Mid-Morning Look
Thursday, December 05, 2024
Index |
Up/Down |
% |
Last |
DJ Industrials |
-30.11 |
0.06% |
44,985 |
S&P 500 |
-3.66 |
0.06% |
6,082 |
Nasdaq |
-12.39 |
0.07% |
19,721 |
Russell 2000 |
-5.46 |
0.22% |
2,421 |
U.S. stocks doing a whole lot of nothing this morning, as the overnight futures trading session saw a narrow 7-point range all night, as investors remain content to hold markets at record highs with the S&P 500, Nasdaq and Dow all looking to extend record gains. Volume has completely dried up the last 3 trading days (since the day after Thanksgiving) as major averages continue to melt higher. The S&P 500 (SPX) looks to rise for the 12th time in the last 13 trading days and the Nasdaq looks to rise for the 11th time in last 13 trading days. The Dow Jones Industrial Average is holding above 45,000 after closing above for the first time ever on Wednesday. Fed Chairman Powell comments at conference yesterday remained dovish keeping rate cuts on table ahead of FOMC meeting in two weeks. A handful of earnings results in tech (NCNO, S, SNPS) and retail (FIVE, DG, PVH, AEO) moving several names today. Crypto a big day as Bitcoin tops $100,00 for the first time (highs above $103,500) after several attempts prior failed. Few economic data points but all eyes on the Nonfarm Payroll report on Friday morning. U.S. markets remain steady, failing to pullback over the last month, as investors look to lower interest rates from the Fed, reduced regulation into the new Trump administration. S&P futures (Spuz) made another new high, now 13 consecutive days of higher highs as momentum remains sharply to the upside!
Economic Data
- Weekly Jobless Claims climbed to 224,000 from 215,000 last week and above consensus 215,000; the 4-week moving average climbed to 218,250 from 217,500 prior week; continued claims fell to 1.871M from 1.896M while prior week (revised down from 1.907M) and vs. consensus 1.905M.
- The U.S. Oct trade deficit narrowed to -$73.8B from Sept deficit -$83.8B and vs. consensus deficit -$75.0B-; Oct goods deficit $98.67B, services surplus $24.83B; Oct exports -1.6% vs Sept -1.0%, imports -4.0% vs Sept +3.1%; Oct exports $265.72B vs Sept $270.02B, imports $339.56B vs Sept $353.81B.
- Challenger announced layoffs rebounded 2.1k to 57.7k in November after dropping -17k to 55.6k in October. On a 12-month basis, projected job cuts slowed to a 26.8% y/y pace, halving the prior 50.9% y/y clip. Challenger reported “downstream cuts to Automotive suppliers and parts manufactures (8.2k), as well as ongoing cuts in Consumer and Industrial Manufacturing (2.8k), with Technology (6.6k) also seeing a high number of layoffs.
Macro |
Up/Down |
Last |
WTI Crude |
0.19 |
68.73 |
Brent |
0.32 |
72.63 |
Gold |
-15.60 |
2,660.60 |
EUR/USD |
0.0054 |
1.0563 |
JPY/USD |
-0.26 |
150.33 |
10-Year Note |
0.021 |
4.203% |
Sector Movers Today
- In Autos: Ford (F) was downgraded from Peer Perform to Underperform at Wolfe Research saying 2024 has been a year to forget for autos but expects continued headwinds and uncertainty for the industry in 2025, which should result in revenue and even earnings down YoY for traditional automakers and many suppliers. Wolfe also upgraded MBLY to outperform in driver-assistance sector, MGA upgraded to Peer Perform from Underperform in auto suppliers and downgraded ALLY in auto lending on stocks valuation. In global tires, Bernstein downgraded Pielli (PLLIF) to Underperform and upgraded Continental AG (CTTAY) to Market Perform in global tires outlook saying 2025 will be another tough year in autos but sees continuing structural tailwinds.
- In Airlines: LUV raised its Q4 forecast for revenue per available seat miles, benefiting from improved pricing and a rebound in domestic travel demand as now sees range between 5.5% and 7%, compared with its prior expectation of between 3.5% and 5.5%. AAL forecasts Q4 adj EPS $0.55-$0.75, above prior view $0.25-$0.50, now expects Q4 TRASM to be about flat to up 1% and forecasts Q4 CASM-ex up about 5%-6%, from prior up about 4%-6%. Reuters reported the US Department of Transportation said it was seeking public comment on whether airlines should be required to pay passengers cash compensation when flight disruptions are caused by carriers.
- In Energy: JP Morgan with several changes as they upgraded COP to Overweight from Neutral citing its more defensive tilt on oil levered names and the underperformance YTD while the firm downgraded DVN to Neutral from Overweight noting shares did not respond to Devon’s positive operational updates in 2024, and compares are tougher in 2025 given its strong well productivity. JPM also downgraded CNX to Underweight from Neutral but raised tgt o $37 from $31 after stock’s year-to-date outperformance. SM was downgraded to Neutral noting its near-term cash returns trail peers and ranks lower in its forced ranker compared to SMid cap oily peers.
Stock GAINERS
- AAL +10%; forecasts Q4 adj EPS $0.55-$0.75, above prior view $0.25-$0.50, now expects Q4 TRASM to be about flat to up 1% and forecasts Q4 CASM-ex up about 5%-6%, from prior up about 4%-6%.
- BF/b +10%; after beating top and bottom line Q2 results, backed its FY25 organic net sales view up 2%-4% and lowered FY25 capital expenditures view to $180M-$190M from $195M-$205M; said a boost from int’l mkts will help it generate organic net sales and organic operating income in fiscal 2025.
- FIVE +13%; jumped after Q3 comps accelerated to +0.6% (above guidance and expectations) on much better Q3 earnings and sales and raises year sales to $3.84B-$3.87B vs. prior $3.73B-$3.8B.
- MSTR +5%; as Bitcoin related investors/miners rise after Bitcoin finally topped $100,000.
- TARA +125%; after saying patients in the intravesical trial studying its investigational cell-based therapy TARA-002 to treat non-muscle invasive bladder cancer have shown high complete response rates for up to six months, and as high as nine months for some patients.
- TSLA +4%; as upside momentum continues since the election, now with 10% of all-time highs of $414.50 on November 4th of 2021.
- VRNT +24%; following results as Q3 EPS $0.54 topped consensus $0.43; Q3 revs $224.2M vs. est. $210.0M; New SaaS ACV bookings for new deals, excluding cloud conversions, increased 37% y/y in Q3.
Stock LAGGARDS
- AEO -14%; after lowering annual comparable sales growth of about 3% vs. prior expectation of ~4% rise while Q3 revenue of $1.29B missed estimates of $1.30B, but EPS beat; said revenue decline includes roughly $85M from retail calendar shift, one less selling week.
- APD -2%; Mantle Ridge withdraws nomination for five board candidates to APD, now only nominating its remaining four candidates for co’s board.
- AVAV -12%; on mixed results as Q2 EPS $0.47 misses the $0.67 estimate and Ebitda also missed though revs of $188.5M beat; income from operations of $7M declined from $25.2M y/y citing increase in SG&A expense.
- FI -5%; shares declined after President-elect Donald Trump tapped Fiserv CEO Frank Bisignano late on Wednesday to head the Social Security Administration.
- NCNO -9%; after mixed guidance and incremental churn expected in nCino Mortgage; F4Q25 revenue of $139.5M-$141.5M (consensus $143.8M), up 14% y/ y at the midpoint, subscription revenue of $122.5M-$124.5M (consensus $143.8M), and FY25 revenue guidance calls for $539.0M-$541.0M (previously $538.5M-$544.5M).
- S -10%; after mixed results and guidance; guidance was mixed with ARR/Revenue raised, while FY4Q OM was light of consensus.
- SIG -9%; after Q3 sales fell -3.1% to $1.35B, below est. $1.37B and lowered full-year projections, as now expects sales between $6.74B-$6.81B (vs. prior $6.66B-$7.02B) and adj EPS to $9.62-$10.88 (vs. prior $9.90-$11.52).
- SNPS -8%; shares declined after guiding 2025 revs of $6.75B-$6.8B, below consensus of $6.91B saying sees pressure on China sales as the U.S. tightens controls on chip technology exports to the country.
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.