Early Look

Thursday, June 27, 2024

U.S. futures are looking lower following a pullback in semiconductors overnight after Micron (MU) posted a quarterly beat but failed to raise guidance for the year, disappointing Wall Street, though futures have pared losses already. The Nasdaq Composite led Wednesday’s advance in U.S. stocks, with the Dow Jones Industrial Average and S&P 500 fending off bouts of weakness seen throughout the session. All three averages ended higher, surging into to the close to finish at the highs while only the Smallcap Russell 2000 finished in negative territory. In Asian markets, The Nikkei Index tumbled -325 points to 39,341, the Shanghai Index fell -26 points to 2,945, and the Hang Seng Index dropped -373 points to 17,716. In Europe, the German DAX is up 14 points to 18,169, while the FTSE 100 is down -17 points to 8,207. Bank stress tests ended up being a non-event as all passed, with attention now turning to the Q1 GDP reading at 8:30 AM today, Nike (NKE) earnings after the bell in retail, and the Presidential debate this evening. Finally, the May PCE inflation data on Friday morning (8:30 AM) could be a market moving catalyst. In other stock news, IP shares tumble as Brazil’s Suzano terminated talks to buy the U.S.-based firm, LEVI shares tumbled following its outlook and semi equipment stocks rise after MU higher capex.

• The Dow Jones Industrial Average rose 15.64 points, or 0.04%, to 39,127.80.
• The Nasdaq Composite gained 87.50 points, or 0.49%, to 17,805.16.
• The Russell 2000 Index declined -4.23 points, or 0.21% to 2,018.12.

• 8:30 AM ET                  Continuing Claims…est. 1.824M
• 8:30 AM ET                  Gross Domestic Product (GDP) for Q1-Final…est. +1.3%
• 8:30 AM ET GDP Consumer Spending for Q1-Final…est. +2.0%
• 8:30 AM ET GDP Price Deflator for Q1-Final…est. +3.1%
• 8:30 AM ET PCE Prices for Q1-Final…prior +3.3%
• 8:30 AM ET                  Core-PCE Prices for Q1-Final…est. +3.6% (in-line with prior +3.6%)
• 8:30 AM ET                  Advance Goods Trade Balance for May
• 8:30 AM ET                  Durable Goods Orders M/M for May…est. (-0.1%)
• 8:30 AM ET                  Durable Goods Orders Ex: Transports for May…est. +0.2%
• 10:00 AM ET                Pending Home Sales M/M for May…est. +2.5%
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 11:00 AM ET                Kansas City Fed Manufacturing for June…prior -1
• 1:00 PM ET U.S. Treasury to sell 7-year notes.

• Earnings After the Close: ACCD AOUT NKE PNST

• Design Automation Conference (DAC) conference 6/23-6/27, in San Francisco, CA
• 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

• China’s January to May industrial profit grew by 3.4% y/y to 2.57 trillion yuan. May profit grew 0.7% y/y vs 4.0% in April.

• McCormick (MKC) Q2 adj EPS $0.69 vs. est. $0.59; Q2 sales fell -1% y/y to $1.64B vs. est. $1.63B; Guides FY adj EPS $2.76-$2.81, down from prior $2.80-$2.85 (est. $2.86) and guides operating income +8% to +10%.
• MillerKnoll (MLKN) Q4 adj EPS $0.67 vs. est. $0.53; Q4 revs $888.9M vs. est. $898.67M; guides Q1 EPS $0.38-$0.44 vs. est. $0.41 and sees Q1 revenue $872.0M-$912.0M vs. est. $906.33M; Q4 orders were up 1.1% on a reported basis and up 2.9% organically from last year.
• Target Hospitality (TH) cuts FY24 revenue view to $375M-$385M from $410M-$425M, lowers FY24 adjusted EBITDA view to $184M-$190M from $195M-$210M, while backs its FY24 capital spending view $25M-$30M.

• Apogee Enterprises (APOG) Q1 adj EPS $1.44 vs. est. $1.04; Q1 revs $332M vs. est. $333.22M; raises FY25 adjusted EPS view to $4.65-$5.00 from $4.35-$4.75 (est. $4.520; still expects full-year net sales decline in the range of 4%-7%.
• BP’s (BP) new CEO Murray Auchincloss has imposed a hiring freeze and paused new offshore wind projects as he places a renewed emphasis on oil and gas amid investor discontent over its energy transition strategy – Reuters.
• HB Fuller (FUL) Q2 adj EPS $1.12 vs. est. $1.03; Q2 revs $917M vs. est. $911.9M; Q2 adj gross margin 31.1%; Q2 adj EBITDA $157.3M vs. est. $152.4M; reinitiated share repurchase program, acquiring 182,400 shares during quarter; updates FY adj EBITDA guidance to upper end of previously provided range.
• International Paper (IP) shares dropped -15% after the world’s largest pulp manufacturer, Brazil’s Suzano, terminated talks to buy the U.S.-based firm.
• SpaceX will sell insider shares at $112 apiece in a tender offer, a higher-than-expected price that boosts the value of Elon Musk’s space and satellite company closer to $210 billion, sources say – Bloomberg reported.
• Worthington Steel (WS) Q4 adj EPS $1.06 vs $1.47 last year and revs rose 3% to $911M vs $884M y/y; Q4 adjusted EBIT of $70.4M compared to $98.4M y/y; said Q4 Gross margin decreased by $19.2M y/y to $131.0M; Q4 Operating income decreased $22.5M over the prior year quarter to $67.3M; says entering FY25, remain focused on executing strategy and driving shareholder value through organic growth and strategic M&A.

• Hut 8 (HUT) set to join the Russell 3000 Index.
• U.S. Bancorp (USB) downgraded to Neutral from Overweight at JPMorgan with a $43.50 price target.
• Franklin Covey (FC) Q3 net income increases 25% to $5.7M; Q3 EPS $0.43 vs. est. $0.39; Q3 revenue $73.4M vs. est. $72.12M; guides FY24 adjusted EBITDA at low end of $54.5M-$58M range, which represents 13% growth over the $48.1M of adjusted EBITDA achieved in fiscal 2023.
• Jefferies (JEF) Q2 EPS $0.64 vs. est. $0.63 as profit jumped nearly twelve-fold as it earned higher fees from advising on deals as well as underwriting stock and bond sales, and revs were $1.66B as investment banking revenue rose 59% y/y to $803.2M; Q2 capital markets revenue jumped 24%, thanks to strength in equities; raises quarterly dividend by 17% to 35c per share.

• Recursion Pharmaceuticals (RXRX) prices $200M public offering of class a common stock.
• Verona Pharma (VRNA) said the U.S. FDA approved its inhaled therapy Ohtuvayre as maintenance treatment for a chronic lung disease; it is the company’s first and provides a new inhaled non-steroidal treatment for chronic obstructive pulmonary disease (COPD).

• Blackberry (BB) Q1 non-GAAPS loss (3c) vs. consensus (4c); Q1 revs $144M vs. est. $134.05M; sees FY25 non-GAAP EPS (7c)-(3c), vs. consensus (4c) and sees FY25 revenue $586M-$616M, consensus $600.97M.
• Concentrix Corp. (CNXC) Q2 EPS $2.69 vs. est. $2.62; Q2 revs $2.38B vs. est. $2.35B; Q2 adj operating margin was 13.5% and operating margin 6.3%; sees Q3 EPS $2.76-$3.04 below consensus $3.22 and revs $2.35B- $2.4B vs. est. $2.39B; guides FY24 EPS $11.40 -$12.07 vs. est. $11.91 and revs $9.58B-$9.675B vs. est. $9.6B.