Early Look

Wednesday, June 26, 2024

U.S. stock futures are looking flat to higher, adding to gains in the Nasdaq from yesterday amid a rebound in shares of NVDA after a 3-day rout, alongside bounces in mega cap tech names (AAPL, AMZN, GOOGL, META). Focus turns to financials tonight with the Fed bank stress tests and semiconductors yet again with Micron (MU) results after the bell. Another relatively quiet day for economic data with New Home Sales data at 10:00 and a $70B 5-yr bond auction at 1:00 before attention turns to GDP data tomorrow morning and then core PCE inflation data on Friday (the Fed’s preferred gauge of inflation). Dow Transports and industrials likely see early strength after package delivery giant Fed-ex (FDX) shares rose 15% overnight behind better earnings and guidance. There are also a few movers on M&A headlines with Whirlpool (WHR) and Visto (VSTO) edging higher (see reports below). In Asian markets, The Nikkei Index jumped 493 points to 39,667, the Shanghai Index rose 22 points to 2,972, and the Hang Seng Index edged higher 17 points to 18,089. In Europe, the German DAX is up 35 points to 18,213, while the FTSE 100 rises 13 points to 8,260. The Yen is trading above 160 to the dollar, near levels that triggered a sharp reversal in April when authorities intervened to support the currency, raising speculation they may act again. There

• The Dow Jones Industrial Average fell -299.05 points, or 0.76%, to 39,112.16.
• The Nasdaq Composite gained 220.84 points, or 1.26%, to 17,717.65.
• The Russell 2000 Index declined -8.47 points, or 0.42% to 2,022.35.

• 10:00 AM ET                New Home Sales M/M for May
• 10:30 AM ET                Weekly DOE Inventory Data
• 1:00 PM ET U.S. Treasury to sell $70B in 5-year notes.
• 4:00 PM ET                   The Federal Reserve’s stress test results are due after the close on Wednesday (6/26).

• Earnings After the Close: AVAV CNXC FC FUL JEF KEQU LEVI MLKN MU WS

• Goldman Sachs European Business Services, Transport & Leisure Conference, 6/24-6/26, in London
• Goldman Sachs China Healthcare Corporate Day 2024, 6/24-6/26 (virtual)
• Jefferies Shipping 1×1 Summit, 6/25-6/26, in New York
• Oppenheimer Montauk Life Sciences Summit, 6/26-6/28, in Montauk, NY
• Roth MKM 10th Annual ROTH London Conference, 6/25-6/27, in London

• Volkswagen (VWAGY) plans to make a $5B investment into Rivian (RIVN) as they plan a joint venture for next-gen electric vehicles.  The announced transaction could result in an unplanned cash outflow of up to 2B EUR in the current fiscal year. Volkswagen to invest an initial $1B, with up to $4B in planned additional investment. Shares of RIVN surged more than 30% overnight on the JV headlines.
• MNC Capital raises the all-cash offer to acquire Vista Outdoor (VSTO) to $42 per share, or approximately $3.2B. The revised proposal represents a premium of 55% to the-VWAP from when Vista’s transaction with the Czechoslovak Group was announced on October 16, 2023, to the last closing price before MNC’s initial offer on February 19, 2024.
• Ferrari NV (RACE) plans to offer an extended warranty service for its next generation of hybrid and electric supercars to soothe customer concerns over aging battery packs. The Italian manufacturer is set to offer an annual subscription costing around €7,000 ($7,500) for batteries, people familiar with the matter said – Bloomberg.
• Southwest Airlines Co (LUV) provided Q2 update saying expects an all-time quarterly record for operating revenue in Q2 2024; forecasts Q2 RASM y/y down 4.0% to 4.5% (down from prior guidance of down 1.5% to 3.5%) and forecasts Q2 2024 CASM up 6.5% to 7.5% year-over-year; said the cut in revs were driven primarily by “complexities in adapting its revenue management to current booking patterns in this dynamic environment”.
• Home Depot (HD) upgraded to Buy at DA Davidson and raise tgt to $395 from $352.

• Albemarle (ALB) said it plans to hold more lithium auctions to boost price transparency; ALB will provide auction data to Fastmarkets and other pricing agencies to formulate into publicly available prices.
• Transocean Ltd. (RIG) announced a 365-day contract extension for the Deepwater Asgard with an independent operator in the U.S. Gulf of Mexico. The program is expected to commence in direct continuation of the rig’s current program and is estimated to contribute approximately $188 million in backlog, including additional services.
• TXO Partners (TXO) announced that it has entered into separate purchase agreements with Eagle Mountain Energy Partners and a private company to purchase assets in the Elm Coulee field in Montana and the Russian Creek field in North Dakota for total cash considerations of $243 million and 2.5 million common units of TXO.
• Worthington Industries (WOR) Q4 adj EPS $0.74 vs. est. $0.95; Q4 revs $318.8M vs. est. $359.4M; raised quarterly dividend by 6.35% to $0.17; Q4 sales fell -74% y/y to $318.8M vs. est. $353M and posted operating loss of (-$56.1M) vs. $122.6M profit y/y.
• U.S. Steel (X) upgraded to Outperform from Market Perform at BMO Capital.

• Beam Therapeutics (BEAM) announces the first patient dosed in the phase 1/2 study of beam-302 in alpha-1 antitrypsin deficiency (AAD).
• Sanofi (SNY) is seeking buyers for its consumer health arm as it simultaneously plans to potentially list the unit, Bloomberg reported, citing unnamed sources.
• Savara (SVRA) announced positive results from the pivotal, Phase 3 IMPALA-2 clinical trial. IMPALA-2 is a 48-week, randomized, double-blind, placebo-controlled trial assessing the efficacy and safety of molgramostim 300 mcg administered once daily by inhalation with matching placebo in adult patients with aPAP.
• Taysha Gene Therapies (TSHA) announced that it has commenced an underwritten public offering of up to $75Mof shares of its common stock.