Early Look
Tuesday, November 7, 2023
|
Futures |
Up/Down |
% |
Last |
|
Dow |
-117.00 |
0.34% |
34,047 |
|
S&P 500 |
-15.25 |
0.35% |
4,368 |
|
Nasdaq |
-46.50 |
0.31% |
15,185 |
U.S. futures are pointing to a lower open, taking a breather after the Nasdaq Composite posted its 7th up day in a row (and recorded its 18th straight higher Monday) while the S&P 500 index made it a 6th consecutive day of gains despite a jump in Treasury yields and negative market breadth. Markets were paced by defensive sectors such as healthcare and consumer staples while large cap tech helped lead as well. We are in the later innings of earnings season with more than 80% of S&P companies having reported and attention turns back to the macro with several Fed speakers on tap today (see below) and the first of three bond auctions this week with a $48B 3-year note auction this afternoon (to be followed by a $40B 10-year note auction on Wednesday and $24B in 30-year bonds on Thursday). Oil prices extend losses as WTI crude drops -1.5% to move back below the $80 per barrel level. In Asian markets, The Nikkei Index dropped -436 points to 32,271, the Shanghai Index dipped -1 point to 3,057, and the Hang Seng Index declined -296 points to 17,670. In Europe, the German DAX is down about -60 points to 15,975, while the FTSE 100 is down a few points to 7,413. In the stat of the day, the top 10 stocks in the S&P 500 account for about 89% of the index’s gains this year. The market’s returns haven’t been this lopsided in at least 15 years, according to Societe Generale.
Market Closing Prices Yesterday
· The S&P 500 Index climbed 7.64 points, or 0.18%, to 4,365.98.
· The Dow Jones Industrial Average rose 34.54 points, or 0.10%, to 34,095.86.
· The Nasdaq Composite gained 40.50 points, or 0.30%, to 13,518.78.
· The Russell 2000 Index declined -22.77 points, or 1.29% to 1,737.94.
Economic Calendar for Today
· 7:45 AM ET ICSC Weekly Retail Sales
· 8:30 AM ET International Trade for September
· 8:55 AM ET Johnson/Redbook Weekly Sales
· 9:50 AM ET Fed’s Schmid Speaks at Dallas/Kansas City Energy Conference
· 1:25 PM ET Fed’s Logan Participates in Moderated Discussion
· 1:30 PM ET Fed’s Logan Speaks at Dallas/Kansas City Fed Energy Conference
· 3:00 PM ET Consumer Credit for September
· 4:30 PM ET API Weekly Inventory Data
Earnings Calendar:
· Earnings Before the Open: ABUS ACMR ALT AMRK AMRX APD AXGN BCO BHG BLUE BOWL CECO CG CHH CNSL DDOG DHI DK DKL DTC ELAN EMR ESPR EVRG EXPD FIS FOR GEN GOGO HAIN HLNE KKR LCII LQDA MFA MPLN MRNS MSGE OB OSCR PINC PLNT PMTS RMBL SAGE SEAT SGRY SHO SMRT SQSP SWIM TGI TGNA TPG TWKS UBER VAL VST VTNR WAT WKHS ZBH
· Earnings After the Close: ACL AEL AGS AKAM AMBC ANDE ANGI APEI APLE ARAY ARRY ATEN AXON BBAI BHF BLND BMBL BODY BROS BRP CARG CASA CAVA CBAY CIVI COLL COTY CPNG CRCT CRVS CTOS DAR DOOR DOX DVA DVN EBAY EGY ENVX COLS EXR FLYW FNF FSP FTK GILD GMED GO GPRO GXO HCI HEAR HOOD HRB IAC INGN INSP IOVA IPAR JKHY KD LAND LCID LZ MASI MEG MOS MQ MRC NCMI NDLS NINE NKTR NRDY OCUL OM OSUR OVV OXY PAYS PCT PETQ PGNY PLUS POWI PRCH PRI PTEN PXLW REAL RIGL RIVN RRR RXT RYAM SGHT SHLS SNBR SNCR SND TKO TOST TVTX UPST UPWK USPH VRM WISH XNCR XPOF ZYME
Other Key Events:
· Baird Global Industrials Conference 2023, 11/7-11/9, in Chicago, IL
|
Macro |
Up/Down |
Last |
|
Nymex |
-1.27 |
79.55 |
|
Brent |
-1.44 |
83.74 |
|
Gold |
-17.10 |
1,971.50 |
|
EUR/USD |
-0.004 |
1.0675 |
|
JPY/USD |
0.32 |
150.40 |
|
10-Year Note |
-0.05 |
4.612% |
World News
· China’s exports fell by 6.4% year-on-year in October in U.S. dollar terms, China’s customs agency said. China’s imports unexpectedly rose by 3% during that time the data showed. However, China’s imports from the U.S. were down by 3.7% in October versus the year ago period.
· The RBA raised cash rate target by 25bps to 4.35%, as expected by most analysts as the central bank changed their forward guidance from “some further tightening of monetary policy may be required” to “whether further tightening of monetary policy is required”.
· Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s too soon to declare victory over inflation, despite positive signs that price pressures are easing. “Before we declare that ‘we’re absolutely done, we’ve solved the problem,’ let’s get more data and see how the economy evolves,” Kashkari said Monday in an interview on Fox News.
· Brent and WTI crude are down about -1.5% as mixed economic data from China offset the impact of Saudi Arabia and Russia extending output cuts.
· House Republicans are reportedly in the process of crafting a short-term spending measure with the aim of preventing a government shutdown slated for November 18. Following discussions with newly appointed Speaker Johnson, it seems lawmakers might vote on this bill this week.
Sector News Breakdown
Consumer
· Celsius Holdings (CELH) Q3 EPS $0.89 vs. est. $0.46; Q3 revs rose 104% y/y to $384.76M vs. est. $348.94M; North America revenue increased 107% to $371M, up from $180M in Q3 2022.
· Goodyear Tire (GT) Q3 EPS loss (-$0.31) vs. est. $0.19; Q3 sales $5.14B vs. est. $5.31B; said 3Q was 1st qtr where benefits of price/mix vs. raw materials exceeded inflation; Q4 results are expected to be negatively impacted by a fire in our factory in Poland; still forecasts FY interest expense about $540M.
· IFF (IFF) Q3 adj EPS $0.89 vs. est. $0.75; Q3 revs $2.8B vs. est. $2.77B; backs FY23 revenue and adj operating Ebitda outlook; said Icahn Cap, IFF agreed to renominate one Icahn Director and one mutually agreed director to the IFF Board for the 2024 Proxy Season.
· Tripadvisor (TRIP) Q3 EPS $0.52 vs. est. $0.46; Q3 revs $533M vs. est. $505.03M; said exceeded expectations for adjusted EBITDA, at $127M or 24% of revenue, in large part due to revenue performance; expects to recognize additional pre-tax restructuring, other related reorganization costs of about $3M-$4M.
Energy
· Coterra Energy (CTRA) Q3 adj EPS $0.50 vs es.t $0.44, adj FCF $758Mm; raising FY total production to 655-665MBoepd, oil production to 94.5-95.5 Mboepd, Nat gas production to $2,840-2,870 MMcfpd.
· Diamondback Energy (FANG) Q3 adj EPS $5.49 vs. est. $5.03; Q3 adj EBITDA $1.75B vs. est. $1.68B; said its production averaged 452,848 barrels of oil equivalent per day (boepd) for the quarter, higher than the 390,630 boepd a year ago; said its average unhedged realized prices were $81.57 per barrel of oil, lower than the $89.79 per barrel a year earlier.
· NextEra Energy Partners, LP (NEP) announced that it has entered into a definitive agreement with Kinder Morgan, Inc. (KMI) to sell its Texas natural gas pipeline portfolio for $1.815 billion.
Financials
· CoreCivic (CXW) Q3 FFO $0.34, in-line with consensus and Q3 revs $483.7M vs. est. $475.24M; raises 2023 view to adj EPS $0.54-$0.60 and narrow 2023 view to FFO $1.37/$1.43.
· Realty Income (O) Q3 AFFO $1.02, EPS $0.33 vs est. $0.32, same-store rental revs +2.2%; sees FY AFFO/shr $3.98-4.01 and EPS $1.25-1.32 vs est. $1.28.
· Ryman Hospitality (RHP) Q3 AFFO/shr $1.73 on revs $528.511Mm vs est. $530.3Mm; same-store hospitality segment record Q3 revs of $396.2Mm on record Q3 ADR.
· Sabre Health (SBRA) Q3 normalized AFFO/shr $0.34 vs est. $0.33 on revs $161.6Mm vs est. $158.95Mm.
· WeWork Inc. (WE), once the biggest office tenant in Manhattan, has filed for bankruptcy listing nearly $19 billion of debts.
· Welltower (WELL) announces sale of 17.5M shares of common stock.
Healthcare
· Aura Biosciences (AURA) 11M share Spot Secondary priced at $9.00.
· Coherus Bio (CHRS) cut its net product revenue and combined R&D and SG&A expenses forecast for the full year.
· Guardant Health Inc. (GH) Q3 adj EPS ($0.67) vs est. ($0.95) on revs $143Mm vs est. $137.4Mm, adj EBITDA ($79.7)Mm; raises FY revs guide to $553-556Mm vs est. $549.06Mm.
· NanoString technologies (NSTG) Q3 EPS ($0.78) vs est. ($0.58), adj EBITDA ($20.213)Mm on revs $48.089Mm vs est. $47.21Mm; sees FY revs $175-180Mm vs est. $180.93Mm and adj EBITDA ($85)-($80)Mm vs est. ($83.41)Mm.
· Shockwave Medical (SWAV) Q3 EPS $0.92 vs est. $0.79 on revs $186.02Mm vs est. $184.72Mm, adj EBITDA $65Mm vs est. $42.88Mm; guides FY revs $725-730Mm vs est. $728.85Mm.
· TransMedics (TMDX) Q3 EPS ($0.78) including non-recurring acquisition costs vs est. ($0.16) on revs $66.4Mm vs est. $49.19Mm; guides FY revs $222-230Mm vs prior $180-190Mm est. $194.01Mm.
· Ventyx Biosciences (VTYX) shares tumbled over -70% after saying it’s terminating its Phase 2 trial of VTX958 in plaque psoriasis and psoriatic arthritis as efficacy results did not meet the internal target to support further development.
· Vertex Pharmaceuticals (VRTX) Q3 adj EPS $3.98 vs. est. $3.97; company raises full year 2023 product revenue guidance to approximately $9.85B vs. prior view of $9.7B-$9.8B; said FDA advisory committee meeting for exa-cel in SCD completed; PDUFA date is 12/8.
Industrials & Materials
· Cabot (CBT) Q4 adj EPS $1.65 vs. est. $1.48; Q4 revs $965M vs. est. $991.48M; sees FY24 adjusted EPS $6.30-$6.80 vs. est. $6.54, driven by continued growth in our Reinforcement Materials segment; see strong operating cash flow driven by robust EBITDA assuming constant feedstock costs.
· Sterling Infrastructure (STRL) Q3 EPS $1.26 vs est. $1.25 on revs $560.347Mm vs est. $565.8Mm, gr mgn 16.4%; sees FY revs $1.99-2.05B and EPS $4.10-4.23 vs est. $4.09.
Technology, Media & Telecom
· Alteryx (AYX) Q3 EPS $0.29 vs. est. loss (-$0.06); Q3 revs $232M vs. est. $210.23M; sees Q4 EPS $1.10-$1.17 vs. est. $1.19; sees Q4 ARR $942M-$948M, representing y/y growth of 13% to 14%; and sees non-GAAP income from operations is $112M-$118M.
· Alphatec (ATEC) Q3 EPS loss (-$0.35) vs. est. loss (-$0.28); Q3 revs $118M vs. est. $113.39M; continues to expect total revenue to grow 35% to $472M for FY and now expects non-Gaap adjusted ebitda of approximately $3M for FY23.
· Aspen Technology (ASPN) Q1 adj EPS $1.16 vs est. $1.44 on revs $249.3Mm vs est. $264.75Mm; guides FY ACV growth at least 11.5%, FCF at least $360Mm, total bookings at least $1.04B, total revs at least $1.12B vs est. $1.147B, adj EPS at least $6.57 vs est. $6.59.
· Clearwater Analytics (CWAN) 20M share Spot Secondary priced at $17.50.
· Coherent Inc. (COHR) Q1 adj EPS $0.16 vs est. $0.12 on revs $1.053B vs est. $1.052B; sees Q2 revs $1.075-1.175B vs est. $1.098B and adj EPS $0.14-0.32 vs est. $0.22; sees FY revs $4.5-4.7B vs est. $4.581B adj EPS $1.00-1.50 vs est. $1.27.
· Fabrinet (FN) Q1 adj EPS $2.00 vs. est. $1.86; Q1 revs $685.5M vs. est. $659.01M; sees Q2 adj EPS $1.98-$2.05 vs. est. $1.95 and revs $680M-$700M vs. est. $682.23M.
· NXP Semiconductors (NXPI) Q3 EPS $3.70 vs. est. $3.59; Q3 revs $3.43B vs. est. $3.4B; Q3 gross margin 57.2%; guides Q4 EPS $2.71-$3.13 vs. est. $3.61 and revs $3.3B-$3.5B vs. est. $3.43B.
· RingCentral (RNG) Q3 adj EPS $0.78 vs est. $0.75, adj EBITDA $128Mm vs est. $122.81Mm on revs $558.164Mm vs est. $554.16; sees FY adj EPS $3.19-3.20 vs est. $3.15 and revs $2.198-2.205B vs est. $2.198B.
· Sanmina (SANM) Q4 adj EPS $1.42 vs est. $1.54 on revs $2.05B vs est. $2.15B; sees Q1 revs $1.85-1.95B and adj EPS $1.20-1.30 as some customers continuing to adjust inventory levels amid ongoing economic uncertainty; see headwinds for next couple quarters.
· Teradata Corp. (TDC) Q3 adj EPS $0.42, in-line with ests and revs $438M vs. est. $437.5M; raises FY23 EPS view to $2.01-$2.05 from $1.92-$2.04 (est. $1.97) while reaffirms FY23 revenue growth view 1%-4%, vs. consensus $1.84B.
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.