Morning Preview: October 23, 2024
Early Look
Wednesday, October 23, 2024
Futures |
Up/Down |
% |
Last |
Dow |
-219.00 |
0.51% |
42,950 |
S&P 500 |
-16.25 |
0.28% |
5,876 |
Nasdaq |
-89.50 |
0.43% |
20,452 |
Just like yesterday, U.S. futures are pointing to a modest decline on the open as news of an e coli breakout at a McDonald’s in Colorado leading to hospitalizations (and one death) has pushed shares of the Dow component lower by 7%, while investors analyze a slew of other earnings repots this morning. Chip stocks (analog) get a bounce on better TXN results; lodging/hotel names slip after Hilton (HLT) guidance; solar stocks stumble behind another miss and lower guide from ENPH. Plenty more to come today and the remainder of the week (see below for top movers today). Yesterday overall was a quiet day of trading as the Dow and S&P 500-edged red at the close while the Nasdaq posts a slight gain amid gains in large cap tech. Industrials and Materials were the weakest S&P sectors while Consumer Staples lead gainers. Despite Tuesday’s dip in the S&P, its first back-to-back decline in 6-weeks, however, the S&P is on track to post its sixth straight month of gains in October and on track for its overall 7th straight month of gains while so far this year, the index has gained nearly 23%.
The U.S. dollar Index (DXY) adding gains again, rising +0.25% to 104.36, its highest levels since the end of July while the euro drops and stays below 1.08 and the dollar/Japanese yen rises over 1% to 152.65 (also highest since end of July). Treasury yields continued to move up, with the 10-year note hovering around its highest point since late July, having surged more than 60 basis points over just the past five weeks. Gold prices are making yet more all-time highs and oil prices are pulling back this morning. In Asian markets, The Nikkei Index dropped -307 points to 38,104, the Shanghai Index gained 16 points to 3,302, and the Hang Seng Index jumped 261 points to 20,760. In Europe, the German DAX is down -38 points to 19,383, while the FTSE 100 slips -30 points to 8,276.
Market Closing Prices Yesterday
- The S&P 500 Index dipped -2.78 points, or 0.05%, to 5,851.20.
- The Dow Jones Industrial Average fell -6.71 points, or 0.02%, to 42,924.89.
- The Nasdaq Composite gained 33.12 points, or 0.18%, to 18,573.13.
- The Russell 2000 Index declined -8.20 points, or 0.37% to 2,231.52.
Economic Calendar for Today
- 7:00 AM ET MBA Mortgage Applications Data
- 9:00 AM ET Fed’s Bowman Gives Opening Remarks
- 10:00 AM ET Existing Home Sales M/M for September
- 10:30 AM ET Weekly DOE Inventory Data
- 1:00 PM ET US Treasury to sell $13B in 20-year notes
- 2:00 PM ET Federal Reserve Releases Beige Book
Earnings Calendar:
- Earnings Before the Open: APH AVY BA BLFY BSX BXMT CFFN CME COOP EVR GD GEV HCSG HLT KBR KO LAD LII NEE NEP NTRS ODFL PB PRG ROP T TDY TMHC TMO TNL TRU UCB UNF VRT WAB WGO
- Earnings After the Close: ALGN AMP AMSF AMTB ASGN BELFA BRKL BWB CACI CASH CBAN CCS CHDN CLB CVBF CVLG CYH EGBN EGP FAF GBX GGG GTY HBNC HLX IBM INBK KALU KNX LC LOB LRCX MAT MC MCRI MOH MORN MSA MXL NEM NEU NLY NOW OBK OII ORLY PEGA PI PLXS QRCH QS RBBN RJF ROL SEIC SLM SLP SSB STC TER TMUS TSLA TYL URI VLTO WH WHR WSBC WU
Macro |
Up/Down |
Last |
Nymex |
-1.33 |
70.42 |
Brent |
-1.07 |
74.97 |
Gold |
6.00 |
2,765.80 |
EUR/USD |
-0.0017 |
1.0780 |
JPY/USD |
1.60 |
152.67 |
10-Year Note |
+0.014 |
4.22% |
Sector News Breakdown
Consumer
- McDonalds (MCD) shares fall after the CDC reported ten people have been hospitalized and one older person in Colorado has died after E. coli infections linked to consuming McDonald’s quarter pounder hamburger.
- Starbucks (SBUX) guidance will be suspended for full fiscal year 2025; said directors approved an increase in quarterly cash dividend from $0.57 to $0.61 per share; guides prelim Q4 adj EPS $0.80 below est. $1.03; says is developing a plan to turn around business.
- Amazon.com Inc. (AMZN) said Wednesday that Prime members can now save 10 cents per gallon at about 7,000 gas stations operated by BP, Amoco across the U.S. The company estimates the offer could save Prime members on average almost $70 a year on their gas bill.
- Hilton (HLT) Q3 results mixed as EPS of $1.92 beat ests but revs $2.87B below $2.91B estimates as System-wide comparable RevPAR increased 1.4%; the hotel operator lowered the upper end of its annual room revenue growth forecast to be between 2% and 2.5%, compared with its prior view of 2% to 3% noting some U.S. consumers cut back on domestic travel spending amid a drop in disposable income; also lowers FY24 net income outlook to $1.41B to $1.43B, from $1.53B to $1.56B.
- Stride Inc. (LRN) shares jump; Q1 EPS $0.94 vs est. $0.22, adj EBITDA $83.9Mm vs est. $46.2Mm; sees Q2 revs $560-580Mm vs est. $535.35Mm and adj op Inc $115-125Mm vs est. $97.96Mm; guides FY revs $2.23-2.3B vs est. $2.167B and adj op Inc $395-425Mm vs est. $313.39Mm.
- USANA Health Sciences (USNA) Q3 EPS $0.56 vs est. $0.49 on sales $200Mm vs est. $205.77Mm; guides FY sales $850Mm vs prior $850-880Mm and est. $861.94Mm, sees EPS $2.45 vs prior $2.40-2.55 and est. $2.50.
Energy,
- Enphase Energy (ENPH) shares tumble on miss and lower guide; Q3 EPS $0.65 vs. est. $0.77; Q3 revs $380.87M vs. consensus $392.11M; said shipped 1,731,768 microinverters, or approximately 730.0 megawatts DC, and 172.9 megawatt hours of IQ Batteries in Q3; guided Q4 revenue $360.0M-$400.0M below consensus $437M and guides Q4 adj operating expenses $81M-$85M (solar space remains pressured SEDG, RUN, NOVA, etc.)
- Matador Resources (MTDR) Q3 adj EPS $1.99 vs. est. $1.72; Q3 adj Ebitda $574.5M vs. $563.7M est.; raised dividend by 25%; guides total production 167,500 to 172,500 BOE/d, up from prior 158,500 to 163,500 after Q3 Avg production 171,480 BOE/d, rose +27% y/y.
- Nabors (NBR) Q3 adj Ebitda $221.7M, revs $731.8M, and op income $62.48M.
- Range Resources (RRC) Q3 adj EPS $0.48 vs. est. $0.38; Q3 revs $615M vs. consensus $616.14M; Q3 Production BCFE/Day 2.20, +3.8% y/y; Q3 Capital spending of $156 million, approximately 24% of the 2024 budget; guides FY capex $645M-$670M, vs. prior $620M-$670M.
- Weatherford (WFRD) Q3 EPS $2.06 vs. est. $1.66 and revs $1.41B vs. est. $1.42B; Q3 operating income rose 11% y/y to $243M and adj EBITDA rose 16% y/y to $355M; Q3 adjusted EBITDA margin of 25.2% increased by 197 bps y/y.
Financials
- Comerica (CMA) enters $100M accelerated share buyback agreement.
- Costar Group (CSGP) Q3 EPS $0.13 vs. est. $0.16; Q3 revs $693M vs. consensus $696.1M; Q3 EBITDA was $51M and Adjusted EBITDA was $76M, which represent increases from the second quarter of 2024 of 320% and 86% respectively; raises FY24 EPS view to 67c-69c from 64c-66c while guides FY24 revs $2.72B-$2.73B vs. est. $2.74B.
- Deutsche Bank (DB) said it is on track to meet its targets for the year after it reported a better-than-expected rise in third-quarter profit; DB posted Q3 after-tax profit of 1.67 billion euros ($1.80 billion), a 39% jump y/y vs. est. for 1.56B; said it still expects revenue to amount to 30 billion euros for 2024 after a strong investment-banking performance boosted its third-quarter print. The bank increased its loan loss guidance for the year to 1.8 billion euros.
- Enova International (ENVA) Q3 adj EPS $2.45 vs est. $2.31, adj EBITDA $172Mm vs est. $165.9Mm on revs $689.924Mm vs est. $666.33Mm.
- PennyMac Financials (PFSI) Q3 adj pre-tax Inc $151.4Mm vs est. $193.6Mm on sales $411.83Mm vs est. $511.41Mm.
- Retail Opportunity (ROIC) Q3 FFO/SHR $0.25 vs est. $0.26, 97.1% lease rate, 13.8% increase same-space cash base rents on new leases; sees FY FFO/SHR $1.03-1.05 vs est. $1.05.
Industrials and Materials
- John Bean Technologies (JBT) Q3 adj EPS $1.50 vs est. $1.41 on revs $453.8Mm vs est. $442.2Mm; guides FY revs $1.72-1.75B vs est. $1.726B and adj EPS $5.05-5.35 vs est. $5.16.
- Packaging Corp. (PKG) Q3 adj EPS $2.65 vs est. $2.50, adj EBITDA $460.6Mm vs est. $442.09Mm on sales $2.182B vs est. $2.094B.
- Vicor Corp. (VICR) Q3 EPS $0.26 vs est. $0.14 on revs $93.2Mm vs est. $85.23Mm; gr mgn 49.1%.
Technology, Media & Telecom
- Qualcomm (QCOM) shares -5% pre mkt after Arm Holdings (ARM) said it is cancelling an architectural license agreement that allows QCOM to use intellectual property to design chips, Bloomberg News reported. ARM has given QCOM a mandated 60-day notice of the cancellation of the licensing agreement, the report said.
- Manhattan Associates (MANH) Q3 adj EPS $1.35 vs est. $1.06 on revs $266.7Mm vs est. $263.1Mm, cloud revs $86.5Mm; guides FY revs $1.039-1.041B vs est. $1.40B, adj op mgn 34.0-34.1%, adj EPS $4.60-4.62 vs est. $4.29.
- Seagate Technology (STX) Q1 adj EPS $1.58 vs est. $1.49 on revs $2.168B vs est. $2.13B; guides Q2 adj EPS $1.65-2.05 vs est. $1.73 and revs $2.3B vs est. $2.287B.
- Texas Instruments (TXN) Q3 EPS $1.47 vs est. $1.38 on revs $4.151B vs est. $4.12B; sees Q4 revs $3.7-4.0B vs est. $4.067B and EPS $1.07-1.29 vs est. $1.34 (results lifting shares of analog semis like ON, NXPI overnight)
- Vertiv Holdings (VRT) shares fall pre mkt; Q3 adj EPS $0.76 vs. est. $0.69; Q3 revs $2.07B vs. consensus $1.98B; raises year EPS and rev outlook but Q4 guidance mixed as sees Q4 adjusted EPS 80c-84c, vs. consensus 75c while mid-point of Q4 revenue $2.12B-$2.17B below consensus $2.15B.
- AT&T (T) reported Q3 revenue that missed estimates but maintained its full-year earnings guidance; Q3 EPS $0.60 beats $0.57 est. while revenue for the quarter of $30.2 billion just missed Wall Street expectations of $30.4 billion. AT&T said service revenue growth from subscriber and average revenue per user gains were more than offset by lower equipment revenue. AT&T reported 403,000 postpaid phone net additions in the quarter, below the 419,000 posted in the latest second quarter and below analysts’ estimates of 435,500.
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.