Early Look

Wednesday, December 4, 2024

Another day, another record on tap potentially for the S&P 500 and Nasdaq after the S&P posted its 54^th all-time high this year on Tuesday as strong earnings results from several technology companies overnight are boosting markets. Shares of Dow component and software giant Salesforce (CRM), semi chip maker Marvell technologies (MRVL), storage company Pure Storage (PSTG) and security software maker Okta (OKTA) are all trading up 10% or more overnight following results. Next up, investors awaited further jobs data with the ADP Private payroll report up next at 8:15 AM ET, then the Nonfarm payrolls report on Friday morning. Markets have also digested reassuring dovish comments from Federal Reserve policymakers the last few days (Daly, Goolsbee, Kugler) while tonight, we will hear from Fed Chairman Powell in a moderated discussion at NYT. The recent Fed speakers stayed away from signaling whether they would support another interest rate cut later this month, but it remains on the table as Fed futures show a roughly 72% chance of a 25-basis-point rate cut at the Fed’s Dec. 17-18 policy meeting. A report on Tuesday showed U.S. job openings increased solidly in October while layoffs dropped by the most in 1-1/2 years. Markets remain strong as the S&P 500 advanced 5.7% in November as former U.S. President Donald Trump recaptured the White House in the Nov. 5 election and his Republican Party swept both houses of Congress while the index is up roughly 27% for the year to date. In Asian markets, The Nikkei Index gained 27 points to 39,276, the Shanghai Index fell -14 points to 3,364, and the Hang Seng Index dipped -3 points to 19,742. In Europe, the German DAX is up 192 points to 20,209, while the FTSE 100 is down -20 points to 8,337.

• The Dow Jones Industrial Average fell -76.47 points, or 0.17%, to 44,705.53.
• The Nasdaq Composite gained 76.96 points, or 0.40%, to 19,480.91.
• The Russell 2000 Index declined -17.79 points, or 0.73% to 2,416.35.

• 8:15 AM ET ADP Private Payrolls for November…est. 150K
• 8:45 AM ET                  Fed’s Musalem Speaks on US Economy, Policy
• 9:45 AM ET S&P Global Composite, Final PMI…prior 55.3
• 9:45 AM ET S&P Global Services PMI, Nov-Final…prior 57.0
• 10:00 AM ET ISM Non-Manufacturing PMI, for November…est. 55.5
• 10:00 AM ET                Factory Orders M/M for October…est. +0.2%
• 10:30 AM ET                Weekly DOE Inventory Data
• 2:00 PM ET                   Federal Reserve Releases Beige Book

• Earnings After the Close: AEO AVAV CHPT CXM FIVE GEF IDT NCNO OOMA PVH S SNPS VRNT

• Deutsche Bank 9th Annual Lithium l Battery Supply Chain Conference, 12/4 (virtual)
• Goldman Sachs 16th Annual Industrials & Autos Week, 12/2-12/5, in London
• Goldman Sachs Industrials and Materials Conference 2024, 12/4-12/5, in New York
• Piper Healthcare Conference, 12/3-12/5, in New York
• Roth MKM 7th Annual Sustainability Private Capital Event, 12/4-12/5 (virtual)
• 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

• At an emergency meeting, South Korea Finance Minister Choi said that the government will deploy “unlimited liquidity” into the country’s financial markets if necessary to help stabilize.
• Caixin China services PMI 51.5 vs 52.4 estimate, composite PMI 52.

• Foot Locker (FL) Q3 adj EPS $0.33 vs. est. $0.41 on sales $1.96B vs. est. $2.02B and comp sales 2.4% vs. est. 2.75%; lowers FY25 adj EPS $1.20 to $1.30, from prior $1.50 to $1.70 (est. $1.53) and narrows comp sales FY25 view to +1% to +1.5%, from +1% to +3%; lowers FY25 gross margin view to 28.7%-28.8%, from 29.5%-29.7%.
• General Motors (GM) said it would record two non-cash charges totaling more than $5 billion on its joint venture in China, one related to the restructuring of the operation and another reflecting its reduced value. GM expects the charge for restructuring costs to be $2.6B-$2.9B and the charge for reduced joint-venture value to be $2.7B.
• Torrid Holdings (CURV) Q3 EPS ($0.01) vs est. $0.03, adj EBITDA $19.584Mm vs est. $26.82Mm on revs $263.766Mm vs est. $285.82Mm; guides Q4 net sales $255-270Mm vs est. $290.63Mm and adj EBITDA $9.0-15.0Mm vs est. $18.88Mm; sees FY sales $1.083-1.098B vs est. $1.139B and adj EBITDA $101-107Mm vs est. $118.34Mm.
• Volkswagen (VWAGY) is recalling 4,616 vehicles in the United States over concerns that their high-voltage batteries may overheat and increase the risk of a fire, the National Highway Traffic Safety Administration said.

• Intuitive Machines (LUNR) prices upsized offering of 9.523M shares of common stock at $10.50 per share.
• Old Dominion (ODFL) reported LTL tons per day for November of -8%, LTL shipments per day -6.8% and LTL weight per shipment -1.2%.
• XPO, Inc. (XPO) reported certain preliminary LTL segment operating metrics for November 2024. LTL tonnage per day decreased 4.0%, as compared with November 2023, attributable to a year-over-year decrease of 4.2% in shipments per day and an increase of 0.2% in weight per shipment.

• Iris Energy (IREN) announces $300M convertible senior notes offering due 2030.
• Raymond James Financial Inc (RJF) authorized repurchase of company’s shares of common stock in an aggregate amount of up to $1.5B and raises dividend to $0.50.
• Royal Bank of Canada (RY) Q4 adjusted EPS C$3.07 vs. C$2.65 last year and revs C$15.07B vs. C$12.69B last year; raises quarterly dividend by 4.2%.

• Novavax (NVAX) said to sell its Czech Republic manufacturing facility to Novo Nordisk (NVO) for $200M and expects to reduce annual operating costs by ~$80M.
• Revolution Medicines (RVMD) 14.13M share Secondary priced at $46.00.

• Box Inc. (BOX) Q3 EPS $0.45 vs. est. $0.42; Q3 revs rose 5% y/y to $275.9M vs. est. $275.1M; Q3 Remaining performance obligations (“RPO”) as of October 31, 2024 were $1.282B, up 13% q/q; raises FY25 EPS view to $1.70 from $1.64-$1.66 (est. $1.67); narrows FY25 revs to $1.09B from $1.086B-$1.09B (est. $1.09B).
• Couchbase Inc. (BASE) Q3 EPS ($0.35) vs est. ($0.08) on revs $51.628Mm vs est. $50.78Mm; guides Q4 revs $52.7-53.5Mm vs est. $54.05Mm, ARR $236.5-239.5Mm and adj op Inc ($5.7)Mm-($4.7)Mm vs est. ($5.732)Mm.
• Marvell Technologies (MRVL) Q3 adj EPS $0.43 vs. est. $0.41 while revs rose 6.9% y/y to $1.52B vs. est. $1.45B; Q3 adj gross margin 60.5% vs. 60.6% y/y; sees Q4 adj EPS 59c plus/minus $0.05 vs. est. $0.52 and Q4 revenue $1.8B plus/minus 5% vs. est. $1.65B. GAAP gross margin is expected to be approximately 50%.
• Okta Inc. (OKTA) shares rise on results; Q3 adj EPS $0.67 vs est. $0.58 on revs $665Mm vs est. $649.7Mm; guides Q4 revs $667-669Mm vs est. $650.64Mm and adj EPS $0.73-0.74 vs est. $0.67; sees FY revs $2.595-2.597B vs est. $2.563B and adj EPS $2.75-2.76 vs est. $2.61.
• Pure Storage (PSTG) shares surge on results; Q3 adj EPS $0.50 vs est. $0.42, adj op Inc $167.3Mm vs est. $141.5Mm on revs $831.1Mm vs est. $814.88Mm; guides Q4 revs $867Mm vs est. $855.91Mm, adj op Inc $135Mm vs est. $155.86Mm and adj op mgn 15.6%.
• NXP Semiconductors (NXPI) and a Taiwan Semi (TSM) affiliate are discussing an expansion of their $8B Singapore venture, as they look to diversify chip production in anticipation of growing U.S.-Chinese tensions over technology