Early Look

Tuesday, December 12, 2023

Futures	Up/Down	%	Last
Dow	45.00	0.12%	36,850,
S&P 500	1.25	0.03%	4,679
Nasdaq	18.50	0.11%	16,468

 

 

S&P futures (Spuz) are flat at 4,680, trading in the middle of a 10-point range overnight (high 4,685.25 and low 4,675), as markets await the 8:30 AM ET Nov CPI data, while Treasury advance and yields slip with the 10-year below 4.2%. Major stock averages posted fresh closing highs for this year yesterday ahead of key inflation data today (CPI) and tomorrow (PPI) and the Federal Reserve’s interest-rate decision later this week. The Dow finished at its best level since January 2022, the S&P 500 its highest close since March 2022, and the Nasdaq Composite scored its highest close since April 4, 2022, while it drastically underperformed the Nasdaq 100 Index, despite underperformance in the top seven names in the index AAPL, AMZN, GOOGL, META, NVDA, MSFT, and TSLA. The S&P finished above 4,600 in a slow move higher all day, finishing at the highs ahead of the consumer price index (CPI) data today at 8:30 AM ET. The November CPI M/M is est. to be unchanged (same as prior month), while Y/Y to rise +3.1% (prior +3.2%). On a core basis, ex: food & energy, CPI est. to rise +0.3% (vs. +0.2% prior) and +4% Y/Y (same as October). In Asian markets, The Nikkei Index rose 51 points to 32,843, the Shanghai Index gained 12 points to 3,033, and the Hang Seng Index advanced 173 points to 16,374. In Europe, the German DAX is down -30 points to 16,762, while the FTSE 100 is up 35 points to 7,580. In Stock news, shares of Oracle (ORCL) slide -8% overnight after weaker cloud revenues missed consensus.

 

Economic Calendar for Today

·     6:00 AM ET                  NFIB Small Business Optimism for November

·     7:45 AM ET                  ICSC Weekly Retail Sales

·     8:30 AM ET                  Consumer Price Index (CPI) Headline M/M for November…est. 0%

·     8:30 AM ET                  Consumer Price Index (CPI) Headline Y/Y for November…est. +3.1%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) M/M for November…est. +0.3%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) YoY for November…est. +4.0%

·     8:55 AM ET                  Johnson/Redbook Weekly Sales

·     11:00 AM ET                Cleveland Fed CPI for November

·     2:00 PM ET                   Federal Budget for November

·     4:30 PM ET                   API Weekly Inventory Data

 

Other Key Events:

·     DA Davidson East Coast Bank Summit, 12/12-12/13 (virtual)

·     Evercore/ISI 2023 IT Hardware & Networking Equipment Virtual IR Summit, 12-12/12-13

·     Piper Indiana Bank Tour, 12/12-12/13 (virtual)

·     Truist Texas Bank Summit – CMA, TCBI, HWC, CADE, IBTX, 12/12 in Dallas, TX

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 18.07 points, or 0.39%, to 4,622.24.

·     The Dow Jones Industrial Average jumped 157.06 points, or 0.43%, to 36,404.93.

·     The Nasdaq Composite gained 28.51 points, or 0.20%, to 14,432.49.

·     The Russell 2000 Index advanced 2.86 points, or 0.15% to 1,883.68.

 

 

Macro	Up/Down	Last
Nymex	-0.24	71.08
Brent	-0.24	75.79
Gold	9.40	2,003.10
EUR/USD	0.0036	1.0797
JPY/USD	-1.07	145.09
10-Year Note	-0.046	4.193%

 

 

Sector News Breakdown

Consumer

·     Choice Hotels (CHH) launches an exchange offer to acquire all outstanding shares of Wyndham Hotels & Resorts (WH); CHH currently holds approximately 1.5M shares of Wyndham stock.

·     Casey General (CASY) Q2 EPS $4.24 vs est. $3.80, inside same-store sales +2.9%, revs $4.06B vs est. $4.058B; sees FY24 EBITDA growth in-line with long-term strategic plan goals of +8-10% vs est. +5.2%, sees FY24 inside same-store sales +3.5-5.0%.

·     Ford (F) is cutting F-150 lightning production by half in 2024- automotive news reported.

·     Hasbro (HAS) said it is cutting nearly 20% of its workers, roughly 1,100 jobs, on weak sales of toys and games heading into the holiday sales season.

·     Lucid Group, Inc. (LCID) announced Sherry House, Chief Financial Officer (CFO), informed the Company that she is resigning from her position, effective immediately, to pursue other opportunities.

 

Energy, Industrials and Materials

·     Blue Bird Corp. (BLBD) Q4 adj EPS $0.66 vs est. $0.48, adj EBITDA $40.7Mm vs est. $28.67Mm on revs $303Mm vs est. $290.11Mm; sees FY24 net revs $1.15-1.25B vs est. $1.195B, adj EBITDA $105-125Mm vs est. $90.60Mm and FCF $50-60Mm; also confirms long-term outlook of profitable growth towards about $2B net revs and 12%+ adj EBITDA mgn.

·     Boeing (BA) has promoted Stephanie Pope, the head of its services business to chief operating officer, putting her in discussion as a potential heir apparent to CEO David Calhoun.

·     Star Bulk (SBLK) and Eagle Bulk Shipping (EGLE) to combine, creating a leader in dry bulk shipping; Eagle shareholders will receive 2.6211 shares of Star Bulk common stock for each share of Eagle common stock owned; represents a total consideration of approximately $52.60 per share, a 17% premium based on Eagle’s closing share price of $44.85 on December 8, 2023.

·     Transocean Ltd. (RIG) announced a minimum 540-day contract for the Transocean Barents with OMV Petrom S.A. in the Romanian Black Sea at a rate of $465,000 per day, excluding additional services. The program is expected to commence in the first quarter of 2025 and is estimated to contribute approximately $251 million in backlog.

 

Financials

·     AllianceBernstein L.P. (AB) preliminary assets under management increased to $696 billion during November 2023 from $652 billion at the end of October. The 6.7% AUM increase was due to market appreciation and firmwide net inflows into all three distribution channels.

·     Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1.41 trillion at November 30, 2023, compared to $1.33 trillion at October 31, 2023. This month’s increase in AUM reflected the impact of positive markets and flat long-term net outflows.

·     Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $159.6B as of November 30, 2023, and average assets under management for November of $155.4B.

·     Veritas Capital is close to a deal to sell a 50% stake in Cotiviti to alternative-asset manager KKR in a deal that would value the healthcare-technology company at around $11 billion, the WSJ reported last night.

·     Prudential (PRU) authorizes a stock buyback for up to $1.0B.

 

Healthcare

·     ADC Therapeutics (ADCT) said a combination of its cancer drug Zynlonta and a biosimilar of Roche’s (RHHBY) Rituxan demonstrated an overall response rate of 96% in patients with a type of lymphatic cancer in a mid-stage study.

·     Centene (CNC) said it expects to generate over $6.70 in adj EPS, up from prior view of $6.60 and vs. consensus of $6.74; sees FY24 revs $142.5B-$145.5B vs. $142.01B consensus, and the company authorized a $4B increase to its existing stock repurchase program.

·     Connect Biopharma (CNTB) announces positive Rademikibart global phase 2b topline results in adult patients with moderate-to-severe persistent asthma.

·     Inotiv (NOTV) Q4 adj EBITDA $23.7Mm vs est. $31.23Mm on revs $140.7Mm vs est. $139.43Mm; says anticipate achieving balance of expected expense reductions in FY24, continues to execute on its site optimization plan for its Blackthorn, UK site; expect to continue to remain in compliance with financial covenants for fiscal year.

·     Pfizer (PFE) announced the acceptance of regulatory submissions for its anti-tissue factor pathway inhibitor (anti-TFPI) candidate, marstacimab.

·     Sanofi (SNY) releases statement saying they are disappointed with the FTC announcement it is seeking a preliminary injunction against a proposed licensing agreement between Sanofi and Maze Therapeutics; company says they will therefore be terminating the agreement with Maze in accordance with its terms.

 

Technology, Media & Telecom

·     Oracle (ORCL) Q2 adj EPS $1.34 vs est. $1.32 on adj revs $12.9B vs est. $13.048B, cloud revs $4.8B up 25% vs. expectations of +30%, adj op mgn 43%; says in next few months are turning on 20 new Oracle cloud datacenters collocated with and connected to Microsoft Azure; says business is good and getting better.

·     Alphabet (GOOGL) owned Google has lost an antitrust case filed by Epic Games after a California federal jury decided it maintains a monopoly in its app store’s distribution and payments market.