Early Look

Friday, July 19, 2024

U.S. futures are lower but recovering after the largest IT outage in industry impacted airlines, healthcare, media, and banking industries. The issue appears to have come from CrowdStrike (CRWD) which caused major outage affecting businesses around the world. According to an alert sent by Crowdstrike to its clients and reviewed by Reuters, the company’s “Falcon Sensor” software is causing Microsoft Windows to crash and display a blue screen, known informally as the “Blue Screen of Death”. S&P futures had fallen more than 30 points initially but are back to flat on the day. Stocks ended lower across the board on Thursday, with the blue-chip Dow and small-caps bearing the brunt of the selling as equities saw across-the board declines. The Dow Jones Industrial Average ended with a loss of around 533 points, or 1.3%. The small-cap Russell 2000 gave back 1.8%, while the large-cap benchmark S&P 500 declined 0.8% and the tech-heavy Nasdaq Composite lost 0.7%. Markets also digesting comments from Donald Trump last night as he concluded the 4-day Republican National Convention in a long speech last night. Coming into Friday, the S&P 500 and Nasdaq are on track for weekly losses with the S&P posting its biggest back-to-back daily losses since mid-April as investors take profits in technology shares ahead of earnings season.

The airlines industry has been hit by a massive global cyber outage as air passengers around the world faced delays, cancellations and problems checking in as airports and airlines were caught up in a massive IT outage that also affected industries ranging from banks to media companies. An update by cybersecurity firm CrowdStrike led to a major IT outage on Friday, impacting businesses around the world. Analysts said the cyber outage impacting airlines was likely tied to a glitch in Microsoft software used globally. Microsoft said users might be unable to access various Office 365 apps and services due to a “configuration change in a portion of our Azure-backed workloads”. China’s flag carrier Air China and other major airlines have not been affected by a global tech outage that disrupted operations in multiple industries on Friday due to the use of different systems, state media CGTN reported. “The damage to business processes at the global level is dramatic. The glitch is due to a software update of CrowdStrike’s EDR product,” said Omer Grossman, CIO at identity security firm CyberArk. In Asian markets, The Nikkei Index fell -62 points to 40,063, the Shanghai Index rose 5 points to 2,982, and the Hang Seng Index dropped -360 points to 17,417. In Europe, the German DAX is down -132 points to 18,222, while the FTSE 100 falls -34 points to 8,169.

• The Dow Jones Industrial Average fell -533.06 points, or 1.29%, to 40,665.02.
• The Nasdaq Composite tumbled -125.70 points, or 0.70%, to 17,871.22.
• The Russell 2000 Index declined -41.38 points, or 1.85% to 2,198.29.

• 1:00 PM ET                   Baker Hughes Weekly rig count data

• Scholastic (SCHL) Q4 EPS $1.73 vs. $2.26 last year and revs $474.9M vs. $528.3M last year; sees FY25 revenue growth of 4%-6% from $1.67B in FY24 and sees FY25 adjusted EBITDA $140M-$150M.
• Wolverine Worldwide (WWW) upgraded to Buy from Neutral at UBS and raised tgt to $20 from $13.

• Hawaiian Electric Industries (HE) shares climb over 30% this morning as the utility firm and other defendants agreed to pay more than $4 bln in settlement amount, as per a Bloomberg report. The company and other defendants face multiple lawsuits from residents, the county of Maui and shareholders over Maui wildfires in 2023.
• Plug Power (PLUG) announces a $200M common stock offering.
• PPG Industries (PPG) Q2 adjusted EPS $2.50 vs. est. $2.48; Q2 revs $4.79B vs. est. $4.92B; sees Q3 adj EPS $2.10-$2.20 vs. consensus $2.28 and guides Q3 organic sales growth flat to up low single digits; cuts FY24 adj EPS view to $8.15-$8.30 from $8.34-$8.59 and lowers FY24 organic sales growth view to flat to up low single digits from up low single digits.
• Watch solar and electric vehicle stocks (TSLA, RIVN, LCID, ARRY, ENPH, FSLR, CSIQ, SEDG, NOVA) after Donald Trump used his nomination speech to take aim at President Joe Biden’s electric vehicle policies, vowing to action against them on his first day in office.
• Two oil tankers have been on fire since early Friday morning after a collision to the east of Singapore, raising fresh questions over the rising risks to maritime traffic, the environment and human lives in one of the world’s busiest waterways.

• Fifth Third (FITB) Q2 EPS $0.81 vs. est. $0.85; sees FY24 revenue down ~2% y/y; sees FY24 net interest income down 2%-4%; noninterest income stable to down 1%; Average loans & leases down ~3%.
• Metropolitan Bank (MCB) Q2 EPS $1.50 vs. est. $1.57; Q2 revs $67.7M vs. estimate $67.9M; Q2 net interest margin expanded 4 basis points to 3.44% from 3.40% in Q1.
• Selective Insurance (SIGI) Q2 EPS $1.10 vs. est. $1.48; Q2 revs $1.2B vs. est. $1.2B; Q2 adjusted book value per common share was $49.67, down 3% from last quarter.
• Western Alliance Bancorp (WAL) Q2 EPS $1.75 vs. est. $1.71; Q2 total deposits $66.24B, tangible book value per share $48.79, book value per share $54.80; Q2 net interest margin 3.63% vs. est. 3.44%, Q2 net interest income (NII) $656.6M, vs. Bloomberg est. $620.8M; provision for credit losses $37.1M.

• Scilex (SCLX) files to sell 3.5M shares of common stock for holders.

• CrowdStrike (CRWD) shares fall over -16% pre mkt issue causes major outage affecting businesses around the world. An update by cybersecurity firm CrowdStrike led to a major IT outage on Friday, impacting businesses around the world. “The issue has been identified, isolated and a fix has been deployed,” CEO Kurtz said in a statement on X. The comments came after widespread reports of technical issues, with many Microsoft users around the world facing an error screen known as the “blue screen of death.