Early Look

Friday, November 1, 2024

U.S. stock markets tumbled on Thursday, ending October with losses following a handful of disappointing earnings results, mixed economic data, and rising Treasury yields as for the month, the S&P 500 fell 0.99%, the Nasdaq declined 0.52%, and the Dow fell 1.34%. It was a sharp reversal after spending much of October in positive territory, but some selling pressure ahead of the uncertainty of next week’s Presidential election weighed on sentiment. Stock futures are looking higher overnight to start November, aided by earnings from Amazon (AMZN) following a tech-led selloff in the previous session that pushed the Nasdaq Composite down over 500 points or nearly 3% on the day, while investors awaited crucial nonfarm payrolls data for clues on the Federal Reserve’s interest-rate trajectory. Apple (AAPL) also reported earnings overnight, failing to provide any meaningful updates as shares are down slightly. Outside of the earnings barrage, markets will focus on the October Nonfarm payrolls report at 8:30 AM with estimates calling for the Nonfarm payrolls to rise +113K jobs (prior 254K), for Private Payrolls est. 90K (prior 253K) and Manufacturing payrolls est. (-28K) vs. prior (-7K). The Unemployment rate for October est. to hold at 4.1% and Average Hourly Earnings M/m for October est. +0.3% (prior +0.4%). In Asian markets, The Nikkei Index plunged 1,027 points or 2.63% to settle at 38,053, the Shanghai Index dipped -7 points to 3,272, and the Hang Seng Index rose 189 points to 20,506. In Europe, the German DAX is up 92 points to 19,180, while the FTSE 100 rises 47 points to 8,157. Treasury yields have risen to nearly four-month highs in recent weeks, pressuring equities, as traders speculate that the central bank will adopt a less dovish stance. Bitcoin slides over $3,000 in recent days to move back below the $70,000 level while oil prices jump overnight.

• The Dow Jones Industrial Average fell -378.08 points, or 0.90%, to 41,763.46.
• The Nasdaq Composite tumbled -512.78 points, or 2.76%, to 18,095.15.
• The Russell 2000 Index declined -36.38 points, or 1.63% to 2,196.65.

• 8:30 AM ET                  Private Payrolls for October…est. 90K (prior 253K)
• 8:30 AM ET                  Manufacturing payrolls for October…est. (-28K)…prior (-7K)
• 8:30 AM ET                  Unemployment rate for October…est. 4.1%
• 8:30 AM ET                  Average Hourly Earnings M/m for October…est. +0.3% (prior +0.4%)
• 10:00 AM ET                Construction Spending M/M for September…est. 0.0%
• 10:00 AM ET ISM Manufacturing PMI for October…est. 47.6
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• BJ Restaurants (BJRI) Q3 EPS ($0.13) vs est. $0.02, adj EBITDA $18.5Mm vs est. $22.2Mm on revs $325.7Mm vs est. $326.66Mm.
• Fox Factory (FOXF) Q3 adj EPS $0.35 vs est. $0.42 on sales $359.121Mm vs est. $366.87Mm; sees Q4 sales $300-340Mm vs est. $385.63Mm and adj EPS $0.25-0.40 vs est. $0.49; sees FY sales $1.341-1.381B vs est. $1.435B and adj EPS $1.27-1.42 vs est. $1.57.
• Li Auto Inc. (LI) said it delivered 51,443 vehicles in October 2024, up 27.3% year over year. As of October 31, 2024, Li Auto had delivered a total of 393,255 vehicles in 2024, with cumulative deliveries reaching 1,026,619.
• NIO Inc. (NIO) said it delivered 20,976 vehicles in October 2024, representing an increase of 30.5% y/y. The deliveries consisted of 16,657 vehicles from the Company’s premium smart electric vehicle brand NIO, and 4,319 vehicles from the Company’s family-oriented smart electric vehicle brand ONVO.
• Vivi Properties (VICI) Q3 AFFO $0.57 vs. est. $0.56; Q3 revs $964.7M vs. est. $952.86M; raises FY24 AFFO view to $2.25-$2.26 from $2.24-$2.26 (est. $2.26)
• XPeng Inc. (XPEV) said it delivered 23,917 Smart EVs in October 2024, setting a record for its monthly deliveries and representing growth of 20% y/y and 12% over the prior month. For the second straight month, deliveries of XPENG MONA M03 exceeded 10,000 units. For the first ten months of 2024, XPENG delivered 122,478 Smart EVs, a 21% increase from the same period last year.

• Exxon Mobil (XOM) raises quarterly dividend 4% to 99c per share; reports Q3 adjusted EPS $1.92 vs. consensus $1.88 and reports Q3 revenue $90.02B vs. consensus $93.94B; reported income of $8.61 billion, down from $9.07 billion a year ago; Q3 upstream production 4.582M oil-equivalent barrels per day.
• Boeing (BA) shares rise; the plane maker reached a deal for a new tentative offer for its striking workers in the Pacific Northwest. The union has slated a vote for Monday. The new deal includes 38% wage increases over four years and a $12,000 ratification bonus. Union members have rejected two deals, one that raised wages by about 25%, and another that boosted wages by about 35%.
• AES Corp. (AES) Q3 adj EPS $0.71 vs. est. $0.64; Q3 revs $3.29B vs. consensus $3.46B; sees FY24 adjusted EPS in ‘upper half’ of $1.87-$1.97, vs. consensus $1.92 and reaffirming its annualized growth target for adjusted EPS of 7% to 9% through 2027, from a base of its 2023 guidance of $1.65 to $1.75.
• Coterra Energy (CTRA) Q3 adj EPS $0.32 vs est. $0.34, adj FCF $755Mm on revs $1.36B vs est. $1.303B; guides Q4 total equivalent production of 630-660 MBOEPD.

• LendingTree (TREE) Q3 adj EPS $0.80 vs. est. $0.66; Q3 revs $260.8M vs. est. $244.51M; guides Q4 revs $231M-$241M vs. est. $230.9M; raises FY24 revenue view to $870M-$880M from $830M-$870M and boosts FY24 adjusted EBITDA view to $92M-$95M from $85M-$95M.
• Reinsurance Group (RGA) Q3 EPS $2.33 vs est. $5.31, adj op Inc $242Mm vs est. $491Mm; adj ROE 13.8%.

• Ardelyx (ARDX) Q3 EPS $0.00 vs est. ($0.05) on revs $98.24Mm vs est. $86.64Mm; ends 3Q with approximately $190M in cash, cash equivalents and investments; XPHOZAH generates $51.5M in net product sales.
• Halozyme (HALO) Q3 adj EPS $1.27 vs est. $0.98 on sales $290.1Mm vs est. $251.06MM; guides FY revs $970Mm – $1.02B vs est. $983.85Mm and adj EPS $4.00-4.20 vs est. $3.96
• Sabra Health (SBRA) Q3 AFFO/shr $0.37, EPS $0.13 vs est. $0.16; sees FY normalized AFFO/shr $1.43-1.44 vs prior $1.41-1.44 and est. $1.38.
• In the cannabis space (MSOS), the Drug Enforcement Administration’s hearing on the Biden administration’s marijuana rescheduling proposal is being delayed until 2025, Marijuana Moment has learned. After DEA Administrator Millgram signed off on over two dozen witnesses to participate in the hearing on Monday, Chief Administrative Law Judge Mulrooney issued a preliminary order signaling that the information provided on those set to testify was insufficient and requesting additional details and potential availability for a formal hearing in January or February 2025.

• Avis Budget (CAR) Q3 EPS $6.65 vs. consensus $8.18; Q3 revenue $3.48B vs. consensus $3.53B; Q3 adj Ebitda $503M vs. est. $537.2M; says U.S. model year 2025 buy is well underway and expected to drive significant savings.
• Eastman Chemical (EMN) Q3 adj EPS $2.26 vs est. $2.14 on revs $2.464B vs es t$2.378B; guides FY EPS $7.50-7.70 vs est. $7.69 and cash from ops to approach $1.3B.
• Ingersoll Rand (IR) Q3 EPS $0.84 vs. est. $0.81; Q3 revs rose 7% y/y to $1.86B vs. est. $1.87B; outlook 2024 total revenue growth range of 5% to 7% for full year (vs. prior 6%-8%) and 2024 adj EPS of $3.28-$3.34 vs. est. $3.32.
• MasTec (MTZ) Q3 adj EPS $1.63 vs est. $1.23 on revs $3.325B vs est. $3.425B; sees Q4 revs $3.325B vs est. $3.318B and adj EPS $1.29 vs est. $0.94.
• Sonoco Products (SON) Q3 adj EPS $1.49 vs. est. $1.45; Q3 revs $1.68B vs. est. $1.72B; consumer segment operating profit margin increased to 13% and Adjusted EBITDA margin to 16%; industrial segment operating profit margin was 12% and Adjusted EBITDA margin was 17%; sees Q4 adjusted EPS $1.15-$1.35, vs. consensus $1.20.
• U.S. Steel (X) Q3 adj EPS $0.56 vs. est. $0.47; Q3 revs $3.85B vs. est. $3.77B; Q3 adj EBITDA was $319 million; continue to work towards closing transaction with Nippon steel by year-end; outlook Q4 adjusted ebitda in range of $225 mln and $275 mln.
• Wesco (WCC) announced it has entered a definitive agreement to acquire Ascent, a privately held company headquartered in St. Louis, Missouri and a premier provider of data center facility management services for a cash-free, debt-free purchase price of $185M.
• Wildan Group (WLDN) Q3 adj EPS $0.73 vs est. $0.55, adj EBITDA $15.2Mm vs est. $14.82Mm on revs $75.7Mm vs est. $72.6Mm; guides FY revs $285-295Mm vs est. $290.05Mm and adj EPS $2.15-2.25 vs est. $2.10.

• Intel Inc. (INTC) shares rise; Q3 adj EPS loss (-$0.46) vs. est. loss (-$0.02); Q3 revs $13.28B vs est. $13.02B; guides Q4 adjusted EPS $0.12 above ests $0.08 and revs $13.3B-$14.3B above consensus $13.66B; said making “significant progress” on plan to deliver $10 bln in cost reductions in 2025; CEO notes he intends to keep company together; reducing headcount by 16,500 employees and said expects to recognize $3B of restructuring charges.
• Atlassian Corp. (TEAM) shares rise; Q1 adj EPS $0.77 vs est. $0.64 on revs $1.188B vs est. $1.155B; guides Q2 revs $1.23-1.24B vs est. $1.321B, sees Q2 cloud revs +25.5% yr/yr and FY cloud revs +24% yr/yr.
• Cohu Inc. (COHU) Q3 adj EPS ($0.08) vs est. ($0.07) on sales $95.3Mm vs est. $95.7Mm, sees Q4 sales $95Mm vs est. $98.19Mm.
• Onto Innovation (ONTO) Q3 adj EPS $1.34 vs est. $1.32 on revs $252.21Mm vs est. $250.8Mm; guides Q4 revs $253-267Mm vs est. $259.23Mm and adj EPS $1.33-1.48 vs est. $1.41.