Early Look

Thursday, August 15, 2024

S&P 500 futures were little changed overnight for a second day ahead of more economic data that could reinforce the case for Fed rate cuts. A heavy slate of data is on the calendar today, highlighted by monthly Retail Sales to see the strength of the consumer, along with weekly jobless claims, import/export prices, NY manufacturing data, Philly Fed survey, Industrial production, Business inventories, and housing data. U.S. stocks look to build on the recent upward momentum following another win for the Bulls on Wednesday as the S&P 500 and Nasdaq each made it a 5^th straight day of gains as the July CPI inflation data was in-line with consensus readings yesterday, following a tamer PPI reading the day prior, easing the inflation concern for markets and raising hopes for aggressive rate cuts in September. The Dow Jones Industrial Average closed above the 40,000 level for the first time since the first of August. Earnings results overnight have Dow component Cisco (CSCO) trading higher in technology and Deere (DE) shares looking higher in the industrial sector after earnings this morning. Shares of retailers Nike and Ulta moving higher after quarterly filings showed notable investors took stakes in the company’s (more below). In Asian markets, The Nikkei Index gained 284 points to 36,726, the Shanghai Index jumped 26 points to 2,877, and the Hang Seng Index dipped -4 points to 17,109. In Europe, the German DAX is up 41 points to 17,926, while the FTSE 100 is flat at 8,284. Investors have kept a cautious eye on this week’s data releases – the last set of economic indicators before Fed Chairman Jerome Powell delivers a much-anticipated speech at Jackson Hole next week.

• The Dow Jones Industrial Average rose 242.75 points, or 0.61%, to 40,008.39.
• The Nasdaq Composite edged higher 4.99 points, or 0.03%, to 17,192.60.
• The Russell 2000 Index declined -10.87 points, or 0.52% to 2,084.32.

• 8:30 AM ET                  Continuing Claims…est.1.875M
• 8:30 AM ET NY Empire Manufacturing for August…est. (-6)
• 8:30 AM ET                  Import Prices M/M for July…est. (-0.1%)
• 8:30 AM ET                  Export Prices M/M for July…est. unchanged
• 8:30 AM ET                  Philly Fed Business Index for August…est. 6.0
• 8:30 AM ET                  Retail Sales M/M for July…est. +0.3%
• 8:30 AM ET                  Retail Sales – Less Autos M/M for July…est. +0.1%
• 9:10 AM ET                  Fed’s Musalem Speaks on Economy, Policy
• 9:15 AM ET                  Industrial Production M/M for July…est. (-0.3%)
• 9:15 AM ET                  Capacity utilization for July…est. 78.5% (down from 78.8%)
• 10:00 AM ET                Business inventory M/M for June…est. +0.3%
• 10:00 AM ET NAHB Housing Market Index for August…est. 43
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 1:10 PM ET                   Fed’s Harker Gives Speech on Center at Philadelphia Fed
• 4:00 PM ET                   Net Long-term TIC Flows for June

• Earnings After the Close: AMAT COHR HRB SWKH

• Britain’s economy showed Gross domestic product (GDP) grew 0.6% in the second quarter of 2024 after a 0.7% expansion in the first quarter which was the fastest in more than two years, But in June alone monthly output growth slowed to zero from 0.4% in May.

• Nike (NKE) shares rise as Pershing Square’s William Ackman built new stakes in NKE during second quarter, according to regulatory filing, revealing Ackman’s hedge fund owns 3.04 mln class B shares of co.
• Ulta Beauty (ULTA) shares rose overnight after a quarterly filing showed Warren Buffett’s Berkshire Hathaway acquired a sizeable stake in the cosmetics store chain worth $185.4M.

• Origin Materials (ORGN) Q2 adj EPS ($0.14) vs est. ($0.12), adj EBITDA ($12.9Mm) vs est. ($31.95Mm) on revs $7.033Mm vs est. $7.78Mm; maintains FY revs and net cash burn guidance.
• Titan Machinery (TITN) shares tumble; guides Q2 adj EPS around $0.17 on sales $634M, below consensus $0.60/$696M saying lower commodity prices and sustained high interest rates, along with mixed growing conditions across our footprint, have negatively affected farmer sentiment resulting in lower agriculture equipment sales; cuts FY25 adjusted EPS view to 0c-$0.50 from $2.25-$2.75

• Klarna nears picking Goldman as lead bank for US IPO – Bloomberg.

• Accuray (ARAY) Q4 EPS $0.03 vs est.$0.03 on revs $134.289Mm vs est. $121.51Mm; sees FY revs $460-470Mm vs est. $456.41Mm and adj EBITDA $27.5-29.5Mm vs est. $28.48Mm.
• Avidity Biosciences (RNA) 7.32M share Secondary priced at $41.00.
• Johnson & Johnsons (JNJ) was twice blocked in New Jersey from getting bankruptcy protection from one of its units to resolve billions of dollars in cancer claims tied to baby powder use. For its third try, the company is eyeing Texas – Bloomberg News reported.
• Roche (RHHBY) turned down a potentially $14B-a-year weight-loss pill that is now being developed by Eli Lilly (LLY), giving the company a leading position in the weight-loss market, The Financial Times reports. In 2018, Roche decided to not take advantage of its “right of first refusal” to purchase a type-two diabetes pill from drugmaker Chugai, with which it has a 20 year-long partnership.

• JD.com (JD) Q2 adj EPS $1.29 vs. est. $0.85; Q2 revs $40.1B vs. est. $40.94B; Q2 net revenue of 291.40 billion yuan ($40.71 billion) in Q2 vs estimates of 292.89 billion yuan.
• Lumentum Holdings (LITE) Q4 adj EPS $0.06 vs est. $0.03 on revs $308.3Mm vs est. $301.02Mm; sees Q1 revs $315-335Mm vs est. $312.57Mm, adj op mgn 0.0-3.0% and adj EPS $0.07-0.17 vs est. $0.13.