Early Look

Thursday, March 16, 2023

Futures	Up/Down	%	Last
Dow	-104.00	0.32%	31,991
S&P 500	-9.25	0.04%	3,915
Nasdaq	12.50	0.10%	12,389

 

 

U.S. stock futures are looking mixed, with S&P futures (Spuz) down -0.25% around 3,915 (overnight high 3,947.50 and low 3,912.25) as banking woes ease a bit after Credit Suisse said it would borrow as much as 50 billion Swiss francs from the Swiss National Bank to relax liquidity concerns. Other European banks shares also gained. Oil rose from the lowest close in 15 months after a three-day rout started by the US banking crisis. Bitcoin rises 2.5% to $25,000; Treasury yields are flat as are currencies into the ECB meeting later this morning. Significant uncertainty exists over today’s ECB policy meeting decision due at 7:45 AM this morning, which is followed by ECB President Lagarde’s press conference shortly after. A rate hike is still on the table but given the money provided by the SNB to Credit Suisse last night to help liquidity concerns, a 25-bps is the most likely scenario. A heavy dose of economic data today in the U.S. with weekly jobless claims, Philly Fed, import prices, and Housing Starts are released at 8:30 AM. U.S. stocks pared losses late on Wednesday, but the Dow and S&P 500 still closed lower, as problems at Credit Suisse revived fears of a banking crisis, eclipsing bets on a smaller U.S. rate hike this month. Major averages gained ground in late trade after Bloomberg reported the Swiss government was holding talks on options to stabilize the country’s banking giant. The Nasdaq finished higher. Most of the 11 major S&P 500 sectors were in the red, with energy the worst performer with a 5.42% fall.

 

In Asian markets, The Nikkei Index fell -218 points to 27,010, the Shanghai Index dropped -36 points to 3,226, and the Hang Seng Index declined -335 points to 19,203. In Europe, the German DAX is higher by 118 points or 0.8% to 14,850, while the FTSE 100 rises 85 points or 1,15% to 7,430. Note the European Central Bank (ECB) will reveal its interest rate decision today, though its plans for a big hike has been called into question amid the Credit Suisse woes. The European Central Bank faces a challenging policy decision later today in Frankfurt, as near-record inflation around the region demands aggressive rate hikes while contagion from bank failures in the United States, and weakness at Credit Suisse, endangers the Eurozone financial system.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -27.36 points, or 0.70%, to 3,891.93.

·     The Dow Jones Industrial Average slid -280.83 points, or 0.87%, to 31,874.57.

·     The Nasdaq Composite edged higher 5.90 points, or 0.05%, to 11,434.05.

·     The Russell 2000 Index declined -30.95 points, or 1.74% to 1,745.94.

 

Economic Calendar for Today

·     8:30 AM ET           Weekly Jobless Claims…est. 205K (prior 211K)

·     8:30 AM ET           Continuing Claims…est. 1.715M (prior 1.718M)

·     8:30 AM ET           Housing Starts M/M for February…est. 1.31M

·     8:30 AM ET           Building Permits M/M for February…est. 1.34M

·     8:30 AM ET           Import Prices M/M for February…est. (-0.2%)

·     8:30 AM ET           Export Prices M/M for February…est. (-0.1%)

·     8:30 AM ET           Philly Fed Business Index for March…est. (-15.6)

·     10:30 AM ET         Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ACTG APYX ASO DBI DG DXLG EVLO GIII JBL LE LQDA PRVB RMBL SIG TITN

·     Earnings After the Close: ACHV BEAT COOK ETON FDX GOCO IDEX PLBY PRPL SNES

 

Other Key Events:

·     Barclay’s Global Healthcare Conference, 3/14-3/16, in Miami, FL

·     JMP Securities Life Sciences Conference, 3/15-3/16, in New York

 

 

Macro	Up/Down	Last
Nymex	0.60	68.21
Brent	0.82	74.51
Gold	-7.90	1,923.40
EUR/USD	0.003	1.0604
JPY/USD	-0.43	132.97
10-Year Note	-0.004	3.49%

 

 

World News

·     U.S. Jan net overall capital flow +$183.1B vs +$26.7B in Dec (prev +$28.6B); China’s U.S. Treasury securities holdings $859B in Jan vs 867 bln in Dec; Japan’s U.S. Treasury holdings $1.104T in Jan vs 1.076 trln in Dec

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -29.2 vs -16.9 last week. Bulls fall to 19.2% from 24.8%, Neutrals fall to 32.4% from 33.4%, Bears rise to 48.4% from 41.7%.

·     The Federal Reserve’s emergency loan program may inject as much as $2 trillion of funds into the US banking system and ease the liquidity crunch, according to JPMorgan Chase & Co.

 

Sector News Breakdown

Consumer

·     Five Below (FIVE) Q4 EPS $3.07, in-line with consensus and revs $1.12B vs. est. $1.11B; Q4 comparable sales increased by 1.9% vs. est. 0.6%; guides Q1 comp sales 2.5%-4% vs. est. 3.4% and year comps 1%-4% vs. est. 2.65%; guides year EPS $0.59-$0.65 vs. est. $0.69 and sees net sales $723M-$735M vs. est. $728M.

·     GrowGeneration Corp. (GRWG) Q4 EPS loss (-$0.25) vs. est. loss (-$0.12); Q4 revs rose 40% y/y to $54.46M above consensus $51.8M; sees FY23 revenue $250M-$270M vs. est. $270.7M; sees FY23 adjusted EBITDA of ($4M) to $1M vs. ($16.7M) in FY22.

 

Energy, Industrials and Materials

·     Berkshire Hathaway (BRKA) purchased nearly 8-million shares of Occidental Petroleum (OXY) in recent days, bringing its stake to 208 million shares, or 23% of the big energy company, according to a regulatory filing late Wednesday.

·     FedEx (FDX) upgraded to Buy from Hold at Stifel and raised tgt to $222 from $171.

·     Amyris Inc. (AMRS) Q4 EPS loss (-$0.46) vs. est. loss (-$0.27); Q4 revs rose 17% y/y to $75.8M vs. est. $104.1M; sees FY23 revenue growth 95%-100% vs. est. $505.65M.

·     L3Harris Technologies (LHX) received a request for additional information from the Federal Trade Commission (FTC) as part of the regulatory review process for the acquisition of Aerojet Rocketdyne (AJRD).

·     Ritchie Bros. (RBA) files to sell 7.58M common shares for holders.

·     ZTO Express (ZTO) Q4 adj EPS $0.37 vs. est. $0.38; Q4 revs $1.43B vs. est. $1.47B; grew parcel volume by 2.1B, or 9.4% y/y and expanded market share by 1.5 percentage points to 22.1%; company’s parcel volume for 2023 is expected to be in the range of 28.78B-29.75B, representing a 18%-22% increase y/y.

 

Financials

·     Credit Suisse (CS) shares rise after the bank said it would borrow as much as 50 billion Swiss francs from the Swiss National Bank to stanch liquidity concerns. Other European banks shares also gained.

·     Block (SQ) upgraded to Buy from Neutral at Mizuho.

·     Citigroup Inc (C) credit card charge-offs 1.55 % in Feb vs 1.50% in Jan; credit card delinquency rate 1.12% at Feb end vs 1.04% at Jan end.

·     First Republic Bank (FRC) is exploring strategic options including a sale, Bloomberg reported on Wednesday, citing people with knowledge of the matter; shares -15%.

·     Robinhood Markets Inc (HOOD) said its Chief Operating Officer Gretchen Howard will retire at the end of 2023.

 

Healthcare

·     Esperion Therapeutics (ESPR) plunges after disclosing a dispute over milestone payments with partner Daiichi Sankyo Europe. Any failure to receive or any delay in receipt of the payments may “significantly” impact future capital needs, the US drug company said.

·     Proterra Inc. (PTRA) Q4 EPS loss (-$0.50) vs. est. loss (-$0.25); Q4 revs $80M vs. est. $86.85M; sees FY23 revenue $450M-$500M, consensus $533.8M.

·     The Alzheimer’s Association has deployed 1,000 people diagnosed with, or caring for someone with the disease, to meet with all 535 members of Congress across the United States and urge them to press Medicare for early access to a new class of drugs, beginning with lecanemab, that promise to slow the disease (BIIB, LLY)

 

Technology, Media & Telecom

·     Adobe Systems (ADBE) shares rise 4%; Q1 adj EPS $3.80 vs. est. $3.68; Q1 revs $4.66B vs. est. $4.62B; raising annual targets as boosts FY23 adjusted EPS view to $15.30-$15.60 from $15.15-$15.45 (est. $15.31) and sees FY23 digital media net new ARR roughly $1.7B.

·     Baidu (BIDU) unveiled its much-awaited artificial intelligence-powered chatbot known as Ernie Bot on Thursday, but disappointed investors with its use of pre-recorded videos and the lack of a public launch, sending its shares tumbling over -5%.

·     LivePerson Inc. (LPSN) shares slide -28%; Q4 EPS loss (-$0.55) vs. est. loss (-$0.22); Q4 revs fell -1.1% y/y to $122.5M vs. est. $127.1M; sees Q1 revs $106M-$109M vs. est. $132.5M and sees year revs $395M-$410M below consensus $550.5M.

·     PagerDuty (PD) Q4 adj EPS $0.08 vs. est. $0.02; Q4 revs grew 32% y/y to $101M saying achieved first $100M quarter vs. consensus $98.84M; sees Q1 adjusted EPS $0.09-$0.10 vs. est. $0.03 and revs $102M-$104M vs. est. $104.82M.

·     UiPath Inc. (PATH) Q4 adj EPS $0.15 vs. est. $0.06; Q4 revs rose 6.5% y/y to $308.5M vs. est. $278.62M; sees Q1 revenue $270M-$272M vs. est. $269.14M and sees FY24 revenue $1.253B-$1.258B vs. est. $1.21B; sees FY24 adjusted operating income roughly $120M; Q4 ARR grew 30% year-over-year reaching $1.204 billion driven by net new ARR of $94 million.

·     Snap Inc. (SNAP) shares rise after the Biden administration said TikTok’s Chinese owners must sell their stakes in the video-sharing app or face a possible U.S. ban.

·     Skyworks (SWKS) and Qualcomm (QCOM) both upgraded to positive from neutral at Susquehanna and Intel (INTC) upgraded to Neutral from Negative.

·     Aeye Inc. (LIDR) Q4 EPS loss (-$0.11) vs. est. loss (-$0.15); Q4 revs $1.1M; Cash, cash equivalents, and marketable securities were $94.2 million as of December 31, 2022.

·     Amtech Systems (ASYS) announced a multi-unit order for high volume reflow systems used in advanced packaging applications valued at $1.8M.

·     Rapid7 (RPD) announced it has acquired Minerva Labs, a provider of anti-evasion and ransomware prevention technology for $38M.