Early Look

Tuesday, November 28, 2023

Futures	Up/Down	%	Last
Dow	-3.00	0.01%	35,370
S&P 500	-3.25	0.08%	4,557
Nasdaq	-11.50	0.07%	15,997

 

 

U.S. futures are looking flat after modest losses on Monday while European markets decline for a second day as the massive +10% rally off the October lows takes a breather heading into the final trading month of 2023. Treasuries extended their November advance on Monday after the $55 billion auction of five-year notes drew strong demand after a soft $54 billion sale of two-year bonds (with a $38B y-year auction later today); the 10-year yield fell about 8 bps yielding around 4.4%. Stocks fluctuated with energy, industrial and financial shares underperforming while Amazon.com Inc. led gains in retailers as Cyber Monday kicked off. In Asian markets, The Nikkei Index fell -39 points to 33,408, the Shanghai Index rose 6 points to 3,038, and the Hang Seng Index dropped -170 points to 17,354. In Europe, the German DAX is down -23 points to 15,942, while the FTSE 100 slips -28 points to 7,432. There are four Fed speakers on the agenda today — Goolsbee, Waller, Bowman, and Barr, along with housing, manufacturing, and confidence data.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -8.91 points, or 0.20%, to 4,550.43.

·     The Dow Jones Industrial Average fell -56.68 points, or 0.16%, to 35,333.47.

·     The Nasdaq Composite slipped -9.83 points, or 0.07%, to 14,241.02.

·     The Russell 2000 Index declined -6.35 points, or 0.35% to 1,801.15.

 

Economic Calendar for Today

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     9:00 AM ET                  Monthly Home Price index for September

·     9:00 AM ET                  CaseShiller 20-City Index for September

·     10:00 AM ET                Consumer Confidence for November

·     10:00 AM ET                Richmond Fed Manufacturing for November

·     1:00 PM ET                   US Treasury to auction $38B in 7-yr notes

·     4:30 PM ET                   API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BNS CTRN PDD

·     Earnings After the Close: AZEK CRWD FLNC HPE INTU LESL NTAP SPLK WDAY

 

Other Key Events:

·     Bank America European Tech Fieldtrip, 11/27-12/1 (virtual)

·     Piper Annual Healthcare Conference, 11/28-11/30, in NY

·     UBS Global Technology Conference, 11/27-11/30, in Scottsdale, AZ

 

 

Macro	Up/Down	Last
Nymex	0.78	75.64
Brent	0.77	80.75
Gold	3.50	2,015.90
EUR/USD	-0.0001	1.0952
JPY/USD	-0.22	148.44
10-Year Note	+0.014	4.402%

 

 

Sector News Breakdown

Consumer

·     Crocs (CROX) upgraded to Strong Buy from Outperform at Raymond James.

·     Shopify (SHOP) was downgraded to underweight from neutral at Piper Sandler saying the current shares hold an “untenable valuation.”

 

Energy, Industrials and Materials

·     Boeing (BA) upgraded to outperform from sector perform at RBC Capital saying shares in the company are in the early stages of a significant shift in sentiment amid strong demand.

·     Clearway Energy Inc. (CWEN) will replace Veritiv Corporation (VRTV) in the S&P SmallCap 600. Clayton, Dubilier & Rice, LLC is to acquire Veritiv Corporation.

·     Oshkosh Defense (OSK) announced that the U.S. Army Contracting Command – Detroit Arsenal awarded a production contract for the Medium Equipment Trailer or MET. Oshkosh will partner with Broshuis, B.V to execute the $342 million contract.

·     Southwest Gas Holdings (SWX) said Paul Daily intends to retire in 2024 as president and chief executive officer of its subsidiary Centuri Group.

 

Financials

·     Affirm (AFRM) upgraded to Hold from Underperform at Jefferies and raise tgt to $30 from $9.50 saying many of the factors driving the Underperform rating have played out.

·     Bank of Nova Scotia (BNS) missed Q4 profit estimates as the company set aside more money than expected for potentially souring loans; increased its provision for credit losses to C$1.26 billion from C$529 million a year earlier; reported adjusted net income of C$1.67 billion ($1.23 billion), or C$1.26 per share, for the three months ended Oct. 31, compared with C$2.62 billion, or C$2.06 per share, a year earlier.

·     Carlyle Group Inc. (CG) will replace ICU Medical Inc. (ICUI) in the S&P MidCap 400. ICU Medical will replace PacWest Bancorp (PACW) in the S&P SmallCap 600, which is being acquired by BANC.

·     WP Carey Inc. (WPC) will replace Worthington Industries Inc. (WOR) in the S&P MidCap 400. Worthington Industries will replace Avantax, Inc. (AVTA) in the S&P SmallCap 600. Aretec Group, Inc. is acquiring Avantax.

 

Healthcare

·     Aldeyra Therapeutics (ALDX) receives complete response letter from the U.S. FDA for the reproxalap new drug application for the treatment of dry eye disease; said additional trial required to demonstrate positive effect on the treatment of ocular symptoms in dry eye disease.

·     Argenx (ARGX) shares fell after saying that its study evaluating Vyvgart Hytrulo didn’t meet the primary endpoint of a sustained platelet count response in patients with chronic primary immune thrombocytopenia, an autoimmune disorder.

·     Bristol Myers Squibb (BMY) said it will take a stake in Avidity Biosciences (RNA) as part of a broader licensing and research deal focused on the development and commercialization of multiple cardiovascular targets. Bristol will pay Avidity $60 million in cash and buy about $40 million of its stock at a price of $7.88 a share as part of the deal.

·     Novavax Inc.’s stock (NVAX) said its protein-based COVID-19 vaccine had been granted emergency-use listing by the World Health Organization. The move means that all 194 of the agency’s member states can use the Novavax vaccine for individuals aged 12 and older.

·     SpringWorks Therapeutics (SWTX) said the FDA approved nirogacestat, the biotech’s oral treatment for desmoid tumors.

 

Technology, Media & Telecom

·     PDD Holdings (PDD) Q3 EPS $1.64 vs. est. $1.23; Q3 revs $9.62B vs. est. $7.69B; expect Temu, launched late last year, to generate more than $16B in revenue this year.

·     Tenable (TENB) announces $100M share buyback.

·     Zscaler (ZS) Q1 adj EPS $0.67 vs est. $0.49 on revs $496.703Mm vs est. $473.35Mm; sees Q2 adj EPS $0.57-0.58 vs est. $0.51; sees FY revs approx $2.09-2.1B vs est. $2.063B, calculated billings $2.52-2.56B, adj EPS $2.45-2.48 vs est. $2.24.

·     Forecasts indicate that by 2028, the market scale for Micro LED in wearables is poised to surpass that of TV-use Micro LED, with Apple Watch adoption expected to materialize in 2026 at the latest – Digitimes reports.