Early Look

Friday, January 5, 2024

The S&P 500, Dow, and Nasdaq appear on track to snap their 9-week winning streaks, as U.S. stocks have opened the New Year to the downside in a bout of profit taking, as market expectations for aggressive rate cuts have slimmed down this week. Jobs data on Thursday showed resiliency in the labor market as ADP and weekly jobless claims showed improvement. Next up is the December nonfarm payrolls where payrolls ests. to rise 170K (prior 199K), private payrolls est. 130K (prior 150K) and unemployment rate to rise to 3.8% from 3.7%. It was a disappointing finish to yesterday’s trading, as stocks struggled closing at the lows and bonds fell (lifting yields) after stronger-than-expected jobs data sparked doubts whether the Fed will start lowering rates as soon as March as markets are expecting. The Nasdaq closed lower on Thursday for a fifth consecutive session — its longest losing streak since October 2022. The S&P 500 index dropped below the 4,700 level and is now down over 100 points on the week. Treasury yields have extended their rise to start the year with the 10-year at 4.04%, up over 20-bps this week alone. In Asian markets, The Nikkei Index rose 89 points to 33,377, the Shanghai Index fell -25 points to 2,929, and the Hang Seng Index dropped -110 points to 16,535. In Europe, the German DAX is down -150 points to 16,465, while the FTSE 100 is down -75 points to 7,645. All eyes on the jobs number later at 8:30 AM for direction in markets.

• The Dow Jones Industrial Average rose 10.15 points, or 0.03%, to 37,440.34.
• The Nasdaq Composite dropped -81.91 points, or 0.56%, to 14,510.30.
• The Russell 2000 Index slipped -1.47 points, or 0.08% to 1,957.73.

• 8:30 AM ET                  Private payrolls for December…est. +130K
• 8:30 AM ET                  Manufacturing Payrolls for December…est. +5K
• 8:30 AM ET                  Unemployment rate for December…est. 3.8%
• 8:30 AM ET                  Average Hourly Earnings M/M for December…est. +0.3%
• 10:00 AM ET                Factory Orders M/M for November…est. +2.1%
• 10:00 AM ET                Durable Goods Orders M/M for November
• 10:00 AM ET                ISM Non-Manufacturing PMI for December…est. 52.6
• 1:00 PM EST                Baker Hughes Weekly rig count data
• 1:30 PM ET                   Fed’s Barkin speakers to Maryland Bankers Association

• US Secretary of State Antony Blinken embarked on a fourth trip to the Middle East since the Oct. 7 attack on Israel, as part of US efforts to counter growing risks of a broader regional conflict. The top US diplomat’s tour will include stops in Saudi Arabia and Israel – Bloomberg.
• Japan services PMI came in at 51.5 in the final December reading, above the 50.8 in November but slightly below the 52.0 prelim number. This stronger improvement in business activity across the Japanese services sector marked the first such improvement in four months.

• Kura Sushi (KRUS) Q1 EPS loss (-$0.18) vs. est. loss (-$0.10); Q1 revs $51.48M, in-line with consensus $51.65M; Q1 comp restaurant sales increased 3.8%; backs FY24 revenue view $239M-$244M 9est. $240.4M); expects 12 to 14 new restaurants in FY24.
• Tesla (TSLA) said it is recalling 1.62 million vehicles, including its models S, X, 3 and Y in China, the market regulator said to avoid misuse of the Autosteer function and cut the risk of collision. Tesla can remotely upgrade the vehicles to fix the issues, the China State Administration for Market Regulation said.

• ExxonMobil (XOM) said it forecasts changes in gas prices to positively impact Q4 upstream earnings by $0.4B – $0.8B vs Q3; sees change in industry margins to negatively impact Q4 energy products earnings by $1.7B- $1.5B vs Q3; sees change in unsettled derivatives to impact Q4 energy products earnings by $1B-$1.4B vs Q3.
• India probes DHL, FedEx, UPS for alleged antitrust practices, price collusion.

• Zions Bancorp (ZION) downgraded to Hold from Buy at Truist.

• Applied Therapeutics (APLT) shares tumbled after reported its drug AT-001 was not statistically significant vs placebo in a late-stage trial to treat patients with diabetic cardiomyopathy at high risk of heart failure.
• Aprea Therapeutics (APRE) announced development plans for 2024, saying expect to determine recommended phase 2 dose (rp2d) in the second half of 2024 for atrn-119.
• Cytokinetics (CYTK) downgraded to Equal Weight from Overweight at Morgan Stanley but raise price target to $90 from $60 as thinks shares are close to being fully valued shares having appreciated almost 90% following last week’s positive topline aficamten Phase 3 SEQUOIA-HCM data.
• Fusion Pharmaceuticals (FUSN) said the company’s Phase 2/3 protocol for FPI-2265, a treatment for certain kinds of prostate cancer had a protocol approved by regulators.
• Liquidia (LQDA) provides update on clinical pipeline targeting PAH and PH-ILD; said enrolled first PH-ILD patient in the open-label ASCENT study of YUTREPIA and confirmed with FDA that a single pivotal efficacy trial with L606 will support PAH and PH-ILD indications.
• QIAGEN (QGEN) announced a strategic plan to step up investments over the next five years in its market leading QIAGEN Digital Insights (QDI) business.
• Theravance Biopharma (TPBH) shares fell after saying results from its Phase 4 study of Yupelri Revefenacin inhalation solution didn’t show a statistically significant difference between Yupelri and Spiriva HandiHaler on the primary endpoint, the change from baseline in trough forced expiratory volume in one second at day 85.
• Voyager Therapeutics (VYGR) 7.778M share Spot Secondary priced at $9.00.

• Palantir (PLTR) downgraded to Underperform from Hold at Jefferies and cut tgt to $13 from $18 as expects 2024 to be another positive year for software, but says the group is likely see more measured returns versus 2023.