Early Look

Friday, January 6, 2023

Futures	Up/Down	%	Last
Dow	42.00	0.013%	33,112
S&P 500	1.25	0.05%	3,831
Nasdaq	-23.50	0.22%	10,796

 

 

U.S futures are flat, trading in a tight range overnight (overnight high 3,849 and low 3,824) ahead of the key December payroll report this morning. It’s likely all about the jobs data with the December Nonfarm payrolls est. +200K and private payrolls +180K, unemployment rate 3.7% and avg hourly earnings +0.4% m/m all at 8:30 AM. At 10:00 Am Nov Durable Goods, factory orders and Dec ISM Manufacturing (est. 55.0). U.S. stocks and bonds fell on Thursday as a round of strong employment data in the form of ADP private payrolls and weekly jobless claims helped build the case for the Federal Reserve to keep raising interest rates. Equities and Treasuries briefly trimmed losses after St. Louis Fed President James Bullard said rates are nearing a sufficiently high level and the data will shape the decision for whether the rate increase at the next meeting will be 25bps or 50bps. In Asian markets, The Nikkei Index gained 153 points to 25,973, the Shanghai Index edged higher 2 points to 3,157, and the Hang Seng Index fell -60 points to 20,991. In Europe, the German DAX is down -13 points to 14,425, while the FTSE 100 rises +0.2% to 7,650. In stock news, more pain for Tesla (TSLA) after saying it cut its prices in China for the second time in less than three months on Friday.

 

Economic Calendar for Today

·     8:30 AM ET            Non-farm Payrolls for December…est. +200K

·     8:30 AM ET            Private Payrolls for December…est. +180K

·     8:30 AM ET            Manufacturing Payrolls for December…est. +10K

·     8:30 AM ET            Unemployment Rate for December…est. 3.7%

·     8:30 AM ET            Average Hourly Earnings for December…est. +0.4%

·     10:00 AM ET          Durable Goods Orders M/M for November…prior (-2.6%)

·     10:00 AM ET          Durable Goods Ex: transportation for November

·     10:00 AM ET          Factory Orders M/M for November…est. (-0.8%)

·     10:00 AM ET          ISM Non-Manufacturing PMI for December… est. 55.0

·     12:15 PM ET          Fed’s Barkin speaks on the Economic Outlook

·     1:00 PM EST          Baker Hughes Weekly rig count data

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -44.87 points, or 1.16%, to 3,808.10

·     The Dow Jones Industrial Average slid -339.69 points, or 1.02%, to 32,930.08

·     The Nasdaq Composite slumped -153.52 points, or 1.47%, to 10,305.24

·     The Russell 2000 Index declined -19.35 points, or 1.09% to 1,753.19

 

 

Macro	Up/Down	Last
Nymex	-0.17	73.50
Brent	-0.14	78.55
Gold	0.50	1,841.10
EUR/USD	-0.0024	1.0495
JPY/USD	1.10	134.50
10-Year Note	+0.005	3.727%

 

 

World News

·     Euro zone inflation tumbled by more than expected last month but underlying price pressures rose. Consumer price growth in the bloc slowed to 9.2% in December from 10.1% a month earlier, below forecast for 9.7%. Inflation ex: food and energy rose 6.9% from 6.6% prior

·     Russia’s defense ministry said its troops were observing a 36-hour ceasefire ordered by President Vladimir Putin to mark Orthodox Christmas, and accused Ukraine of shelling its military positions

 

Sector News Breakdown

Consumer

·     Costco Wholesale (COST) reported net sales of $23.80B for the retail month of December, the five weeks ended January 1, 2023, an increase of 7.0% from $22.24B last year. For the 18 weeks ended January 1, 2023, the Company reported net sales of $82.16B, up 7.6% y/y

·     Kura Sushi (KRUS) 1Q adj EBITDA $600k vs est. $575k on sales $39.3Mm vs est. $39.75Mm

·     Tesla (TSLA) shares fall -5%; cut its prices in China for the second time in less than three months for its best-selling Model Y and Model 3 cars in Japan, South Korea, and Australia – Reuters

 

Energy, Industrials and Materials

·     Greenbrier (GBX) reports Q1 adj EPS $0.05 vs. est. $0.50; Q1 revs $766.5M vs. est. $747.08M; reports diversified new railcar orders for 5,600 units valued at $700M and deliveries of 4,800 units; new railcar backlog of 28,300 units with an estimated value of $3.4B as of November 30; excludes railcar conversion backlog of 1,800 units valued at $150M

·     Southwest Airlines (LUV) promised a thorough review of an operational collapse that stranded thousands of passengers at the end of the year after a union leader said the carrier had not identified how to avoid a repeat; said it expects to report a net loss in Q4

 

Financials

·     Discover Financial (DFS) downgraded to Equal Weight from Overweight

·     Franklin Covey (FC) 1Q EPS $0.32 vs est. $0.28 on net sales $69.4Mm vs est. $68.6Mm; affirms FY23 guidance

·     Hut 8 Mining (HUT) increased its Bitcoin holdings by 161 in the period ending December 31, bringing its total self-mined holdings to 9,086 Bitcoin

 

Healthcare

·     Fate Therapeutics (FATE) shares fall -5%; said it had terminated its collaboration and option agreement with Johnson & Johnson’s (JNJ) Janssen, with all collaboration activities set to be wound down in Q1 2023. Said it would prioritize its clinical programs and reduce its operating expenses, including through layoffs and the discontinuation of some clinical programs.

·     Aurinia Pharmaceuticals Inc. (AUPH) said it expects its fourth-quarter revenue to be $28.4M, up from year-ago sales of $23.4M; net product revenue accounts for most of its Q4 sales at $28.3M

·     Acorda Therapeutics, Inc. (ACOR) entered into a new long-term global supply agreement with Catalent (CTLT) for the manufacture of INBRIJA where Catalent will continue to manufacture INBRIJA through 2030. Under the new supply agreement Acorda is required to purchase $8.5 million in INBRIJA supply in 2023 and $15.5 million in 2024, reduced from $18 million annually.

·     Alnylam Pharmaceuticals Inc. (ALNY) said that Executive Chair Michael W. Bonney is stepping down; said that Amy W. Schulman, who joined the board of directors in 2014, will succeed Mr. Bonney in the role

·     Geron (GERN) 55.88M share Secondary priced at $2.45

·     Pacira BioSciences, Inc. (PCRX) preliminary unaudited total revenue of $666.8 million for 2022, compared with $541.5 million for 2021, representing an increase of 23.1%

·     Rani Therapeutics Holdings, Inc. (RANI) said that it completed a pre-Investigational New Drug (IND) meeting with the U.S. FDA with respect to RT-102, the RaniPill GO containing a proprietary formulation of human parathyroid hormone (1-34) analog (PTH) for the potential treatment of osteoporosis and provided a corporate update.

·     USANA Health (USNA) sees FY22 net sales approx $995Mm vs est. $203.8Mm and EPS approx $3.65 vs est. $3.28; guides FY23 net sales $850-950Mm vs est. $959.9Mm and EPS $2.35-3.30 vs est. $3.35

 

Technology, Media & Telecom

·     Samsung Electronics (SSNLF) said its quarterly profit tumbled by two-thirds to an eight-year low, saying profits are expected to shrink again in the current quarter, after its October-December operating profit likely fell 69% to 4.3 trillion won ($3.37 billion) from 13.87 trillion y/y

·     CACI International (CACI) wins $2.25 billion defense counterintelligence and security agency background investigation fieldwork contract

·     Duck Creek technology (DCT) 1Q EPS $0.02 vs est. flat on revs $80.6Mm vs est. $76.6Mm; sees 2Q adj EPS $0.02-0.03 vs est. $0.03 with revs $79.5-81.5Mm vs est. $81.8Mm; sees FY adj EPS $0.13-0.14 vs est. $0.12 with revs $331-338Mm vs est. $331.8Mm

·     WWE Inc. (WWE) – Vince McMahon Plots Return to WWE – Company founder intends to come back to pursue a sale of the business https://on.wsj.com/3GJ2FtG

·     WWE Inc. (WWE) – Vince McMahon takes actions in support of plan for WWE to undertake a review of strategic alternatives and capture unique opportunity to maximize long-term value for all shareholders