Morning Preview: March 05, 2024

Early Look

Tuesday, March 5, 2024

Futures

Up/Down

%

Last

Dow

-52.00

0.13%

38,970

S&P 500

-15.25

0.30%

5,123

Nasdaq

-112.75

0.62%

18,149

 

 

U.S. futures are looking lower, adding to the late day market pullback Tuesday which saw major averages finish at their lows in a late day bout of selling pressure. The pullback came after the S&P 500 and Nasdaq each hit fresh intraday highs late day on more momentum related buying. Still major averages come into the week with the S&P and Nasdaq rising 16 of the last 18 weeks, heading into Fed Chairman Powell testimony to Congress and Senate panels tomorrow and Thursday discussing the economy and monetary policy. This week is also a big one for jobs data with ADP payrolls and JOLTs tomorrow, jobless claims Thursday and Nonfarm payrolls Friday. In stocks news, retailer target (TGT) shares looking higher after better Q4 results this morning, while AMD slips after reports they hit a government roadblock in attempting to sell an artificial intelligence chip tailored for the Chinese market, while Apple falls on reports iPhone sales in China have plunged. In Asian markets, The Nikkei Index dipped -11 points to 40,097, the Shanghai Index rose 8 points to 3,047, and the Hang Seng Index tumbled -433 points to 16,162. In Europe, the German DAX is down -13 points to 17,702, while the FTSE 100 is flat at 7,642. In political news, 15 states hold Republican contests on the biggest voting day of the primary season called “Super Tuesday”, where former President Trump looks to lock up the Republican nomination over lone challenger Nikki Haley. Oil futures hovered near unchanged early Tuesday, consolidating after a pullback the previous session as investors weighed the demand outlook for China.

 

Market Closing Prices Yesterday

  • The S&P 500 Index slumped -6.13 points, or 0.12%, to 5,130.95.
  • The Dow Jones Industrial Average fell -97.55 points, or 0.25%, to 38,989.83.
  • The Nasdaq Composite dropped -67.43 points, or 0.41%, to 16,207.51.
  • The Russell 2000 Index declined -2.09 points, or 0.10% to 2,074.31.

Economic Calendar for Today

  • 7:45 AM ET                  ICSC Weekly Retail Sales
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 9:45 AM ET                  S&P Global Composite Feb-Final
  • 9:45 AM ET                  S&P Global Services PMI, Feb-Final
  • 10:00 AM ET                ISM Non-Manufacturing PMI for February
  • 10:00 AM ET                Durable Goods Orders M/M for January
  • 10:00 AM ET                Factory Orders M/M for January
  • 4:30 PM ET                   API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AXGN BWEN CECO CNSL FWRG MCRB MRNS MYE RNGR SEAT SMRT TGT VVX
  • Earnings After the Close: AEVA AGTI APEI BNGO BOX CHPT CRCT CRWD CXDO DAVE FLL HCP JWN LXU MLNK OFIX OOMA PCT RIGL ROST TCON VTOL WTI

Other Key Events:

  • Goldman Sachs 12th Annual Latin America Financials Conference, 3/4-3/5, in London
  • Morgan Stanley Energy & Power Conference, 3/4-3/7 in New York
  • Morgan Stanley Technology, Media & Telecom Conference, 3/4-3/6, in San Francisco, CA
  • RBC Capital Global Financial Institutions Conference, 3/5-3/6, in New York
  • TD Cowen 44th Annual Health Care Conference, 3/4-3/6, in Boston, MA
  • Super Tuesday voting day

 

 

Macro

Up/Down

Last

Nymex

-0.34

78.40

Brent

-0.16

82.64

Gold

7.00

2,133.30

EUR/USD

-0.0003

1.0851

JPY/USD

-0.09

150.43

10-Year Note

-0.035

4.184%

 

World News

  • China’s services activity grew at a slower pace in February, with business confidence moderating for the second month as the Caixin/S&P Global services purchasing managers’ index (PMI) edged down to 52.5 from 52.7 in January but was still above the 50-mark that separates expansion from contraction for the 14th consecutive month.
  • Chinese Premier Li Qiang announced a 2024 economic growth target of around 5% on Tuesday, promising steps to transform the country’s development model and defuse risks fueled by bankrupt property developers and indebted cities. Li also flagged higher defense spending, while hardening the rhetoric on Taiwan.
  • Eurozone Business activity showed signs of recovery last month as the HCOB’s composite Purchasing Managers’ Index (PMI) for the bloc, compiled by S&P Global, jumped to 49.2 in February from January’s 47.9, ahead of a preliminary 48.9 estimate. That was its best reading since June but remained below the 50 mark. The services’ PMI rose to 50.2 from 48.4, beating the 50.0 flash reading.

Sector News Breakdown

Consumer

  • Target Corp. (TGT) Q4 adj EPS $2.98 vs. est. $2.40; Q4 sales rose 1.6% y/y to $31.47B vs. est. $31.35B; Q4 comp sales fell (-4.4%) vs. +0.7% y/y but in-line with expectations; foot traffic was down 1.7% from the year prior, an improvement from down 4.1% in Q3; guides Q1 EPS $1.70-$2.10 vs. est. $2.08 and FY $8.60-$9.60 vs. est. $9.15.
  • Stitch Fix (SFIX) Q2 adj. EBITDA cont ops $4.45M, vs. est. $4.5M and Q2 revs $330.4M vs. est. $330.5M; lowers FY revs to $1.29B-$1.32B from prior $1.30B-$1.37B and FY adj EBITDA from continuing ops $10M-$20M vs. prior $30M.
  • Tesla’s (TSLA) European Gigafactory near Berlin halted production and was left without power after a suspected arson attack set an electricity pylon ablaze close to the site early on Tuesday. The blaze southeast of the German capital, did not spread to the Tesla site according to the reports.
  • ThredUp (TDUP) Q4 EPS ($0.14) vs est. ($0.13), adj EBITDA ($2.1)Mm vs est. ($0.957)Mm on revs $81.393Mm vs est. $80.33Mm, gr mgn 61.9%; sees Q1 revs $79-81Mm vs est. $80.32Mm, gross mgn 68.5-70.5%, adj EBITDA mgn -3% to -1%; sees FY revs $350-350Mm, gr mgn 69.5-71.5% and adj EBITDA mgn +0.5-1.5%.

Energy, Industrials and Materials

  • AeroVironment (AVAV) Q4 adj EBITDA $28.8Mm vs est. $23.88MM on revs $186.6Mm vs est. $170.62Mm, funded backlog $462.8Mm; guides FY revs $700-710Mm vs est. $700.83Mm, adj EBITDA $122-127Mm vs est. $129.21Mm and adj EPS $2.69-2.83 vs est. $2.73.
  • Albemarle (ALB) announces $1.75B depositary shares offering.
  • Crescent Energy Co (CRGY) fixed quarterly cash dividend of $0.12 per share plus $150 million share buyback authorization after Q4 results.
  • Eos Energy (EOSE) Q4 revs $6.6Mm vs est. $8.997Mm; guides FY revs $60-90Mm vs est. $130.55Mm.
  • Kosmos Energy Ltd. (KOS) announces offering of $300M of convertible senior notes due 2030.
  • NASA has selected 15 companies to provide flight and payload integration services to advance technologies and procedures for operating in space, including testing in high-altitude, reduced gravity, or other relevant environments. Among them, Rocket Lab USA (RKLB) and Momentus Space (MNTS) for the $45m contract. https://tinyurl.com/52vh32m8

Financials

  • Hamilton Lane (HLNE) commenced underwritten public offering of 1.92M shares of Class A common stock.
  • MicroStrategy (MSTR) announces a proposed private offering of $600M of convertible senior notes.
  • Paymentus Holdings (PAY) Q4 EPS $0.07 in-line with consensus on better revs $164.8M vs. est. $157.4M; sees FY24 revenue $720M-$744M vs. est. $732.2M and sees FY24 adjusted EBITDA $65M-$75M vs. $58.1M in FY23; but guided Q1 revs $170M-$176M vs. est. $177.9M.

Healthcare

  • Dialysis companies DaVita (DVA) and Fresenius (FMS) shares looking higher early after Novo Nordisk (NVO) reported results of a clinical trial for blockbuster drug Ozempic in people with diabetes and chronic kidney disease, cutting kidney-disease risk less than analysts hoped. Novo Nordisk said the trial achieved its main primary objective by showing a 24% reduction in the risk of kidney disease-related events in people with type 2 diabetes and chronic kidney disease (note Citi said in a research note they expected a relative risk reduction of 30% on objective).
  • Akoya Biosciences (AKYA) Q4 op Inc ($9.4)Mm vs est. ($8.761)Mm on revs $26.5Mm vs est. $25.89Mm, gross mgn 62.7%; guides FY revs $114-118Mm vs est. $117.39Mm with op cash flow breakeven by year end.
  • BridgeBio Pharma, Inc. (BBIO) announced an underwritten public offering of $250M of shares of its common stock.
  • Cara Therapeutics (CARA) Q4 EPS ($0.59) vs est. ($0.41) on revs $5Mm vs est. $9.42Mm; says expects current unrestricted cash and equivalents and available-for-sale marketable securities will be sufficient to fund operating plan into 2026.
  • CVS Corp. (CVS) said it still sees FY adjusted EPS at least $8.30, vs. estimate $8.32 and still sees cash flow from operations at least $12.0B, vs, estimate $12.53B.
  • Passage Bio Inc. (PASG) files for mixed shelf of up to $200M.
  • Tandem Diabetes Care (TNDM) announces proposed private placement of convertible notes.

Technology, Media & Telecom

  • Advanced Micro Devices (AMD) shares dip overnight on reports the company hit U.S. government roadblock in efforts to sell AI chip tailored for Chinese market, according to Bloomberg News. The block reflects Washington’s crackdown on export of advanced technologies to China, despite the chip having lower performance than what AMD sells outside of China and being designed to meet U.S. export restrictions.
  • Apple’s (AAPL) iPhone sales in China fell 24% year-on-year in the first six weeks of 2024, according to research firm Counterpoint, as the U.S. company faced increased competition from domestic rivals such as Huawei – Reuters.
  • GitLab Inc. (GTLB) Q4 adj EPS $0.15 vs est. $0.08, adj op Inc $13.2Mm vs est. $5.844Mm on revs $163.8Mm vs est. $158.21Mm; guides Q1 revs $165-166Mm vs est. $161.86Mm, adj op Inc ($13)mm – ($12)Mm vs est. $2.224Mm and adj EPS ($0.05)-($0.04) vs est. $0.06; sees FY revs $725-731Mm vs est. $731.67Mm.
  • Viant Technology (DSP) Q4 adj EPS $0.14 vs est. ($0.03) on revs $64.406Mm vs est. $65.92Mm; sees Q1 revs $49-52Mm vs est. $48.22Mm, adj EBITDA $2.0-3.0Mm vs est. $1.737Mm.

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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.