Early Look

Thursday, June 6, 2024

After another record smashing day for the Nasdaq Composite, Nasdaq 100, and S&P 500 Index, all closing at record highs Wednesday, U.S. futures are looking flattish, with S&P futures (Spuz) trading in a narrow 10-point range overnight (high 5,372.75 and low 5,362.50) ahead of a moderately busy day of economic data. Attention turned back to central banks and rate cuts on Wednesday after the Bank of Canada cut its key policy rate by 25 bps to 4.75%, its first cut in four years, joining Sweden’s Riksbank and the Swiss National Bank in bringing down rates and comes ahead of today’s ECB meeting, where rate cuts are expected. Of course, market enthusiasm in the “AI” growth sector has been the key catalyst for U.S. technology stock outperformance in 2023 and now in 2024, led by the poster child of “AI” NVDA, which surged above $1,200 for the first time yesterday, dragging other semi-chip plays higher as the SOX index now up 28% YTD. Nvidia and Apple reached the $3 trillion mark in market capitalization, yesterday, joining Microsoft as the only three U.S. companies in the club. The Nasdaq composite closed 2% higher as it crossed back above the 17,000 level. The Nasdaq is also up 14.5% year-to-date, while the S&P 500 climbed 1.2% for its fourth-straight gain (and up 12% YTD). Reminder the European Central Bank (ECB) rate policy meeting this morning, with expectations for a possible cut. The activity and stock market chasing in options continues to fuel this massive upside momentum, buying at every pullback opportunity as @MikeZaccardi notes “0-day S&P options volume now accounts for nearly half of all S&P options volume”. In Asian markets, The Nikkei Index gained 213 points to 38,703, the Shanghai Index fell -16 points to 3,048, and the Hang Seng Index climbed 51 points to 18,476. In Europe, the German DAX is up 125 points to 18,703, while the FTSE 100 is up 28 points to 8,275. Next up, the nonfarm payrolls data tomorrow morning.

• The Dow Jones Industrial Average rose 96.04 points, or 0.25%, to 38,807.33.
• The Nasdaq Composite surged 330.86 points, or 1.96%, to 17,187.91.
• The Russell 2000 Index advanced 29.93 points, or 1.47% to 2,063.87.

• 8:30 AM ET                  Weekly Jobless Claims…est. 220K
• 8:30 AM ET                  Continuing Claims…est. 1.79M
• 8:30 AM ET                  International Trade for April…est. (-$76.1B)
• 8:30 AM ET                  Nonfarm Productivity for Q1…est. +0.1%
• 8:30 AM ET                  Unit Labor Costs for Q1…est. +4.9%
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data

• Earnings After the Close: AGX AMSWA AVO BBCP BRZE DOCU IOT LMNR MTN NAPA NGL NX ODC PL RENT TLYS ZUMZ

• Deutsche Bank 21st Annual Global Consumer Conference, 6/4-6/6, in Paris
• Deutsche Bank 15th Annual Global Materials & Industrials Conference, 6/5-6/6, in New York
• European Association for the Study of the Liver (EASL) annual meeting, 6/5-6/8, in Milan, Italy
• Goldman Sachs Annual European Financials Conference, 6/4-6/6, in Madrid
• Jefferies Healthcare Conference, 6/5-6/6, in New York
• RBC Capital Global Energy, Power & Infrastructure Conference, 6/4-6/5, in New York
• RBC Capital 2024 Investor Sessions for Canadian REITs and REOCs, 6/5-6/6, in New York
• NAREIT Conference 2024, 6/4-6/6, in New York
• TD Cowen Financials, Payments & Fintech Summit, 6/5-6/7, in Miami, FL
• William Blair 44th Annual Growth Stock Conference, 6/4-6/6, in Chicago, IL

• Five Below (FIVE) shares fell -15% overnight; Q1 adj EPS $0.60 vs. est. $0.63; Q1 revs $811.86M vs. est. $833.9M; Q1 comp sales decreased by (-2.3%) vs. est. +1.4%; guides Q2 net sales $830M-$850M vs. est. $879.5M and EPS $0.57-$0.69 vs. est. $1.01; cuts FY24 adjusted EPS view to $5.00-$5.40 from $5.71-$6.22 and lowers year sales view.
• ChargePoint (CHPT) Q1 EPS loss (-$0.17) vs. est. loss (-$0.13); Q1 revs fell -18% y/y to $107M vs. est. $105.79M; sees Q2 revenue $108M-$118M, vs. consensus $121.35M; said the company produced sequential gross margin improvements and a meaningful reduction in operating expenses in the quarter.
• Costco (COST) Net sales of $19.64B for retail month of May, four weeks ended June 2, 2024; total company comparable sales for May 6.4%; May us comp sales ex-gas, FX +5.7% vs. est. +5.8% and total comp sales +6.4% vs. est. +5.9%.
• Victoria Secret (VSCO) Q1 adj EPS $0.12 vs. est. $0.09; Q1 revs in-line at $1.36B; Q1 adj operating income $39.6M vs. est. $37.3M; forecasts Q2 adj. operating income $30M-$45M vs. est. $30.3M and still forecasts FY adj. operating income $250M-$275M; backs year rev outlook of $6.0B; guides Q2 EPS $0.05-$0.20 vs. est. $0.08.
• Gentherm (THRM) announces new stock repurchase authorization.

• Old Dominion (ODFL) said May revenue/day increased 5.6% vs May 2023.

• Samsung Bioepis, Biogen (BIIB), Roche’s (RHHBY) Genentech and Novartis (NVS) and some of their Italian and Dutch counterparts are being investigate by Italy’s competition watchdog, accused of postponing the market entry of biosimilar drug Byooviz in Italy. Samsung Bioepis and Novartis said they would fully cooperate with the investigation.
• Bit Digital (BTBT) said in May 2024, the company produced 63.3 BTC (BTC), a 47% decrease compared to the prior month. The decrease was predominantly due to the reduction of bitcoin block rewards following the April halving event. Active hash rate was approximately 2.54 EH/s as of May 31.
• Dynex Capital (DX) 10.5M share Spot Secondary price at implied $12.00.

• Structure Therapeutics (GPCR) 9.07M share Secondary priced at $52.50.

• Semtech (SMTC) Q1 EPS $0.06 vs. est. 0c; Q1 revs $206.1M vs. est. $200.2M; sees Q2 EPS $0.06-$0.12 vs. est. $0.11 and sees Q2 revenue $207M-$217M vs. est. $210.2M; Q1 GAAP gross margin of 48.3% and Non-GAAP gross margin of 49.8%, above the midpoint of guidance.
• Smartsheet Inc. (SMAR) Q1 adj EPS $0.32 vs. est. $0.26; Q1 revs $263M above consensus $258.28M; announced inaugural $150 mln share repurchase program; sees Q2 adj EPS $0.28-$0.29 vs. est. $0.25; sees Q2 revenue $273M-$275M vs. consensus $274.41M; Raises FY25 revenue view to $1.116B-$1.121B from $1.113B-$1.118B.
• Sprinklr Inc. (CXM) Q1 EPS $0.09 vs. est. $0.07; Q1 revs $196.0M vs. est. $194.4M; Q1 RPO and cRPO up 30% and 19% y/y, respectively; 138 $1M customers, up 20% y/y; guides Q2 EPS $0.06-$0.07 vs. est. $0.09; sees Q2 revs $194M-$195M vs. consensus $196.8M; raises year EPS view but cuts revs view to $779M-$781M from $804.5M-$805.5M.
• Cadence Design (CDNS) files to sell 1.74M shares of common stock for holders.
• nVent Electric plc (NVT) has entered into a definitive agreement to acquire the parent of Trachte, LLC for a purchase price of $695 million, subject to customary adjustments. Trachte is a leading manufacturer of custom-engineered control building solutions designed to protect critical infrastructure assets.