Early Look

Tuesday, February 4, 2025

U.S. futures are looking slightly lower for a 3^rd straight morning after rebounding and paring losses Monday/rising after the close last night following news that Canada joined Mexico in supporting their borders to the U.S. by deploying 10,000 troops, appeasing the U.S. for the time being as the tariffs imposed this past weekend by President Trump (25% each to Mexico and Canada) have been paused by 30-days. In addition, Canada said it is making new commitments to appoint a Fentanyl Czar, will list cartels as terrorists, ensure 24/7 eyes on the border, and launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. However, U.S. futures dipped overnight after China imposed targeted tariffs on American imports and put several U.S. companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Donald Trump. China’s additional tariffs are estimated to about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff according to UK based research firm Capital Economics. China’s new measures include a 15% levy on U.S. coal and LNG and 10% for crude oil, farm equipment and a small number of trucks as well as big-engine sedans shipped to China from the U.S. China said it was starting an anti-monopoly investigation into Alphabet Inc’s Google and put both PVH and biotechnology company Illumina on a list for potential sanctions. In Asian markets, The Nikkei Index gained 278 points to 38,798, the Shanghai Index remained closed, and the Hang Seng Index jumped 572 points to 20,789. In Europe, the German DAX is up 13 points to 21,441, while the FTSE 100 is down -10 points to 8,572. A busy day of earnings including Merck, Pepsi this morning and Alphabet, AMD, Amgen, and Chipotle tonight. Also a busy day of economic data with Factory Orders, Durable Goods and the first read of jobs this week with JOLTs. Treasury yields are higher, while the dollar, gold and Bitcoin prices all slip along with oil prices.

• The Dow Jones Industrial Average fell -122.75 points, or 0.28%, to 44,421.91.
• The Nasdaq Composite slumped -235.49 points, or 1.20%, to 19,391.96.
• The Russell 2000 Index declined -29.28 points, or 1.28% to 2,258.41.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 10:00 AM ET                Durable Goods Orders M/M for December
• 10:00 AM ET                Factory Orders M/M for December…est. (-0.7%)
• 10:00 AM ET                JOLTs Job Openings for December…est. 8.0N (prior 8.098M)
• 11:00 AM ET                Fed’s Bostic Speaks in Moderated Conversation on Housing
• 2:00 PM ET                   Fed’s Daly Speaks in Moderated Panel
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: AAT AFG ALGT AMD AMGN APAM ATEN ATO AZEK AZPN BDN CMG COLM CRUS CSL CVRX DEI DOX DXC EA EGHT ENPH ENVA ESS FICO FMC GBDC GOOGL HRB ICHR IEX INTA JKHY JNPR KE KTCC LARK LUMN MAT MDLZ MOD MRCY MTCH MWA NOV OI OMC OSCR PRU SKY SNAP SPG THG UNM VLTO VOYA VRNS WU ZWS

• China Caixin Services PMI for January

• Estée Lauder Cos. Inc.’s (EL) posted Q4 adj EPS $0.62 vs. est. $0.32; Q4 sales $4B vs. est. $3.98B; sees Q3 organic net sales growth -10% to -8% and EPS $0.24-$0.34 vs. et. $0.63 and total sales growth down -10%.
• J&J Snack Foods (JJSF) Q1 adj EPS $0.33 vs est. $0.59, adj EBITDA $25.3Mm vs est. $33.55Mm on sales $362.6Mm vs est. $361.67Mm; announces new $50M stock repurchase authorization.
• PepsiCo (PEP) Q4 EPS core $1.96 vs. est. $1.94; Q4 revs $27.78B vs. est. $27.89B; trimmed its full-year outlook to a low-single-digit increase in organic revenue; announces 5% increase to annualized dividend to $5.69 per share.

• AECOM (ACM) Q1 adj EPS $1.31 vs. est. $1.10; Q1 revs $4.01B vs. est. $4.11B; narrows FY25 adj EPS view to $5.05-$5.20 from $5.00-$5.20 (est. $5.10); narrows FY25 adj EBITDA view to $1.175B-$1.21B from $1.17B-$1.21B.
• Cabot Corp. (CBT) Q1 adj EPS $1.76, vs. est. $1.74; Q1 sales $955M vs. est. $993.8M; still sees FY adj EPS $7.40 to $7.80, vs. $7.61; Q1 Reinforcement Materials segment EBIT of $130M; up 1% y/y and Q1 Performance Chemicals segment EBIT of $45M; up 32% y/y.
• FlexSteel industries (FLXS) Q2 EPS $1.62 vs est. $0.74 on revs $108.483Mm vs est. $104.61Mm, gr mgn 21%; guides Q3 sales +3-7% vs est. +2.1%; sees FY sales +5.5-8.0% vs est. +4.88%.
• New Jersey Resources (NJR) Q1 EPS $1.32 vs est. $1.07 on revs $488.4Mm vs est. $750Mm; guides FY25 NFEPS $3.05-3.20 vs est. $3.10, still sees long-term net financial EPS growth +7-9%.
• Woodward Inc. (WWD) Q1 adj EPS $1.35, vs est. $1.18, adj EBIT $107Mm vs est. $98.7Mm on sales $773Mm vs est. $775Mm; says on track to deliver FY guidance, narrowed FY adj EPS guide to $5.85-6.25 vs est. $6.07.

• Everest Group (EG) Q4 operating EPS loss (-$18.39) vs. consensus loss (-$17.42); increased current accident yr losses by $229M for the group; said California wildfire pre-tax net catastrophe loss estimated to be in the range of $350M-$450M for Q1; Q4 $4.7 billion in gross written premium with year-over-year growth of 7.2% for the Group, 12.6% for Reinsurance, and -1.6% for Insurance on a comparable basis.
• K Force (KFRC) Q4 EPS $0.60 vs est. $0.59 on revs $343.8Mm vs est. $342.05Mm; guides Q1 revs $330-338Mm vs est. $339.82Mm and EPS $0.44-0.52 vs est. $0.52.
• MGIC Investment (MTG) Q4 EPS $0.72 vs est. $0.67, adj op Inc $184.5Mm on revs $301.4Mm vs est. $303.53Mm.

• Healthpeak (DOC) Q4 AFFO/shr $0.40 vs est. $0.45 on revs $698Mm vs est. $688.77Mm; guides FY AFFO/shr $1.81-1.87 vs est. $1.80.
• Illumina (ILMN) shares slide after China said it was starting an anti-monopoly investigation into Alphabet Inc’s Google and put both PVH and biotechnology company Illumina on a list for potential sanctions.
• Regeneron (REGN) Q4 EPS $12.07 vs. est. $11.19; Q4 revs $3.79B vs. est. $3.75B; said sees 2025 CapEx $850M-$975M and sees 2025 non-GAAP R&D $5.00B-$5.20B.

• Infineon (IFNNY) shares rose in Europe after results and guidance; upgraded its full-year revenue outlook and reported quarterly results and guidance above expectations; guided for flat-to-slightly up Automotive revenue in FY25; Power & Sensor segment is also expected to be up significantly in FY25.
• Fabrinet (FN) Q2 EPS $2.61 vs. est. $2.49; Q2 revs $833.61M vs. est. $813.57M; sees Q3 EPS $2.55-$2.63 vs. consensus $2.55 and guides Q3 revenue $850M-$870M vs. est. $825.05M; Board of directors approved expansion of shr repurchase of up to additional $100.0M.
• Kyndryl Holdings (KD) initiated a $300M share buyback program; Q3 EPS $0.89 vs. est. $0.41; Q3 revs $3.74B vs. est. $3.81B; sees Q4 revenue up 2% from $3.74B in Q3; sees FY25 Adjusted EBITDA margin of at least 16.7%; is raising its earnings and cash flow outlook for its FY25.
• Lumentum (LITE) announced that Michael Hurlston has been appointed President and Chief Executive Officer and as a Director of the Company, effective February 7; raises Q2 adj EPS view to $0.40-$0.42 from $0.30-$0.40 and boosts Q2 revenue view to roughly $402M from $380M-$400M (est. $389.34M).
• Rambus Inc. (RMBS) Q4 EPS $0.58 vs est. $0.58 on revs $161.1Mm vs est. $158.47Mm, op mgn 36%; guides Q1 product revs $72-78Mm, licensing billings $59-65Mm and contract & other revs $22-28Mm.
• Salesforce (CRM) is cutting more than 1,000 jobs as it simultaneously hires workers to sell new artificial intelligence products, Bloomberg News reported on Monday.
• Super Micro (SMCI) shares rise after saying it will share Q2 business update on Feb. 11. On Dec. 2, 2024, SMCI said its independent committee review found no evidence of fraud/misconduct on the management’s part. Days later co got extension until Feb. 25 from Nasdaq to file delayed annual and quarterly reports.
• Synaptics (SYNA) guides Q2 revs $267Mm vs est. $265.14Mm and adj EPS $0.65-1.05 vs est. $0.72; announces President/CEO stepping down.