Morning Preview: October 03, 2024

Early Look

Thursday, October 3, 2024

Futures

Up/Down

%

Last

Dow

-137.00

0.32%

42,373

S&P 500

-15.25

0.26%

5,745

Nasdaq

-69.50

0.35%

19,940

 

 

U.S. stock futures are looking slightly lower while oil prices extended gains as geopolitical risks keep investors on edge. Israel’s warplanes bombed Beirut overnight, after eight of its soldiers were killed in southern Lebanon in ongoing ground battles against Hezbollah according to news reports. Also, the East Coast dockworkers union strike (of 45K members) enters its third day, disrupting half the traffic of ports in the country over demands for higher pay and a ban on automation. Stocks flip flopped on Wednesday, as the S&P 500 finished around unchanged and small gains for the Dow and Nasdaq. The U.S. dollar is higher for a 4th straight day heading into the key nonfarm payrolls report tomorrow morning, though a busy slate of data ahead today with jobless claims, ISM services, S&P Global Manufacturing and factory orders. Yesterday the yen fell sharply against the dollar following comments from Japan’s Prime Minister Shigeru Ishiba, who said conditions weren’t right for the Bank of Japan to move again following two interest rate hikes earlier this year. Today, the British Pound slides -1.1% to 1.3116 against the dollar after Bank of England Governor Andrew Bailey said the Central bank could be more aggressive in cutting borrowing costs if inflation remained benign. In Asian markets, The Nikkei Index gained 743 points to 38,552, the Shanghai Index remained closed this week for its Golden Week holiday, and the Hang Seng Index fell -330 points to 22,113. In Europe, the German DAX is down about -100 points to 19,067, while the FTSE 100 rises 23 points to 8,314.

 

Market Closing Prices Yesterday

  • The S&P 500 Index edged higher 0.79 points, or 0.01%, to 5,709.54.
  • The Dow Jones Industrial Average rose 39.55 points, or 0.09%, to 42,196.52.
  • The Nasdaq Composite gained 14.76 points, or 0.08%, to 17,925.12.
  • The Russell 2000 Index slipped -2.03 points, or 0.09% to 2,195.01.

Economic Calendar for Today

  • 7:30 AM ET                  Challenger Job Layoffs for September
  • 8:30 AM ET                  Weekly Jobless Claims…est. 220K
  • 8:30 AM ET                  Continuing Claims…est. 1.832M
  • 9:45 AM ET S&P Global Composite PMI, Sept F…prior 54.4
  • 9:45 AM ET S&P Global Services PMI, Sept-F…prior 55.4
  • 10:00 AM ET ISM Non-Manufacturing PMI (services) for September…est. 51.7 (prior 51.5)
  • 10:00 AM ET                Factory Orders M/M for August…est. 0.0%
  • 10:00 AM ET                Durable Goods M/M for August
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 10:40 AM ET                Fed’s Kashkari Moderates Chat w/ Bostic on Inclusive Economy

Earnings Calendar:

  • Earnings Before the Open: ANGO APOG STZ
  • Earnings After the Close: PEV

 

 

Macro

Up/Down

Last

Nymex

1.58

71.68

Brent

1.47

75.37

Gold

-4.10

2,665.60

EUR/USD

-0.001

1.1034

JPY/USD

0.38

146.84

10-Year Note

+0.024

3.809%

 

World News

  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 18.2 vs 25.9 last week. Bulls fall to 45.5% from 49.6%, Neutrals rise to 27.3% from 26.7%, Bears rise to 27.3% from 23.7%.
  • Typhoon Krathon crossed the southwest coast of Taiwan packing dangerous winds, with the storm leaving thousands of customers without power and shutting the stock exchange a second day.

Sector News Breakdown

Consumer

  • Levi Strauss (LEVI) Q3 adj EPS $0.33 vs est. $0.31, adj EBIT mgn 11.6%, gr mgn 60% on revs $1.5B vs est. $1.55B; reaffirms FY adj EPS $1.17-1.27 vs est. $1.25, sees FY reported net revs about +1% vs est. +2.28%; initiated formal review of strategic alternatives for Dockers brand.
  • Tesla (TSLA) said it would recall 27,000 Cybertruck in the U.S. due to delayed rear-view camera images that could impair driver visibility and increase crash risks, adding that a software update would resolve the issue.
  • Tesco (TSCDY) raised its FY25 profit guidance to around 2.9 billion pounds ($3.85 billion) compared with the previous target of at least 2.8 billion pounds saying price cuts boosted sales volumes in the first half; Revenue rose to 34.77 billion pounds from 33.80 billion pounds, which compares with expectations of 34.74 billion pounds.

Energy, Industrials and Materials

  • Avangrid (AGR) awarded $425M federal capacity contract for Maine Transmission Project.
  • Ingevity’s (NGVT) president and CEO, John Fortson, has left the maker of specialty chemicals and carbon materials, and that it has appointed Luis Fernandez-Moreno as interim president and CEO.
  • Parsons (PSN) awarded position on $4B defense threat reduction agency contract; said contract has $4B ceiling value with five-year base period.
  • RTX (RTX) upgraded to Hold from Sell at Deutsche Bank with $129 price target.
  • Four electricity transmission projects serving the U.S. southwest, southeast and New England will get $1.5 billion in public funding to improve the grid’s resilience and connect customers with clean energy, the government said on Thursday (watch shares of PWR, PRIM, MTZ as well as CCJ, URA, BWXT, etc.)

Financials

  • Bank America (BAC) slides after Warren Buffett’s Berkshire Hathaway (BRK.A) sold another 8.5M shares of stock between Sept. 30 and Oct. 2 valued at $338M, the 13th round of share sale since mid-July. Berkshire has so far sold 238.7N BAC shares since mid-July for $9.75B (still owns about 10% stake as per filing). Once Berkshire’s holding in BofA falls below 10%, it will no longer be required to report stake sales regularly.

Healthcare

  • AngioDynamics (ANGO) Q1 adjusted EPS (-$0.11) vs. consensus loss (-$-0.15) on sales $67.5M vs est. $67.9M; guides FY sales $282-$288M; said they expect to continue to deliver strong revenue growth within our Med Tech business as we execute on key commercial initiatives; guided DY gross margin 52-53%.

Technology, Media & Telecom

  • Nvidia (NVDA) shares higher after CNBC interview last night as Jensen Huang, Nvidia CEO, says that “Blackwell is in full production” and that “everything is on track.” – CNBC
  • Google (GOOGL) teams in recent months have made progress on AI reasoning models, like OpenAI’s o1 according to Bloomberg. Since OpenAI unveiled its o1 model, known internally as Strawberry, in mid-September, some in DeepMind have been concerned that the company had fallen behind.
  • On Wednesday, OpenAI, the creator of ChatGPT said in a blog post that it raised $6.6 billion in new funding at a whopping valuation of $157 billion to “accelerate progress toward its mission.” At that valuation, OpenAI is worth more than 87% of the S&P 500 companies. It makes OpenAI among the highest-valued private companies in the world, along with SpaceX, which is currently valued at $201 billion, and TikTok – Market watch.
  • President Joe Biden has signed legislation exempting some U.S. semiconductor manufacturing facilities that are receiving government subsidies from federal environmental reviews – Reuters.
  • SAP AG (SAP): U.S. prosecutors are broadening probe into potential price-fixing in government contracts by SAP and tech reseller Carahsoft, Bloomberg reported.
  • Wolfspeed (WOLF) downgraded to underperform at Mizuho as it sees slower Global EV sales in 2H24E and 2025E, with IHS now estimating EVs up ~6% y/y in 2024E (down from up ~33% y/y in January), and it sees 2025E up only ~10% y/y (below IHS up ~40% y/y); and increasing China SiC supply up another 50-100% y/y in 2025E.

_________________________________________________________________

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.