Early Look

Thursday, August 22, 2024

U.S. futures are edging slightly higher, after rising for the 9^th time in 10-trading days on Wednesday for the S&P 500 and Nasdaq, as markets await a busy day of data with U.S. PMI Services Aug, Initial Jobless Claims, Existing Home Sales July, and Kansas City Fed releases Jackson Hole 2024 agenda. Markets took the biggest negative revision to payrolls (-818K jobs) since the global financial crisis in stride yesterday, as all wait on the Fed speakers today and tomorrow and size of expected rate cuts. Overnight this morning a few movers on earnings and guidance in tech and retail, with AAP, URBN, BJ, SNOW, CSIQ, TD looking lower on results/guidance and SNPS, WOLF, ZM, ZUO looking higher after results. In Asian markets, The Nikkei Index gained 259 points to 38,211, the Shanghai Index fell -7 points to 2,848, and the Hang Seng Index jumped 250 points to 17,641. In Europe, the German DAX is up 65 points to 18,514, while the FTSE 100 is up 20 points to 8,303. The yen hovers around 145.35/USD ahead of Ueda’s Friday appearance in Japan’s parliament. Treasury 10-year yield remains steady near 3.80%. Note 475 of the S&P 500 companies have now reported Q2 earnings. So far there has been a smaller earnings surprise of 5.15% compared to Q1 of 8.25%. The sales surprise has also been smaller, rising +0.75%, compared to last quarter’s 1.045%.

• The Dow Jones Industrial Average rose 55.52 points, or 0.14%, to 40,890.49.
• The Nasdaq Composite jumped 102.05 points, or 0.57%, to 17,918.99.
• The Russell 2000 Index advanced 28.37 points, or 1.32% to 2,170.56.

• 8:30 AM ET                  Continuing Claims…est. 1.867M
• 9:45 AM ET S&P Global Manufacturing PMI, Aug-flash…est. 49.6
• 9:45 AM ET S&P Global Services PMI, Aug-flash…est. 54.0
• 9:45 AM ET S&P Global Composite, Aug-flash…est. 53.5
• 10:00 AM ET                Existing Home Sales M/M for July…est. 3.93M
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 11:00 AM ET                Kansas City Fed Manufacturing for August…prior (-12)
• 1:00 PM ET U.S. sells $9B for 30-year TIPs auction

• Earnings After the Close: AMWSA BILL CAVA INTU NDRA ROST RRGB WDAY

• Kansas City Fed sets Jackson Hole conference dates 8/22-8/24, in Wyoming
• Wells Fargo FinTech, Information & Business Services Forum, 8/21-8/22 in Newport

• The Bank of Korea leaves the key interest rate unchanged at 3.50% for the 13th consecutive meeting; updated economic forecasts have 2024 CPI at 2.5% versus the 2.6% estimate in May, and 2025 CPI at 2.1%, unchanged from previous estimate.
• Japan’s services PMI rose to 54.0 in August from 53.7, driven by growth in new business, including exports. Despite rising input costs, service providers raised prices at the slowest pace in nine months. Japan’s manufacturing PMI increased slightly to 49.5 in August from 49.1.
• Australia’s manufacturing PMI rose to 48.7 in August from 47.5, indicating a slight improvement though still in contraction. The services PMI increased to 52.2 from 50.4, signaling growth in the services sector.

• Advance Auto Parts (AAP) Q2 EPS $0.75 vs. est. $0.94; Q2 rev $2.7B vs. est. $2.67B; Q2 comparable store sales increased 0.4%; cuts FY24 EPS view to $2.00-$2.50 from $3.75-$4.25 (EST. $3.55), lowers FY24 revenue view to $11.15B-$11.25B from $11.3B-$11.4B (est. $11.29B) and cuts FY24 comp store sales view to (1%)-0% from 0%-1%.
• BJ’s Wholesale (BJ) reports Q2 adjusted EPS $1.09 vs. consensus $1.00; Q2 revs $5.2B vs. est. $5.15B; Q2 comp club sales increased by 3.1% y/y; Q2 comparable club sales excl. Gasoline +2.4%, vs. est. +1.35%; Q2 Membership fees $113.1M, +9.1% y/y; sees FY24 adjusted EPS $3.75-$4.00 vs. est. $3.93.
• Estee Lauder (EL) upgraded to Overweight from Neutral at Piper Sandler and raised tgt to $114 from $95.
• Urban Outfitters (URBN) Q2 EPS $1.24 vs est. $1.00 on sales $1.352B vs est. $1.339B; retail comps +7.1%; Q2 Comparable Retail segment net sales increased 7.1% at Free People and 6.7% at Anthropologie and decreased 9.3% at Urban Outfitters.

• Nordson Inc. (NDSN) Q3 adj EPS $2.41 vs est. $2.33 on sales $661.604Mm vs est. $656.23Mm; guides FY revs $2.665-2.705B vs est. $2.652B and adj EPS $9.45-9.65 vs est. $9.51.
• Unifi (UFI) Q4 adj EPS ($0.22) vs est. ($0.23) on sales $157.5Mm vs est. $156.69Mm; sees Q1 sales $147-153Mm vs est. $158.15Mm and FY sales growth more than 10% vs est. +17.6%.

• TD Bank (TD) said it had set aside $2.6 billion for fines for weaknesses in its anti-money-laundering practices. It plans the sale of 40.5 million shares of common stock in Charles Schwab (SCHW), reducing its ownership interest in the wealth-management company to about 10% from more than 12%.

• Snowflake (SNOW) Q2 adj EPS $0.18 vs. est. $0.16; Q2 revs $868.8M vs. consensus $851.3M; raises FY25 product revenue view to $3.356B from $3.3B and vs. est. $3.31B; Q2 Product revenue was up 30% y/y at $829M, while remaining performance obligations were $5.2B, up 48% y/y; sees q3 product revs $850M-$855M.
• Synopsys (SNPS) Q3 adj EPS $3.43 vs. consensus $3.28; Q3 revs $1.53B vs. consensus $1.52B; sees Q4 adj EPS $3.27-$3.32, vs. consensus $3.23 and sees Q4 revenue $1.614B-$1.644B vs. consensus $1.61B; for the full yr, we expect to achieve rev growth of approximately 15%.
• Wolfspeed (WOLF) Q4 adj EPS ($0.89) vs est. ($0.85) on revs $200.7Mm vs est. $201.19Mm; guides Q1 adj EPS ($1.09) – ($0.90) vs est. ($0.84); cuts FY25 net CAPEX by $200Mm.
• Zoom Video (ZM) Q2 EPS $1.39 topped consensus $1.21; Q2 revs $1.16B vs. est. $1.15B; for Q2, grew operating cash flow and free cash flow by 33.7% and 26.2% year over year, respectively; sees Q3 EPS $1.29-$1.31 above consensus $1.24 and raises FY25 EPS view to $5.29-$5.32 from $4.99-$5.02 and ups FY25 revenue view to $4.63B-$4.64B from $4.61B-$4.62B; Q2 3,933 customers contributing more than $100,000 in trailing 12 month revs, up about 7.1% y/y.
• Zuora Inc. (ZUO) raising both our revenue outlook and our non-GAAP operating income ranges, as well as increasing our target for adjusted free cash flow, while absorbing the operating expense impact of our recent Togai and Sub(x) acquisitions; Q2 adj EPS $0.19 vs est. $0.10, adj op Inc $25.6Mm vs est. $18.82Mm on revs $115.4Mm vs est. $112.6Mm; guides Q3 revs $115-117Mm vs est. $115.11Mm, adj op Inc $20.5-21.5Mm vs est. $20.34.
• Edgar Bronfman sweetened his offer for Shari Redstone’s media empire, submitting a revised bid of $6 billion for National Amusements and a minority stake in Paramount (PARA) – the WSJ https://tinyurl.com/yt9awsew