Early Look

Friday, August 23, 2024

S&P futures are up about +0.55% at 5,625, overnight highs and paring some of yesterday losses ahead of Fed Chairman Powell this afternoon as traders are closely watching for comments of any kind of signal about the timing, size and pace of interest-rate cuts. Bank of England Governor Andrew Bailey is also scheduled to speak today, while the yen firms as Bank of Japan (BOJ) Governor Kazuo Ueda reaffirmed his hawkish stance, to raise rates if inflation stayed on course to sustainably hit the 2% target. Stocks sold off on Thursday, ending near the lows after a strong rally since early August was met with some mild profit taking. Markets are now pricing in a 76% chance of the Fed cutting rates by 25 basis points (bps) at its September meeting, the CME FedWatch tool showed, with traders backing away from bets on a big 50 bps cut. Overall, they see 100 bps of cuts over the next three meetings, although some analysts think markets are being far too aggressive and could be disappointed if Powell is cautious. In Asian markets, The Nikkei Index gained 153 points to 38,364, the Shanghai Index rose 5 points to 2,854, and the Hang Seng Index fell -28 points to 17,612. In Europe, the German DAX is up 124 points to 18,617, while the FTSE 100 is up 26 points to 8,314. In politics, Vice President Kamala Harris formally accepted the Democratic presidential nomination on Thursday as the DNC wrapped up its 4-day convention. The euro was last, up 0.1% at $1.1123, not far from the 13-month high it touched on Wednesday, while sterling rose 0.2% to $1.3125, just shy of the 13-month high on Thursday. Gold prices rebound following Thursday’s slippage while the dollar dips and yields are steady.

• The Dow Jones Industrial Average fell -177.71 points, or 0.43%, to 40,712.78.
• The Nasdaq Composite plunged -299.63 points, or 1.67%, to 17,619.35.
• The Russell 2000 Index declined -20.53 points, or 0.95% to 2,150.03.

• 1:00 PM ET                   Baker Hughes Weekly rig count data

• Fed Chairman Powell speaks at Jackson Hole at 10:00 AM ET.

• Nissan (NSANY) downgraded to Underweight from Neutral at JPMorgan.
• Red Robin Gourmet (RRGB) Q2 adj EPS loss (-$0.48) vs. est. loss (-$0.42); Q2 adj Ebitda $11.8M vs. est. $12.8M; Q2 revs $300.2M vs. est. $294.3M; forecasts FY total rev of about $1.25B (in-line with ests); lowers FY adj. EBITDA to $40.0M-$45.0M from prior $60M-$70M; sees FY restaurant level operating profit of 11.0% to 11.5%.
• Ross Stores (ROST) Q2 EPS $1.59 vs. est. $1.50; Q2 revs $5.29B vs. est. $5.25B; Q2 comp sales +4%, vs. est. +2.98%; raises FY EPS view to $6.00-$6.13, from prior forecast $5.79-$5.98 (est. $6.01); guides Q4 EPS $1.60-$1.67 vs. est. $1.68.
• Uber (UBER) and GM’s Cruise unit to deploy autonomous vehicles on the Uber platform; Uber and cruise plan to launch partnership next year with a dedicated number of chevy bolt-based autonomous vehicles.

• Workers at Canadian National Railway (CNI) will begin to return to work on Friday, a major labor union said, after the Canadian government moved in to end an unprecedented rail stoppage. Rival Canadian Pacific Kansas City (CP) is also preparing to restart operations and is awaiting an order from the Canadian Industrial Relations Board (CIRB). CN and CPKC locked out more than 9,000 unionized workers on Thursday after contract talks were deadlocked.
• PG&E (PCG) is working to confront an uptick in fires ignited by its power lines ahead of the riskier months of the wildfire season, the WSJ reported.

• Moderna (MRNA) announced that it has received approval from the Ministry of Health, Labour and Welfare, MHLW, in Japan for a partial change application for an updated formulation of its COVID-19 mRNA vaccine Spikevax, targeting the SARS-CoV-2 variant JN.1.

• AvidXchange (AVDX) announces $100M share repurchase program.
• Bill Inc. (BILL) announces $300M share buyback program; Q4 adj EPS $0.57 vs est. $0.46, adj op Inc $60Mm vs est. $41.6Mm on revs $343.7Mm vs est. $327.77Mm; guides Q1 revs $346-351Mm vs est. $337Mm, adj op Inc $52-57Mm vs est. $43.35Mm and adj EPS $0.48-0.51 vs es.t $0.51; sees FY revs $1.415-1.45B vs est. $1.438B, adj op Inc $160-195Mm vs est. $209.5Mm and adj EPS $1.36-1.61 vs est. $2.25.
• Roku (ROKU) gets upgraded to Buy from Neutral at Guggenheim with a price target $75.
• Workday (WDAY) authorized buyback of up to $1.0B shares; Q2 adj EPS $1.75 tops consensus $1.65 and Q2 revs $2.085B vs. consensus $2.07B; Q2 subscription revenue $1.903B, up 17.2% y/y, while sees Q3 subscription revenue $1.955B, representing growth of 16%; backs FY25 subscription revenue view $7.7B-$7.725B