Early Look

Friday, November 15, 2024

After finishing Thursday lower on “hotter” PPI inflation data and cautious comments from Fed Chairman Jerome Powell late in the day about rates, U.S. stock futures dropped further overnight, on track for weekly losses heading into the final day of trading this week. The U.S. dollar weakens for the first time in 6-days as markets pivot from Trump trades to the Fed’s cautious tone on interest-rate cuts after Powell said late yesterday that the economy is not sending signals that U.S. Central bank needs to be in a hurry to lower interest rates. Traders pared back December Fed rate-cut odds after Chair Powell’s remarks on economic resilience, stabilizing Treasury yields after Thursday’s swings. Adding to that comment, @NickTimiraos tweeted “Boston Fed President Susan Collins said the Fed could eventually need to slow down the pace of rate cuts and said it was too soon to say whether that should happen next month. A December cut is “certainly on the table, but it’s not a done deal.” In Asian markets, The Nikkei Index advanced 107 points to 38,642, the Shanghai Index dropped -49 points to 3,330, and the Hang Seng Index slipped -9 points to 19,426. In Europe, the German DAX is down -10 points to 19,253, while the FTSE 100 is up a few points to 8,074. Bitcoin prices are up over 1% holding above $89,000 while gold is little changed, but on track for a weekly loss of 4%, hitting lowest levels since the middle of September. The dollar is down today but set for its best week in more than a month.  Treasuries edged higher, paring their weekly decline as traders turned their focus from Donald Trump’s US election victory to the latest economic data prints and Federal Reserve speakers. The yield on the 10-year note slipped for a second day, leaving it up about 12 basis points in the week

In stock and sector news, Healthcare (XLV), Biotech (XBI), vaccine stocks (MRNA, PFE, BNTX, NVAX), and food companies (CPB, K, GIS, CAG) all declined sharply late Thursday after President-elect Donald Trump announced on Thursday, he has selected Robert F. Kennedy Jr. to lead the Department of Health and Human Services, the United States’ top health agency. Over posts on social media platform X and interviews in recent weeks, Kennedy has indicated his priorities include addressing what he calls the “chronic disease epidemic” of conditions including obesity, diabetes and autism, and reducing chemicals in food. Another sector that saw a broad selloff was the defense (NOC, LMT, GD) and IT Defense consulting companies (BAH, CACI, LDOS, KBR) on fears of deep cuts in fiscal spending under the Trump administration. Semiconductor equipment stocks are under pressure after AMAT reported results and lower guidance last night. A handful of stocks are moving after quarterly 13F filings were released last night as well.

• The Dow Jones Industrial Average fell -207.33 points, or 0.47%, to 43,750.86.
• The Nasdaq Composite slumped -123.07 points, or 0.64%, to 19,107.65.
• The Russell 2000 Index declined -32.43 points, or 1.37% to 2,336.94.

• 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. +0.3%
• 8:30 AM ET                  Import and Export Prices M/M for October…est. (-0.1%)
• 9:15 AM ET                  Industrial Output M/M for October…est. (-0.3%)
• 9:15 AM ET                  Capacity utilization for October…est. 77.2%
• 10:00 AM ET                Business Inventories M/M for September…est. +0.2%
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• Boston Beer (SAM) said to buy back up to $50M of Class A shares.
• Domino’s Pizza (DPZ) and Pool Corp. (POOL) shares jumped overnight after Q324 13F Filing for Warren Buffett’s Berkshire Hathaway showed new buys in both stocks.
• Spectrum Brands (SPB) Q4 adjusted EPS $0.97 vs. est. $1.07 and revs $773.7M vs. consensus $747.51M; expects low single-digit growth in reported net sales in fiscal 2025; said fiscal 2025 adjusted EBITDA is expected to increase by mid to high single-digits.

• Axon (AXON) announced that, following a competitive procurement process, it has been awarded a Public Services and Procurement Canada-led contract to supply the Royal Canadian Mounted Police with Axon Body 4 body-worn cameras and digital evidence management system Axon Evidence. Once the rollout is complete, the RCMP will have deployed more than 10,000 Axon Body 4 body-worn cameras.
• Dragonfly Energy (DFLI) Q3 EPS ($0.11) vs est. ($0.18), adj EBITDA ($0.08)Mm vs est. ($5.739)Mm on net sales $12.7Mm vs est. $14.15Mm; sees Q4 net sales $13.5-14.0Mm vs est. $18.34Mm, gross margin 22.0-25.0% and op exp ($6.5)Mm – ($5.5)Mm.
• Esco Technologies (ESE) Q4 adj EPS $1.46 vs. consensus $1.43; Q4 revs $298.533M vs. est. $282.6M; sees Q1 adjusted EPS $0.68-$0.75 vs. est. $0.75; sees FY25 adjusted EPS $4.70-$4.90 vs. consensus $4.16; sees FY25 revenue $1.09B-$1.11B, vs. consensus $1.07B.
• Kodiak Gas Services Inc (KGS) 4.9M share secondary priced at $34.50; announces $50M share repurchase program.
• Origin Materials (ORGN) Q3 EPS ($0.26) vs est. ($0.11), adj EBITDA ($12)Mm vs est. ($30.8)Mm on revs $8.202Mm vs est. $8.3Mm; maintains FY revs guide $25-35Mm vs est. $31.24Mm and net cash burn $55-65Mm.

• Discover Financial Services (DFS) credit card charge-off rate 2.07% at October end; credit card delinquency rate 1.74% at October end.
• JPMorgan (JPM) reported charge-offs for October of 1.62% and delinquencies 0.87%.

• Halozyme Therapeutics, Inc. (HALO) confirmed it has submitted a non-binding proposal to the Management Board and Supervisory Board of Evotec SE (EVO) to acquire Evotec for EUR11.00 per share in cash, implying a fully diluted equity value of EUR2.0 billion.
• Lineage Cell therapeutics (LCTX) Q3 EPS ($0.02) vs est. ($0.04) on revs $3.77Mm vs est. $1.033Mm.

• Digimarc Corp. (DMRC) Q3 adj EPS ($0.29) vs est. ($0.23) on revs $9.443Mm vs est. $10.68Mm, adj gr mgn 78%.
• Globant SA (GLOB) Q3 adj EPS $1.63, in-line with consensus on revs $614.7M vs. est. $614.8M; guides FY24 EPS $6.37-$6.43 vs. prior $6.30-$6.50 and revs $2.415B-$2.42B vs. est. $2.42B.
• Vuzix Corp. (VUZI) Q3 EPS ($0.14) vs est. ($0.12) on revs $1.386Mm vs est. $1.967Mm; says CES 2025 will Mark a pivotal moment as we unveil Co-developed AI smart glasses concepts with OEM partners, further demonstrating the versatility and innovation of our technology.