Early Look

Wednesday, January 31, 2024

Futures	Up/Down	%	Last
Dow	55.00	0.14%	38,667
S&P 500	-23.25	0.48%	4,927
Nasdaq	-207.00	1.18%	17,381

 

 

U.S. futures are pulling back from all-time highs, hit by weakness in technology shares as AMD, GOOGL, and MSFT all reported better quarterly results, but guidance and outlook wasn’t enough to keep the upside momentum going for the time being, and profit taking ensued and Nasdaq futures are down -1.2% into the Fed. The Federal Open Markets Committee (FOMC) began its two-day meeting on Tuesday, and it is expected to hold the federal-funds rate steady when it announces its decision on Wednesday at 2:00 PM, followed by Powell press conference at 2:30 PM. In earnings, Boeing (BA) and Mastercard (MA) will probably get the most attention today, but the next round of big tech is Thursday night with Apple, Amazon, and Meta. Overnight AMD shares fell -6% as Q1 guidance fell short of estimates, GOOGL shares fell -4% as ad revenue missed expectations and MSFT was down slightly. In Asian markets, The Nikkei Index jumped 220 points to 36,286, the Shanghai Index fell -41 points to 2,788, and the Hang Seng Index dropped -218 points to 15,485. In Europe, the German DAX is down a few points to 16,963, while the FTSE 100 is flat at 7,666. In addition to the FOMC meeting, Wall Street gets the ADP private payroll report at 8:15 AM, and the Chicago PMI at 9:45 AM.

 

• The Dow Jones Industrial Average rose 133.86 points, or 0.35%, to 38,467.31.
• The Nasdaq Composite dropped -118.15 points, or 0.76%, to 15,509.90.
• The Russell 2000 Index declined -15.19 points, or 0.76% to 1,996.24.

• 8:15 AM ET                  ADP Employment Change for January…est. 145K
• 8:30 AM ET                  Employment Costs for Q4…est. +1.0%
• 9:45 AM ET                  Chicago PMI for January…est. 48.0
• 10:30 AM ET                Weekly DOE Inventory Data
• 2:00 PM ET                   FOMC Meeting – no rate change expected.

• Earnings After the Close: AFL ALGN ARAY ASH AVB AVD BDN BHE BOOT BV CCS CHRW CLB CNMD CTVA SGII EGHT FLEX GTIM LARK LSTR MET MTG MTH MXL NEU NXT PTC QCOM QRVO RYN SEIC SIGI THG TTEK UGI VSTO WOLF

 

 

Macro	Up/Down	Last
Nymex	-0.86	76.96
Brent	-0.84	82.03
Gold	5.10	2,056.00
EUR/USD	-0.0002	1.0839
JPY/USD	0.17	147.77
10-Year Note	-0.027	4.03%

 

• Australia’s Q4 CPI inflation came in lower-than-expected at 0.6% QoQ (0.8% expected), to lower annual inflation to 4.1% from 5.4% previously. The RBA’s preferred core inflation trimmed mean measure also came in lower-then-expected at 0.8% (0.9% expected) to be 4.2% YoY.
• Japanese economic data released today for December showed industrial production and retail sales both came in softer than expected. Industrial production rose 1.8% MoM (est. 2.5%, prev. -0.9%), and fell -0.7% YoY. Retail sales fell -2.9% MoM (est. 0.2%, prev. 1.1%), and rose 2.1% YoY.

• H&M Hennes & Mauritz (HNNMY) has replaced its chief executive; H&M reported weaker-than-expected fourth-quarter profits while net profit for the period came in at about half the level expected by analysts; said full-year 2023 sales increased 6% relative to the year before to 236 billion Swedish krona, equivalent to $22.7 billion.
• Fortune Brands (FBIN) announces $650M share repurchase authorization; Q4 EPS $0.95 vs. est. $0.93; Q4 revs $1.161B vs. est. $1.18B; guides FY 24 EPS $4.20-$4.40 vs. est. $4.19 and sees FY24 revenue up 3.5%-5.5%.
• Mondelez (MDLZ) Q4 adj EPS $0.84 vs est. $0.78 o revs $9.314B vs. est. $9.31B, gross mgn 37.3%; guides FY24 organic net revs +3-5% vs est. +4.16%, adj EPS +high-single % constant currency vs. est. +8.47%.
• Starbucks (SBUX) Q1 EPS $0.90 vs. est. $0.93; Q1 revs $9.4B vs. est. $9.6B; Q1 comp sales +5%, vs, est. +6.39%; Global comparable store sales increased 5%, driven by a 3% increase in comparable transactions and 2% increase in average ticket. North America and U.S. comparable store sales increased 5%.
• Hawaiian Holdings (HA) Q4 adj EPS loss ($2.37) vs est. loss ($2.35), adj EBITDA ($98.1Mm) vs est. ($94.95Mm); sees Q1 avail seat miles +2.5-5.5%, operating RASM -1% to +2%, adj CASM +8%-11%; sees FY ASM +6-9%, adj CASM ex fuel +0-3%.
• Modine Manufacturing (MOD) Q3 adj PS $0.74 vs est. $0.59 on revs $561.4Mm vs est. $594.93Mm, adj EBITDA $73.9Mm vs est. $63.43Mm; guides FY net sales +4-7% vs est. +8.23% and adj EBITDA $305-313Mm vs est. $298.6Mm.
• Tesla (TSLA) registrations of vehicles in California dropped 10% in the last quarter of 2023, the first fall in more than three years in the state; total of 47,592 Tesla vehicles were registered in California in the fourth quarter, compared with 52,782 a year earlier – Reuters.
• Elon Musk’s $55 billion pay package at Tesla (TSLA) was voided by a Delaware judge after a shareholder challenged it as excessive.

• Otis Worldwide (OTIS) Q4 EPS $0.87 vs. est. $0.86; Q4 revs $3.62B vs. est. $3.57B; Q4 new equipment orders were up 3% and backlog was up 2%; sees FY24 adjusted EPS $3.80-$3.90 (est. $3.85), sees FY24 revenue $14.5B-$14.8B (est. $14.66B) and sees FY24 organic sales up 3%-5%.
• Saudi Arabia is considering plans to revive a follow-on offering in Aramco as soon as February, sources say, in a multibillion-dollar deal that’s likely to rank among the biggest share sales in recent years – Bloomberg.

• Lending Club (LC) Q4 EPS $0.09 vs. est. $0.01; Q4 revs $185.6M vs. est. $182.36M; Book value per common share of $11.34 compared to $11.02 in the prior quarter; Loan originations of $1.6 billion compared to $1.5 billion in the prior quarter; Net interest income (NII) of $131.5 million compared to $137.0 million prior.
• Navient (NAVI) announced strategic actions to simplify the company and reduce its expense base as a result of the review overseen by the board over the past several months.
• Unum (UNM) Q4 EPS $1.79 vs. est. $1.87; Q4 revs $3.145B vs. est. $3.14B; says positive business trends expected to continue into 2024 with outlook for core ops premium growth of 5% to 7%; Q4 Book value per common share of $49.91 increased 13.0 percent compared to the year-ago quarter.

• Stryker (SYK) Q4 EPS $3.46 vs. est. $3.27; Q4 revs $5.82B vs. est. $5.6B; Q4 organic net sales increased 11.4%; guides 2024 earnings per diluted share to be in range of $11.70-$12.00 vs. est. $11.56; anticipate sales will be modestly unfavorably impacted for the full year, being more negative in the first half of the year.
• Thermo Fisher (TMO) Q4 adj EPS $5.67 vs. est. $5.64; Q4 revs $10.89B vs. est. $10.73B; sees FY24 adjusted EPS $20.95-$22.00, vs. consensus $22.04 and FY24 revenue $42.1B-$43.3B vs. est. $42.93B; said that it expects a slump in demand for its services used to make therapeutics and vaccines to continue this year.

• AMD Inc. (AMD) Q4 adj EPS $0.77 vs. est. $0.71; 4Q revs $6.2B vs. est. $6.13B; Q4 adj. operating margin 23% vs. est. 23.2%; Q4 R&D expenses $1.51B; Q4 adj. operating income $1.41B vs. est. $1.43B; sees Q1 revenue $5.4B plus/minus $300M vs. est. $5.28B; demand for high-performance data center product portfolio accelerates.
• Microsoft (MSFT) Q2 EPS $2.93 vs est. $2.78 on revs $62.02B vs est. $61.119B; intelligent cloud revs $25.9B +20%; Q2 cloud revs $33.7B vs. est. $32.21B; Q2 Azure revenue growth was boosted 6% by AI.
• Media mogul Byron Allen has made a $14.3 billion offer to buy all the outstanding shares of Paramount Global (PARA), according to people familiar with his terms. Allen offered $28.58 each for the voting shares of Paramount, a 50% premium to recent trading, and $21.53 for the non-voting shares – Bloomberg http://tinyurl.com/mpenun8m
• Samsung (SSNLF) said operating profit fell to 2.8 trillion won ($2.11 billion) in October-December, versus 4.3 trillion won a year earlier; for the full year, its chip business swung to a record loss of 14.9 trillion won in 2023 from a 23.8 trillion won profit a year earlier; Q4 losses shrank to 2.18 trillion won in the fourth quarter.
• EA Inc. (EA) Q3 EPS $1.07 vs est. $0.86 on revs $1.95B vs est. $2.39B, net bookings $2.37B; guides Q4 net revs $1.625-1.925B vs est. $1.825B, EPS $0.20-0.68 vs est. $0.66.
• Match Group (MTCH) Q4 EPS $0.81 vs est. $0.49 on revs $866.2Mm vs est. $861.17Mm, qtrly payers -5% to 15.2Mm y/y; sees Q1 revs $850-860Mm vs est. $867Mm, adj op Inc $270-275Mm vs est. $225.53Mm; sees FY revs $3.565-3.665B vs est. $3.621B and adj op Inc margins at least 36%.
• Skyworks Solutions (SWKS) Q1 adj EPS $1.97 vs. est. $1.95; Q1 revs $1.202B vs. est. $1.2B; sees Q2 adj EPS $1.52, vs. consensus $1.54 and revs $1.02B-$1.07B vs. est. $1.04B.
• Teradyne (TER) Q4 adj EPS $0.79 vs. est. $0.71; Q4 revs $671M vs. est. $674.66M; guided Q1 adj EPS $0.22-$0.38 on revs $540M-$590M, below consensus of $0.53/$625.13M.
• Dell Technologies (DELL) disclosed that on January 25, the company delivered to Broadcom Inc. (AVGO) written notice of termination of the Commercial Framework Agreement, dated as of November 1, 2021.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.