Early Look

Thursday, September 5, 2024

U.S. stock index futures are mostly flat ahead of a series of economic data later this morning as investors look for clues to determine the size of the Federal Reserve’s interest rate cut that is expected later this month. The S&P 500 and the tech-heavy Nasdaq closed lower for the second straight session on Wednesday following a drop in job openings in July. Traders’ bets for a 25-basis point reduction in interest rates at the U.S. central bank’s meeting later in September stand at 59%, according to the CME Group’s FedWatch Tool. Bets for a larger 50-bps cut rose to 41% from 34% a week earlier. This morning’s ADP private payroll report and tomorrow’s nonfarm Payroll report will be good indicators of just how strong the economy is. In Asian markets, The Nikkei Index declined -390 points to 36,657, the Shanghai Index rose 4 points to 2,788, and the Hang Seng Index fell -13 points to 17,444. In Europe, the German DAX is up 15 points to 18,607, while the FTSE 100 is flat at 8,270. Oil prices advanced, with WTI edging higher but still holding under $70 per barrel amid reports OPEC+ is close to an agreement on delaying a planned increase in production. Verizon Communications Inc. agreed to buy rival telecommunications operator Frontier Communications Parent Inc. for an enterprise value of $20 billion.

• The Dow Jones Industrial Average rose 38.04 points, or 0.09%, to 40,974.97.
• The Nasdaq Composite dropped -52.00 points, or 0.30%, to 17,084.30.
• The Russell 2000 Index declined -3.99 points, or 0.19% to 2,145.22.

• 8:15 AM ET ADP Private Payroll Employment for August…est. +145K (prior +122K)
• 8:30 AM ET                  Weekly Jobless Claims…est. 230K (prior 231K)
• 8:30 AM ET                  Continuing Claims…est. 1.865M
• 8:30 AM ET                  Q2 US Nonfarm Productivity…est. +2.5%
• 8:30 AM ET                  Q2 Unit Labor Costs…est. +0.8%
• 9:45 AM ET S&P Global Composite PMI, Aug-Final…prior 54.1
• 9:45 AM ET S&P Global Services PMI, Aug-Final…est. 55.2
• 10:00 AM ET ISM Non-Manufacturing PMI for August…est. 51.1 (prior 51.4)
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data

• Earnings After the Close: AGX AOUT AVGO BOWL BRZE DOCU EGAN GWRE IOT NX PATH PL RENT SMAR SWBI TLYS ZUMZ

• Deutsche Bank European TMT Conference, 9/4-9/5, in London
• Goldman Sachs European MedTech & Healthcare Services Conference, 9/4-9/5 in London
• Goldman Sachs 31st Annual Global Retailing Conference, 9/4-9/5, in New York

• The German economy is expected to stagnate this year, the Ifo institute said on Thursday, as it expects the economy to grow by 0.9% next year, lower than the 1.5% previously forecast. In 2026, gross domestic product is likely to increase by 1.5%, according to the economic institute.
• U.S. crude oil and fuel inventories fell last week, according to market sources citing American Petroleum Institute figures on Wednesday. The API figures showed crude stocks fell by 7.431M barrels in the week ended Aug. 30, gasoline inventories fell by 336,000 barrels, and distillates fell by 406,000 barrels.
• The United States should immediately lift all tariffs on Chinese goods, the Chinese commerce ministry said on Thursday, ahead of an announcement by the Biden administration on expected hikes in levies on Chinese-made items, including electric vehicles. Initially, the higher duties of 100% on EVs, 50% on semiconductors and solar cells, and 25% on lithium-ion batteries and key minerals, steel and aluminium, ship-to-shore cranes and syringes were due to take effect on Aug. 1.

• Beazer Homes (BZH) upgraded to Outperform from Neutral at Wedbush.
• Casey General (CASY) Q1 EPS $4.83 vs est. $4.51 on revs $4.1B vs est. $4.155B; inside comps +2.3%, inside mgn 41.7%; fuel gallon comps +0.7%, fuel margin 40.7 cents/gallon; no FY25 outlook update until after Fikes transaction.
• ChargePoint (CHPT) Q2 EPS loss (-$0.16) vs. est. loss (-$0.10); Q2 revs $109M vs. est. $113.6M; announces reorganization, to cut workforce by about 15% which is expected to result in estimated annualized GAAP and non-GAAP operating expense savings of approximately $41M and $38M respectively; sees Q3 revenue $85M-$95M, vs. consensus $136.81M.
• Copart (CPRT) Q4 EPS $0.33 vs est. $0.36 on revs $1.069B vs est. $1.081B.
• Utz Brands Inc (UTZ) reaffirms its FY outlook for adjusted EBITDA and adjusted earnings per share growth and net leverage ratio; forecasts FY organic net sales to grow between 2% – 2.5%; says remains confident that we are well-positioned to deliver 2026 targets.
• Topgolf Callaway (MODG) brands announces intent to separate into two independent companies, unwinding the combination of the golf-club maker and driving-range operator after less than four years.

• Concrete Pumping Holdings (BBCP) Q3 EPS $0.13 vs est. $0.19, adj EBITDA $31.6Mm vs est. $36.3Mm on revs $109.6Mm vs est. $125.47Mm; guides FY revs $420-430Mm vs est. $457.51Mm, adj EBITDA $108-113Mm vs est. $120.6Mm and FCF at least $67Mm.
• Fortive (FTV) said it plans to split into two publicly traded companies.
• Old Dominion Freight Line, Inc. (ODFL) August revenue per day decreased 5.2% y/y due to a 6.1% decrease in LTL tons per day that was partially offset by an increase in LTL revenue per hundredweight. The change in LTL tons per day was attributable to a 5.0% decrease in LTL shipments per day and a 1.1% decrease in LTL weight per shipment.
• Sonoco (SON) announces review of strategic alternatives for the thermoformed & flexibles packaging business as part of further portfolio simplification.
• XPO Inc. (XPO) releases August results preliminary saying y/y decrease of -4.5% in shipments per day and August LTL tonnage per day fell -4.6% y/y.

• Starwood Property (STWD), KKR Real Estate Finance (KREF) and Newmark (NMRK) upgraded to Outperform from Market Perform at KBW Inc in commercial real estate sector saying the market is nearing a bottom on key indicators like prices, volumes, loss reserves, and the Federal Reserve signaling interest rate cuts, the backdrop will improve in Q4.

• Kazia Therapeutics (KZIA) files to sell $100M of American Depositary Shares
• Phreesia (PHR) Q2 EPS ($0.31) vs est. ($0.36), adj EBITDA $6.5Mm vs est. $4.098Mm on revs $102.115Mm vs est. $101.7Mm; guides FY25 revs $416-426Mm vs est. $420.41Mm, adj EBITDA $26-31Mm vs est. $23.27Mm; see FY25 AHSCs to reach approx 4,200 and total revs/AHSC to increase vs $98,944 in FY24; sees AHSCs reaching approx 4,500 in FY26 and total revs/AHSC above FY25 level.

• Couchbase Inc. (BASE) Q2 EPS loss (-$0.39) vs. est. loss (-$0.09); Q2 revs $51.58M vs. est. $51.1M; guides Q3 revs $50.3M-$51.1M and Q3 forecasts adj. operating loss $4.5M to $5.5M vs. est. loss $5.97M.
• C3.ai Inc. (AI) Q1 revs rose 21% y/y to $87.2M, in-line with consensus as subscription revenue rises 20% y/y to $73.5M, below estimates; guides Q2 revs $88.6-$93.6M vs. est. $91.1M; affirms FY25 revenue view of $370M-$395M vs. consensus $383.4M and affirms FY25 operating loss ($125M) to ($95M) vs. ($318.3M) in FY24.
• Credo Technology (CRDO) Q1 adj EPS $0.04 vs est. $0.04 on revs $59.7Mm vs est. $59.54Mm, adj gr mgn 62.9%; guides Q2 revs $65-68Mm vs est. $64.6Mm, adj gr mgn 62-64%.
• Hewlett Packard Enterprises (HPE) Q3 adj EPS $0.50 vs est. $0.47 on revs $7.7B vs est. $7.673B; sees Q4 revs $8.1-8.4B vs est. $8.175B and adj EPS $0.52-0.57 vs est. $0.55; raises FY24 EPS view to $1.92-$1.97 from $1.85-$1.95 (est. $1.97), while affirms FY24 revenue growth outlook up 1%-3%.
• Nvidia (NVDA) said it did not receive a U.S. Justice Department subpoena, a spokesperson said in a statement on Wednesday, refuting the story from Bloomberg the day before.
• Qualcomm (QCOM) CEO Cristiano Amon told CNBC the chip designer is working with Samsung (SSNLF) and Google (GOOGL) to explore mixed-reality smart glasses – CNBC https://tinyurl.com/yfvzfkb2
• Sprinklr Inc. (CXM) Q2 adj EPS $0.06 vs. est. $0.07; Q2 revs $197.2M vs. est. $194.5M; cuts FY25 EPS view to $0.32-$0.33 from prior view $0.40-$0.41 (est. $0.41) and raises FY25 revs to $785M-$787M from $779M-$781M (est. $780.39M).
• Verint Systems (VRNT) Q2 adj EPS $0.49 vs est. $0.53 on revs $210.2Mm vs est. $212.84Mm; sees FY revs $933Mm +/- 2% vs est. $936.17Mm, EPS $2.90 at revs midpoint vs est. $2.91; authorizes $200M stock repurchase program.
• Yext Inc. (YEXT) Q2 EPS adj EPS $0.05 vs est. $0.03, adj EBITDA $9.8Mm vs est. $8.289Mm on revs $97.7Mm vs est. $98.14Mm; guides FY revs $420-421Mm vs est. $395.49Mm and adj EBITDA $66-67Mm vs est. $65.68Mm.