Early Look

Tuesday, November 22, 2022

Futures	Up/Down	%	Last
Dow	21.00	0.06%	33,756
S&P 500	1.25	0.04%	3,959
Nasdaq	-5.50	0.05%	11,582

 

 

U.S. futures are edging higher in narrow trading heading into the Thanksgiving Day holiday Thursday (markets closed), with major averages stuck in a 100-point range roughly for almost 2-weeks now (3,900-4,000 for the S&P). In Asian markets, The Nikkei Index gained 170 points to 28,115, the Shanghai Index edged higher 3 points to 3,088, and the Hang Seng Index slipped -231 points to 17,424. In Europe, the German DAX is up 15-points to 14,395, while the FTSE 100 rises 40 points to 7,417. In stock news, workers at the largest U.S. rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant damage to the U.S. economy and strand vital shipments of food and fuel. Treasury yields are slightly lower while the dollar eases. The November Richmond Fed Manufacturing Index prints at 10:00 AM while scheduled Fed speakers today consist of Mester on wages and inflation, George on policy, and Bullard on economics. China’s lockdowns surge in week since covid policy adjusted.

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -15.40 points, or 0.39%, to 3,949.94

·     The Dow Jones Industrial Average slid -45.41 points, or 0.13%, to 33,700.28

·     The Nasdaq Composite dropped -121.55 points, or 1.09%, to 11,024.51

·     The Russell 2000 Index declined -10.59 points, or 0.57% to 1,839.14

 

Economic Calendar for Today

·     7:45 AM ET            ICSC Weekly Retail Sales

·     8:55 AM ET            Johnson/Redbook Weekly Sales

·     10:00 AM ET          Richmond Fed index for November

·     11:00 AM ET          Fed’s Mester Discusses Wages and Inflation

·     1:00 PM ET             US Treasury to sell $35B in 7-year notes

·     2:15 PM ET             Fed’s George Takes Part in Policy Panel

·     4:30 PM ET             API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ADI AMWD ANF BBY BURL CAL CHS DKS DLTR DY IMBI JACK MOV ROAD WMG

·     Earnings After the Close: ADSK AEO GES HPQ JWN VMW

 

 

Macro	Up/Down	Last
Nymex	1.10	81.14
Brent	1.11	88.56
Gold	9.20	1,748.80
EUR/USD	0.0032	1.0275
JPY/USD	-0.95	141.18
10-Year Note	+0.02	3.793%

 

 

Sector News Breakdown

Consumer

·     Urban Outfitters (URBN) 3Q EPS $0.40 vs est. $0.41 on revs $1.18B vs est. $1.16B, retail segment comps +4%, total inventory +18.6% vs net sales +3.9%

·     Carl Icahn started shorting GameStop (GME) during the height of the meme-stock frenzy in January 2021 and continues to hold a large position in the game retailer – Bloomberg

·     Central Garden (CENT) Q4 EPS loss (-$0.04) vs. est. $0.01; Q4 revs rose 1% y/y $707M vs. est. $719.67M; sees FY23 EPS $2.60-$2.80 below consensus $2.93

·     Inter Parfums Inc (IPAR) said it expects 2023 net sales of $1.11 bln, resulting in earnings per diluted share of $3.70; excluding one-time items, we are targeting 12% earnings per diluted share growth in coming year

·     Lion Electric (LEV) enters into multi-year cell supply agreement for EV battery manufacturing with a top-tier supplier; has committed to purchase, on a non-exclusive basis, lithium-ion battery cells at escalading volumes over 2023 and 2024

·     BellRing Brands (BRBR) announces secondary equity offering of 4,597,339 shares of common stock held by post

 

Energy, Industrials and Materials

·     Workers at the largest U.S. rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant damage to the U.S. economy and strand vital shipments of food and fuel. Train and engine service members of the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers narrowly voted to reject the deal.

·     China’s crude buyers have paused purchases of some Russian oil as they wait for details of a US-led cap to see whether it presents a better price – Bloomberg.

·     Dutch unions started a partial strike at BP’s (BP) refinery in Rotterdam

·     American Woodmark (AMWD) Q2 sales rose 24% y/y to $561.5M vs. est. $555M; Q2 operating income $42.0M and adj EPS $2.24 vs. est. $1.67

·     Canadian Solar (CSIQ) Q3 EPS $1.12 vs. est. $0.49; Q3 revs rose 57% y/y to $1.93B vs. est. $2.07B; sees Q4 revs $1.8B-$1/9B vs. est. $2.07B; sees solar module shipments 6.0 to 6.3 GW; sees 2023 Total Module Shipments 30 GW to 35 GW

·     Diamondback Energy (FANG) files mixed securities shelf

·     Dycom (DY) Q3 EPS $1.80 vs. est. $1.32; Q3 sales rose 22% y/y to $1.04B vs. est. $975.6M

·     Norfolk Southern (NSC) announced it will acquire substantially all the assets of the Cincinnati Southern Railway, an approximately 337-mile railroad that runs from Cincinnati, Ohio to Chattanooga, Tennessee.

·     ZTO Express (ZTO) increases share buyback program to $1.5B

 

Financials

·     Blackstone (BX) downgraded to underperform from neutral at Credit Suisse saying that it is awaiting a better entry point for US alternative asset manager stocks

·     Binance said no to an investment in Genesis as the crypto lender seeks to raise a $1 billion emergency loan, according to the Wall Street Journal. Binance turned down the deal, citing a potential conflict of interest with Genesis’ business model.

 

Healthcare

·     Walgreens Boots Alliance (WBA) upgraded to Outperform from Market Perform at Cowen and raise tgt to $54 from $43

·     Agilent Inc. (A) Q4 adj EPS $1.53 vs. est. $1.9; Q4 revs rose 17% y/y to $1.85B vs. est. $1.76B; sees FY EPS $5.61-$5.69 vs. est. $5.01 and revs $6.9B-$7.0B vs. est. $6.76B

·     Enanta Pharma (ENTA) 4Q EPS ($1.27) vs est. ($1.35) on revs $20.3Mm vs est. $22.9Mm, cash, cash equivalent and marketable $278.5Mm at qtr end; expects current cash, equivalent and marketable as well as continuing royalty revs will be sufficient to meet anticipated cash requirements into 4Q24

·     Qiagen (QGEN) launches monkeypox test for NeuMoDx platform to fight global outbreak by boosting research and surveillance

·     Prothena (PRTA) announces achievement of $40 million clinical milestone payment from Novo Nordisk (NVO) for PRX004/NNC6019 under investigation for the treatment of ATTR Cardiomyopathy; Prothena is eligible to receive development and sales milestone payments totaling up to $1.2 billion, including $100 million announced to date

 

Technology, Media & Telecom

·     Dell Inc. (DELL) Q3 ad EPS $2.30 vs. est. $1.60; Q3 revs down -6% y/y to $24.7B vs. est. $24.56B; qtrly infrastructure solutions group rev of $9.6 bln, up 12% and qtrly client solutions group rev of $13.8 bln, down 17%; ends Q3 with remaining performance obligations of $39B

·     Zoom Video (ZM) 3Q EPS $1.07 vs est. $0.84 on revs $1.1B vs est. $1.1B, adj operating margin 6%; sees 4Q revs $1.10-1.11B vs est. $1.12B; sees FY adj EPS $3.91-3.94 vs prior $3.66-3.69 and est. $3.70; sees 4Q adj EPS $0.75-0.78 vs est. $0.81

·     Private equity firm Clayton Dubilier & Rice is in talks to invest about $1 billion in enterprise software provider Pegasystems (PEGA), sources say https://bloom.bg/3USKFl4

·     Sea Limited (SE) downgraded on lack of visibility at Cowen