Morning Preview: December 03, 2024

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Early Look

Tuesday, December 3, 2024

Futures

Up/Down

%

Last

Dow

-28.00

0.06%

44,877

S&P 500

-0.75

0.01%

6,061

Nasdaq

-18.00

0.08%

21,200

 

 

After a mixed trading session on Monday that saw large cap technology stocks boost the S&P 500 and Nasdaq to new record highs, U.S. futures are looking modestly lower as investors await key jobs data today and the rest of this week for clues to the next move by the FOMC at its policy meeting next week. Fed Governor Christopher Waller said late yesterday that with inflation still forecast to fall to 2% he is inclined “at present” to support another interest rate cut later this month. Fed speakers today include comments from Chicago Fed President Austan Goolsbee and Fed Board Governor Adriana Kugler. The S&P 500 reached a new all-time high on Monday, while the Nasdaq 100 rose 1.1%, while the Dow Jones slipped 0.3%. After yesterday’s market rally, the S&P 500 futures (Spuz) have now posted 9 days in a row of higher highs, so, with one month left, just how strong are major averages? @KobeissiLetter tweeted last night, “The S&P 500 (SPX) is up 26.5% this year and on track for its best annual performance in 26 years. If the S&P 500 rises another 3.5%, it would mark the first annual gain of 30% or more since 1997. Additionally, the S&P 500 has hit 53 all-time highs year-to-date, the 3rd highest this century. This is only below the 70 and 62 all-time highs seen in 2021 and 2017.” In Asian markets, The Nikkei Index surged 735 points or 1.91% to 39,248, the Shanghai Index gained 14 points to 3,378, and the Hang Seng Index jumped 196 points to 19,746. In Europe, the German DAX is up 18 points to 19,952, while the FTSE 100 is up 58 points to 8,371. Treasury yields little changed, Bitcoin back under $95,000, and oil prices are higher.

 

Market Closing Prices Yesterday

  • The S&P 500 Index gained 14.77 points, or 0.24%, to 6,047.15.
  • The Dow Jones Industrial Average fell -128.65 points, or 0.29%, to 44,782.00
  • The Nasdaq Composite jumped 185.78 points, or 0.97%, to 19,403.95.
  • The Russell 2000 Index slipped -0.59 points, or 0.02% to 2,434.13.

Economic Calendar for Today

  • 7:45 AM ET ICSC Weekly Retail Sales
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 1:45 PM ET                   Fed’s Goolsbee Gives Closing Remarks
  • 4:30 PM ET API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: CNM CTRN DCI REX
  • Earnings After the Close: BASE BOX CRM CURV MRVL NOTV OKTA PSTG

Other Key Events:

  • Goldman Sachs 16th Annual Industrials & Autos Week, 12/2-12/5, in London
  • Goldman Sachs 2024 Aircraft Leasing Conference, 12/3 in New York
  • Oppenheimer Insurance Summit, 12/3
  • Piper Healthcare Conference, 12/3-12/5, in New York
  • Seaport Global Macau Global Gaming tour, 12/2-12/6, in Macau China
  • UBS Global technology Conference, 12/2-12/5, in Scottsdale, AZ
  • Wells Fargo TMT Summit, 12/3-12/4, in Rancho Palos Verde

 

 

Macro

Up/Down

Last

Nymex

0.77

68.87

Brent

0.78

72.61

Gold

8.60

2,667.10

EUR/USD

0.0024

1.0521

JPY/USD

0.12

149.71

10-Year Note

+0.015

4.209%

 

World News

  • OPEC+ is likely at its meeting on Thursday to extend its latest round of oil output cuts until the end of the first quarter, four OPEC+ sources told Reuters, to provide additional support for the oil market. OPEC+, which pumps about half the world’s oil, has been aiming to unwind output cuts through 2025. However, a slowdown in global demand and rising output outside the group pose hurdles to that plan and have weighed on prices.
  • China said it has banned rare material exports to the U.S. of items related to the minerals gallium, germanium and antimony that have potential military applications, its commerce ministry said on Tuesday, a day after Washington’s latest crackdown on China’s chip sector (shares of rare earth names active like MP).

Sector News Breakdown

Consumer

  • Tesla (TSLA) sales of China-made electric vehicles fell 4.3% y/y to 78,856 in November, data from the China Passenger Car Association (CPCA) showed. Deliveries of China-made Model 3 and Model Y vehicles recorded a 15.5% increase from the previous month.
  • Kroger (KR) was upgraded to Buy from Hold at Jefferies and raised tgt to $73 from $54 while BMO Capital downgraded the shares of Kroger this morning with an unchanged price target of $60.
  • Live Nation Entertainment (LYV) announces launch of $1B in convertible senior notes due 2030.

Energy, Industrials and Materials

  • Axon (AXON) upgraded to Overweight from Equal Weight at Morgan Stanley and raised tgt to $700 from $500.
  • Crane Company (CR) announces agreement to sell engineered materials segment to KPS Capital Partners, LP for $227M; forecasts Q4 adj EPS from cont ops $1.10 to $1.25.
  • Donaldson (DCI) Q1 adj EPS $0.83 vs. est. $0.82; Q1 revs $900.1M vs. est. $892.43M; still sees FY25 EPS $3.56-$3.72, vs. consensus $3.62 and still sees FY25 revenue growth 2%-6% from FY24 revenue of $3.59B.
  • FedEx (FDX) downgraded to market perform from outperform at Bernstein ahead of Q2 earnings and an impending less-than-truckload (LTL) freight spin off decision; cuts tgt to $316 from $337.
  • General Motors (GM) announced it has reached a non-binding agreement to sell its stake in the nearly completed Ultium Cells LLC battery cell plant in Lansing, Michigan to its joint venture partner LG Energy Solutions.
  • Honeywell (HON) and Bombardier (BDRBF) sign landmark agreement to deliver the next generation of aviation technology; Honeywell updates 2024 outlook.
  • Joby Aviation Inc (JOBY) said CFO Matthew field to resign effective December 13, 2024 (went to OSK).
  • Rayonier (RYN) announces a new $300M share repurchase authorization and announces a special dividend of $1.80 per share.
  • United States Steel (X) shares fell after President-elect Donald Trump said a series of tax incentives and tariffs will revive U.S. Steel, as he reiterated his opposition to Nippon Steel’s planned $15 bln purchase of co.

Financials

  • Aflac (AFL) raises the quarterly dividend 16% to $0.58 per share.
  • CleanSpark Inc. (CLSK) FY revs $378.9Mm vs est. $397.32Mm and adj EBITDA $245.8Mm vs est. $141.44Mm.
  • Regional Management Corp (RM) announces a $30M stock repurchase program.
  • State Street (STT) upgraded to Outperform from Market Perform at Keefe Bruyette and raised tgt to $120.

Healthcare

  • PTC Therapeutics (PTCT) upgraded to Outperform from Sector Perform at RBC Capital and raised tgt to $63 from $39 as views its Huntington’s program deal with Novartis (NVS) as “transformative” for PTC.
  • TransMedics (TMDX) narrows FY24 revenue view to $428M-$432M, from prior $425M-$445M (est. $432.37M) and announces new CFO as Gerardo Hernandez succeeds Stephen Gordon.
  • Vaxart (VXRT) completes enrollment of sentinel cohort in phase 2B study evaluating its COVID-19 oral pill vaccine candidate.

Technology, Media & Telecom

  • Microchip Technology (MCHP) shares fell overnight; provided lower updated revenue guidance for the December 2024 quarter and announced manufacturing restructuring plans; expects December 2024 qtr revenue close to low end of their original guidance $1.025B; said “with inventory levels high and having ample capacity in place, we have decided to shut down our Tempe wafer fabrication facility that we refer to as Fab 2.”
  • Microsoft (MSFT) faces a 1-billion-pound ($1.27 billion) dispute in the U.K. over how it charges customers who buy cloud software services that rival its own Azure, the latest antitrust challenge to the U.S. tech giant’s approach to licensing, the WSJ reported.
  • AT&T (T) authorizes repurchase of about $10B in shares; raises FY adjusted EPS $2.20 to $2.25, from prior $2.15 to $2.25; sees capital expenditure high end of $21B to $22B, vs. prior $21B to $22B; still sees free cash flow $17B to $18B, estimate $17.47B and still sees adjusted EBITDA +3%.
  • Credo Technology (CRDO) Q2 revs $72.0M vs. est. $66.5M; Q2 EPS $0.07 vs. est. $0.05; forecasts Q3 gross margin 60.6% to 62.6% and guides Q3 rev $115M to $125M
  • Bill Holdings (BILL) to offer $1.0B of convertible senior notes due 2030.
  • Ingram Micro (INGM) to reduce headcount by 850 associates.
  • IonQ (IONQ) announced the launch of its quantum operating system, now called IonQ Quantum OS, and a collection of new capabilities named IonQ Hybrid Services suite. These technologies will greatly advance performance and utility of quantum computing for enterprise customers.
  • Seagate Technologies (STX) sad in 8K “As a result, production output for Seagate’s fiscal third quarter ending March 28, 2025, will be lower than previously expected with an associated revenue impact of up to $200 million for the fiscal third quarter”
  • Zscaler (ZS) Q1 adj EPS $0.77 vs est. $0.63 on revs $627.955Mm vs est. $606.19Mm; guides Q2 revs $633-635Mm vs est. $633.84Mm and adj EPS $0.68-0.69 vs est. $0.69; sees FY revs $2.623-2.643B vs est. $2.614B and adj EPS $2.94-2.99 vs est. $2.90.

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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.

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