Early Look

Friday, January 26, 2024

Stock futures are pointing to a lower open, on track to snap the 6-day winning streak for the S&P 500 and Nasdaq if losses hold, but still finish the week strong which saw the Dow, S&P and Nasdaq all touch record high levels. Nasdaq futures are falling further thanks in part to soft guidance from Intel and KLA Tencor in the semiconductor sector, with shares down -10% and -6% pre mkt respectively. The Philly semi-index (SOX) has been one of the market leaders to start 2024, up 7% this month so far. Yesterday saw major averages finish higher across the board as economic data provided a little something for everyone but ended up boosting sentiment for an economic “soft landing” with GDP coming in stronger than anticipated while inflation data points pointed to more deceleration. Today we get a fresher version of the Personal Consumption (PCE) index to get a more updated outlook on inflation. Another “tamer” reading could spark another stock market rally on hopes the FOMC will say next week when it meets about the possibility of possible rate cut at the March meeting. In Asian markets, The Nikkei Index dropped -485 points to 35,751, the Shanghai Index rose 4 points to 2,910, and the Hang Seng Index fell -259 points to 15,952. In Europe, the German DAX is up 37 points to 16,944, while the FTSE 100 gains nearly 100-points to 7,627. Asia broke a six-day streak of gains in equity markets on Friday, weak earnings from Intel weighed on the tech sector while more broadly sentiment was soured as the brief and bright reaction to China stimulus measures fades.

• The Dow Jones Industrial Average rose 242.74 points, or 0.64%, to 38,049.13.
• The Nasdaq Composite gained 28.58 points, or 0.18%, to 15,510.50.
• The Russell 2000 Index advanced 14.01 points, or 0.71% to 1,975.88.

• 8:30 AM ET                  Personal Spending M/M for December…est. +0.4%
• 8:30 AM ET                  PCE Price Index M/M for December…est. +0.2%
• 8:30 AM ET                  PCE Price Index Y/Y for December…est. +2.6%
• 8:30 AM ET                  Core-PCE Price Index M/M for December…est. +0.2%
• 8:30 AM ET                  Core-PCE Price Index Y/Y for December…est. +3.0%
• 10:00 AM ET                Pending Home Sales M/M for December…est. +1.5%
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• Japan: Tokyo area CPI for January below expected; +1.6% y/y vs +2.0% consensus; CPI Ex Fresh Food below expected; +1.6% y/y vs +1.9% consensus and Fresh Food, Energy below expected; +3.1% y/y vs. +3.4%.

• Levi Strauss (LEVI) Q4 EPS $0.44 vs. est. $0.43; Q4 revs $1.64B vs. est. $1.66B; guides FY24 EPS $1.15-$1.25, vs. consensus $1.33 and sees FY24 revenue up 1%-3%, or $6.24B-$6.36B vs. est. $6.49B; qtrly gross margin 57.8% up 200 basis points over prior year; qtrly inventory down 17% on a comparable basis.
• Tesla (TSLA) removed from the Wedbush Best Ideas List (BIL) due to investment price discipline.

• Olin Corp. (OLN) Q4 EPS $0.43 vs. est. $0.19’ Q4 revs $1.61B vs. est. $1.52B; Q4 adjusted EBITDA $210.1M vs. est. $213.3M; expect Olin’s 1Q24 adjusted EBITDA to improve by approximately 10% from 4Q23 levels.
• Weyerhaeuser (WY) Q4 adj EPS $0.16 vs. est. $0.17; Q4 revs $1.774B vs. est. $1.86B; Q4 adj EBITDA was $321M vs. est. $357.6M; in West, expects moderately higher fee harvest volumes and significantly lower per unit log and haul costs in Q1; sees Q1 adjusted EPS slightly higher than Q4 (est. $0.30).

• Visa Inc. (V) Q1 adj EPS $2.41 vs est. $2.34 on revs $8.6B vs est. $8.539B; payments volume +8% y/y constant-dollar basis; guides Q2 net revs growth upper mid to high single digit vs est. +8.67% and EPS growth high teens vs est. +12.15%.
• Ameris Bancorp (ABCB) Q4 adj EPS $1.07 vs. est. $1.10; Q4 revs $262.35M vs. est. $264.66M; Q4 provision for credit losses $23.0M vs. $24.5M in Q3; tangible book value per share increased $1.26 per share, or 15.4% annualized, during Q4 to $33.64 at December 31, 2023.
• Fair Isaac (FICO) Q1 adj EPS $4.81 vs est. $5.06 on revs $382.059Mm vs est. $390.89Mm; guides FY revs 1.675B vs est. $1.704B and adj EPS $22.45 vs est. $23.96.
• Federated Hermes (FHI) Q4 EPS $0.96 vs est. $0.83 on revs $391.497Mm vs est. $396.98Mm; AUM $757.6B.
• Western Alliance (WAL) Q4 EPS $1.91 vs. est. $1.88; Q4 revs $682.2M vs. est. $699.4M; Net interest margin (NIM) of 3.65% decreased from 3.67%; return on average assets and on tangible common equity of 0.84% and 11.9%, compared to 1.24% and 17.3%, respectively; recorded a provision for credit losses of $9.3M in Q4, a decrease of $2.8M from $12.1M y/y.

• CVRx (CVRX) Q4 EPS ($0.44) vs est. ($0.54) on revs $11.3Mm vs es.t $11.14Mm; sees FY24 revs $53-57Mm vs est. $56Mm, gr mgn 83-84%, op exp $86-90Mm.
• PTC Therapeutics (PTCT) shares drop after the Committee for Medicinal Products for Human Use of the European Medicines Agency issued a negative opinion following a re-examination procedure for conditional marketing authorization of Translarna.
• Sagimet Biosciences (SGMT) 9M share Secondary priced at $12.50.

• KLA-Tencor (KLAC) Q2 adj EPS $6.16 vs est. $5.91 on revs $2.487B vs est. $2.462B; sees Q3 revs $2.175-2.425B vs est. $2.455B, adj gr mgn 60.5-62.5%, adj EPS $4.66-5.86 vs est. $5.85.
• T-Mobile (TMUS) Q4 EPS $1.67 vs est. $1.90 on revs $20.478B vs est. $19.636B, adj EBITDA $7.224B vs est. $7.276B, qtrly postpaid net adds 1.6Mm, qtrly postpaid phone churn +0.96%; sees FY24 adj EBITDA growth approx 9% at mid-point vs est. +7.68%.
• Western Digital (WDC) Q2 EPS loss (-$0.69) vs. est. loss (-$1.13); Q2 revs $3.03B vs. est. $2.99B; sees Q3 EPS loss (-$0.10) to $0.20 vs. est. loss (-$0.42); sees Q3 revenue $3.2B-$3.4B vs. est. $3.1B.
• AppFolio (APPF) Q4 adj EPS $0.88 vs est. $0.72 on revs $171.83Mm vs est. $162.71Mm; guides FY24 revs $755-765Mm vs est. $763.34Mm, adj op mgn 21-23%, adj FCF mgn 17-19%.