Early Look

Tuesday, June 4, 2024

U.S. futures are pointing to a lower open, led by sharp declines in energy stocks as oil prices tumble further this week and markets await potential catalysts. With earnings in the rear-view mirror for the quarter, attention turns to jobs data this week (JOLTs openings today, ADP private payrolls tomorrow and Nonfarm payrolls on Friday) as well as expected commentary from companies at several key conferences this week (see agendas below). There are no Fed speakers ahead of next week’s FOMC policy meeting. In a cautious stock market call, Stifel said this morning they continue to forecast the S&P 500 corrects about -10% to ~4,750 before the end of 3Q 2024 from the recent peak ~5,300 in late May. Oil prices extend yesterday’s sharp declines, down another 2% after falling over 3.5% Monday as investors remain worried about supply rising later in the year amid signs of weakening U.S. demand. In Asian markets, The Nikkei Index slips -85 points to 38,837, the Shanghai Index rose 12 points to 3,091, and the Hang Seng Index rises 41 points to 18,144. In Europe, the German DAX is down -214 points or 1.15% to 18,393, while the FTSE 100 is down -46 points to 8,216. Stocks slipped on Monday after survey data showed U.S. factory activity had slowed more than expected in May and construction spending slipped in April, although the S&P 500 and the Nasdaq closed the session slightly higher. Traders are now pricing in a nearly 62% chance of the Fed cutting rates in September, up from about 53% before ISM data was released and under 50% last week.

• The Dow Jones Industrial Average fell -115.29 points, or 0.30%, to 38,571.03.
• The Nasdaq Composite climbed 93.66 points, or 0.56%, to 16,828.67.
• The Russell 2000 Index declined -10.44 points, or 0.50% to 2,059.68.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 10:00 AM ET                Factory Orders M/M for April…est. +0.6%
• 10:00 AM ET                Durable Goods M/M for April
• 10:00 AM ET                JOLTs Job Openings for April…est. 8.355M (prior 8.488M)
• 4:30 PM ET                   API Weekly Inventory Data

• Earnings After the Close: CRWD GWRE HPE LAKE PVH SFIX SPWH VRNT

• Bank America Global technology Conference, 6/4-6/6, in San Francisco, CA
• Deutsche Bank 21st Annual Global Consumer Conference, 6/4-6/6, in Paris
• Goldman Sachs Annual European Financials Conference, 6/4-6/6, in Madrid
• NAREIT Conference 2024, 6/4-6/6, in New York
• RBC Capital Global Energy, Power & Infrastructure Conference, 6/4-6/5, in New York
• TD Cowen 8th Annual Future of the Consumer Conference, 6/4-6/5, in New York
• Wedbush Gaming Company Conference, 6/4-6/5 (virtual)
• William Blair 44th Annual Growth Stock Conference, 6/4-6/6, in Chicago, IL
• China Caixin Services PMI for May

• Philip Morris (PM) revises its 2024 full-year reported diluted EPS forecast – for currency only – to a range of $5.77 to $5.89; excluding a total 2024 adjustment of $0.49 per share, forecast range for adjusted diluted EPS of $6.26 to $6.38; reaffirming currency-neutral adjusted diluted EPS growth forecast of 9.0% to 11.0% for 2024 full-year.
• SiteOne Landscape (SITE) forecasts Q2 volume down about 1%, forecasts Q2 organic daily sales down ~4% to 5% and said is experiencing softening volume.

• DT Midstream (DTM), Kinder Morgan (KMI) and Williams (WMB) all upgraded to Overweight from Equal Weight with price targets of $77, $22, and $46, respectively at Wells Fargo in the Pipeline sector.
• Sonoco (SON) announced it is implementing a further price increase as input costs have continued to rise beyond our initial estimation.

• HealthEquity (HQY) Q1 adj EPS $0.80 vs est. $0.66, adj EBITDA $117.4Mm vs est. $104Mm on revs $287.597Mm vs est. $278.11Mm; sees FY revs $1.16-1.18B vs est. $1.156B, adj EBITDA $454-474Mm vs est. $450.49Mm and adj EPS $2.93-3.10 vs est. $2.90.
• Scholar Rock (SRRK) announced encouraging data from its Phase 1 DRAGON proof-of-concept trial of SRK-181, a selective inhibitor of latent TGFbeta1 activation, in combination with pembrolizumab in patients with advanced solid tumors.
• Structure Therapeutics (GPCR) announces offering of 8M American depositary shares.

• GitLab (GTLB) Q1 EPS $0.03 vs. est. loss (-$0.04); Q1 revs $169.2M vs. est. $165.9M; sees Q2 revs $1766M-$177M vs. est. 4177.1M and sees FY revs $733.0M-$737.0M above prior view $725.0M-$731.0M.
• Microsoft (MSFT) to lay off hundreds at Azure cloud unit, Business Insider reported.