Early Look

Tuesday, January 23, 2024

U.S. futures are mixed as investors prepare for earnings in large cap industrials and Pharma this morning. The Dow Jones Industrial Average closed above 38,000 for the first time in history on Monday and the S&P 500 also closed at a new all-time high for a 2nd straight day. Just massive strength to start the year for broader averages, as @Barchart tweeted last night that “70% of S&P 500 stocks are now trading above their 200D moving average.” With the FOMC meeting next week (the Fed is in their blackout period this week ahead of the meeting), attention turns to GDP and PCE inflation data later this week (the Fed’s preferred inflation reading) as well as earnings. More than 70 S&P 500 companies, including Tesla, AT&T, Johnson & Johnson, Visa, General Electric, and Intel, are scheduled to report this coming week. The following week will be even more packed with more than a quarter of the index’s components will publish results, including Microsoft, Apple, Exxon Mobil, Boeing, and Qualcomm. This morning so far, shares of GE, MMM, DHI in the industrials space are all trading notably lower following results and guidance. Dow component JNJ also reported results (details of all below). In Asian markets, The Nikkei Index dropped -29 points to 36,517, the Shanghai Index rose 14 points to 2,770, and the Hang Seng Index gained 392 points to 15,353 on reports China is considering a stock market rescue package (more below). The Bank of Japan kept rates unchanged as expected. In Europe, the German DAX is down slightly at 16,679, while the FTSE 100 dips 8 points to 7,480. Bitcoin prices continue to stumble, falling another 2% to below $39,000 ($10K off January highs).

• The Dow Jones Industrial Average rose 138.01 points, or 0.36%, to 38,001.81.
• The Nasdaq Composite gained 49.32 points, or 0.32%, to 15,360.29.
• The Russell 2000 Index advanced 38.99 points, or 2.01% to 1,983.38.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 10:00 AM ET                Richmond Fed Index for January
• 12:00 PM ET                US Treasury to sell $57B in 2-year notes.
• 4:30 PM ET                   API Weekly Inventory Data

• Earnings After the Close: BFST BKR BUSE CVLG EWBC HAFC ISRG LRN NBHC NFLX QCRH RNST STLD TRMK TXN VBTX WSBC

• Jefferies Winter Consumer Summit, 1/22-1/23, in CO
• TD Cowen Annual Global Mining Conference, 1/23-1/25, in Toronto, CA

• China is considering a stock market rescue package of ~$280b; will mobilize ~ 2T yuan ($278b) mainly from offshore accounts of Chinese SOEs to buy onshore shares via Hong Kong exchange link; some policy measures could be announced this week  – Bloomberg.

• United Airlines (UAL) Q4 adj EPS $2.00 vs est. $1.69 on revs $13.6B vs est. $13.541B; CASM -0.1%, CASM-EX +4.9% y/y; says last two weeks of Dec busiest travel period in history flying 8.2Mm customers, says well positioned to deliver on short-term and long-term financial targets; sees Q1 adj EPS ($0.85)-($0.35) vs est. ($0.22), sees FY adj EPS $9.00-11.00 vs est. $9.52.
• Vroom, Inc. (VRM) said that it is discontinuing its ecommerce operations and winding down its used vehicle dealership business to preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses; anticipates that approximately 800 employees will be impacted.

• 3M (MMM) Q4 adj EPS $2.42 vs. est. $2.31; Q4 revs $7.69B vs. est. $7.7B; guides Q1 EPS $2.00-$2.15 vs. est. $2.11 and Q1 revs $7.6B vs. est. $7.89B as sees Q1 macroeconomic trends similar to Q4; sees FY adj EPS $9.35-$9.75 vs. consensus of $9.81.
• Halliburton (HAL) Q4 adj EPS $0.86 vs. est. $0.80; Q4 revs $5.7B vs. est. $5.78B; Q4 cash flow from operations $1.4B; free cash flow $1.1B; boosts qtrly div to 17c-shr from 16c.
• CenterPoint Energy (CNP) downgraded to In Line from Outperform at Evercore ISI.
• Duke Energy (DUK) upgraded to Outperform from In Line at Evercore ISI.
• Exxon Mobil (XOM) upgraded to Outperform from Market Perform at TD Cowen.
• Chevron (CVX) downgraded to Market Perform from Outperform at TD Cowen.
• Enphase (ENPH) and Sunnova (NOVA) both upgraded to Buy from Hold at Truist in solar.

• Assurant (AIZ) files mixed securities shelf.
• Brown & Brown (BRO) Q4 EPS $0.58 vs. est. $0.53; Q4 revs $1.03B vs. est. $985.5M.
• Capital Bancorp (CBNK) Q4 EPS $0.65 vs est. $0.62, NII $34.9Mm vs est. $36.46Mm, adj NIM 3.92%, loan loss provision $2.808Mm.
• Coinbase (COIN) downgraded to Underweight from Neutral at JPMorgan.
• CrossFirst Bancshares (CFB) Q4 adj EPS $0.39 vs est. $0.36; sees FY24 NIM 3.2-3.25%.
• Synchrony (SYF) Q4 EPS $1.03 vs. est. $0.93; qtr included $9M FDIC special assessment and restructuring costs related to site strategy of $9M; sees FY 2024 net interest income $17.5B-$18.5B; Q4 deposits increased $9.5 billion, or 13%, to $81.2 billion.
• The U.S. Federal Trade Commission on Monday issued an opinion and final order finding that TurboTax maker Intuit Inc (INTU) engaged in deceptive practices.

• The FDA said companies will be required to add a serious warning (black box warnings) on the prescribing information for cancer therapies known as CAR-T, made by Gilead Sciences (GILD), Johnson & Johnson (JNJ), Novartis (NVS) and others. The other cancer therapies include Bristol Myers Squibb’s (BMY) Breyanzi and its partnered therapy, Abecma, with 2seventy bio (TSVT) J&J unit Janssen and Legend Biotech’s (LEGN) Carvykti, Novartis AG’s Kymriah, and Gilead unit Kite’s Tecartus and Yescarta.
• Adicet Bio (ACET) 27.05M share Spot Secondary priced at $2.40.
• Teva (TEVA) upgraded to Buy from Hold at Jefferies.

• Akami technology (AKAM) downgraded to Neutral from Buy at Goldman Sachs.
• Blackbaud (BLKB) announces $500M share buyback.
• Logitech (LOGI) Q3 EPS $1.53 vs est. $1.17; Q3 revs $1.26B vs. est. $1.25B; raises FY24 revenue view to $4.20B-$4.25B from $4.0B-$4.15B (est. $4.22B) and raises FY24 operating income view to $610M-$660M from $525M-$575M.
• Netflix (NFLX) Films head Scott Stuber steps down to start new company, LA Times reported.
• Samsung (SSNLF) is exploring the development of noninvasive glucose monitoring and continuous blood pressure checking in a race with Apple (AAPL) – Bloomberg.
• Tencent (TCEHY), NetEase (NTES): China regulators have appeared to backpedal from its plan to reduce how much money people spend on online video games after the proposal tanked video gaming company stocks – NYT reported http://tinyurl.com/262c5mwc .