Early Look

Wednesday, August 28, 2024

A quiet starts to U.S. stocks, as S&P futures (Spuz) trade in a 20-point range overnight, last up slightly at 5,646 after posting modest gains on Tuesday as markets eagerly anticipate earnings results from AI and semi chip giant Nvidia (NVDA) after the close tonight. Expectations are high and could impact the tech space greatly. U.S. stocks edged higher in a light volume on Tuesday as the S&P 500 closed within 1% of its record closing high reached on July 16, and in doing so joined the Nasdaq in posting modest gains in the range-bound session. The Dow Jones Industrial Average edged higher, posting its 2^nd consecutive all-time closing high. A larger-than-expected uptick in August consumer confidence helped boost major averages on Tuesday, led by chip stocks, financials, and industrials while housing and energy stocks slumped. In Asian markets, The Nikkei Index gained 83 points to 38,371, the Shanghai Index fell -11 points to 2,837, and the Hang Seng Index dropped -182 points to 17,692. In Europe, the German DAX jumped 160 points to 18,843, while the FTSE 100 is flat at 8,346. Oil prices are sinking about -1.5% to $74.30 per barrel, gold edges lower after recent record highs and the dollar index (DXY) is up +0.3%, but still on track for a monthly decline of about -3%. Not much in the way of economic data on Wednesday, but markets await Q2 GDP on Thursday and PCE inflation data on Friday. Bitcoin adds to Tuesday losses, falling another 3% back below $60,000.

• The Dow Jones Industrial Average rose 9.98 points, or 0.02%, to 41,250.50.
• The Nasdaq Composite gained 29.06 points, or 0.16%, to 17,754.82.
• The Russell 2000 Index declined -14.93 points, or 0.67% to 2,203.00

• 10:30 AM ET                Weekly DOE Inventory Data
• 1:00 PM ET US Treasury to sell $70B in 5-year notes
• 6:00 PM ET                   Fed’s Bostic Speaks on Economic Outlook

• Earnings After the Close: AFRM APLD COO CRM CRWD FIVE GEF HPQ NTAP NTNX NVDA OKTA PAHC PSTG VEEV VSCO

• Jefferies Semiconductor, IT Hardware & Communication Technology Summit, 8/27-8/28, in Chicago, IL

• Nordstrom (JWN) Q2 adj EPS $0.96 above est. $0.72; Q2 revs $3.89B vs. est. $3.88B; Q2 adj EBITDA $379M vs. est. $332.5M and gross margin 36.6% above est. 35.3%; guides FY adj EPS $1.75-$2.05 vs. est. $1.76; sees FY rev growth 1% decline to 1% growth vs prior outlook 2% decline to 1% growth and sees FY comparable sales growth flat to 2% growth vs prior outlook 1% decline to 2% growth.
• PVH Corp. (PVH) Q2 adj EPS $3.01 vs. est. $2.29; Q2 revs $2.074B, in-line with consensus $2.07B; raises FY24 EPS view to $11.55-$11.80 from $11.00-$11.25 (est. $11.31), while backs FY24 revenue decline view 6%-7%; sees Q3 revenue to decrease 6% to 7% y/y; expects to make common stock repurchases under stock repurchase program of about $400M.
• General Motors (GM) said it would delay the start of production at a planned battery plant in Indiana by about a year, to 2027.
• Li Auto (LI) Q2 adj EPS $0.20 vs. est. $0.19; Q2 revs rose 11% y/y to 31.68B yuan vs. est. 30.27B yuan; Q2 deliveries reached 108,581 vehicles, up 25% y/y that slowed from the 53% vehicle sales growth in the first quarter; Q2 Gross margin fell to 19.5% from 21.8% a year ago and 20.6% in Q1; for Q3, said it expects to deliver between 145,000 and 155,000 vehicles and post revenue of 39.4 billion yuan to 42.2 billion yuan.

• Uranium prices are seen averaging $120/lb. in 2025 and at $135/lb. by 2026 according to a bullish report from Bank America this morning saying, “longer term, we believe China drives story with plans to materially increase installed generating capacity as it decarbonizes its energy supply.” (UEC, UUUU, CAJ among uranium plays).

• Royal Bank of Canada (RY) Q3 adj EPS C$3.26 vs. est. C$3.09; Q3 revs C$14.63B vs. est. C$14,36B; Q3 provision for credit loss C$659M vs. est. C$899.7M; adjusted net income rose to C$4.73 billion ($3.51 billion), or C$3.26 per share, in the three months ended July 31, from C$4.01 billion, or C$2.83 per share.
• TransUnion (TRU) downgraded to Hold from Buy at Needham.

• SpringWorks Therapeutics, Inc. (SWTX) said the FDA has accepted the Company’s New Drug Application (NDA) for mirdametinib, an investigational MEK inhibitor, for the treatment of adult and pediatric patients with neurofibromatosis type 1-associated plexiform neurofibromas.

• Box Inc. (BOX) Q2 adj EPS $0.44 vs. est. $0.40 and revs $270M vs. consensus $269.18M; guides Q3 results above views while raises FY25 adjusted EPS view to $1.64-$1.66 from $1.54-$1.58 (est. $1.57) and boosts FY25 revenue view to $1.086B-$1.09B from $1.075B-$1.08B vs. consensus $1.08B.
• nCino Inc. (NCNO) Q2 adj EPS $0.14 vs est. $0.13 on revs $132.403Mm vs est. $131.04Mm, subscription revs $113.9Mm, adj op Inc $19.3Mm vs est. $17.8Mm; guides Q3 revs $136-138Mm vs est. $138.63Mm, subscription revs $117-119Mm, adj op Inc $21-22Mm vs est. $21.81Mm, adj EPS $0.15-0.16 vs est. $0.16; sees FY revs $538.5-544.5Mm vs est. $541.72Mm, subscription revs $463-469Mm, adj op Inc $87-90Mm vs est. $87.63Mm and adj EPS $0.66-0.69 vs est. $0.67.
• Ooma Inc. (OOMA) Q2 adj EPS $0.15 vs. est. $0.14; Q2 revs $64.1M vs. est. $62.7M; Q2 adj Ebitda $5.6M vs. est. $4.72M; forecasts FY revs view to $254M-$255.5M above prior $250.7M-$253.0M and guides Q3 just above consensus views.
• Semtech Holdings (SMTC) Q2 adj EPS ($0.11) vs est. $0.09, adj EBITDA $40.5Mm vs est. $35.4Mm on sales $215.4Mm vs est. $212.3Mm, adj gr mgn 50.4%, adj op mgn $14.2Mm; guides Q3 sales $228-238Mm vs est. $227.49Mm, adj gr mgn 51.5-52.5%, adj EBITDA $45.9-51.5Mm vs est. $38.67Mm, adj EPS $0.20-0.26 vs est. $0.21.
• SentinelOne (S) Q2 EPS $0.01 vs. est. 0.00; Q2 revs rose 33% y/y to $198.9M vs. est. $197.3M; Q2 adj gross margin 80% vs. est. 78.9%; Q2 annualized recurring revenue (ARR) increased 32% to $806.0M; Q2 customers with ARR of $100,000 or more grew 24% to 1,233; sees Q3 revenue $209.5M, in-line with consensus $209.47M and adj gross margin 79%; raises FY25 revenue view to $815M form $808M-$815M and FY adj gross margin view.
• Samsung SDI said Wednesday that it and General Motors agreed to build a $3.5 billion battery-making joint venture in the U.S. by 2027. The Samsung SDI-GM joint venture will have an initial production capacity of 27 gigawatt hours a year, which could be increased to 36 GWh in future, the South Korean battery maker said in a statement.