Early Look

Wednesday, November 23, 2022

U.S futures are slightly higher, adding to 2-month highs for the S&P on light volume overnight ahead of the Thanksgiving Day holiday tomorrow where markets will be closed in the US. A busy day of economic data ahead of the off-day Thursday, with weekly jobless claims moved up a day early (est. 225K), Durable Goods orders for Oct (est. +0.4%), S& Global PMI, Nov-F New Home Sales for Oct (est. 570K) and University of Michigan Sentiment (est. 55.0) along with both 1 and 5-yr inflation expectations. In Asian markets, The Nikkei Index gained 170 points to 28,115, the Shanghai Index rose 7 points to 3,096, and the Hang Seng Index rose 99 points to 17,523. In Europe, the German DAX is down -28 points to 14,393, while the FTSE 100 rises 18 points to 7,471. The S&P 500 closed at its highest level since Sept. 12 Tuesday, with the energy sector providing support after rising 3.18% after two sessions of declines as Saudi Arabia said OPEC+ was sticking with outputs cuts.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 53.69 points, or 1.36%, to 4,003.63

·     The Dow Jones Industrial Average rose 397.75 points, or 1.18%, to 34,098.03

·     The Nasdaq Composite surged 149.90 points, or 1.36%, to 11,174.41

·     The Russell 2000 Index advanced 21.30 points, or 1.16% to 1,860.44

Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     8:30 AM ET            Weekly Jobless Claims…est. 225K

·     8:30 AM ET            Continuing Claims…est. 1.517M

·     8:30 AM ET            Durable Goods Orders for Oct…est. +0.4%

·     8:30 AM ET            Durables Goods Orders Ex: Transportation for Oct…est. unchanged

·     9:45 AM ET            S&P Global Manufacturing PMI, Nov-F…est. 50.0

·     9:45 AM ET            S&P Global Services PMI, Nov-F…est. 47.9

·     10:00 AM ET          University of Michigan Sentiment, Nov-F…est. 55.0

·     10:00 AM ET          University of Michigan 1-yr and 5-yr inflation expectation

·     10:00 AM ET          New Home Sales M/M for October…est. 570K

·     10:30 AM ET          Weekly DOE Inventory Data

·     2:00 PM ET             FOMC Meeting Minutes from Nov 2^nd meeting

World News

·     China needs to cut banks’ reserve ratio and use other monetary policy tools in a timely and appropriate manner to maintain ample liquidity, state television reports – Bloomberg

·     UK Nov. Flash Services PMI 48.8; Est 48

·     UK Nov. Flash Manufacturing PMI 46.2; Est 45.8

·     Eurozone Nov. Flash Services PMI 48.6; Est. 48

·     Germany Nov. Flash Manufacturing PMI 46.7; Est 45

·     France Nov. Flash Services PMI 49.4; Est 50.6

Sector News Breakdown

Consumer

·     Guess Inc. (GES) approved a quarterly cash dividend of $0.225 per share on company’s common stock; Q4 adj EPS $0.44 vs. est. $0.55; sees expects fiscal 2023 revenue growth of about 2.0% in U.S. dollars, 10.5% in constant currency; expects fiscal 2023 Gaap and adjusted operating margins of 9.3% and 9.7%, respectively

·     Nordstrom (JWN) Q3 adj EPS $0.20 vs. est. $0.13; Q3 revs $3.55B vs. est. $3.47B; remains on pace to achieve fiscal 2022 revenue and adjusted earnings outlook; said Q3 net sales decreased 3.4%, for Nordstrom rack banner, net sales decreased (-1.9%) for Q3; qtr ending inventory increased 0.6% y/y; Q3 digital sales down 16.4% y/y; backs year EPS and rev growth views

·     Tesla (TSLA) upgraded to Neutral from Sell at Citigroup saying that near- term risk/reward in Tesla shares looks balanced following a year-to-date pullback of more than 50%.

Energy, Industrials and Materials

·     Deere (DE) Q4 EPS $7.44 vs. est. $7.09; Q4 sales rose 37% y/y to $15.54B vs. est. $13.38B with all business segments beating expectations citing positive farm fundamentals and fleet dynamics and increased investment in infrastructure; Operating margin also improved for all segments; sees FY23 production and precision agriculture sales to be up 15% to 20% from a year ago, while the FactSet sales consensus of $24.96 billion implies 13.4% growth

·     Sempra Energy (SRE) announces strategic partnership with ConocoPhillips (COP) for Port Arthur LNG; Sempra Energy parties have also entered into an equity sale and purchase agreement whereby ConocoPhillips will acquire 30% of the equity in phase 1 of Port Arthur LNG

Financials

·     Credit Suisse (CS) warned it will lose about $1.6 billion in Q4 after its clients withdrew deposits and funds. The lender had outflows of some 6% of its $1.5 trillion of assets between Sept. 30 and Nov. 11. that is equivalent to about $88 billion. Its wealth management arm had outflows of about $67 billion.

·     Prudential (PRU) double downgraded to Market Perform at Raymond James

Healthcare

·     AbbVie (ABBV) announces European Commission approval of SKYRIZI(R) (Risankizumab) for the Treatment of Moderate to Severe Active Crohn’s Disease; third approved indication for SKYRIZI and the first specific IL-23 inhibitor for the treatment of Crohn’s disease in the EE

·     uniQure N.V. (QURE) announced that its partner, global biotechnology leader CSL (CSLLY), has received approval from the U.S. FDA for HEMGENIX (etranacogene dezaparvovec-drlb), a one-time gene therapy for the treatment of adults 18 years of age and older living with hemophilia B.

·     MacroGenics (MGNX) upgraded to buy from neutral at Guggenheim citing a stronger balance sheet and near-term clinical data catalysts

·     Xeris Biopharma (XERS) announces research collaboration and option agreement with Horizon Therapeutics (HZNP) XeriJect formulation of teprotumumab

Technology, Media & Telecom

·     Autodesk (ADSK) Q3 non-GAAP EPS $1.70 in-line with consensus and Q3 revenue $1.28B also in-line with estimates; sees Q4 non-GAAP EPS $1.77-$1.83 vs. est. $1.83 and sees Q4 revenue $1.303B-$1.318B vs. est. $1.33B; Q3 total billings increased 16% to $1.3B and Q3 subscription plan revenue was $1.188B, an increase of 14% as reported

·     Hewlett Packard (HPQ) Q4 adj EPS $0.85 vs. est. $0.84; Q4 revs fell -11% y/y to $14.8B vs. est. $14.65B; guides Q1 EPS $0.70-$0.80 vs. est. $0.86 and FY23 $3.20-$3.60 vs. est. $3.61; Q4 Personal systems revenue $10.27B, -13% y/y and Printing revenue $4.53B, -7.1% y/y; Increases quarterly dividend 5% to 26.25c/share from 25c; Plans cost-reduction steps including cutting gross global headcount by about 4,000-6,000 employees.

·     VMWare (VMW) Q3 adj EPS $1.47 vs. est. $1.53; Q3 revs rose 1% y/y to $3.21B vs. est. $3.35B; combination of subscription and SaaS and license revenue was $1.61B for Q3, up 5% y/y

·     Manchester United (MANU) announced that the company’s Board of Directors is commencing a process to explore strategic alternatives for the club. As part of this process, the Board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the Company.