Morning Preview: October 10, 2024

Early Look

Thursday, October 10, 2024

Futures

Up/Down

%

Last

Dow

-52.00

0.11%

42,764

S&P 500

-11.25

0.20%

5,829

Nasdaq

-51.50

0.25%

20,412

 

 

After U.S. stocks finished with strong gains, closing at the highs for a second straight day and the S&P 500 index finishing at its 44th record high of the year, U.S. futures edge slightly lower overnight ahead of the consumer price index (CPI) September inflation reading. The September Consumer Price Index (CPI) data is due at 8:30 AM ET with ests for headline CPI M/M for Sept to rise +0.1% (prior +0.2%) and headline Y/Y est. +2.3% (prior +2.5%). The core CPI or ex: Food & Energy M/M for Sept to rise +0.2% (prior +0.3%) and Y/Y for Sept to rise +3.2% (prior +3.2%). Global stocks advanced again on Wednesday along with U.S. Treasury yields, as minutes from the Federal Reserve’s September meeting indicated more rate cuts. Minutes from the meeting showed a “substantial majority” of U.S. Federal Reserve officials supported beginning an era of easier monetary policy with an outsized half-point rate cut, but there appeared even broader agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future. After completely pricing in a cut of at least 25 bps last week, with a 35.2% chance of a second consecutive cut of 50 bps, the market is betting on a 79.4% chance of a 25-basis point cut at the Fed’s November meeting, and a 20.6% chance it will hold rates steady, CME‘s FedWatch Tool showed. The expectations for a cut in November decreased slightly after the Fed minutes. Despite this, stock markets in the U.S. continue to rally on broad market momentum. In Asian markets, The Nikkei Index advanced 102 points to 39,380, the Shanghai Index rose 43 points to 3,301, and the Hang Seng Index climbed 614 points to 21,251. In Europe, the German DAX is up 5 points to 19,259, while the FTSE 100 is down about -10 points to 8,234. Oil prices rose after a two-day decline as traders watched for an Israeli response to Iran’s missile attack early last week, while US crude stockpiles expanded the most since April. Hurricane Milton is moving off the coast of eastern Florida into the Atlantic after making landfall near Tampa on Wednesday evening.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 40.91 points, or 0.71%, to 5,792.04.
  • The Dow Jones Industrial Average rose 431.63 points, or 1.03%, to 42,512.00.
  • The Nasdaq Composite gained 108.70 points, or 0.60%, to 18,291.62.
  • The Russell 2000 Index advanced 5.60 points, or 0.26% to 2,200.59.

Economic Calendar for Today

  • 8:30 AM ET                  Consumer Price Index (CPI) headline M/M for Sept…est. +0.1% (prior +0.2%)
  • 8:30 AM ET                  Consumer Price Index (CPI) headline Y/Y for Sept…est. +2.3% (prior +2.5%)
  • 8:30 AM ET                  Core CPI (Ex: Food & Energy) M/M for Sept…est. +0.2% (prior +0.3%)
  • 8:30 AM ET                  Core CPI (Ex: Food & Energy) Y/Y for Sept…est. +3.2% (prior +3.2%)
  • 8:30 AM ET                  Weekly Jobless Claims…est. 230K
  • 8:30 AM ET                  Continuing Claims…est. 1.83M
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 11:00 AM ET                Cleveland Fed CPI for September
  • 11:00 AM ET                Fed’s Williams Gives Keynote Remarks
  • 1:00 PM ET US Treasury to sell $22B in 30-year notes
  • 2:00 PM ET                   Federal Budget for September

Earnings Calendar:

  • Earnings Before the Open: CBZ DAL DPZ NEOG
  • Earnings After the Close: AEHR EDUC ODC

Other Key Events:

  • Tesla (TSLA) Robotaxi event
  • Zoomtopia Conference, 10/9-10/10

 

 

Macro

Up/Down

Last

Nymex

1.17

74.41

Brent

1.07

77.67

Gold

8.80

2,634.80

EUR/USD

-0.0004

1.0935

JPY/USD

-0.45

148.83

10-Year Note

+0.011

4.079%

 

World News

  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 28.4 vs 18.2 last week. Bulls rise to 49% from 45.5%, Neutrals rise to 30.4% from 27.3%, Bears fall to 20.6% from 27.3%.

Sector News Breakdown

Consumer

  • Costco (COST) reported net sales of $24.62 billion for the retail month of September, the five weeks ended October 6, 2024, an increase of 9.0 percent from $22.59 billion last year. Sept. total comp sales +6.7% and Sept. US comp sales ex-gas, FX +9.3%.
  • Domino’s Pizza (DPZ) Q3 EPS $4.19, vs. consensus $3.65 and reports Q3 revenue $1.08B vs. consensus $1.1B; continues to expect the following in 2026-2028: 7%+ annual global retail sales growth and 8%+ annual income from operations growth; Q3 total domestic stores comp sales growth +3%, EST +3.55%, Domestic franchise comparable sales growth +3%, EST +3.55%, and Domestic Co-owned comparable sales growth +3.1%, EST +3.52%.
  • Nike (NKE) upgraded to Buy from Hold at Truist and raised tgt to $97.

Energy, Industrials and Materials

  • Atlas Energy Solutions (AESI) said it expects third-quarter revenue to fall below prior guidance due to higher plant operating expenses; said it now expects revenue of between $300M-$310M for the quarter vs. et. $318M.
  • Babcock & Wilcox (BW) reaches agreement to sell its Italian and Swedish Businesses; B&W to receive approximately $40M in cash at closing, subject to customary adjustments and expenses.
  • Delta Air Lines (DAL) Q3 adj EPS $1.50 vs. est. $1.52 and revs $14.59B vs. est. $14.65B; Q3 Passenger load factor 87% vs. 88% y/y, vs. 87.2%; forecasts Q4 adj EPS $1.60 to $1.85, est. $1.78.
  • GXO Logistics (GXO) is exploring a potential sale after receiving takeover interest, a person familiar with the matter tells Reuters. GXO, spun off from trucking company XPO in 2021, is working with a financial adviser to field acquisition interest from suitors, which include rival logistics providers – Reuters.

Financials

  • AllianceBernstein L.P. (AB) announced that preliminary assets under management increased to $806 billion during September 2024 from $791 billion at the end of August. The 2% increase in month-end AUM was driven by market appreciation and net inflows into all three distribution channels – Retail, Institutions and Private Wealth.
  • Artisan Partners Asset Management (APAM) reported that its preliminary assets under management or AUM, as of September 30 totaled $167.8B. Artisan Funds and Artisan Global Funds accounted for $81B of total firm AUM, while separate accounts and other AUM1 accounted for $86.8B.
  • Lending Club (LC) upgraded to Outperform from Market Perform at Keefe Bruyette.
  • TD Bank (TD) is expected to pay about $3 billion in penalties and accept limits on its growth in the U.S. as part of a settlement with regulators and prosecutors over charges it failed to properly monitor money laundering by drug cartels – WSJ reports.

Healthcare

  • 10x Genomics (TXG) shares tumbled over -20% overnight after guiding Q3 revenue $151.7M below consensus $162.24M saying the previously announced modifications they made to their commercial processes and organization to increase effectiveness represented a significant change in how we engage with customers. The transition was more disruptive than anticipated, especially in the Americas.
  • GSK (GSK) has struck a $2.2 billion agreement to settle most U.S. lawsuits filed against it over claims its Zantac heartburn remedy causes cancer.
  • Medtronic (MDT) upgraded to Outperform from Sector Perform at RBC Capital.

Technology, Media & Telecom

  • Applied Digital (APLD) Q1 adj EPS ($0.15) vs est. ($0.29), adj EBITDA $20Mm vs est. $10.91Mm on revs $60.7Mm vs est. $54.85Mm; says Saidal Mohmand will assume role of CFO.
  • American Tower (AMT) downgraded to Equal Weight from Overweight at Wells Fargo.
  • Amazon (AMZN) said that Apple (AAPL) TV+ will become available on Prime Video later this month in the U.S. for $9.99 per month, in a boost for the iPhone maker.
  • Baidu (BIDU) is looking to test and deploy its Apollo Go robotaxis in places including Hong Kong, Singapore and the Middle East, in an effort to extend its competitive advantage outside China – WSJ
  • E2Open Parent (ETWO) shares tumbles; Q2 adj EPS $0.05 vs est. $0.05, adj EBITDA $54.9Mm vs est. $53.61Mm on revs $152.2Mm vs est. $154.82Mm; guides FY total revs $607-617Mm vs est. $632.97Mm and adj gr mgn 68-70%; sees FY adj EBITDA low end of $215-225Mm range vs est. $218.82Mm
  • Skyworks Solutions (SWKS) downgraded to Underweight from Equal-Weight at Barclays and cut tgt to $87 from $115

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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.