 35 points to 20,394, while the FTSE 100 id won a few points to 8,345.

• The Dow Jones Industrial Average fell -248.33 points, or 0.55%, to 44,765.71.
• The Nasdaq Composite dipped -34.86 points, or 0.18%, to 19,700.26.
• The Russell 2000 Index declined -30.39 points, or 1.25% to 2,396.17.

• 8:30 AM ET                  Private Payrolls for November…est. +200K (prior -28K)
• 8:30 AM ET                  Manufacturing Payrolls for November…est. +28K (prior -46K)
• 8:30 AM ET                  Unemployment rate for November…est. 4.2% (prior 4.1%)
• 8:30 AM ET                  Average hourly earnings M/M for November…est. +0.3% (prior +0.4%)
• 10:00 AM ET                University of Michigan Confidence, Dec-P…est. 73.0 (prior 71.8
• 1:00 PM ET                   Baker Hughes Weekly rig count data
• 3:00 PM ET                   Consumer Credit for October…est. +$10.0B

• Lululemon Athletica (LULU) Q3 EPS $2.87 vs. est. $2.75; Q3 revs rose 9% y/y to $2.4B vs. est. $2.36B; Q3 gross margins 58.5%; authorizes $1.0B boost in stock buyback program; Q3 Comparable sales increased 4%, or 3% on a constant dollar basis; raised its annual revenue forecast to $10.452B-$10.487B above prior $10.375B-$10.475B.
• Tilly’s (TLYS) Q3 EPS ($0.43) vs est. ($0.37) on revs $143.442Mm vs est. $140.84Mm; guides Q4 net sales $149-156Mm vs est. $168.51Mm, comps -9% to -5%, product margin up approx 200bps, EPS ($0.43) – ($0.32) vs est. ($0.14); says comps through December 3 were -153% with meaningfully improved product margins.
• Ulta Beauty (ULTA) Q3 EPS $5.14 vs est. $4.54 on sales $2.53B vs est. $2.226B; guides FY sales $11.1-11.2B vs prior $11.0-11.2B and est. $11.171B, comps -1% – 0% vs prior -2% – 0%, op mgn 12.9-13.1% vs prior $12.7-13.0% and EPS $23.20-23.75 vs prior $22.60-23.50 est. $23.15.
• Victoria Secret (VSCO) Q3 adj EPS loss (-$0.50) vs. est. loss (-$0.62); Q3 revs $1.35B vs. est. $1.29B; total comparable sales for the Q3 increased 3%; sees Q4 adj EPS $2.00-$2.30 vs. consensus $2.09 and sees Q4 revenue up 2%-4%; Guides Q4 adj operating income $240M-$270M vs. est. $239.4M; raises FY24 sales view to 1%-2%.
• Zumiez (ZUMZ) Q3 EPS $0.06 vs est. $0.03 on sales $222.475Mm vs est. $222.04Mm; says Q4-to-date sales +10%, comps +2.9%; sees Q4 sales $284-288Mm vs est. $283.48Mm with consolidated op mgn 6.0-7.5% and EPS $0.83-0.93 vs est. $0.96.
• BRP Inc. (DOOO) raises FY25 normalized EPS view to C$4.25-C$4.75 from C$2.75-C$3.25 while lowers FY25 revenue view to C$7.6B-C$7.8B from C$7.8B-C$8B. Raises FY25 normalized EBITDA view to C$1.02B-C$1.07B from C$890M-C$940M. Lowers FY25 capital expenditures view to C$430M from C$475M.
• Duckhorn Portfolio (NAPA) Q1 adj EPS $0.16 vs est. $0.16, adj EBITDA $48.6Mm on revs $122.9Mm vs est. $127.98Mm, adj gr mgn 51.9%.
• Altria Group (MO) upgraded to Buy at Bank America and raise tgt to $65 from $55.
• Boyd Gaming (BYD) reports an added $500M share buyback.
• Smith & Wesson Brands (SWBI) Q2 adj EPS $0.11 vs est. $0.17 on revs $129.7M vs est. $133.52M, gr mgn 26.6%.
• WingStop (WING) announces an additional $500M share repurchase authorization.

• Rocket labs (RKLB) schedule a launch window opening on 12/18 to deploy a Synspective satellite — enabling real-time, all-weather Earth observation for disaster relief, infrastructure monitoring & security applications.
• Transocean (RIG) upgraded to Neutral from underweight at JP Morgan with $5 tgt citing valuation and its expectation that earnings will be the most resilient in its coverage on the back of the co contracted backlog.

• British insurer Aviva (AVVIY) has agreed to buy smaller rival Direct Line (DIISY) in a sweetened 3.61-billion-pound ($4.60 billion) cash-and-stock deal that will create the UK’s largest home and motor insurer – Reuters.
• HSBC (HSBC) announced several senior management departures and appointments on Thursday, as CEO Georges Elhedery completed the first phase of a sweeping overhaul aimed at streamlining costs. Global Private Banking and Wealth head Annabel Spring was among the most senior newly announced departures.

• Petco Health (WOOF) Q3 adj EPS ($0.02) vs est. ($0.04) on revs $1.51B vs est. $1.501B; guides Q4 net revs about $1.55B vs est. $1.574B and adj EPS $0.00-0.02 vs est. $0.03.
• Veeva Systems (VEEV) Q3 adj EPS $1.75 vs est. $1.58 on revs $699.207mm vs est. $688.35Mm; guides Q4 revs $696-699Mm vs est. $701.53Mm and adj EPS about $1.57 vs est. $1.54.

• Domo Inc. (DOMO) Q3 EPS loss (-$0.08) vs. est. loss (-$0.15); Q3 revs $79.8M vs. est. $77.6M; Q3 billings were $73.4M; Q3 Subscription Remaining Performance Obligations (RPO) was $354.1M, rising 3% y/y; raises FY25 revenue view to $315.5M-$316M from $313M-$315M.
• DocuSign (DOCU) Q3 adj EPS $0.90 vs. est. $0.87; Q3 revs $754.8M vs. est. $745.33M; Q3 billings were $752.3M, a 9% y/y increase; sees Q4 revenue $758M-$762M vs. consensus $756.2M and guides Q4 subscription revenue $741M-$745M and billings $870M-$880M.
• GitLab Inc. (GTLB) Q3 adj EPS $0.24 vs est. $0.16 on revs $196Mm vs est. $187.9Mm, adj gr mgn 91%; guides Q4 revs $205-206M vs est. $204.37M, adj op Inc $28-29M vs est. $23.14M and adj EPS $0.22-0.23 vs est. $0.14.
• Guidewire Software (GWRE) Q1 adj EPS $0.43 vs. est. $0.30; Q1 revs $262.9M vs. est. $253.9M; guides Q2 revs $282M-$288M vs. est. $279.3M; raises FY25 revenue view to $1.155B-$1.167B from $1.135B-$1.149B (est. $1.14B); Q1 subscription revs rose 33% to $169.7M.
• HashiCorp Inc. (HCP) Q3 adj EPS $0.13 vs est. $0.05 on revs $173.4Mm vs est. $163.94Mm
• Hewlett Packard Enterprises (HPE) Q4 EPS $0.58 vs. est. $0.56; Q4 revs $8.46B vs. est. $8.26B; Q4 ARR rose 49% y/y to $1.9B; Q4 Server revenue was $4.7B, up 32% y/y in actual dollars and up 31% in constant currency, with 11.6% operating profit margin, compared to 10.1% from the prior-year period; sees JNPR deal closing in early 2025; guided Q3 EPS $0.47-$0.52 vs. est. $0.49 and Q1 revs up mid-teens.
• Rubrik (RBRK) Q3 EPS loss (-$0.21) vs. est. loss (-$0.40); Q3 revs $236.2M vs. consensus $217.5M; said has surpassed $1 billion in Subscription ARR, growing 38% y/y; sees Q4 EPS loss (-$0.41)-(-$0.37), vs. est. loss (-$0.41); sees Q4 revenue $231.5M-$233.5M vs. est. $225.1M.
• Semtech (SMTC) 9.127M share Secondary priced at $63.00
• UiPath (PATH) Q3 adj EPS $0.11 vs. est. $0.07; Q3 revs rose 8.8% y/y to $355M vs. est. $347.72M; sees Q4 revenue $422M-$427M, vs. consensus $424.03M and sees Q4 ARR $1.669B-$1.674B.