Early Look

Tuesday, November 14, 2023

Futures	Up/Down	%	Last
Dow	4.00	0.01%	34,389
S&P 500	2.25	0.06%	4,427
Nasdaq	28.50	0.18%	15,575

 

 

Stocks edge slightly higher and bond yields lower ahead of the 8:30 AM consumer price index (CPI) inflation data, the likely main driver of today’s market action. The headline October consumer price index (CPI) is expected to rise +0.1% m/m (vs prior +0.4%) and rise +3.3% y/y (vs. prior +3.7%) while the core CPI (ex: food & energy) is expected to rise +0.3% m/m (same as prior month) and rise +4.1% y/y (also same as prior). The 10-yr yield is down around 4.62% heading into the data, gold flat around $1,950 an ounce and stock futures modestly higher. The moves come a day after the Nasdaq 100 Index snapped its streak of 18-straight Monday’s closing in positive territory, though the Smallcap Russell 2000 saw modest gains. Oil prices edge higher after the IEA raised its oil demand growth forecasts for this year and next. Dow component Home Depot (HD) reported slightly better Q3 earnings and revenues while narrowed its year outlook for profit, sales, and comp sales. In Asian markets, The Nikkei Index rose 110 points to 32,695, the Shanghai Index gained 9 points to 3,056, and the Hang Seng Index slipped -29 points to 17,396. In Europe, the German DAX is up about 50 points to 15,395, while the FTSE 100 slides -35 points to 7,389.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -3.69 points, or 0.08%, to 4,411.55.

·     The Dow Jones Industrial Average rose 54.77 points, or 0.16%, to 34,337.87.

·     The Nasdaq Composite dropped -30.37 points, or 0.22%, to 13,767.74.

·     The Russell 2000 Index edged higher 0.18 points, or 0.01% to 1,705.50.

 

Economic Calendar for Today

·     6:00 AM ET                  NFIB Small Business Optimism for October…prior 90.80

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:30 AM ET                  Consumer Price Index (CPI) M/M for October…est. +0.1%

·     8:30 AM ET                  Consumer Price Index (CPI) Y/Y for October…est. +3.3%

·     8:30 AM ET                  CPI Core – Ex: Food & Energy M/M for October…est. +0.3%

·     8:30 AM ET                  CPI Core – Ex: Food & Energy Y/Y for October…est. +4.1%

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     11:00 AM ET                Cleveland Fed CPI for October

·     12:45 PM ET                Fed’s Goolsbee Speaks on Economy and Monetary Policy

·     4:30 PM ET                   API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ARMK BTAI ENR HD IMUX IPWR MOND ONDS RMTI SBH SNDA URGN WKHS

·     Earnings After the Close: AEMD AEY BEAT ECC FLNT GETY LUCD ONTX POL QRHC VREX

 

Other Key Events:

·     American Association for the Study of Liver Disease’s Annual Liver Meeting, 11/10-11/14.

·     Edison Electric Institute (EEI) Conference, 11/12-11/14, in Phoenix, AZ

·     Needham 17th Annual Needham Security, Networking, & Comm Conf (virtual), 11/14-11/16

·     RBC Capital Precious Metals Conference 11/14, in London

·     RBC Capital Technology, Internet, Media & Telecom Conference, 11/14-11/16, in New York

·     REITWorld, 11/13-11/15, in Los Angeles, CA

·     Stephens Annual Investment Conference, 11/13-11/16, in Nashville, TN

·     Stifel 2023 Healthcare Conference, 11/14-11/15, in New York

·     China Industrial Output and Retail Sales for October

 

 

Macro	Up/Down	Last
Nymex	0.13	78.39
Brent	0.25	82.77
Gold	0.90	1,951.10
EUR/USD	0.0022	1.0719
JPY/USD	-0.02	151.69
10-Year Note	-0.012	4.62%

 

 

World News

·     The International Energy Agency (IEA) raised its oil demand growth forecasts for this year and next despite an expected deceleration in economic growth in nearly all major economies. For 2023, the IEA raised its growth forecast to 2.4 million barrels per day (bpd) from 2.3 million bpd and moving closer to OPEC’s forecast of 2.46 million bpd.

·     German investor morale improved more than expected in November, as the ZEW economic sentiment index rose to 9.8 points from -1.1 points in October, beating forecasts for a positive reading of 5.0; the expectations index rose for a fourth straight month.

·     Charlie Bilello tweeted: “If the S&P 500 fails to hit a new all-time high in the next month and half this would be the first year since 2012 without at least 1 all-time high.

·     The euro zone economy contracted marginally quarter-on-quarter in Q3, falling -0.1% quarter-on-quarter in the July-September period for a 0.1% year-on-year rise.

·     October NFIB small business optimism index 90.7, vs. consensus 90.5 and below prior 90.8

 

Sector News Breakdown

Consumer

·     Home Depot (HD) Q3 EPS $3.81 tops consensus $3.77; Q3 revs $37.71B vs. est. $37.63B; Q3 comp sales fell (-3.1%) vs. est. drop (-3.3%) and comp sales in the U.S. dropped (-3.5%); sees 2023 sales and comp sales to decline between 3% and 4% y/y (vs. prior down 2%-5% view for both sales and comps), EPS to decline between 9% and 11% y/y (vs. prior 7%-13% view) and sees 2023 operating margin rate to be between 14.2%-14.1%.

·     Fisker (FSR) said 4,725 vehicles were produced and 1,097 vehicles were delivered in Q3 2023; delivered over 1,200 vehicles in October, exceeding entire Q3 delivery volume; sad now delivering in ten countries, expected to add two more markets later this month.

·     Kraft Heinz (KHC) upgraded to Outperform from Market Perform at Bernstein.

·     On Holdings (ONON) Q3 Net sales of CHF 480.5M vs est. CHF453.3M; Q3 EPS CHF0.20 tops consensus est. CHF0.14; A3 adj gross margins 59.9% and Ebit CHF57.8M.

 

Energy, Industrials and Materials

·     Aecom (ACM) Q4 adj EPS $1.01 vs. est. $0.98; Q4 revs $3.842B vs. est. $3.69B; sees FY24 EPS $4.35-$4.55 vs. est. $4.32; expects to deliver record segment adjusted operating margins, and double-digit adjusted earnings per share growth; approved increases to both its share repurchase authorization to $1B and its quarterly dividend program by 22% to $0.22.

·     Canadian Solar (CSIQ) Q3 revs $1.85B vs. est. $2.03B; Q3 EPS $0.32 vs. est. $0.82; guides Q4 revenue $1.6B-$1.8B below consensus $2.65B.

·     Teck Resources (TECK) sold its 77% stake in its steelmaking coal business to Glencore (GLNCY) for $6.93B in cash as the deal is expected to close in Q3 2024; TECK will also sell 20% of the steelmaking coal business to Japan’s Nippon Steel Corp.

·     Safran said it signed a series of contracts worth more than $1.2 billion to equip Emirates’ EMIRA.UL aircraft with equipment.

·     Viper Energy (VNOM) announces offering of 9.02M shares of common stock for holders.

·     The French government and utility EDF have reached a deal on future nuclear power prices of 70 euros per megawatt hour (MWh) as a reference level in a compromise they said would allow EDF to be profitable while shielding consumers from sharp rises in bills.

 

Financials

·     The industrial auction subsidiary of B. Riley Financial, Inc. (RILY), together with Capital Recovery Group, LLC, today announced it will be offering complete wood mills for sale and conducting a series of public auctions in support of the previously announced expansion of the global sourcing strategy of The AMES Companies, a wholly owned subsidiary of Griffon Corporation (GFF).

 

Healthcare

·     Catalent (CTLT) delays 10-q filing saying needs more time to complete procedures related to assessment of measurement, timing of non-cash goodwill impairment of about $700M; anticipates reporting nearly 50% decline in covid-related rev for 3 months ended Sept 30 y/y.

·     The BeautyHealth Company (SKIN) announced that Andrew Stanleick will depart the Company as President & CEO and relinquish his Board seat, effective November 19, 2023; Q3 sales rose 9.7% y/y to $97.4M below est. $117.2M on lower margins y/y (62.5% vs. 75.1%) and as cash and cash equivalents $559.4M, fall -18% y/y; cuts FY23 rev view to $385M-$400M from $460M-$480M. Watch other aesthetics companies (ESTA, INMD, CUTR, RVNC) after the SKIN miss/guide.

·     Autifony Therapeutics entered into an exclusive global licensing agreement with Jazz Pharmaceuticals plc (JAZZ) for up to $770.5 million to discover and develop drug candidates targeting two different ion channel targets associated with neurological disorders.

·     Viking Therapeutics (VKTX) announced the presentation of new results from the ongoing Phase 2b clinical trial of VK2809, the company’s novel liver-selective thyroid hormone receptor beta agonist, in patients with biopsy-confirmed non-alcoholic steatohepatitis, or NASH.

·     Vyne Therapeutics (VYNE) files for resale of up to 39.3 mln shares of common stock.

·     The life expectancy of men (73.2) in the U.S. is nearly six years shorter than that of women (79.1), according to new research published on Monday in JAMA Internal Medicine. Life expectancy in the U.S. has declined significantly over the past few years, falling from 78.8 years in 2019 to 77 in 2020 and 76.1 in 2022 https://tinyurl.com/cf48n5mb

 

Technology, Media & Telecom

·     Nvidia (NVDA) added new features to H200, its top-of-the-line chip for artificial intelligence (AI), saying the new offering will start to roll out next year with AMZN, GOOGL and ORCL. The H200 will overtake Nvidia’s current top H100 chip.

·     Foxconn reported a surprise increase in Q3 profits, rising 11% y/y, helped by gains in non-operating income but reiterated revenue was set to fall slightly for the year; Q3 profit was T$43.1 billion ($1.3 billion), beating market estimates for an 11% drop.

·     Amazon (AMZN) has reached a deal with Snap (SNAP) that will let people buy Amazon products directly from ads on the Snapchat app, The Information reported https://tinyurl.com/4naepf92

·     Rumble (RUM) widened its loss to $29M or (-$0.14) from $1.8 million, or (-$0.01) a year earlier as revenue climbed 64% to $18M from $11M; said average global monthly active users reached 58 million in the third quarter, 40 million of which were based in the U.S. and Canada.

·     Tencent Music (TME) Q3 total revenue fell to 6.57B yuan ($900.9 million) above ests 6.31B yuan; Net profit attributable to equity holders of the company rose to 1.71B yuan, from 1.06B y/y; Paying users for its online music streaming service rose to 103M in Q3 from 85.3M y/y.

·     Xperi (XPER) Q3 adj EPS loss (-$0.08) vs. est. loss (-$0.09); Q3 revs $130.4M vs. est. $127.86M; narrows FY23 revenue view to $518M-$532M from $510M-$540M while lowered its FY23 adjusted EBITDA margin view to 6%-8% from 6%-10%.

·     DoubleVerify (DV) 12.5M share Spot Secondary priced at $30.45.

·     Take-Two (TTWO) upgraded to Buy from Hold at Deutsche Bank and raise tgt to $175 from $155.