Morning Preview: November 01, 2023

Auto PostDaily Market Report

Early Look

Wednesday, November 1, 2023

Futures

Up/Down

%

Last

Dow

-95.00

0.29%

33,038

S&P 500

-13.25

0.32%

4,198

Nasdaq

-50.50

0.35%

14,439

 

 

After stocks rose back-to-back days for the first time in 2-weeks on Tuesday, U.S. stock futures are slipping ahead of the Fed’s interest-rate decision at 2:00 PM ET today and the US government’s new borrowing plan announcement. The central bank is expected to hold rates steady at a 22-year high for a second meeting, while leaving open the possibility of another hike as soon as December with economic growth staying resilient. Investors say good riddance to October as the S&P 500 fell -2.2%, the Dow fell -1.4%, the Nasdaq fell -2.8%, and the Smallcap Russell 2000 declined -6.88% for the month – the third straight monthly decline for major averages. Gold prices slipped on Tuesday but rose 7% for the month while oil prices pull back about 10% in October. Treasury yields also make it 6-months in a row of higher yields. In Asian markets, The Nikkei Index jumped 742 points to 31,601, the Shanghai Index rose 4 points to 3,023, and the Hang Seng Index dipped -10 points to 17,101. In Europe, the German DAX is up 13 points to 14,823, while the FTSE 100 slips -10 points to 7,311. After the S&P closed lower for a 3rd straight month, BTIG’s Jonathan Krinsky noted it hasn’t been down four straight months since 2011 and hasn’t been down four straight months ending in November since 1946. In stocks news another barrage of earnings results today, while AMD slips slightly after Q3 beat but light Q4 guide.

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 26.98 points, or 0.65%, to 4,193.80.

·     The Dow Jones Industrial Average rose 69.08 points, or 0.38%, to 33,052.87.

·     The Nasdaq Composite gained 61.76 points, or 0.48%, to 12,851.24.

·     The Russell 2000 Index advanced 14.99 points, or 0.91% to 1,662.28.

 

Economic Calendar for Today

·     7:00 AM ET                  MBA Mortgage Applications Data

·     8:15 AM ET                  ADP Private Payrolls data for October…est. +150K

·     9:45 AM ET                  S&P Global Manufacturing PMI, Oct-Final…prior 50.0

·     10:00 AM ET                Construction Spending M/M for September…est. +0.4%

·     10:00 AM ET                ISM Manufacturing PMI for October…est. 49.0

·     10:00 AM ET                JOLTs Job Openings for September…est. 9.25M (prior 9.61M)

·     10:30 AM ET                Weekly DOE Inventory Data

·     2:00 PM ET                   FOMC Policy rate meeting at 2:00 – expected to hold 5.25%-5.5%.

·     2:30 PM ET                   Fed Chairman Powell Press Conference

 

Earnings Calendar:

·     Earnings Before the Open: ALIT APO ASTE AXTA BBGI BRY CDW CHEF CLH CVS DBRG DD DFIN DIN DNB DRVN DTE EAT EL ETR EXTR FDP FTDR FWRG FYBR GNRC GTHX HUM IDXX IQV KHC KMT LPX MCS MLM MYE NCLH NI NNN PSN PUMP RGS SGEN SITE SLAB SMG SPR SPWR SUN SUP SXC TEL TKR UTHR VRSK W WING YUM

·     Earnings After the Close: ABNB ACLS ACR AFG AFL AIG ALB ALL AMSC AMWL ANSS APA ARIS ASPN ATRC ATUS AVT AWK AWRE BALY BBSI BCOV BFAM BKH BLDR BMRN BXP CAKE CAR CCRN CDAY CF CFLT CHRW CLB CNDT CNXN CORT CPE CRC CSGS CTSH CW CWH CWST DASH DHX DXC EA EB ECPG EGHT EIX ELF ERII ET ETSY EXAS EXEL FC FCPT FORM FSLY GKOS HBB HCC HLF HPP HST INFA INN IR IVAC JAKK JOBY KAR KAMN KW LMND LNC LXU MCK MDLZ MET MKSI MOD MRO MSTR MTW MUSA NGVT NOG NUS NVRO NVST NYMT PBPB PGRE PK PRU PTC PYPL QCOM QDEL QRVO QTWO RCKY RDN RGLD RGR RM ROKU RRGB RUN RVLV RYN SBGI SCI SNCI SRPT SUM TENB TNDM TYL UFCS VAC VSTO WERN WES WMB WSC ZETA ZG

 

 

Macro

Up/Down

Last

Nymex

0.84

81.86

Brent

0.93

85.95

Gold

-3.00

1,991.30

EUR/USD

-0.0028

1.0548

JPY/USD

-0.48

151.19

10-Year Note

+0.028

4.903%

 

 

World News

·     China Oct Caixin Manufacturing PMI was 49.5 vs 50.8 consensus.

·     Japan Oct Manufacturing PMI (final) was 48.7 vs 48.5 preliminary.

 

Sector News Breakdown

Consumer

·     Caesars Entertainment (CZR) Q3 EPS $0.34 vs est. $0.29 on revs $3.0B vs est. $2.932B; adj EBITDA $1.043B vs est. $1.007B.

·     Meritage Homes (MTH) Q3 EPS $5.98 vs. est. $5.14; Q3 revs $1.61B vs. est. $1.57B; said Q3 orders of 3,474 homes for the third quarter increased 50% y/y; said projecting 3,500 to 3,700 home closings for the Q4; sees Q4 home closing revs of $1.45B-$1.53B.

·     Li Auto (LI) said it delivered 40,422 vehicles in October, representing an increase of 302.1% year over year. Monthly deliveries exceeded the 40,000 milestone for the first time.

·     NIO (NIO) delivered 16,074 vehicles in October 2023, increasing by 59.8% year-over-year. The deliveries consisted of 11,086 premium smart electric SUVs, and 4,988 premium smart electric sedans. Cumulative deliveries of NIO vehicles reached 415,623 as of October 31, 2023.

·     XPeng Inc. (XPEV) said its Smart EV monthly deliveries reached a record high of 20,002 units, representing a 31% increase over the prior month and a 292% increase year-over-year.

·     Skyline Champion (SKY) Q2 adj EPS $0.82 vs est. $0.80, adj EBITDA $$58.5Mm vs est. $59.08Mm, adj EBITDA mgn 12.7%, sales $464.2Mm vs est. $459.48Mm.

·     Wynn Resorts (WYNN), MGM Resorts (MGM), Las Vegas Sands (LVS): Macau’s casino revenue jumped in October after the world’s largest gambling hub saw a surge during China’s Golden Week holiday. Gross gaming revenue grew 400% to 19.5 billion patacas ($2.4 billion), according to data released by the Gaming Inspection and Coordination Bureau, more than the median analyst estimate of a 392% year-on-year increase.

·     Yum China (YUMC) Q3 adj EPS $0.59 vs. est. $0.68; Q3 revs rose 9% y/y to $2.91B vs. est. $3.06B; Q3 comp store sales rose 4% vs. est. 4.9%; KFC comp. sales +4%, vs. est. +4.9% and Pizza Hut comparable sales +2% vs. est. +5.57%; says on track to meet our updated full-year target of 1,400 to 1,600 for net new stores; will continue to stay agile and take actions to drive sales and cost-efficiency in these evolving market conditions.

 

Energy

·     Chesapeake Energy (CHK) Q3 adj EPS $1.09 vs est. $0.60, adj FCF $713Mm; expects to drill 35-45 well and place 50-60 wells on production in Q4.

·     First Solar (FSLR) Q3 EPS $2.50 vs est. $2.06; Q3 revs $801M below consensus $894.1M; narrows FY23 EPS view to $7.20-$8.00 from $7.00-$8.00 (est. $7.65) and maintain FY23 revenue view $3.4B-$3.6B vs. est. $3.52B; sees FY operating expenses $440M-$470M.

·     Noble Corp. (NE) Q3 EPS $1.09 vs. est. $0.80; Q3 revs $697M vs. est. $643.82M; raises dividend t0 $0.40; says full year 2023 guidance for adjusted EBITDA range now $775 to $825 million, the top half of the previous range.

·     ONEOK (OKE) Q3 EPS $0.99 vs est. $1.05, adj EBITDA $1.001B vs est. $1.02B; guides FY adj EBITDA $4.8B vs est. $5.233B; increased its 2023 net income and adjusted EBITDA guidance midpoints by $120M and $125M, respectively.

·     Zurn Elkay Water Solutions (ZWS) Q3 adj EPS $0.29 vs est. $0.27 on revs $398.4Mm vs est. $396.37Mm; sees Q4 sales around $351Mm vs est. $363.52Mm, increases Q4 FCF outlook to $230Mm.

 

Financials

·     Assurant Inc. (AIZ) Q3 adj EPS $4.29 vs. est. $2.58; sees 2023 adjusted ebitda, excluding reportable catastrophes, to increase mid- to high teens; sees 2023 adj earnings, excluding reportable catastrophes, per diluted share, growth rate to exceed growth rate in adjusted ebitda.

·     Equitable Holdings (EQH) Q3 adj EPS $1.30 vs est. $1.33, assets under mgmt $860B.

·     MGIC Investment (MTG) Q3 adj EPS $0.64 vs. est. $0.56; Q3 revs $296.5M vs. est. $296.29M; New insurance written was $14.6B, compared with $12.4B in Q2 and $19.6B y/y; loss ratio for Q3 was (0.0%), compared with (7.3)% for Q2, and (41.7)% y/y; Book value per common share outstanding as of September 30, 2023, increased to $17.37, or 10%.

·     Unum Group (UNM) Q3 adj EPS $1.94 vs. est. $1.92; Q3 book value per common share of $49.32 grew 16.9% y/y; book value per common share excluding accumulated other comprehensive income of $65.47 grew 8.5% y/y; Q3 revs $3.09B vs. est. $3.11B; announces $500M share repurchase authorization.

·     Voya Financials (VOYA) Q3 EPS $2.29 vs est. $2.07; Q3 book value/shr $57.55, vs. est. $30.74.

 

Healthcare

·     AstraZeneca (AZN) plans to invest $245 million in a deal with biotechnology company Cellectis (CLLS) to develop next-generation therapeutics in oncology, immunology, and rare diseases, making an initial payment of $105M in Q4 and AZN said it plans to make a further $140M equity investment, subject to regulatory and other approvals.

·     CVS Health (CVS) Q3 adj EPS $2.21 vs. est. $2.13; Q3 revs $89.76B vs. est. $88.25B; backs FY23 adj EPS view $8.50-$8.70 vs. consensus $8.86 and sees FY23 cash flow from operations $12.5B-$13.5B; Q3 comp store sales rose 8.8% and Pharmacy comps +11.5% and front-end comps declined -2.2%.

·     GSK PLC (GSK) raised its guidance after Q3 net profit rose mainly due to the U.S. launch of its Arexvy vaccine, although it missed analysts’ forecasts; said expects turnover to increase between 12% and 13% compared with previous guidance of 8% to 10% and adjusted operating profit to increase between 13% and 15%, up from 11% to 13%. Adjusted earnings per share are forecast to rise between 17% and 20% compared with 14% to 17%.

·     Tonix Pharmaceuticals (TNXP) said it would discontinue development of its treatment TNX-601 ER for major depressive disorder.

 

Industrials & Materials

·     Amcor Plc (AMCR) Q1 EPS $0.156 vs est. $0.15 on net sales $3.443B vs est. $3.43B; reaffirms FY EPS guide $0.67-0.71 vs est. $0.69 and adj FCF $850-950Mm.

·     DuPont (DD) missed sales estimates for the third quarter and offered guidance that lagged consensus; Q3 adj EPS $0.92 vs. est. $0.84; Q3 revs $3.06B vs. est. $3.15B; narrows FY23 adjusted EPS view $3.45 from $3.40-$3.50 (est. $3.45) and cuts FY23 revenue view to $12.17B from $12.45B-$12.55B (est. $12.46B).

·     Generac (GNRC) Q3 adj EPS $1.64 vs. est. $1.51; Q3 revs $1.07B vs. est. $1.04B; Residential product sales were down 15% at $565M, though commercial and industrial product sales were up by nearly a quarter at $385M; backs FY23 revenue view of decline of approximately 10%-12%.

·     Huntsman (HUN) Q3 adj EPS $0.15 vs. est. $0.19; Q3 revs $1.506B vs. est. $1.55B; says 4Q will likely be the most challenging period in recent memory due to weak demand, pricing pressure, and aggressive customer inventory management.

·     Livent Corp. (LTHM) Q3 adj EPS $0.44 vs. est. $0.46; Q3 revs $211.4M vs. est. $273.56M; cuts FY23 revenue view to $890M-$940M from $1.025B-$1.125B (est. $1.06B); sees FY23 Adjusted EBITDA $500M-$530M; says after merger with Allkem, Arcadium Lithium Plc will be the name of the combined new co.; said drop in Chinese lithium prices in Q3 offset by cost cuts.

·     MasTec (MTZ) Q3 adj EPS $0.95 vs. est. $1.87; Q3 revs $3.26B vs. est. $3.76B; sees FY revenue of approximately $12B vs. est. $12.68B; sees FY adj EPS approximately $1.75 (down from prior $3.75-$4.19) vs. est. $3.71; sees FY adjusted net income of approximately $140M; said they continue to expect strong, although delayed, demand for our services.

·     OI-Glass (OI) Q3 adj EPS $0.80 vs est. $0.70 on sales $1.74B vs est. $1.764B; guides Q4 sales volume growth -dd vs prior -LSD/MSD, adj EPS $0.03 vs prior $0.25-0.35 and est. $0.31.

·     In Paper sector: Europe’s Smurfit Kappa, which agreed an $11 billion deal to buy U.S. rival WestRock (WRK) in September, said it saw tentative improvements in its German order books that could bode well for a return to volume growth.

 

Technology, Media & Telecom

·     AMD Inc. (AMD) Q3 adj EPS $0.70 vs. est. $0.68; Q3 revs rose 4.2% y/y to $5.80B vs. est. $5.7B; said Q2 Data center revenue $1.60B, -0.7% y/y, gaming revenue $1.51B, -7.7% y/y; Free cash flow $297M, -65% y/y; for Q4, expects revenue to be approximately $6.1B, plus/minus $300M vs. est. $6.4B and expect to see strong growth in data center and continued momentum in client.

·     Advanced Energy (AEIS) Q3 adj EPS $0.89 misses the consensus $1.16; Q3 revenue $410M below consensus $421.84M; guides Q4 adj EPS $1.15 plus/minus $0.20 vs. est. $1.26; sees Q4 revenue $405M plus/minus $15M vs. est. $437.17M.

·     Freshworks (FRSH) Q3 adj ESP $0.08 vs est. $0.05 on revs $153.55Mm vs est. $150.70Mm; sees FY revs $593-595.5Mm vs est. $591.14Mm and adj EPS $0.23-0.25 vs est. $0.20.

·     Match Inc. (MTCH) Q3 revs $882M vs. est. $881.1M; sees Q4 total revenue $855m-$865M below consensus of $895.M, anticipating continued weakness in spending on dating services amid unrest in some markets and high inflation; qtrly payers declined 5% y/y to 15.7M and Q3 Tinder direct revenue grew 11% to $509M.

·     Paycom Software (PAYC) Q3 adj EPS $1.77 vs est. $1.61 on revs $406.303Mm vs est. $411.20Mm, adj EBITDA $166Mm vs est. $157.15Mm; sees Q4 revs $420-425Mm vs est. $452.28Mm, adj EBITDA $169-174Mm vs est. $189.06Mm.

·     TE Connectivity (TEL) Q4 adj EPS $1.78 vs. est. $1.76; Q4 revs $4.04B vs. est. $4.01B; sees Q1 adjusted EPS $1.70 vs. est. $1.76 and sees Q1 revenue $3.85B vs. est. $3.94B.

_________________________________________________________________

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.

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