Early Look

Thursday, January 18, 2024

U.S. futures are looking at a higher open after rallying late Wednesday to pare losses and finish the day near its best levels. Futures are currently near the overnight highs around 4,787 (for Spuz), helped by bounces in Apple (AAPL) after receiving an upgrade to Buy at Bank America, as semiconductors rise behind positive AI comments from TSM (shares +5% pre mkt), and as Boeing (BA) shares rise behind an order of its planes. Nasdaq futures outperform behind the bounce in semis. The Dow Jones Industrial Average pared losses late Wednesday, but still posted its 3^rd straight down day. Stocks and bonds declined on Wednesday after a stronger US retail sales data point topped consensus, suggesting the economy remains too hot for Federal Reserve policymakers to cut rates as soon as their March meeting. Fed swaps show the probability of easing as soon as March dropping to around 50% — compared with 80% on Friday. US two-year yields jumped about 13 basis points. The move also reflected a slide in UK bonds after data showed inflation picked up. The CBOE Volatility index (VIX) Index climbed to the highest level since November but has since pared those gains this morning. In Asian markets, The Nikkei Index slipped -11-points to 35,466, while the Shanghai Index climbed 12 points to 2,845, and the Hang Seng Index bounced 114 points to 15,391 after indexes tumbled on Wednesday following weak China economic data. In Europe, the German DAX is up 95 points to 16,527, while the FTSE 100 is up a few points to 7,455. Another busy day of economic data in the U.S. and a handful of regional bank earnings on tap.

• The Dow Jones Industrial Average fell -94.45 points, or 0.25%, to 37,266.67.
• The Nasdaq Composite dropped -88.73 points, or 0.59%, to 14,855.62.
• The Russell 2000 Index declined -14.14 points, or 0.73% to 1,913.17.

• 8:30 AM ET                  Weekly Jobless Claims…est. 207K
• 8:30 AM ET                  Continuing Claims…est. 1.845M
• 8:30 AM ET                  Housing Starts M/M for December…est. 1.426M
• 8:30 AM ET                  Building Permits M/M for December…est. 1.48M
• 8:30 AM ET                  Philly Fed Index for January…est. (-7.0) vs. prior (-10.5)
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 11:00 AM ET                Weekly DOE Inventory Data
• 11:30 AM ET                Fed’s Bostic Speaks on Economic Outlook

• Earnings After the Close: ASPU BANR FNB INDB JBHT MCB OCFC OZK PPG SRCE

• Needham 26th Annual Growth Conference, 1/16-1/19, in New York

• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 13.6 vs 24.4 last week. Bulls fall to 40.4% from 48.6%, Neutrals rise to 32.9% from 27.2%, Bears rise to 26.8% from 24.2%.

• Richemont (CFRUY) said its sales rose to 5.59 billion euros ($6.09 billion) in the quarter, ahead of market expectations as the luxury retailer enjoyed a surge in sales in China in its latest quarter; Richemont’s sales increased by 8% in three months Dec. 31, better than the 5% rise in the previous three months. (better than recent Burberry warning).

• Boeing (BA) shares edge higher this morning after Indian airline Akasa Air says it has ordered 150 Boeing 737 MAX narrowbody planes, the 1^st major order for its MAX jetliner program since a mid-air cabin panel blowout.
• BHP Group (BHP) reported a 2.2% drop in Q2 iron ore production due to impact of the ongoing ramp up of the Central Pilbara hub; said iron ore production from Western Australia on a 100% basis was 72.7 million tonnes (Mt) in the three months to Dec. 31, down from 74.3 Mt reported a year ago.
• HB Fuller (FUL) Q4 adj EPS $1.32 vs est. $1.27, adj EBITDA $173Mm vs est. $172.64Mm on revs $903Mm vs est. $932.16Mm; guides FY adj EPS $4.15-4.45 vs est. $3.81 and adj EBITDA $610-640Mm vs est. $581.57Mm.
• Kinder Morgan (KMI) Q4 adj EPS $0.28 vs est. $0.30 on revs $4.038B vs est. $4.409B, project backlog at end Q4 was $3B vs $3.8B end Q3, says finished year slightly behind budget primarily due to lower commodity prices.
• Mercury Systems Inc. (MRCY) said on January 12, 2024, they approved and initiated a workforce reduction that will eliminate approximately 100 positions.
• ONEOK (OKE) authorizes a $2B share repurchase program; increased its quarterly dividend by 3.7% to $0.99.
• Plug Power (PLUG) files $1B stock securities shelf.
• The administration of President Joe Biden has finalized $1.1 billion in credits for PG&E Corp’s (PCG) Diablo Canyon nuclear power plant in California, the Department of Energy said on Wednesday.

• KeyCorp (KEY) Q4 EPS $0.03 vs. est. $0.23; Q4 revs $1.54B vs. est. $1.53B; included in the fourth quarter are $209M, or 22c per diluted common share, of charges related to a FDIC special assessment, efficiency related expenses, and a pension settlement charge; qtrly average deposits totaled $145.1B for Q4, down -$590M y/y.
• Prudential Financial Inc (PRU) said as of December 31, 2023, assets under management of the PGIM segment were $1.298 trillion.
• Truist Financial (TFC) Q4 adj EPS $0.81 vs. est. $0.89; Q4 revs $5.76B vs. est. $5.69B; Q4 tangible book value per share $21.83; Q4 CET1 capital ratio 10.1% and Q4 net charge-offs .57%; Q4 Total deposits $395.33B, vs. est. $399.6B.

• Taiwan Semi (TSM) said it sees more than 20% growth in 2024 revenue on booming demand for high-end chips used in artificial intelligence applications; For advanced packaging, demand was very strong and TSMC can’t offer enough capacity to support customers, which will continue to next year; forecast capital spending at $28-$32 billion for this year, in line with 2023; posted a 19% drop in net profit for the October-December quarter to T$238.7 billion.