Early Look

Thursday, September 28, 2023

Futures	Up/Down	%	Last
Dow	42.00	0.12%	33,833
S&P 500	5.25	0.13%	4,319
Nasdaq	-5.50	0.03%	14,734

 

 

After a volatile trading day Wednesday that saw big swings higher and lower before ending little changed, U.S. futures are still steady, awaiting a big round of U.S. economic data today and tomorrow. Top stories overnight include bond yields inched up to fresh 16-year highs (10-year hit 4.645%) after rising oil prices (WTI crude hit $95.03 high before falling back to around $93.20 last) increased inflation angst. Oil prices that have moved swiftly to 13-month highs, are adding to the upward pressure on bond yields. Note the Fed’s favored inflation gauge, the core PCE index, will be published on Friday, with GDP readings today along with weekly jobless claims and pending home sales. In Asian markets, The Nikkei Index tumbled -499 points to 31,872, the Shanghai Index rose 3 points to 3,110, and the Hang Seng Index declined -238 points to 17,737. Greater China stocks fall after Evergrande suspends trading in Hong Kong. In Europe, the German DAX is flat at 15,217, while the FTSE 100 is down -30 points to 7,562. No new development out of Washington related to the spending bill as the deadline approaches this weekend and UAW union members are still on strike heading to a third week.

 

Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 215K

·     8:30 AM ET                  Continuing Claims…est. 1.675M

·     8:30 AM ET                  Gross Domestic Product (GDP) Q2-Final…est. 2.1%

·     8:30 AM ET                  GDP Consumer Spending Q2-Final…prior 1.7%

·     8:30 AM ET                  GDP Price Deflator for Q2-Final…est. 2.0%

·     8:30 AM ET                  PCE Prices final for Q2

·     8:30 AM ET                  Core PCE Prices for Q2-Final…est. 3.7%

·     9:00 AM ET                  Fed’s Goolsbee Speaks at Peterson Institute in Washington

·     10:00 AM ET                Pending Home Sales M/M for August…est. (-0.8%)

·     10:30 AM ET                Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET                Kansas City Fed Manufacturing for September…prior 12

·     1:00 PM ET                   US Treasury to sell $36B in 7-year notes.

·     7:00 PM ET                   Fed’s Barkin Gives Speech on Monetary Policy Outlook

 

Earnings Calendar:

·     Earnings Before the Open: ACN BSET DYNT JBL KMX

·     Earnings After the Close: MTN NKE PCYG TGL VRAR

 

Other Key Events:

·     CNBC 13^th Delivering Alpha conference at The Glasshouse in New York City

·     BMO Capital San Francisco & Silicon Valley Property Tour, 9/26-9/28, in San Francisco, CA

·     Cantor Global Healthcare Conference, 9/26-9/28, in New York

·     RBC Capital Global Communications Infrastructure Conference, 9/27-9/28, in Chicago, IL

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 0.98 points, or 0.02%, to 4,274.51.

·     The Dow Jones Industrial Average fell -68.61 points, or 0.20%, to 33,550.27.

·     The Nasdaq Composite climbed 29.24 points, or 0.22%, to 13,092.85.

·     The Russell 2000 Index advanced 17.29 points, or 0.98% to 1,778.90.

 

 

Macro	Up/Down	Last
Nymex	-0.45	93.23
Brent	-0.49	96.06
Gold	1.40	1,892.30
EUR/USD	0.0035	1.0534
JPY/USD	-0.38	149.23
10-Year Note	+0.01	4.637%

 

 

World News

·     Economic sentiment in the eurozone fell for the fifth month in a row in September, as the nation bloc’s economic sentiment indicator declined to 93.3 in September from a revised 93.6 in August, data (reading was, however, an improvement on the 92.5 level expected).

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -13.1 vs -3.3 last week. Bulls fall to 27.8% from 31.3%, Neutrals fall to 31.3% from 34.1%, and Bears rise to 40.9% from 34.6%.

 

Sector News Breakdown

Consumer

·     Caesars (CZR) launches sportsbook live on mobile and desktop in Kentucky.

·     Duckhorn Portfolio (NAPA) Q4 adj EPS $0.15 vs est. $0.13, adj EBITDA $34.2Mm vs est. $30.39Mm on revs $100.0Mm vs est. $99.9Mm; sees FY24 net sales $420-430Mm vs est. $432.5Mm and adj EPS $0.67-0.69 vs est. $0.70.

·     GameStop Corp (GME) board of directors has elected Ryan Cohen as president and chief executive officer, effective immediately.

·     lululemon (LULU) and Peloton (PTON) announced a five-year strategic global partnership through which Peloton will become the exclusive digital fitness content provider for lululemon, and lululemon will become the primary athletic apparel partner to Peloton.

·     Phillip Morris (PM) cuts FY adjusted EPS to $5.96-$6.05 from prior $6.13-$6.22 view (est. $6.17) and said expects over two-thirds of rev from smoke-free items in 2030; guides 3Q adj EPS $1.60-$1.65, vs. est. $1.63.

·     Uber’s (UBER) announces a new CFO coming from Analog Devices in November; names Prashanth Mahendra-Rajah as new CFO replacing Chai.

·     In autos (GM, Ford, STLA): UAW could expand strikes at Detroit Three on Friday; if UAW resident Fain triggers walkouts at more plants starting at noon on Friday, the UAW is expected to continue work stoppages currently underway until a new contract is ratified, Reuters.

 

Energy

·     HB Fuller (FUL) Q3 EPS $1.06 misses the $1.14 estimate and revs $900.6M below $954M est.; lowers top end of FY adj EPS to $3.80-$3.90 from $3.80-$4.20 (est. $3.88) and lowers top end of year adj. EBITDA view to $580M-$590M from $580M-$610M; expect actions from strategic restructuring to generate between $40M-$45M in annual pre-tax run-rate cost savings in 2023.

·     Solar stocks have tumbled in 2022 as the Solar ETF (TAN) made another 52-week low today, touching its lowest levels since September 2020.

·     Ryanair (RYAAY) announced cuts to its winter schedule due to delays in the delivery of Boeing (BA) aircraft but said its full-year traffic forecast was unaffected “as yet”.

·     TechnipFMC (FTI) gets $500M-$1Bb contract for Equinor’s Rosebank.

·     Worthington Industries (WOR) Q1 EPS $1.93 vs. est. $2.04, adj op profit $85.1Mm vs est. $89Mm on revs $1.19B vs est. $1.23B.

 

Financials

·     Jefferies (JEF) Q3 profit declined -74% as EPS $0.22 below the est. $0.33 and revs $1.18B missed the $1.25B est.; Q3 Investment banking revenue at Jefferies dipped -2% y/y to $644.6M but nearly 28% higher q/q; Q3 asset management unit revs fell -97% y/y; Q3 capital markets unit revs jumped 14%, to $523.6M.

·     Interactive Brokers Group (IBKR) announced the consolidation of its European brokerage operations, with Interactive Brokers Central Europe, based in Budapest Hungary, merging its client base and operations into the operations of Interactive Brokers Ireland

·     China Evergrande Group shares were suspended on Thursday, Hong Kong’s exchange announced. The chairman of the embattled Chinese real estate developer has reportedly been placed under surveillance, according to Bloomberg News. https://tinyurl.com/cyzejt8k

 

Healthcare

·     Bionomics Ltd. (BNOX) reported positive results from a mid-stage trial of a treatment for post-traumatic stress disorder; said the Phase 2b trial evaluating BNC210 led to a “statistically significant” reduction in total PTSD symptom severity at 12 weeks.

·     Gritstone bio (GRTS) said late Wednesday they secured a $433 million contract by the U.S. government to conduct a mid-stage study of its mRNA-based COVID-19 vaccine candidate.

·     Immunovant (IMVT) 7.37M share Secondary priced at $38.00.

·     Karuna Therapeutics (KRTX) announced the submission of a New Drug Application to the U.S. FDA for KarXT for the treatment of schizophrenia.

 

Technology, Media & Telecom

·     Workday (WDAY) shares fall -9% after lowering its subscription revenue growth outlook for next three years at 2023 analyst day; said now sees subscription revenue growth between 17% and 19%, owing to macroeconomic conditions, down from prior view of 20% plus growth.

·     Micron Technologies (MU) Q4 adj EPS loss (-$1.07) vs est. (-$1.18) on revs $4.01B vs est. $3.91B; sees Q1 adj revs $4.2-4.6B, gross margin (4.0%) plus/minus 2% (est. $3.97B) and adj EPS ($1.14)-($1.00) vs. est. loss (-$0.90); said expect calendar 2023 dram bit demand to grow in the mid-single-digit percentage range; sees Q1 operating expenses $900M +/- $15M.

·     Apple’s (AAPL) new iPhone 15 are heating up in some scenarios, reaching high temperatures that make them difficult to touch at certain times, according to reviews, tests by The WSJ and social-media posts from buyers in China, the U.S. and Canada – WSJ. https://tinyurl.com/ycyj7bw7

·     Concentrix (CNXC) Q3 adj EPS $2.71 vs. est. $2.85; Q3 revs $1.63B vs. est. $1.64B; Q3 operating margin 9.9% and adj operating margin 14.1%; Q3 adj EBITDA $269.3M; sees Q4 EPS $3.03-$3.15 vs. est. $3.33 and revs $2.19B-$2.21B.