Early Look

Tuesday, October 22, 2024

Stock futures are edging lower as Wall Street braces for a second day of losses after declining on Monday. The S&P 500 and Dow ended lower yesterday, while the Smallcap Russell 2000 underperformed falling over 1.6% amid rising Treasury yields though the Nasdaq advanced behind strength in a handful of mega cap tech stocks AAPL, AMD, NVDA, NFLX. Interest rate sensitive sectors such as Real Estate was the weakest S&P sector as the 10-year benchmark Treasury yield hit 4.19%, the best levels in over 3 months. Treasury yield edged higher overnight globally while the 10-yr touched highs of 4.22%. Earnings season shifts into overdrive starting this week with over 100 names in the S&P reporting. The earnings parade kicks off with GE in aerospace, GM in autos, PHM in homebuilders, MMM in industrial conglomerates, KMB in consumer staples, VZ in telecom and the list goes on. Asia-Pacific markets mostly slipped on Tuesday, trailing a mixed session on Wall Street as The Nikkei Index dropped -542 points to 38,411, though the Shanghai Index gained 17 points to 3,285, and the Hang Seng Index edged higher 20 points to 20,498. In Europe, the German DAX is down -45 points to 19,415, while the FTSE 100 is down -60 points to 8,258. The dollar dips slightly, new record highs for gold and Bitcoin dips again back to $67,000.

• The Dow Jones Industrial Average fell -344.31 points, or 0.80%, to 42,931.60.
• The Nasdaq Composite gained 50.45 points, or 0.27%, to 18,540.01.
• The Russell 2000 Index declined -36.38 points, or 1.60% to 2,239.71.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 10:00 AM ET                Richmond Fed Index for October
• 10:00 AM ET                Fed’s Harker Speaks at Fintech Conference
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: ADC AGR BDN BKR BUSE CSGP ENPH ENVA EWBC HAFC HIW JBT LODE LRN MANH MTDR NBR PFSI PKG PMT RHI RNST ROIC RRC STX TRMK TXN USNA VBTX VICR VMI WFRD

• Deckers Outdoor (DECK) downgraded to Neutral from Buy at BTIG saying sees the stock’s risk/reward as balanced after its channel checks picked up a slower start to the holiday for Ugg and likelihood that any upside stems more from wholesale than direct-to-consumer.
• NIKE (NKE), the National Basketball Association, and the Women’s National Basketball Association announced a 12-year extension of their global outfitting, merchandising, marketing and content partnership.
• PulteGroup (PHM) Q3 EPS $3.35 tops consensus $3.15; Q3 revenue $4.48B vs. consensus $4.26B; Q3 net new orders totaled 7,031 homes with value of $3.9B; reports unit backlog of 12,089 homes with a value of $7.7B.
• Polaris (PII) Q3 adj EPS $0.73 vs. est. $0.88; Q3 revs $1.72B misses consensus $1.768B; lowers FY24 adjusted EPS view to down 65% from down 52%-62% and cuts FY24 revenue view to down 20% from down 17%-20%.
• Walmart (WMT) will start delivering prescriptions to US homes in as little as 30 minutes, a move that’s intended to grab a bigger slice of online spending and compete against Amazon (AMZN) – Bloomberg.
• The Cheesecake Factory Inc. (CAKE) gained 5% following a media report that activist investor JCP Investment Management has built a stake in the restaurant chain.

• DMC Global (BOOM) lowered its Q3 revenue outlook to $152M from $158M-$168M prior (est. $163.23M) as reflects weaker-than-expected sales at both Arcadia Products, DMC’s architectural building products business, and DynaEnergetics; also cuts Q3 adj EBITDA view to $5M from $15M-$18M.
• GE Aerospace (GE) Q3 EPS $1.15 vs. consensus $1.14 and revs $8.94B vs. est. $9.02B; Q3 adjusted free cash flow +5.2% y/y to $1.81B; raises FY adj EPS to $4.20-$4.35 from $3.95-$4.20 (est. $4.24) and guides FY adj free cash flow to $5.6B- $5.8B, from $5.3B-$5.6B; also raises FY adj operating profit $6.7B-$6.9B.
• Flexsteel Industries (FLXS) Q1 EPS $0.74 vs est. $0.62 on revs $104.007Mm vs est. $101.6Mm, gr mgn 21.5%; guides Q2 sales $103-107Mm vs est. $102.93Mm; sees FY sales $427-440Mm vs est. $427.47MM.
• Hexcel Corp. (HXL) Q3 adj EPS $0.47 vs. est. $0.46; Q3 sales rose 8.8% y/y to $456.5M vs. est. $456.9M; Q3 adj operating income $52.9M vs. est. $56M; Still sees sales $1.90B-$1.98B vs. est. $1.92B.
• Nano Nuclear Energy (NNE) files to sell 1.4M units.
• Nucor Corp. (NUE) Q3 adj EPS $1.49 vs. consensus $1.47; Q3 revenue $7.44B vs. est. $7.28B; expects earnings in Q4 to decrease compared to Q3 EPS of $1.05 (Q4 EPS consensus $1.44) saying the largest driver is the decreased earnings of the steel mills segment caused by lower average selling prices and decreased volumes.
• Simpson Manufacturing (SSD) Q3 EPS $2.21 vs est. $2.38 on sales $587.153Mm vs est. $589.01Mm; sees US housing starts down yr/yr, guides FY op mgn 19.0-19.5% and CAPEX $175-185Mm vs. prior $180M-$190M.
• TFI International (TFII) Q3 adj EPS $1.60 missed est. $1.78 and sales rose to $2.18B y/y but missed est. $2.25B; by segment, truckload rose 74% from a year earlier due primarily to the acquisition of Daseke. The logistics segment increased 2% during the period, while the less-than-truckload segment declined by 9%.

• Alexandra Realty (ARE) Q3 AFFO/shr $2.37 vs est. $2.37 and guides FY AFFO/shr $9.45-9.49 vs est. $9.47.
• BOK Financial (BOKF) Q3 EPS $2.18 vs. est. $1.98; Q3 NII $308.1M; Q3 total loans -2.3% q/q, deposits +2.7% q/q and NIM 2.68% vs. 2.56% q/q.
• Cadence Bank (CADE) Q3 adj EPS $0.73 vs est. $0.64 on NII $361.5Mm vs est. $364.54Mm; credit loss provision $12Mm.
• Cathay General (CATY) Q3 EPS $0.94 vs. est. $0.95; Q3 Net interest margin increased to 3.04% from 3.01% in Q2; Q3 total deposits increased by $170.9M, or 3.5% annualized, to $19.94B.
• RLI Corp (RLI) Q3 EPS $1.31 vs. consensus $1.00 and revs $470.0M vs. consensus $417.6M; Q3 Net premiums earned $389.5M, +22% y/y, and Net premiums written $401.5M, +20% y/y.
• Selective Insurance (SIGI) Q3 adj EPS $1.40 vs est. $1.65, adj op Inc $85.7Mm on net premiums written $1.158B vs est. $1.126B; Q3 adj ROE 12.1%, combined ratio 99.5%; raised dividend by 9%.
• ServisFirst (SFBS) Q3 EPS $1.10 vs. consensus $0.97; Q3 NII $115.1M vs. $99.7M prior; said dollar interest margin increasing by $9.2 million, a 35% annualized linked quarter increase, and net interest margin expanded five basis points to 2.84%.
• WR Berkley (WRB) Q3 EPS $0.91 vs est. $0.92 on premiums written $3.633B vs est. $3.677B; says expects to continue to deliver outstanding risk-adjusted returns for remainder of 2024 and beyond.
• Zions Bancorp. (ZION) Q3 EPS $1.37 vs est. $1.17 on NII $620Mm vs est. $613.31Mm; Q3 Net interest margin – a key gauge of profitability – rose to 3.03% in Q3, from 2.93% y/y; Q3 provision for credit losses fell to $5 mln from $46 mln a year earlier.

• HealthStream Inc. (HSTM) Q3 EPS $0.19 vs est. $0.13, adj EBITDA $17.7Mm vs est. $16.2Mm on revs $73.1Mm vs est. $73.54Mm; guides FY revs $290-292Mm vs est. $292.37Mm.
• iRhythm Technologies (IRTC) announced that the U.S. FDA has granted clearance for its 510(k)-submission related to prior design changes made to the Zio AT device via letter to file.
• Medpace Holdings (MEDP) shares fell; Q3 EPS $3.01 vs est. $2.78 on revs $533.317Mm vs est. $540.99MM; guides FY revs $2.09-2.13B vs est. $2.138B and EBITDA $450-470Mm vs est. $444.25Mm, sees FY EPS $11.71-12.09 vs est. $11.56.

• Logitech (LOGI) Q2 EPS $1.20 vs. consensus $1.11; Q2 revs $1.12B, in-line with consensus $1.12B; boosts FY25 revenue view to $4.39B-$4.47B from $4.34B-$4.43B and raises FY25 operating income view to $720M-$750M from $700M-$730M.