Morning Preview: November 07, 2024

Auto PostDaily Market Report

Early Look

Thursday, November 7, 2024

Futures

Up/Down

%

Last

Dow

68.00

0.15%

43969,

S&P 500

8.25

0.14%

5,966

Nasdaq

40.50

0.19%

20,934

 

 

U.S. futures are steady, adding to record all-time highs for the Dow, S&P 500 and Nasdaq while the SmallCap Russell 2000 posted its largest gain in 2 years on Wednesday (+5.84%) and is within 3% of all-time highs ahead of today’s FOMC interest rate policy meeting at 2:00 PM. U.S. stocks rallied sharply to close at record highs on Wednesday after Republican Donald Trump won the 2024 U.S. presidential election as investors are anticipating lower taxes, deregulation and a U.S. president who is not shy to weigh in on everything from the stock market to the dollar, although fresh tariffs could bring challenges in the form of a higher deficit and inflation. Some of yesterday’s biggest movers were financials (record high), Bitcoin (record highs), Energy, and Technology, along with a spike in the dollar (biggest one day % gain since Sept 2022) and Treasury yields. Attention now turns to central banks (and still a lot of earnings), as the Federal Reserve is widely expected to cut rates by 25bps with the target range falling to 4.50-4.75%. Before that is the Bank of England. It too is likely to cut interest rates by a quarter point on Thursday for only the second time since 2020. The euro was up 0.3% at $1.0762 after falling -1.8% yesterday, also not helped by political turmoil in Germany where Chancellor Olaf Scholz sacked his Finance Minister Christian Lindner. In Asian markets, The Nikkei Index declined -99 points to 39,381, the Shanghai Index rose 86 points to 3,470, and the Hang Seng Index jumped 414 points to 20,953. In Europe, the German DAX is surging 244 points to 19,283, while the FTSE 100 is up about 5 points to 8,172.

 

Market Closing Prices Yesterday

  • The S&P 500 Index gained 146.28 points, or 2.53%, to 5,929.04.
  • The Dow Jones Industrial Average surged 1,508.05 points, or 3.57%, to 43,729.93.
  • The Nasdaq Composite gained 544.29 points, or 2.95%, to 18,983.47.
  • The Russell 2000 Index advanced 132.08 points, or 5.84% to 2,392.92.

Economic Calendar for Today

  • 8:30 AM ET                  Weekly Jobless Claims…est. 221K
  • 8:30 AM ET                  Continuing Claims…est. 1.875M
  • 8:30 AM ET                  Nonfarm Productivity for Q3…est. +2.3%
  • 8:30 AM ET                  Unit Labor Costs for Q3…est. +1.0%
  • 10:00 AM ET                Wholesale Inventory M/M for September…est. (-0.1%)
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 2:00 PM ET FOMC Rate decision – 25 bps rate cut widely expected
  • 3:00 PM ET                   Consumer Credit for September

Earnings Calendar:

  • Earnings Before the Open: ACIW ACMR APD APPN ARQ AXGN BDX BIGC BRY CARS CCOI CEVA CG CLDT COLD COMM CRH DBD DCO DDOG DNOW DNUT DT DTC DUK EDR ELAN EPAM EPS FWONA FWRG GRDX GEO GOLF HAE HAIN HAL HBI HGV HSY HYFM IBP IHRT IRWD KELYA KVUE LBRDA LCII LGND MDU ML MPW MRNA MTSI MUR NXST OB OFIX OSCR PBH PCG PENN PLNT PZZA QRTEA RL ROK RXO SCSC SEAT SEE SGA SHOO SPTN STRA SUP TAP TDG TGLS TGNA TPR TPX UAA VITL VST WBD WD WRBY WWW XPEL XRAY YETI YOU
  • Earnings After the Close: AAOI AKAM AON ABNB ACHR ADMA ADPT AFRM AGL AIV ALLO ALRM AMN AMRC ANET AORT ARLO ARRY AVGR AVPT AXON BARK BE BHF BILL BL BLNK BLZE CABO CARG CBUS CIVI CLPT CMBM CODX CPAY CPK CUTR DBX DCGO DH DIOD DKNG DOCS DRH DVAX DXC EB ED ENV EOG EVH EXFY EXPE FARM FIGS FIVN FNKO FTNT FOSL G GAIN GDOT GETY GPRO GRND GSBD HASI HCI HEAR HRB IBEX III INGN JAMF KTOS LASR LCID LITE LPRO MBI MGNI MP MSI MTD MYGN NET NRDY NUS NWSA OPEN OPK PACB PBPB PINS PODD PTCT PX QDEL RDFN RIVN RNG RRR RUN SG SQ SYNA TASK TOST TTD U UPLD UPST VCTR WEST WTI XPOF YELP

Other Key Events:

  • China M2 Money Supply

 

 

Macro

Up/Down

Last

Nymex

-0.87

70.82

Brent

-0.61

74.31

Gold

-4.2

2,672.10

EUR/USD

0.0032

1.076

JPY/USD

-0.63

154.00

10-Year Note

+0.017

4.443%

 

World News

  • China exports surged 12.7% y/y last month, easily topping a forecast 5.2% increase and above the 2.4% rise in September. The data comes a day after Donald Trump was elected 47th President and has threatened tariffs on China. Imports fell 2.3%, compared with expectations for a drop of 1.5%, turning negative for the first time in four months. China’s trade surplus grew to $95.27 billion last month, up from $81.71 billion in September.
  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 13.9 vs 8.6 last week. Bulls rise to 41.5% from 39.5%, Neutrals rise to 30.9% from 29.6%, Bears fall to 27.6% from 30.9%.

Sector News Breakdown

Consumer

  • Costco Wholesale Corporation (COST) reported net sales of $20.03 billion for the retail month of October, the four weeks ended November 3, 2024, an increase of 7.2 percent from $18.68 billion last year. Net sales for the first nine weeks were $44.65 billion, an increase of 8.0 percent from $41.33 billion last year.
  • Duolingo (DUOL) Q3 EPS $0.49 vs est. $0.35, adj EBITDA $47.508Mm vs est. $42.5Mm on revs $192.6Mm vs est. $189.04Mm, bookings $211.5Mm, MAUs 113.1Mm; guides Q4 bookings $244.5-247.5Mm, revs $202.5-205.5Mm vs est. $201.53Mm and adj EBITDA $48.6Mm vs est. $48.58Mm; sees FY bookings $843.5-846.5Mm, revs $741-744Mm vs est. $736.5Mm and adj EBITDA $188.3-190.4Mm vs est. $183.15Mm.
  • Dutch Bros (BROS) Q3 EPS $0.16 vs. est. $0.12; Q3 revs $338.2M vs. est. $325.1M; Q3 System same shop sales and transactions increased 2.7% and 0.8%, respectively, relative to the same period in 2023; raises FY24 revenue view to $1.255B-$1.260B, consensus $1.23 from prior $1.215 billion to $1.230 billion.
  • E.l.f. Beauty (ELF) Q2 adj EPS $0.77 vs. est. $0.43; Q2 revs $301.1M vs. est. $285.8M; expects FY net sales in the range of $1.32B-$1.34B up from prior view $1.28B-$1.3B; said strategy of introducing “dupes” of luxury cosmetics and pricing its products between $2 and $10 has further bolstered demand.
  • Lyft Inc. (LYFT) Q3 revs rose 31.5% y/y to $1.52B vs. est. $1.44B; Q3 bookings $4.11B vs. est. $4.07B; Q3 active riders 24.4M, in-line with estimates; guides Q4 gross bookings $4.28B-$4.35B vs. est. $4.23B; guides Q4 adj Ebitda $100M-$105M vs. est. $85.1M; expects gross bookings for the year to grow about 17%, vs. est. 16.3%.
  • Match Group (MTCH) Q3 EPS $0.51 vs. est. $0.48; Q3 revs $895.48M vs. est. $900.87M; Q3 Tinder Payer trends improved on a y/y, declining -4% Y/Y versus down -8% Y/Y in Q2, and on a sequential basis, with 311,000 sequential Payer additions. Tinder Direct Revenue was slightly below our expectations, driven by modestly lower RPP. Tinder monthly active users (“MAU”) remained down 9% Y/Y; sees Q4 revs $865M-$875M vs. est. $905.43M.
  • Nissan (NSANY) announced a $2.6 billion cost saving plan on Thursday, including 9,000 job cuts and a 20% reduction in global production capacity after cutting its operating profit outlook by 70% and its global production capacity to be cut by a fifth.
  • Zillow Group (Z) Q3 revenue $581M vs. est. $554.67M; traffic to Zillow Group’s mobile apps and sites in Q3 was 233 million average monthly unique users, up 1% y/y; visits during Q3 were 2.4 billion, up 3% y/y; sees Q4 revenue $525M-$540M vs. est. $532.03M and sees Q4 adjusted EBITDA $90M-$105M.

Energy, Industrials and Materials

  • Ameren (AEE) Q3 adj EPS $1.87 vs. est. $1.91; Q3 revs $2.173B, in-line with consensus $2.17B; said expect to deliver 2024 adjusted EPS $4.55-$4.69 per share and sees 2025 EPS in the range of $4.85-$5.05.
  • Albemarle (ALB) Q3 adj EPS loss (-$1.55) vs. est. loss (-$0.44); Q3 net sales $1.35B vs. est. $1.37B; said on Thursday it lost more than $1 billion in the third quarter and that it would slash its capital budget amid a 71% drop in prices for the electric vehicle battery metal.
  • Corteva (CTVA) Q3 adj EPS ($0.49) vs est. ($0.30) and adj EBITDA ($100)Mm vs est. $11.7Mm on organic sales $2.46B vs est. $2.697B; guides FY24 net sales $17.0-17.2B vs est. $17.213B, operating EPS $2.50-2.60 vs est. $2.67; sees prelim FY25 sales $17.3-17.7B vs est. $17.969B.
  • SolarEdge (SEDG) Q3 EPS loss (-$15.30) vs. est. loss (-$1.63); Q3 revs $260.9M vs. est. $269.4M; Q3 adj gross margin -265.4%; announces changes to Board of Directors; guides Q4 revs $180M-$200M vs. est. $309.2M.
  • Williams Energy (WMB) Q3 adj EPS $0.43 vs. est. $0.42; Q3 revs $2.65B vs. est. $2.48B; increased midpoint for full-year 2024 guidance by $125M to $7.075B adjusted ebitda.

Financials

  • Adyen’s (ADYEY) shares fell after saying its Q3 revenue on a constant-currency basis was 498.2 million euros ($535.32 million), up 21% from 413.6 million euros a year earlier, but below ests of 503.3 million euros; said that its quarterly processed volume rose to 320.6 billion euros, but flagged a dip compared to its first-half volumes.
  • Fair Isaac (FICO) Q4 adj EPS $6.54 vs est. $6.39 on revs $453.8Mm vs est. $447.9Mm; guides FY25 revs $1.98B vs est. $1.979B and adj EPS $28.58 vs est. $29.80.
  • Chinese regulators have asked the country’s banks to lower the rates they pay to deposits from other financial institutions to free up funds to boost the economy, Bloomberg News reported on Thursday, citing people familiar with the matter. China’s interest rate self-disciplinary mechanism said banks should benchmark the interbank deposit rate against the 7-day reverse repo rate, currently set at 1.5% annually.

Healthcare

  • Gilead Sciences (GILD) Q3 adj EPS $2.02 tops consensus $1.55; Q3 revs $7.5B vs. est. $7B; said for Q3 posted 7% year-over-year revenue growth, including 13% year-over-year growth for Biktarvy; boosted FY24 EPS view to $4.25-$4.45 from $3.60-$3.90 (est. $3.81) and raises FY24 product sales view to $27.8B-$28.1B from $27.1B-$27.5B.
  • Guardant Health (GH) Q3 adj EPS ($0.45) vs est. ($0.74), adj EBITDA ($56.2)Mm vs est. ($66.35)Mm on revs $191.5Mm vs est. $170.6Mm; guides FY revs $720-725Mm vs est. $695.22Mm, adj gr mgn 61-63%, adj op exp $720-730Mm.
  • McKesson (MCK) Q2 adj EPS $7.07 vs est. $6.88 on revs $93.651B vs est. $89.33B; guides FY adj EPS $32.40-33.00 vs est. $31.99; raises FY repurchase target from $2.8B to $3.2B.
  • Sarepta (SRPT) Q3 EPS $0.62 vs. est. $0.31; Q3 revs $429.8M vs. est. $409.3M; ELEVIDYS net product revenue was $181.0 million in the quarter, exceeding prior guidance.
  • Tandem Diabetes (TNDM) Q3 sales rose 31% y/y to $244.0M vs. est. $225.2M; Q3 U.S. insulin pump sales also rose 31% y/y to $86.7M and International insulin pump sales +30% y/y to $28.1M; sees FY24 revenue $903M-$910M, consensus $891M; sees FY24 Non-GAAP gross margin is estimated to be approximately 51%.

Technology, Media & Telecom

  • Arm Holdings (ARM) Q2 adj EPS $0.30 vs. est. $0.26; Q2 revs rose 5% y/y to $844M vs. est. $808.4M; guides Q3 EPS $0.32-$0.36 vs. est. $0.34 on revs $920M-$970M vs. est. $944.3M.
  • ANSYS Inc. (ANSS) Q3 adj EPS $2.58 vs. est. $1.74; Q3 revs rose 31% y/y to $601.9M vs. est. $521.5M; Q3 operating profit margin 26.8% and adj operating profit margin 45.8%.
  • AppLovin Corp. (APP) Q3 adj EBITDA $722Mm vs est. $642.88Mm on revs $1.198B vs est. $1.131B; FCF $545Mm; board increased share repurchase authorization by $2.0B.
  • Coherent Corp. (COHR) Q1 adj EPS $0.74 vs est. $0.61, adj op Inc $233Mm vs est. $214.6Mm on revs $1.348B vs est. $1.314B; guides Q2 revs $1.33-1.41B vs est. $1.348B and adj EPS $0.61-0.77 vs est. $0.69.
  • CSG Systems (CSGS) Q3 EPS $1.06, in-line with consensus on revs $295.1M vs. est. $298.89M; raises FY24 EPS $4.25-$4.55 from $4.05-$4.35, and guides FY24 revenue $1.2B-$1.24B, vs. consensus $1.18B.
  • Freshworks (FRSH) Q3 adj EPS $0.11 vs est. $0.08 on sales $186.6Mm vs est. $181.637Mm; guides FY revs $713.6-716.6Mm vs es.t $710.11Mm and adj EPS $0.38-0.39 vs est. $0.33.
  • HubSpot Inc. (HUBS) Q3 adj EPS $2.18vs est. $1.91, adj op Inc $125.2Mm vs est. $108.1Mm on revs $669.7Mm vs est. $646.91Mm; guides Q4 revs $672-674Mm vs est. $669.48Mm, adj op Inc $128-129Mm vs est. $130Mm and adj EPS $2.18-2.20 vs est. $2.19; sees FY revs $2.597-2.599B vs est. $2.573B, adj op Inc $455-456Mm vs est. $439.41Mm and adj EPS $7.98-8.00 vs est. $7.73.
  • IONQ Inc. (IONQ) Q3 EPS ($0.24) vs est. ($0.22), adj EBITDA ($23.7)Mm vs est. ($27.91)Mm on revs $12.4Mm vs est. $10.6Mm; guides Q4 revs $7.1-11.1Mm vs est. $10.99Mm; sees FY revs $38.5-42.5Mm vs est. $40.50Mm and bookings $75-95Mm.
  • MercadoLibre (MELI) Q3 revs $5.3B vs. est. $5.27B; posted a net income of $397M for Q3 vs. est. profit of $542M; sales measured by gross merchandise value (GMV) rose 14% year-on-year, with Brazil, its largest market, reporting 34% growth and Mexico growing 27%.
  • PTC Inc. (PTC) Q4 adjusted EPS $1.54 vs. est. $1.45; Q4 revs $627M vs. est. $620.53M; for Q4 said delivered solid ARR and cash flow, with year-over-year ARR growth in the low double-digits and cash flow growth above 20%;
  • Qualcomm (QCOM) board approves new $15B stock repurchase plan; Q4 adj EPS $2.69 vs est. $2.56 on revs $10.24B vs est. $9.905B; sees Q1 revs $10.5-11.3B vs est. $10.587B and adj EPS $2.85-3.05 vs est. $2.86; files mixed securities shelf.
  • Take-Two (TTWO) Q2 EPS loss (-$2.08) on net bookings $1.47B vs. consensus $1.43B; forecast Q3 bookings below Wall Street expectations at $1.35B-$1.4B vs. est. $1.44B, as consumers cut spending budgets owing to higher-for-longer inflation and an uncertain economy.
  • Upwork Holdings (UPWK) Q3 adj EPS $0.29 vs est. $0.26, adj EBITDA $43.2Mm vs est. $39.67Mm on revs $193.78Mm vs est. $185.85Mm; guides Q4 revs $178-183Mm vs est. $175.7Mm and adj EPS $0.24-0.26 vs est. $0.22.
  • Wolfspeed (WOLF) Q1 EPS ($2.23) vs est. ($1.00) on revs $195Mm vs est. $200.39Mm, adj gr mgn 3%; guides Q2 revs $160-200Mm vs est. $214.58Mm and adj EPS ($1.14)-($0.89) vs est. ($0.90).

_________________________________________________________________

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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