Morning Preview: March 20, 2024

Early Look

Wednesday, March 20, 2024

Futures

Up/Down

%

Last

Dow

-34.00

0.09%

39,505

S&P 500

-2.25

0.04%

5,239

Nasdaq

12.50

0.07%

18,282

 

 

Another day, another record for U.S. stocks as the S&P 500 heads into the FOMC policy meeting today holding at all-time highs as investors remained bulled up about lower interest rates and AI growth. There remains zero fear into the FOMC policy meeting later this afternoon at 2:00 PM and Fed Chair Powell press conference, with the S&P 500 closing at a fresh all-time high Tuesday night and @Barchart noted last night that “more than 82% of S&P 500 $SPX stocks are trading above their 150 Day moving average, the most since July 2021.” The continued market strength (straight line higher since beginning of November) comes despite lowered rate cut expectations from the Fed following recent higher CPI and PPI inflation prints. Commentary from Powell later this afternoon could decide the next major move for stock averages. In news overnight, Dow component Boeing (BA) shares slip after comments by their CFO overnight (see below) while other Dow component Intel (INTC) shares rise after the White House announce preliminary terms for up to $8.5 billion in direct funding under CHIPS and Science Act. In new issues, AI chip firm Astera Labs (ALAB) set for public debut today after its IPO priced at $36, above the expected $32-$34 range for ~$713 mln gross raise. In Asian markets, The Nikkei Index was closed overnight (prior close 40,003), the Shanghai Index gained 16 points to 3,079, and the Hang Seng Index edged higher13 points to 16,543. In Europe, the German DAX is up 26 points to 18,014, while the FTSE 100 edges lower -12 points to 7,726. There are no major U.S. economic data points leading into this afternoons FOMC meeting.

 

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 29.09 points, or 0.56%, to 5,178.51.
  • The Dow Jones Industrial Average rose 320.33 points, or 0.83%, to 39,110.76.
  • The Nasdaq Composite gained 63.34 points, or 0.39%, to 16,166.79.
  • The Russell 2000 Index advanced 10.97 points, or 0.54% to 2,035.77.

Economic Calendar for Today

  • 7:00 AM ET                  MBA Mortgage Applications Data
  • 10:30 AM ET                Weekly DOE Inventory Data
  • 2:00 PM ET                   FOMC Policy Meeting with Powell Press Conference 2:30 (no change expected)

Earnings Calendar:

  • Earnings Before the Open: BKKT BNTX GIS JILL JKS LWAY OLLI PDD SIG TCEHY
  • Earnings After the Close: AVGR BEAT CHWY EPAC FIVE GES HOFV KBH MU NANX SCS SERA TRVI WOR

Other Key Events:

  • Bank America Global Industrials Conference, 3/19-3/21, in London
  • Keybanc Midwest Industrials Bus Tour, 3/19-3/20
  • NVIDIA GTC 2024, 3/18-3/21
  • Piper 24th Annual Energy Conference, 3/18-3/20, in Las Vegas
  • S&P Global 39th Annual World Petrochemical Conference, 3/18-3/22, in Houston, TX

 

 

Macro

Up/Down

Last

Nymex

-0.71

82.76

Brent

-0.65

86.73

Gold

-2.40

2,157.30

EUR/USD

-0.0027

1.0838

JPY/USD

0.83

151.66

10-Year Note

-0.017

4.279%

 

Sector News Breakdown

Consumer

  • Chipotle Mexican Grill (CMG) said its Board of Directors approved a 50-for-1 split of its common stock.
  • Sycamore Partners is considering an offer for Gildan Activewear (GIL), Bloomberg reported saying the buyout firm has discussed financing options with potential lenders, according to one of the people. https://tinyurl.com/4e2f6f5r
  • SharkNinja (SN) 4.692M share Secondary priced at $58.00.

Energy, Industrials and Materials

  • Boeing (BA) shares slip after the CFO said they made the decision to keep B737 jet production below 38 per month and will only accept a fully conforming fuselage from supplier Spirit AeroSystems (SPR) at its Washington state factory. Manufacturing quality at both Boeing and the supplier are facing increased scrutiny following a Jan. 5 incident in which a door plug blew off a 737 Max 9 plane mid-flight.
  • JinkoSolar (JKS) Q4 EPS $0.02 vs. est. $0.02; Q4 revs $4.62B vs. est. $4.28B; Q4 shipments were 27,862 MW; module shipments for the full year increased 76.4% y/y to 78.5 GW, back to the top position in the industry. Benefiting from our efforts in cost optimization, our profitability for the full year significantly improved y/y, with gross margin at 16.0%, compared to 14.8% in 2022.
  • ZTO Express (ZTO) Q4 adj EPS $0.38 vs. est. $0.37; Q4 revs $1.5B vs. est. $1.54B; upsizes share repurchase program by $500M; the company’s parcel volume for 2024 is expected to be in the range of 34.73B-35.64B, representing a 15%-18% increase year over year.

Financials

  • Nasdaq Inc (NDAQ) announced the commencement of a secondary offering by Borse Dubai of 26.96M shares; at completion, Borse Dubai expected to hold about 62.4M shares, or about 10.8% of Nasdaq’s outstanding shares; 26.957M share Spot Secondary priced at $59.00.
  • Raymond James Financial (RJF) names Paul Shoukry President and CEO successor, announces additional key leadership changes; Shoukry will retain his current responsibilities until he transitions to the CEO role; Jeff Dowdle has announced that he will be retiring and stepping down from the coo role at the end of the fiscal year.
  • Wells Fargo (WFC) downgraded to Neutral from Buy at Citigroup but raised tgt to $63 from $57.

Healthcare

  • BioNTech SE (BNTX) posted Q4 results that fell sharply to miss expectations, hurt by inventory write-downs by COVID-19 vaccine collaboration partner Pfizer Inc. (PFE); Q4 net profit dropped to EUR457.9 million ($496.5 million), or EUR1.90 a share, from EUR2.28 billion, or EUR9.26 a share, y/y and missed consensus of EUR2.37; Q4 revs sank 65.4% to EUR1.48 billion ($1.60 billion), below the consensus of EUR1.84 billion
  • Aquestive Therapeutics (AQST) 16.667M share Spot Secondary priced at $4.50.
  • Crinetics (CRNX) files to sell 8.33M shares of common stock for holders.
  • HealthEquity (HQY) Q4 EPS $0.63 vs. est. $0.56; Q4 revs $262.39M vs. est. $258.55M; sees FY25 EPS $2.79-$2.96, vs. consensus $2.83 and guides FY25 revenue $1.14B-$1.16B vs. est. $1.15B; said outlook for net income is between $73M-$88M.

Technology, Media & Telecom

  • The White House announced an agreement with the Department of Commerce that would deliver Intel (INTC) up to $8.5 billion to shore up U.S.-based production.
  • Astera Labs (ALAB) 19.8M share IPO priced at $36.00, above its expected $32.00-$34.00 range.
  • Super Micro Computer Inc. (SMCI) announced an underwritten public offering of 2 mln shares at a public offering price of $875.00 per share.
  • PDD Holdings (PDD) Q4 adj EPS $2.40 tops consensus $1.61; Q4 revenue $12.52B vs. est. $11.14B; Q4 results beat driven by robust user growth and sales on its global platform, Temu; Revenues from online marketing services and others were RMB48,675.6Mm (US$6,855.8Mm), an increase of 57% from RMB31,023.4Mm y/y.
  • Benchmark Electronics (BHE) reaffirms Q1 non-GAAP EPS view $0.42-$0.48 vs. est. $0.46 and reaffirms Q1 revenue view $625M-$665M vs. est. $645M.
  • Warner Bros. Discovery (WBD) announces exclusive U.S. media rights agreement with the Professional Fighters League, or PFL, and announced an exclusive U.S. media rights agreement for the new Bellator Champion Series, a mixed martial arts championship, debuting this Friday, March 22. "This new series will stream exclusively on Max and be available on all plans.

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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.