Early Look
Wednesday, November 15, 2023
|
Futures |
Up/Down |
% |
Last |
|
Dow |
114.00 |
0.33% |
35,001 |
|
S&P 500 |
18.25 |
0.41% |
4,529 |
|
Nasdaq |
92.50 |
0.58% |
15,972 |
U.S. futures are adding to yesterday’s massive stock market gains, building further momentum ahead of the producer price index (PPI) inflation reading at 8:30 AM, and getting a boost after retailer Target (TGT) posted quarterly earnings above consensus this morning, sending shares higher by over 13%. U.S. stocks ended sharply higher on Tuesday, with the Dow Jones Industrial Average up 490 points, or 1.4%. the S&P 500 gained 1.9% and the Nasdaq Composite advanced 2.4% after data showed U.S. inflation was flat in October. The Technology Select Sector SPDR Fund (XLK) finished as its highest closing level ever, while interest rate sensitive REITs (XLRE), Utilities (XLU), and Consumer Discretionary (XLY) posted the biggest gains on Tuesday. The tech sector has gained 11.3% since the start of November and is up 48.8% year-to-date. In Asian markets, The Nikkei Index surged 832 points or 2.52% to 33,519, the Shanghai Index gained 16 points to 3,072, and the Hang Seng Index jumped 682 points or 3.92% to 18,079. In Europe, the German DAX is up 108 points to 15,722, while the FTSE 100 gains 70 points to 7,510. Chinese President Xi arrived in San Francisco for his meeting with US President Biden, the first trip to the US by the Chinese leader in six years. Xi was greeted by officials including Treasury Secretary Janet Yellen and California Governor Gavin Newsom. Biden and Xi will meet at 6:45 today. Overnight in Washington DC, in a 336-95 vote on Tuesday, the Republican-run House of Representatives approved a two-step measure that prevents a partial government shutdown. The short-term funding measure now heads to the Democratic-controlled Senate. After stocks suffered in October on rising rate fears and a hard economic landing, sentiment has made a 180 turn with risk appetite strong in November.
Economic Calendar for Today
· 7:00 AM ET MBA Mortgage Applications Data
· 8:30 AM ET Empire Manufacturing for November…est. -2.8
· 8:30 AM ET Producer Price Index (PPI) M/M for October…est. +0.1% (prior +0.5%)
· 8:30 AM ET Producer Price Index (PPI) Y/Y for October…est. +1.9% (prior +2.2%)
· 8:30 AM ET PPI Core – Ex: Food & Energy M/M for October…est. +0.3% (prior +0.3%)
· 8:30 AM ET PPI Core – Ex: Food & Energy Y/Y for October…est. +2.7% (prior +2.7%)
· 8:30 AM ET Retail Sales M/M for October…est. (-0.3%)
· 8:30 AM ET Retail Sales – Less Autos M/M for October…est. 0.0%
· 10:00 AM ET Business Inventories M/M for September…est. +0.4%
· 10:30 AM ET Weekly DOE Inventory Data
Earnings Calendar:
· Earnings Before the Open: AAP BPTH CRWS CTLT TGT TJX
· Earnings After the Close: CSCO HI IIIV JJSF MMS PANW PFLT PNNT SONO TTEK
Other Key Events:
· Deutsche Bank Global Space Summit, 11/15 in New York
· Goldman Sachs Global Metals and Mining Conference 2023, 11/15-11/16, in New York
· Needham 5th Annual Needham Infrastructure, Data Analytics Software, & Cloud Comm, 11/15
· Needham 17th Annual Needham Security, Networking, & Comm Conference (virtual), 11/14-11/16
· Piper 16th East Coast Financial Services Conference, 11/15-11/16, in Florida
· RBC Capital Technology, Internet, Media & Telecom Conference, 11/14-11/16, in New York
· REITWorld, 11/13-11/15, in Los Angeles, CA
· Roth MKM 12th Annual New York Technology Conference, 11/15, in New York
· Stephens Annual Investment Conference, 11/13-11/16, in Nashville, TN
· Stifel 2023 Healthcare Conference, 11/14-11/15, in New York
· China House Prices Y/Y for October
Market Closing Prices Yesterday
· The S&P 500 Index jumped 84.15 points, or 1.91%, to 4,495.70.
· The Dow Jones Industrial Average rose 489.83 points, or 1.43%, to 34,827.70.
· The Nasdaq Composite surged 326.64 points, or 2.37%, to 14,094.38.
· The Russell 2000 Index advanced 92.82 points, or 5.44% to 1,798.32.
|
Macro |
Up/Down |
Last |
|
Nymex |
-0.44 |
77.82 |
|
Brent |
-0.45 |
82.02 |
|
Gold |
10.60 |
1,977.10 |
|
EUR/USD |
-0.0017 |
1.0862 |
|
JPY/USD |
-0.05 |
150.33 |
|
10-Year Note |
+0.026 |
4.467% |
World News
· China’s central bank kept its key policy rates unchanged Wednesday while adding more liquidity to the market amid rising demand for cash. The People’s Bank of China injected 1.45 trillion-yuan ($199.91 billion) worth of funds via the one-year medium-term lending facility at an interest rate of 2.5%–the same as under the previous operation.
· China Retail sales rose 7.6% from a year earlier; helped by a low year-earlier base and the eight-day Golden Week holiday, October’s retail sales growth accelerated from the 5.5% increase in September and topped the 7.0% growth expected by economists.
· China Industrial production growth edged up to 4.6% from September’s 4.5%, the National Bureau of Statistics said Wednesday topping the 4.3% increase expected.
· China Fixed-asset investment increased 2.9% over the January to October period, down from the 3.1% rise in the first three quarters of the year vs. est. to grow 3.1% on year.
· The Japanese economy contracted by 2.1% QoQ, compared with a downwardly revised expansion of 4.5% QoQ in Q2
· Goldman Sachs forecast the S&P 500 index will end 2024 at 4700, representing a 12-month price gain of 5% and a total return of 6% including dividends. Goldman’s baseline assumption during the next year is the US economy continues to expand at a modest pace and avoids a recession, earnings rise by 5%, and the valuation of the equity market equals 18x, close to the current P/E level.
Sector News Breakdown
Consumer
· Target Corp. (TGT) shares jump pre mkt as Q3 adj EPS $2.10 vs. est. $1.48; Q3 revs fell -4.2% to $25.4B vs. est. $25.3B, the second quarter in a row in which Target’s year-over-year sales declined; Q3 comp store sales fell (-4.9%) vs. est. for a (-5.3%) decline; sees Q4 same-store sales falling by mid-single digits, and for adj EPS $1.90-$2.60 vs. est. (-4.7%) and $2.23 respectively.
· Advance Auto Parts (AAP) Q3 sales $2.7B vs. est. $2.67B; Q3 gross margins 36.3%; launching new cost-cutting program aimed at $150 million in savings; Q3 comp sales rose 1.2%; initiates sale processes for WorldPac and Canadian business; narrows FY sales view to $11.25B-$11.3B from $11.25B-$11/35B; slashes FY23 diluted EPS view to $1.40-$1.80 from $4.50-$5.10 (est. $4.65).
· American Eagle (AEO) upgraded to Neutral from Underperform at Bank America with $19 tgt.
· Energizer (ENR) was downgraded to Underweight at JPMorgan and Morgan Stanley and cut to Sector perform from Outperform at RBC Capital following Q4 results.
· Penn Entertainment’s (PENN) ESPN Bet, a sports-gambling service rebranded with the name of the Disney-owned sports channel, launched Tuesday in 17 U.S. states following a $1.5 billion deal with ESPN for rights to the sports media giant’s name in August.
· VF Corp. (VFC) upgraded to Neutral from Underweight at JPMorgan with $19 tgt.
· Xpeng Inc. (XPEV) Q3 loss widened from a year ago while revenue fell short of estimates; Q3 adj loss of RMB3.23 was narrower than the consensus of a loss of RMB3.40; Q3 revs rose to RMB8.53B from RMB6.82B and below the RMB8.68B est.; delivered 40,008 vehicles in Q3, up 72.4% in Q2 and sees Q4 deliveries of 59,500 to 63,500 vehicles, for a rise of 101.2%-114.7% y/y.
Energy, Industrials and Materials
· Canadian Solar (CSIQ) downgraded to Underweight from Neutral at JPMorgan.
· Generac (GNRC) upgraded to Neutral from Underperform at Bank America and raise tgt to $110.
Financials
· Fiserv (FI) reaffirms FY23 EPS view $7.47 to $7.52 vs. est. $7.49 and reaffirms FY23 outlook for organic revenue growth of 11%; sees FY24 adjusted EPS growth 13%-17% and sees FY24 organic revenue growth of 11%-13% for 2024.
· NU Holdings (NU) Q3 revenue $2.1B vs. est. $2.05B; Customer growth: Nu added 5.4 million customers in Q3’23 and 18.7 million year-over-year (YoY), reaching a total of 89.1 million customers globally by September 30, 2023.
Healthcare
· Alcon (ALC) Q3 core EPS $0.66 vs. est. $0.67; Q3 revs $2.3B vs. est. $2.35B; narrows FY23 core EPS view to $2.70-$2.75 from $2.70-$2.80 and narrows FY23 revenue view to $9.3B-$9.4B from $9.3B-$9.5B, vs. consensus $9.49B; Q3 Implantables net sales were $401M, an increase of 2% and Consumables net sales were $661M, an increase of 7%.
· Arcturus Therapeutics (ARCT) Q3 EPS ($0.61) vs est. ($1.69) on revs $45.1Mm vs est. $15.87Mm; expected cash runway extended to end 2026.
· Biohaven (BHVN) Q3 adj EPS loss (-$1.50) vs est. loss (-$1.34); cash, cash equivalents, marketable securities and restricted cash totaled approximately $495M as of Oct 5th.
· Danimer Scientific (DNMR) Q3 EPS ($0.39) vs est. ($0.34) on revs $10.948Mm vs est. $14.74Mm; sees FY adj EBITDA ($40)Mm – ($37)Mm vs est. ($30.38)Mm.
· Heron Therapeutics (HRTX) Q3 EPS loss (-$0.17) vs. est. loss (-$0.29); Q3 revs $31.43M vs. est. $32.65M; boosts FY23 net product sales guidance for the oncology care franchise to $104M-$106M from $99M-$103M and guided year revs to $123M-$125M.
· Varex Imaging (VREX) Q4 adj EPS $0.45 vs. est. $0.33; Q4 revs $227.4M vs. est. $233.7M; Q4 adj Ebitda rose 7.2% y/y to $38.5M vs. est. $38.6M; sees Q1 adj EPS $0.00-$0.20 on revs $180M-$200M vs. est. $214.2M.
Technology, Media & Telecom
· Sirius XM (SIRI) rises pre mkt after Warren Buffett’s Berkshire buys 9.7 mln shares valued at $43.8 mln, as per an SEC filing.
· Quick logic Corp. (QUIK) Q3 adj EPS $0.13 vs est. $0.14 on revs $6.7Mm vs est. $6.5Mm, gr mgn 76.9%.
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.