Morning Preview: January 30, 2024

Early Look

Tuesday, January 30, 2024

Futures

Up/Down

%

Last

Dow

-60.00

0.16%

38,428

S&P 500

-6.25

0.12%

4,948

Nasdaq

-7.50

0.04%

17,698

 

 

After surging on Monday to fresh all-time highs for the S&P, Nasdaq, and Dow Jones Industrials, US futures are pointing to muted declines as the onslaught of mega cap earnings begins today, and as investors await the FOMC policy meeting tomorrow afternoon. Major US earnings tonight including Alphabet and Microsoft are expected in the tech sector, with results from UPS weighing on transports early on lower guide and GM giving the auto industry a boost on results/guidance. The S&P 500 index posted its 6th record close of 2024 on Monday while the Nasdaq 100 closed at record highs as well as the stock buying euphoria continued in some of the largest mega cap tech companies yet again with AMZN, META, and MSFT all posting fresh all-time highs ahead of earnings for all three this week. In Asian markets, The Nikkei Index rose 38 points to 36,065, the Shanghai Index tumbled -52 points or 1.83% to 2,830, and the Hang Seng Index fell -373 points to 15,703. In Europe, the German DAX is up 30 points to 16,971, while the FTSE 100 rises 40 points to 7,672 as European stocks look set to rise for a fifth straight session as data showed the euro zone unexpectedly avoided a recession in the latter half of 2023. It has been a three-month rally to record highs for major averages, with a massive week of earnings, jobs data (JOLTs today, ADP tomorrow, claims Thursday and nonfarm payrolls Friday), and the FOMC tomorrow. All eyes waiting!

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 36.96 points, or 0.76%, to 4,927.93.
  • The Dow Jones Industrial Average rose 224.02 points, or 0.59%, to 38,333.45.
  • The Nasdaq Composite gained 172.68 points, or 1.12%, to 15,628.04.
  • The Russell 2000 Index advanced 33.09 points, or 1.67% to 2,011.42.

Economic Calendar for Today

  • 7:45 AM ET                  ICSC Weekly Retail Sales
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 9:00 AM ET                  Monthly Home Prices M/M for November
  • 9:00 AM ET                  S&P CaseShiller 20-City M/M for November…est. +0.5%
  • 10:00 AM ET                JOLTs Job Openings for December…est. 8.75M (prior 8.79M)
  • 10:00 AM ET                Consumer Confidence for January…est. 115.0 (prior 110.7)
  • 4:30 PM ET                   API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AOS CATC CVLT DHR EAT GLW GM HCA HESM HOPE HUBB JBLU MAN MDC MPC MPLX MSCI NVR OSK PFE PHM PII UPS
  • Earnings After the Close: AMD APAM AX BXP EA ENVA EQR FBIN FCF GOOGL HA JNPR LC LFUS MANH MBUU MDLZ MOD MSFT MTCH POWL RHI SBUX SWKS SYK TER UMBF UNM

Other Key Events:

  • China NBS Manufacturing for January
  • China NBS Non-Manufacturing for January

 

 

Macro

Up/Down

Last

Nymex

-0.93

76.75

Brent

-0.07

82.33

Gold

6.60

2,051.20

EUR/USD

0.0008

1.0841

JPY/USD

-0.19

147.31

10-Year Note

-0.029

4.062%

 

World News

  • The euro zone’s seasonally adjusted GDP was flat compared with the previous quarter and expanded by 0.1% versus the previous year. In a preliminary estimate, the euro area was seen posting 0.5% growth over the whole of 2023.
  • UK shop price inflation dropped to 2.9% in January from 4.3% in December, driven by heavier discounting of goods in January sales this year than in 2023. Non-food prices were up 1.3%, the least since February 2022.
  • Spain’s inflation rose 3.5% in the 12 months through January driven by higher electricity prices, up from a 3.3% increase in the period through December, preliminary data from the National Statistics Institute showed. Spanish 12-month national consumer prices rose 3.4% through January, up from a 3.1% increase in December.

Sector News Breakdown

Consumer

  • General Motors (GM) Q4 adj EPS $1.24 vs. est. $1.16; Q4 revs $42.98B vs. est. $38.97B; forecasts 2024 adj EPS $8.50 to $9.50, above est. $7.70; sees FY adj auto free cash flow $8B to $10B and adj Ebit $12B-$14B, vs. est. $10.96B; expects overall EV sales will rise this year to 10% of the U.S. market from 7% in 2023.
  • Dillard’s, Inc. (DDS), Citi (C) and Mastercard (MA) announced that the companies have entered into new agreements to provide a credit card program for Dillard’s customers.
  • M.D.C. Holdings (MDC) Q4 EPS $1.56 vs. est. $1.49; Q4 revs $1.31B vs. est. $1.29B.
  • Polaris (PII) Q4 adj EPS $1.98 vs. est. $2.57; Q4 revs $2.29B vs. est. $2.24B; expects 2024 sales to be down five to seven percent versus 2023 and expects adj diluted eps from continuing operations to be down 10%-15% versus 2023.
  • PulteGroup (PHM) raises share repurchase authorization by $1.5B; Q4 EPS 3.28 vs. consensus $3.22 and reports Q4 revenue $4.29B vs. est. $4.48B.
  • Whirlpool (WHR) Q4 ongoing EPS $3.85 vs est. $3.56 on sales $5.09B vs est. $4.984B; guides FY24 net sales $16.9B vs est. $19.33B but flat on a like-for-like basis, FCF $550-650Mm, ongoing EBIT mgn 6.8%, ongoing EPS $13.00-15.00 vs est. $15.78.

Energy, Industrials and Materials

  • Cleveland Cliffs (CLF) Q4 EPS loss (-$0.31) vs. est. loss (-$0.04); Q4 revs $5.11B vs. est. $5.15B; sees Q1 adjusted EBITDA meaningfully above that of Q4; says even with UAW labor strike late in Q3 and into Q4, automotive steel demand remained consistently strong, as anticipated; sees FY24 steel shipment volume at 16.5M tons vs. 16.4M in FY23 and said sees Capital expenditures of $675M to $725M.
  • Crane Inc. (CR) Q4 adj EPS $0.90 vs. est. $0.82; Q4 revs $533M vs. est. $520.59M; Q4 adj operating profit $74.6M vs. est. $69M; Q4 adj operating margin 14%; sees year EPS $4.55-$4.85 vs. est. $4.73.
  • Graco (GGG) Q4 adj EPS $0.80 vs. est. $0.79; Q4 revs $566.6M vs. est. $564.21M; says initiating full-year 2024 revenue guidance of low single-digits on an organic, constant currency basis.
  • Helmerich & Payne (HP) Q1 EPS $0.94 vs est. $0.72 on revs $594Mm vs est. $661.27Mm; expect Q2 North America Solutions direct margins to be between $255-$275M; expect to exit the quarter between approximately 154-159 contracted rigs; maintains FY24 capex view of $450M-$500M.
  • Nucor (NUE) Q4 EPS $3.16 vs est. $2.90 on sales $7.7B vs est. $7.688B, adj EBITDA $1.36B vs est. $1.299B; expects 2024 strong year; sees Q1 EPS up sequentially.
  • PotlatchDeltic (PCH) Q4 adj EPS $0.12 vs est. $0.03 on revs $254.5Mm vs est. $240.1Mm, adj EBITDA $40.7Mm vs est. $39.71Mm, adj EBITDA mgn 16.0%.
  • UPS Inc. (UPS) shares fall -4%; Q4 adj EPS $2.47 vs. est. $2.46; Q4 revs $24.9B miss consensus $25.45B; raises quarterly dividend to $1.63 per share; sees FY24 revenue $92B-$94.5B below consensus $95.57B; sees FY24 consolidated adjusted operating margin to range from approximately 10.0% to 10.6%.
  • Woodward Inc. (WWD) Q1 adj EPS $1.45 vs est. $1.10 on revs $786.73Mm vs est. $748.29Mm, adj EBIT $119Mm vs est. $95.26Mm; guides FY sales $3.15-3.3B vs prior $3.1-3.25B and est. $3.199B, adj FCF $300-350Mm vs prior $275-325Mm, adj EPS $5.00-5.40 vs prior $4.75-5.20 and est. $5.08.

Financials

  • Morgan Stanley upgraded shares of Citigroup (C) to Overweight from Underweight (tgt to $65 from $46), Bank America (BAC) to Overweight from Equal weight (tgt to $41 from $32) and Goldman Sachs (GS) to Overweight from Equal Weight (tgt to $449 from $333), increasing its big U.S. bank price targets by a median 16% as it rolls its valuation year from 2024 to 2025.
  • Alexandria Real Estate (ARE) Q4 AFFO/shr $2.28 vs est. $2.29; sees FY24 FFO/shr $9.37-9.57 vs est. $8.89.
  • Equity Lifestyle (ELS) Q4 normalized FFO $0.71 vs. est. $0.72; Q4 revs $360.6M vs. est. $356.78M; raises annual dividend 6.7% to $1.91 per share; forecasts 2024 normalized FFO/shr $2.83 to $2.93, vs. est. $2.92.
  • ServisFirst Bancshares (SFBS) Q4 adj EPS $0.91 vs est. $0.86 on NII $101.687Mm vs est. $99.45Mm, credit loss provision $3.582Mm, BV/shr $26.45.

Healthcare

  • Danaher (DHR) Q4 adj EPS $2.09 vs. est. $1.89; Q4 revs $6.41B vs. est. $6.09B; sees Q1 revenue down high-single digits, vs. consensus $5.73B; sees FY24 revenue down low-single digits vs. consensus $24.05B; from Q1 will no longer provide guidance for or report base business core revenue as pandemic has transitioned to an endemic state.
  • Vertex Pharmaceuticals (VRTX) announced positive results from its Phase 3 program for the selective NaV1.8 inhibitor, VX-548, in the treatment of moderate-to-severe acute pain.

Technology, Media & Telecom

  • BigCommerce (BIGC) forecasts Q4 adj operating income to exceed high ends of view.
  • Calix Inc. (CALX) Q4 EPS $0.43 vs. est. $0.36; Q4 revs $264.7M vs. est. $264.39M; authorized an additional $100M to maintain existing buyback; sees Q1 EPS $0.17-$0.23 below consensus $0.38 and revs $225M-$231M vs. est. $267.57M.
  • Celestica (CLS) Q4 adj EPS $0.76 vs. est. $0.68; Q4 revs $2.14B vs. est. $2.08B; sees Q1 adj EPS $0.67-$0.77 vs. est. $0.60 and sees Q1 revenue $2.025B-$2.175B above consensus $1.99B; raises FY24 adjusted free cash flow view to $200M or more.
  • F5 Networks (FFIV) Q1 adj EPS $3.43 vs est. $3.04 on revs $693Mm vs est. $685.39Mm, adj gr mgn 83.1%, adj EBIT $246Mm vs est. $228.45Mm; guides Q2 revs $675-695Mm vs est. $675Mm and adj EPS $2.79-2.91 vs est. $2.95; sees FY adj EPS +6-8% vs prior +5-7% and est. +6.02% on lower expected tax rate.
  • Harmonic Inc. (HLIT) Q4 adj EPS $0.13 vs. est. $0.10; Q4 revs $167.1M vs. est. $159.8M; Q4 adj net income $14.7M vs. est. $11.8M; says continuing strategic review process for our video business, conservatively guiding our video business for 2024.
  • Sanmina (SANM) Q1 adj EPS $1.30 vs es.t $1.22 on revs $1.875B vs est. $1.87B, adj pre-tax ROIC 22.7%; guides Q2 revs $1.825-1.925B vs est. $1.803B and adj EPS $1.20-1.30 vs est. $1.09.
  • Super Micro (SMCI) Q2 adj EPS $5.59 tops consensus $4.93 and revs $3.66B vs. est. $3.06; raises FY24 revs guidance above consensus and sees Q3 net sales $3.7B-$4.1B, above est. $3.07B and sees Q3 adj EPS $5.20-$6.01 vs. est. $4.65; boosts FY revs to $14.3B-$14.7B, from prior $10B-$11B.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.