***FYI – we are having technical difficulty with new distribution delivery method. Hope to have it corrected shortly.

 

 

 

 

Early Look

Monday, January 29, 2024

Futures	Up/Down	%	Last
Dow	-17.00	0.04%	38,241
S&P 500	2.25	0.06%	4,919
Nasdaq	40.50	0.23%	17,576

 

 

Equity futures steadied as traders awaited the FOMC policy decision on Wednesday, US payroll numbers Friday, and a batch of earnings from some of the biggest US companies this week. U.S. stocks made it 12 weeks of gains in the last 13 on Friday as the S&P 500 rose 1.06%, the Dow gained 0.65% and the Nasdaq advanced 0.94% for the last 5-days. Signs of decelerating inflation have continued to boost hopes for rate cuts by the Fed starting in March, with this week’s meeting laying the potential groundwork. A potentially HUGE week for Wall Street of earnings as well with five of the “Mag 7” companies expected to report (GOOGL, MSFT on 1/30, AAPL, AMZN and META all on 2/1) and some other big names as well (AMD, BA, GM, MA, UPS, XOM among others). The week could mark a fresh catalyst for new market highs or provide the correction that Bears have been waiting for after a relentless 3-month rally. WTI crude is modestly firmer as geopolitics remain in focus; US said three troops were killed by an Iran-linked drone attack near the Syrian border; WTI crude at $78.11 (off overnight highs $79.29 per barrel). In Asian markets, The Nikkei Index rose 275 points to 36,026, the Shanghai Index fell -26 points to 2,883, and the Hang Seng Index rose 125 points to 16,077. China Evergrande Group received a liquidation order from a Hong Kong court, marking the largest collapse in a property crisis that has dragged China’s economic growth. In Europe, the German DAX is down -68 points to 16,892, while the FTSE 100 is up 18 points to 7,653.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -3.19 points, or 0.07%, to 4,890.97.

·     The Dow Jones Industrial Average rose 60.30 points, or 0.16%, to 38,109.43.

·     The Nasdaq Composite slipped -55.13 points, or 0.36%, to 15,455.36.

·     The Russell 2000 Index advanced 2.45 points, or 0.12% to 1,978.33.

 

Economic Calendar for Today

·     10:30 AM ET                Dallas Fed Manufacturing for January

 

Earnings Calendar:

·     Earnings Before the Open: ARLP BEN BMRC CODA DX PPBI PROV SOFI

·     Earnings After the Close: ARE CADE CALX CLF CR CSWC ELS FFIV FSBC GGG HLIT HMST HP HTLF MBIN NUE PCH SANM SFBS SMCI TRNS TWO WHR

 

 

Macro	Up/Down	Last
Nymex	0.14	78.15
Brent	0.23	83.78
Gold	9.20	2,026.50
EUR/USD	-0.0032	1.082
JPY/USD	-0.27	147.89
10-Year Note	-0.055	4.105%

 

 

World News

·     China Jan-Dec Industrial Profit Fell 2.3% on Year; Industrial profits rose 16.8% from a year earlier in December.

·     WSJ’s Timiraos reported yesterday “the Fed won’t cut rates at this week’s policy meeting because the economy has been growing strongly; instead they’re likely to ditch a tightening bias in the policy statement which would affirm they are entertaining lower rates in coming months; they will consider whether softening inflation means real rates will be too restrictive if they don’t act.”

 

Sector News Breakdown

Consumer

·     Brown-Forman (BF/B) downgraded to Equal Weight from Overweight at Morgan Stanley.

·     Dollar Tree (DLTR) upgraded to Overweight from Neutral at JPMorgan.

 

Energy, Industrials and Materials

·     Archer-Daniels-Midland Co. (ADM) CEO Juan Luciano told employees Friday that the company’s intersegment sales, which are under investigation, won’t significantly impact the crop trader’s earnings.

·     Bolts needed to secure part of an Alaska Airlines (ALK) jet that blew off in midair appear to have been missing when the plane left Boeing’s (BA) factory, the WSJ reported. Boeing and other industry officials increasingly believe the plane maker’s employees failed to put back the bolts when they reinstalled a 737 MAX 9 plug door.

·     Barron’s reported that the all-stock merger of Chesapeake (CHK) and Southwestern Energy Co. (SWN) would create a company that would “gain greater efficiencies and scale, reducing costs,” which makes it an ideal buy at a relatively cheap price.

·     Holcim Ltd. is separating its North American business and naming its head of Europe, Miljan Gutovic, chief executive officer as of May 1. The world’s largest cement maker said it’ll float shares of its large North America unit in the US next year, according to a statement Sunday.

·     3M Co. (MMM) said the litigation settlement it agreed to for selling potentially faulty earplugs to the military is on track to exceed the 98% participation threshold by the final registration date of March 25. The company has opted to pay $1 billion of the total of $6 billion in cash, instead of stock.

·     Norfolk Southern (NSC) downgraded to Market Perform from Outperform at TD Cowen.

·     Ryanair Holdings (RYAAY) said Q3 operating costs rose and led to a fall in adjusted after-tax profit as it narrowed its annual guidance for the metric; said revenue per passenger rose 9%, with ancillary revenue up 2% to around EUR23 and average fares up 13% to over EUR42.

·     Ryanair (RYAAY) has offered to pick up more Boeing (BA) 737 Max aircraft if any U.S. airlines cancel orders, the Financial Times reported.

·     Zim Integrated Shipping Services (ZIM) upgrades to buy from hold at Jefferies saying the script has flipped as the shipping firm’s cash burn shifts to significant cash generation.

 

 

Financials

·     Chinese property developer Evergrande faces imminent liquidation after its overseas creditors failed to reach an 11th-hour deal this weekend to restructure the sprawling real-estate company, according to people familiar with the matter. Talks between the company and its top creditors kicked off last week over a new plan that would have allowed the company to continue its operations, the people familiar said – WSJ. http://tinyurl.com/2y4k5nk5

·     WillScot Mobile Mini Holdings (WSC) said it will acquire McGrath RentCorp (MGRC) in a deal with an enterprise value of $3.8 billion, confirming an earlier report by The Wall Street Journal; cash-and-stock deal will provide McGrath RentCorp investors with $123 a share or about 2.8 shares of WSC. http://tinyurl.com/3nvuuda2

·     Pacific Premier (PPBI) Q4 adj EPS $0.51 vs. est. $0.48; Q4 Net interest margin expanded 16 basis points to 3.28%.

 

Healthcare

·     Royal Philips (PHG) reached an agreement with the FDA on the terms of a settlement linked to recall of its Respironics ventilators used to treat sleep apnea; PHG said it booked a 363-million-euro ($394 million) provision in Q4 for remediation activities, inventory write-downs and contract provisions related to the so-called consent decree.

·     Vera Therapeutics (VERA) announces a $200M offering of Class A common stock.

 

Technology, Media & Telecom

·     The Biden administration, eager to highlight a signature economic initiative as elections approach, is expected to award billions of dollars in subsidies to Intel (INTC), TSMC (TSM), and other top semiconductor companies in coming weeks to help build new factories. http://tinyurl.com/3v5s8uy7

·     Progress Software Corp. (PRGS) disclosed it received a subpoena from the Office of the Attorney General for the District of Columbia seeking information related to the MOVEit vulnerability.

·     TD SYNNEX (SNX) announces 7.375M share offering of common stock for holders.

·     Warner Bros Discovery (WBD) downgraded to equal weight from overweight at Wells Fargo saying it expects a flattish multiple and cuts estimates for 2024.

·     ZoomInfo (ZI) upgraded to Buy from Neutral at Bank America.