Early Look

Thursday, January 11, 2024

U.S. futures are building on yesterday’s gains led by technology as Nasdaq futures outperform ahead of the mornings all important inflation data point. Treasury yields are lower, with the 10-yr down 4-bps to 3.98% and stock futures mostly higher as investors are betting for the likelihood of another sign of decelerating inflation in the CPI report at 8:30, boosting hopes for more aggressive rate hikes by the Fed, possibly seeing cuts as early as March. The headline CPI M/M estimate tomorrow is for a gain of +0.2% (vs. +0.1% prior) and Headline CPI Y/Y to rise +3.2% (vs. prior +3.1%). The core CPI, or ex: food & energy expected to rise +0.3% M/M (same as prior month) and core CPI Y/Y est. +3.8% (vs. +4.0% prior). We also get weekly jobless claims, but the CPI will be the focus. Stocks closed higher Wednesday in a melt up all day (until a brief slide the last 30-minutes after Fed Williams commentary) as the S&P 500 rose 0.57%, the Dow gained 0.45%, and the Nasdaq advanced 0.75%. In Asian markets, The Nikkei Index rose 608 points to 35,049, the Shanghai Index gained 8 points to 2,886, and the Hang Seng Index rose 204 points to 16,302. In Europe, the German DAX is up 44 points to 16,734, while the FTSE 100 is flat at 7,650. Oil prices rise as an oil tanker has reportedly been boarded by Iranians in the Gulf of Oman, prompting crude upside and denting risk appetite somewhat. Lastly, Bitcoin prices jumped over 2% topping $47,000 after the SEC approved 11 spot bitcoin exchange-traded funds.

• The Dow Jones Industrial Average rose 170.57 points, or 0.45%, to 37,695.73.
• The Nasdaq Composite jumped 111.94 points, or 0.75%, to 14,969.65.
• The Russell 2000 Index advanced 2.23 points, or 0.11% to 1,970.26.

• 8:30 AM ET                  Consumer Price Index (CPI) Y/Y for December…est. +3.2%
• 8:30 AM ET                  Core CPI – Ex Food & Energy M/M for December…est. +0.3%
• 8:30 AM ET                  Core CPI – Ex Food & Energy Y/Y for December…est. +3.8%
• 8:30 AM ET                  Weekly Jobless Claims…est. 210K
• 8:30 AM ET                  Continuing Claims…est. 1.871M
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 11:00 AM ET                Cleveland Fed CPI for December
• 1:00 PM ET                   US Treasury to sell $21B in 30-year notes.
• 2:00 PM ET                   Federal Budget for December…est. (-$65.25B)

• JP Morgan 42nd Annual Healthcare Conference, 1/7-1/11, in San Francisco, CA
• China CPI, PPI, Import and Exports for December

• Bitcoin ETFs & reported fees: Grayscale (GBTC) 1.5%, Hashdex (DEFI) 0.9%, Valkyrie (BRRR) 0.49%, Invesco (BTCO) 0.39%, Wisdom Tree (BTCW) 0.3%, Franklin (EZBC) 0.29%, Blackrock (IBIT) 0.25%, Fidelity ($FBTC) 0.25%, VanEck (HODL) 0.25%, Ark 21 (ARKB) 0.21% and Bitwise (BITB) 0.2%.
• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 24.4 vs 25.1 last week. Bulls remain unchanged at 48.6%, Neutrals fall to 27.2% from 27.9%, Bears rise to 24.2% from 23.5%.
• Short interest on the Nasdaq fell 4.2% in the second half of December, the exchange said on Wednesday. As of Dec. 29, short interest fell to about 12.375 billion shares, compared with 12.922 billion shares as of Dec. 15.
• The Bank of Japan (BOJ) is considering lowering its inflation outlook for fiscal year 2024 to the mid-2% range in the upcoming quarterly forecast, Jiji news agency reported on Thursday.
• The Bank of Korea left its key policy interest rate unchanged at 3.50% as expected for the eighth time. The decision was unanimous, and 5 board members see the current 3.50% policy rate as the peak.

• KB Homes (KBH) Q4 EPS $1.85 vs. est. $1.69 and Q4 revs fell -14% y/y to $1.67B vs. est. $1.62B; Q4 Homes delivered decreased 10% to 3,407, average selling price was $487,300, compared to $510,400, housing gross margin 20.7% vs. 22.4% y/y; Q4 backlog fell -28% y/y to 5,510 vs. est. 6,166; sees FY24 Housing revenue $6.4B-$6.8B and guides FY24 average selling price $480,000-$490,000.
• Smith Douglas Homes (SDHC) announced the pricing of the initial public offering of 7,692,308 shares of its Class A common stock at a price to the public of $21.00 per share.
• Yum! Brands (YUM) downgraded to Equal Weight from Overweight at Wells Fargo.

• American Electric (AEP) downgraded to Neutral from Buy at Mizuho.
• Crude oil prices jump after an oil tanker was boarded by people in military-style uniforms off the coast of Oman. WTI rises 1.6% to trade near $72.50 while Brent is near $78 a barrel.
• Barnes Group (B) announced that it has entered into a definitive agreement to sell its Associated Sprin and Hanggi businesses to One Equity Partners in a transaction valued at $175M.
• Commercial Metals (CMC) increased share repurchase authorization by $500M.
• L3Harris Technologies (LHX) upgraded to Overweight from Neutral at JPMorgan.
• SunPower (SPWR) downgraded to Neutral from Positive at Susquehanna.

• Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of December 31, 2023, totaling $150.2 billion.
• Citigroup Inc (C) said it recorded a $1.3 billion reserve build in q4 related to increases in transfer risk associated with exposures outside the U.S.; $1.7B charge to operating expenses in quarter.
• Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1.46 trillion at December 31, 2023, compared to $1.41 trillion at November 30, 2023. This month’s increase in AUM reflected the impact of positive markets and long-term net inflows.
• Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,585.3 billion, an increase of 2.8% compared to the previous month-end. The firm delivered net long-term inflows of $5.1 billion in the month. Non-management fee earning net outflows were $1.3 billion and money market net outflows were $13.0 billion.
• Victory Capital Holdings (VCTR) assets under management of $166.6B as of December 31, 2023, and average assets under management for December of $163.5B. Reported long-term net flows in the fourth quarter of -$1.1B.
• Virtus Investment Partners, Inc. (VRTS) preliminary assets under management of $172.3 billion as of December 31, 2023. The increase from September 30, 2023, primarily reflects market performance and net inflows in retail separate accounts, partially offset by net outflows in open-end funds and institutional accounts.

• Infosys (INFY) Q3 quarterly profit estimates missed and tightened its full-year revenue forecast on weak demand from clients amid global economic uncertainty; said Q3 net profit fell 7.3% to 61.06 billion rupees ($735.55 million) vs an expected a profit of 61.67 billion rupees; revised its revenue growth forecast to 1.5%-2% on a constant currency basis for the full year from 1%-2.5% previously.
• Infinera (INFN) said sees preliminary Q3 EPS, revenue within or exceeding guidance.