Morning Preview: November 06, 2024

Early Look

Wednesday, November 6, 2024

Futures

Up/Down

%

Last

Dow

1,242.00

2.93%

43,623

S&P 500

129.25

2.22%

5,941

Nasdaq

330.50

1.62%

20,671

 

 

U.S. futures are surging, with the S&P rising over 2% to 5,940 and Nasdaq futures jumping 1.6% or 330 points to 20,674 as Donald Trump is named the 47th President of the United States, beating out Vice President Kamala Harris after winning 4 battleground states (North Carolina, Georgia, Wisconsin, and Pennsylvania) last night and getting the required 270 electoral votes. The power shift in Washington doesn’t end there as the GOP has also taken majority control of the Senate and the House remains a tight contest, but they are holding on there as well. There are still several states listed as “too close to call” including other key swing states Michigan, Arizona, and Nevada, but Trump is currently leading those as well. There are also several close Senate and House races “too close to call”, but it appears at this point the majority rule in the Senate can increase further. The early reaction on Wall Street appears favorable for several sectors including a 14% jump in shares of Tesla (TSLA) as Elon Musk has been a supporter of Trump, strength in asset managers such as BX, BLK, KKR as Trump has positioned himself as a pro-business candidate committed to easing regulation and antitrust pressure on mergers and acquisitions as well as strength in Smallcaps (IWM +6%), Financials, and Energy among others. Crypto space another winner this morning with Bitcoin prices up around 7% near $74,000 given Trump pro crypto stance. Treasury yields are jumping 17-bps with the 10-year at overnight highs around 4.465% and the dollar surges 1.7% to 105.20 for the DXY. The euro declines over 2% to around 1.07 and gold prices sink while the CBOE Volatility index (VIX) crushes 22% to 15.80.

 

This morning’s stock market push higher comes a day after U.S. stocks rallied, with the S&P 500 clawing back about half the ground it lost over the previous four sessions ahead of the election results as investors looked forward to putting all the uncertainties of a too-close-to-call election behind them. A broad and robust rally lifted all three major U.S. stock indexes sharply higher, and each of the 11 major sectors in S&P 500, led by consumer discretionary stocks, ended the session in the green. In Asian markets overnight, The Nikkei Index surged over 1,000 points to 39,480, the Shanghai Index fell -3 points to 3,383, and the Hang Seng Index fell -468 points to 20,538. In Europe, the German DAX is up 161 points to 19,417, while the FTSE 100 is up 100 points to 8,272. Looks like the S&P, Dow, Russell 2000 all on track to open at record highs and the Nasdaq right near its all-time best as well.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 70.07 points, or 1.23%, to 5,782.86.
  • The Dow Jones Industrial Average rose 427.28 points, or 1.02%, to 42,221.88.
  • The Nasdaq Composite surged 259.19 points, or 1.43%, to 18,439.17.
  • The Russell 2000 Index advanced 41.81 points, or 1.88% to 2,260.84.

Economic Calendar for Today

  • 7:00 AM ET MBA Mortgage Applications Data
  • 10:30 AM ET                Weekly DOE Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AADI ABUS AEP ASTE AVA AVDX BCO CELH CIM CNDT COR CRL CTRI CVS DIN DK DKL EHTH EYE FOLD FUN HLNE HWM IONS IRM JCI KMT KPLT LINE LXP MAC MCFT MKTX NVL OC ODP OSS PFGC PNW RAND RGS SMG SMRT SNDR SRE STWD SUN SWX TCPC TRMB TWIN VERX VSH WW ZVIA
  • Earnings After the Close: ACAD ACLS ACT ADTN AEE ALB ALTO AMC AMRK ANSS APA APP APPS ARAY ARQT ASH ASPN ATO ATRO AWR BALY BBSI BIRD BKD BKH BLND BMBL BROS BYND CCRN CDE CDLX CHRD CLNE CLOV COHR COOK CORZ COTY CPRX CRSR CSGS CTVA CWAN CXT CXW CYTK DUOL DV EE ELF ENS ET FC FICO FNF FRSH FSLY FTEK GH GHLD GILD GNK GNW HCAT HL HRTG HST HUBS IONQ IPAR JAZZ JOBY KAR KD KGS KVYO KW LAND LAW LB LOPE LYFT LZ MCK MEG MRO MTCH MWA NDLS NVGS OM ORA PAHC PCRX PETS PLYA PLYM POWI PR PRI PYCR QCOM RAMP RDN RDW RGLD RLAY RM RPD RRGB RYN SKT SPCE SRPT SUI TKO TNDM TPC TRIP TRUE TTWO UHAL UPWK VAC VECO VNDA VSAT VSTO VZIO WAY WES WMB WOLF ZHR ZG ZIP

 

 

Macro

Up/Down

Last

Nymex

-1.09

70.90

Brent

-1.05

74.48

Gold

-33.50

2,716.20

EUR/USD

-0.0216

1.0714

JPY/USD

2.62

154.20

10-Year Note

+0.175

4.463%

 

World News

  • In the Senate Race: GOP flips West Virginia Senate seat; Moreno ousts Brown in Ohio; GOP flips Senate seat. Montana Senator Tester ousted in Senate race; another win for GOP seat as Sheehy picks up seat; still few races too close in Senate and the House at this time.

Sector News Breakdown

Consumer

  • B&G Foods (BGS) Q3 adj EPS $0.13 vs. est. $0.20 and revs $461.1M below consensus $473.12M; guides FY24 adjusted EPS $0.67-$0.77 vs. consensus $0.74 and sees FY24 revenue $1.92B-$1.95B vs. consensus $1.95B.
  • Celsius Holdings (CELH) Q3 EPS 0c vs. est. $0.03; Q3 revs fell -31% y/y to $265.7M vs. est. $267.11M; Gross margin 46% vs. 50% y/y, EST 46.6% and adj EBITDA $4.4M, -96% y/y.
  • Grocery Outlet (GO) Q3 adj EPS $0.28 vs est. $0.27 on sales $1.108B vs est. $1.1B, comps +1.2%; guides FY net sales $4.3-4.35B vs prior slightly above $4.35B and est. $4.366B, comps about +3.5% vs prior about +2.4%, gr mgn 30.5% vs prior 30.4%, adj EBITDA $252-260Mm vs prior $237-242Mm and es.t $250.88Mm and adj EPS $0.89-0.95 vs prior $0.77-0.80 and est. $0.88.
  • Latham Group (SWIM) Q3 EPS $0.05 vs est. $0.07, adj EBITDA $29.8Mm vs est. $27.9Mm on sales $150.5Mm vs est. $152.3Mm; guides FY sales $500-510Mm vs prior $495-525Mm and est. $512.39Mm, adj EBITDA $77-83Mm vs prior $75-85Mm and est. $81.7Mm.
  • Revolve Group (RVLV) Q3 EPS $0.15 vs. est. $0.10; Q3 revs $283.15M vs. est. $271.02M; Q3 Gross margin 51.2% vs. 51.7% y/y, while adj EBITDA $17.5M, +85% y/y and active customers 2.63M, vs. 2.60M; lowers FY24 gross margin view to 52.2% from 52.5%-53%.

Energy,

  • California Resources (CRC) Q3 adj EPS $1.50 vs est. 41.40; Q3 adj net income $402M vs. est. $136.1M; Q3 average net production sold of 145 thousand barrels of oil equivalent per day (MBoe/d) and average net oil production sold of 113 thousand barrels of oil per day (MBo/d).
  • Devon Energy (DVN) Q3 EPS $1.30 tops consensus $1.14; Q3 oil production reached 335,000 barrels per day, exceeding guidance by 4%; total companywide production averaged 728,000 oil-equivalent barrels per day in Q3 represents a 3% increase in production compared to the previous quarter; is revising its production forecast higher in Q4 to a range of 811,000 to 830,000 Boe per day, a 13% increase compared to the third quarter.
  • Northern Oil & Gas (NOG) Q3 adj EPS $1.40 vs est. $1.20, adj EBITDA $412.4Mm vs est. $382.58Mm on oil and gas sales $513.5Mm vs est. $542.84Mm.

Financials

  • Regional Banks (KRE) early lead up 10% pre mkt as financials seen benefitting from Trump less regulation views.
  • Assurant Inc. (AIZ) Q3 adj EPS $5.08 vs. est. $2.52; Q3 revs $2.97B vs. est. $2.94B; raises FY24 EPS growth view to mid- to high teens from low double digit and boosts FY24 adjusted EBITDA view to low double-digit growth from high single digits growth.
  • Comerica Inc (CMA) authorizes repurchase of up to 10M additional shares.
  • Jack Henry & Associates (JKHY) Q1 EPS $1.63 vs est. $1.61, op Inc $151.276Mm vs est. $151.3Mm on revs $601Mm vs est. $600.11Mm; guides FY adj revs $2.353-2.375B vs est. $2.373B, adj op mgn 22.7-22.8%.
  • Prison operators (CXW, GEO) moving higher on Trump victory

Healthcare

  • Cencora (COR) said it will acquire RCA for approximately $4.6 billion in cash, subject to a customary working capital and net-debt adjustment. RCA’s affiliated practices, physicians and management will retain a minority interest in RCA, with Cencora holding approximately 85% ownership in RCA upon closing
  • CVS Health (CVS) Q3 adjusted EPS $1.09, and revs $95.43B vs. consensus $92.75B; announced Prem Shah will be Group President, and will continue to report to David Joyner, President and Chief Executive Officer. In addition, the company announced the appointment of Steve Nelson as President, Aetna, and he will also report to Joyner.
  • Exact Sciences (EXAS) Q3 EPS loss (-$0.21), in-line with consensus on revs $709M vs. est. $717.66M; cuts FY24 revenue view to $2.73B-$2.75B from $2.81B-$2.85B prior (est. $2.83B) and lowered its FY24 adjusted EBITDA view to $310M-$320M from $335M-$355M.
  • Globus Medical (GMED) Q3 adj EPS $0.83 vs est. $0.65, adj EBITDA $193.7Mm vs est. $176.83Mm on sales $625.7Mm vs est. $603.93Mm; guides FY revs $2.49-2.5B vs est. $2.481B and adj EPS $2.90-3.00 vs est. $2.85.
  • Masimo Corp. (MASI) Q3 adj EPS $0.98 vs. est. $0.84; Q3 revs $504.6M vs. consensus $502.67M; guides Q4 adjusted EPS $1.35-$1.50 vs. consensus $1.41 and sees Q4 revenue $581M-$611M vs. est. $607.35M; raises FY24 EPS view to $3.95-$4.10 from $3.80-$4.00 but cuts FY24 revenue view to $2.075B-$2.105B form $2.085B-$2.135B.
  • Novavax (NVAX) said it has entered into a termination and settlement agreement with the UK Health Security Agency (UKHSA) related to supply of its COVID-19 vaccine. Under the settlement agreement, NVAX will refund $123.8 million to the health agency over a three-year period.
  • Syndax Pharma (SNDX) Q3 EPS ($0.98) vs est. ($1.11) on revs $12.5Mm vs est. $11.2Mm.

Industrials and Materials

  • International Flavors (IFF) Q3 adj EPS $1.04 vs. consensus $1.08; Q3 revs $2.9B vs. consensus $2.83B; raises FY24 revenue view to $11.3B-$11.4B from $11.1B-$11.3B (est. $11.29B); sees adjusted operating EBITDA to be at the high-end of its previously communicated guidance range of $2.1B-$2.17B; now expects volume to increase 5% to 6% versus the previously expected range of 3% to 5%.
  • Limbach Holdings (LMB) Q3 EPS $0.62 vs est. $0.52, adj EBITDA $17.3Mm vs est. $13.35Mm on sales $133.92Mm vs est. $129.5Mm; guides revs $520-540Mm vs prior $515-535Mm and est. $519.25Mm and adj EBITDA $60-63Mm vs prior $55-58Mm and est. $56.1Mm.
  • Mercury Systems (MRCY) Q1 EPS $0.04 vs. est. loss (-$0.08); Q1 revs $204.4M vs. est. $181.772M; Q1 adj Ebitda $21.5M vs. est. $13.6M; Q1 Bookings of $247.7 million; book-to-bill ratio of 1.21.
  • MRC Global (MRC) Q3 adj EPS $0.22 vs est. $0.19, adj EBITDA $48MM vs est. $48.05Mm on sales $797Mm vs est. $794.18Mm; announces new board Chair.
  • Rayonier Advanced Materials (RYAM) Q3 adj EPS loss (-$0.12) vs. est. loss (-$0.08); Q3 revs $401M vs. est. $410.1M; reiterates ebitda guidance, increases free cash flow guidance and successfully refinances its capital structure.

Technology, Media & Telecom

  • SMCI Crop. (SMCI) guides Q2 net sales $5.5B-$6.1B, below est. $6.79B; said the Special Committee has completed its investigation based on a set of initial concerns raised by EY. Following a three-month investigation led by Independent Counsel, the Committee’s investigation to date has found that the Audit Committee has acted independently and that there is no evidence of fraud or misconduct on the part of management or the Board of Directors.
  • Coupang (CPNG) Q3 EPS $0.04 vs est. $0.01, adj EBITDA $343Mm vs est. $319.2Mm on revs $7.9B vs est. $7.761B, gross margin 28.8%.
  • Lumen Technology (LUMN) Q3 adj EPS ($0.13) vs est. ($0.09), adj EBITDA $843Mm vs est. $963.6Mm, adj FCF $1.198B on revs $3.22B vs est. $3.218B; sees FY adj EBITDA $3.9-4.0B vs est. $3.883B and FCF $1.2-1.4B vs prior $1.0-1.2B.
  • Microchip Technology (MCHP) Q2 EPS $0.46 vs. est. $0.43; Q2 revs $1.16B vs. est. $1.15B; increases quarterly dividend to 45.5c per share; sees Q3 EPS $0.25-$0.35 vs. est. $0.46 and revs $1.03B-$1.1B vs. est. $1.18B.
  • Qualys Inc. (QLYS) Q3 adj EPS $1.56 vs est. $1.33, adj EBITDA $69.7Mm vs est. $63.29Mm on revs $153.9Mm vs est. $150.7Mm; guides Q4 revs $154.5-157.5Mm vs est. $154.06Mm and adj EPS $1.28-1.38 vs est. $1.28.

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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.