Early Look

Wednesday, November 16, 2022

Futures	Up/Down	%	Last
Dow	9.00	0.03%	33,614
S&P 500	0.25	0.01%	3,999
Nasdaq	-9.00	0.08%	11,895

 

 

U.S. futures are flat, with the S&P battling the 4,000 level after reports that the Russian rocket explosion in Poland yesterday that spooked markets was caused by a Ukrainian air defense missile. Futures just took a small dip, led by weakness in retailers as Target (TGT) reported a Q3 EPS miss and lowered its margin guidance, as shares fall -13%. The report comes a day after rival Wal-Mart (WMT) gave a much rosier outlook for the holiday sales season. Meanwhile at 8:30 AM ET, investors get a look at October Retail sales data to get a better gauge on the strength of the consumer. Stocks resumed their inflation-driven rally on Tuesday after another report signaled that price increases could be slowing. The S&P 500 had risen as much as 1.8% while the tech-heavy Nasdaq 100 soared as much as 2.8%, then indexes gave back some gains after a report said that Poland was hit by Russian rockets near the border with Ukraine. The dollar looks lower after a decline Tuesday, while crude futures surged on the news of Poland. Lastly overnight, Donald Trump declared his candidacy for the White House in 2024. In Asian markets, The Nikkei Index rose 38 points to 28,028, the Shanghai Index fell -14 points to 3,119, and the Hang Seng Index dropped -86 points to 18,256. In Europe, the German DAX drops nearly 1% to 14,240, while the FTSE 100 is down slightly at 7,363. Bitcoin down about -1% at $16,700 as the industry continues to reel from the SBF FTX scandal.

Economic Calendar for Today

·     7:00 AM ET           MBA Mortgage Applications Data

·     8:30 AM ET           Import Prices M/M for October…est. (-0.4%)

·     8:30 AM ET           Export Prices M/M for October…est. (-0.4%)

·     8:30 AM ET           Retail Sales M/M for October…est. +1.0%

·     8:30 AM ET           Retail Sales – Less Autos M/M for Oct…est. +0.4%

·     9:15 AM ET           Industrial Production M/M for Oct…est. +0.2%

·     9:15 AM ET           Capacity Utilization for Oct…est. 80.4%

·     9:50 AM ET           Fed’s Williams Speaks at 2022 Treasury Market Conference

·     10:00 AM ET         Business Inventories M/M for September…est. +0.5%

·     10:00 AM ET         NAHB Housing Market Index for November…est. 36

·     10:30 AM ET         Weekly DOE Inventory Data

·     4:00 PM ET            Net Long-term TIC Flows for Sept

 

Earnings Calendar:

·     Earnings Before the Open: CRWS LOW SCVL SYPR TGT TJX

·     Earnings After the Close: BBWI CPRT CRMT CSCO HI IIIV NVDA PNNT SONO

 

Other Key Events:

·     Credit Suisse Equity Forum, 11/15-11/17, in Switzerland

·     Deutsche Bank Industrials Conference, 11/16-11/17, in NY

·     Jefferies Consumer Conference, 11/16-11/17, in Miami, FL

·     Piper Battery Summit, 11/14-11/16, in Palo Alto, CA

·     REITWorld 2022 Annual Conference, 11/15-11/17, in San Francisco, CA

·     Roth Capital Technology Event in New York (one-day event)

·     Stifel healthcare Conference, 11/15-11/16, in NY

·     Wolfe Research Healthcare Conference, 11/16-11/18, in NY

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 34.48 points, or 0.87%, to 3,991.73

·     The Dow Jones Industrial Average rose 56.22 points, or 0.17%, to 33,592.92

·     The Nasdaq Composite surged 162.19 points, or 1.45%, to 11,358.41

·     The Russell 2000 Index advanced 27.95 points, or 1.50% to 1,889.20

 

 

Macro	Up/Down	Last
Nymex	-0.09	86.83
Brent	0.24	94.10
Gold	9.20	1,786.00
EUR/USD	0.0065	1.0414
JPY/USD	0.21	139.50
10-Year Note	-0.013	3.863%

 

 

World News

·     Former President Donald Trump announced las night he will run for President in 2024

·     UK Consumer prices rose 11.1% in the 12 months to October, the most since October 1981 and a big jump from 10.1% in September, the Office for National Statistics said (est. +10.7%)

·     Republicans are just one seat shy of securing a majority in the U.S. House of Representatives. The outcome in the House hangs on tight races in states including California, with thousands of votes still being counted. Republicans have won 217 seats compared with the Democrats’ 209

 

Sector News Breakdown

Consumer

·     Target Corp. (TGT) shares fall -13%; Q3 adj EPS $1.54 vs. est. $2.15; Q3 sales rose 3.3% y/y to $26.12B vs. est. $25.97B; Q3 Comparable sales +2.7% vs. +12.7% y/y, vs. estimate +2.51%; said it would launch a cost-cut plan to save $2 billion to $3 billion over three years; halved its operating margin rate forecast for the fourth quarter to about 3% and said it was expecting comparable sales to fall in the range of a low single-digit percentage

·     Lowe’s (LOW) shares rise 3%; Q3 adj EPS $3.27 vs. est. $3.10; Q3 revs $23.48B vs. est. $23.13B; Q3 U.S. comparable sales up 3%; boosts FY share-repurchase view to $13 billion from $12 billion; raises full-year EPS view to $13.65-$13.80 from $13.10-$13.60 prior

·     Advance Auto Parts (AAP) shares fall -14%; Q3 adj EPS $2.84 vs. est. $3.34; Q3 revs rose +0.8% to $2.6B vs. est. $2.64B; Q3 comp sales fell (-0.7%) y/y; guides year EPS $12.60-$12.80 vs. est. $13.02 and FY sales $11B-$11.2B vs. est. $11.1B

·     Carnival Corp (CCL) shares fall -12%; commenced a private offering of $1 bln of convertible senior notes due 2027 to be used as part of company’s 2024 refinancing plan

·     Lulu’s Fashion (LVLU) announced that Crystal Landsem, currently co-president and CFO, has been appointed CEO, effective March 6, 2023. David McCreight, currently CEO, will become executive chairman of the board; Q3 EPS $0.02 vs. est. $0.09; Q3 revs fell -1% y/y to $105.3M vs. est. $114.2M; sees year revs $425M-$440M vs. est. $459.3M

·     Nike (NKE) raises quarterly dividend by 11%

·     O’Reilly Automotive (ORLY) increases buyback authorization by $1.5b

·     Tattooed Chef (TTCF) lowers year revenue guidance to $235M-$245M from prior $280M-$295M after Q4 EPS loss (-$0.46) vs. est. loss (-$0.19) and revs $54.1M vs. est. $72.96M

 

Energy, Industrials and Materials

·     The American Petroleum Institute said weekly crude oil inventories fell -5.835 MM barrels with Cushing a draw of -0.842 MM barrels, gasoline a build of +1.690 MM barrels and distillate inventories rose 850K barrels

·     Golar LNG (GLNG) Q3 revenue $68.63M vs. est. $81.9M; Q3 adj Ebitda $85.2M vs. $52.3M a year ago and net income $141.3M

 

Healthcare

·     Novartis (NVS) is weighing sales of non-core assets as it seeks to raise money to invest in cutting-edge medicines; Ophthalmology business alone could fetch about $5 billion – Bloomberg

·     Varex Imaging (VREX) Q4 adj EPS $0.42 vs. est. $0.36; Q4 revs $231M vs. est. $223.27M; guides Q1 EPS $0.10-$0.30 on revs $195M-$215M vs. est. $210.75M

·     Dermata Therapeutics (DRMA) files $100M mixed securities shelf

·     Ginkgo Bioworks (DNA) announces proposed public offering of Class A common stock

·     Hologic (HOLX) files mixed-securities shelf

·     Natera (NTRA) 11.43M share Spot Secondary priced at $35.00

 

Technology, Media & Telecom

·     Disney (DIS) said its Disney World to hike Magic Kingdom ticket prices to as high as $189 for entry. Currently, the lowest price for a one-day ticket to any of its four Orlando theme parks is $109. But now, Magic Kingdom prices will start at $124 and skyrocket to $189 depending on the date and demand – NY Post

·     Amkor (AMKR) announces 50% increase in quarterly cash dividend and shareholder return goal

·     Tencent Music (TME) upgraded to Buy from Hold at Benchmark