Early Look

Wednesday, October 2, 2024

After slipping on Tuesday following an escalation of tensions in the Middle East with Iran firing nearly 200 missiles at Israel, mixed economic data, and the start of a port strike on the East Coast (45K workers striking), U.S. futures are down modestly, still holding above the prior day lows. Markets are also dealing with devastation in the South after Hurricane Helene ripped through parts of South Carolina, North Carolina, Georgia, and Tennessee, where many are still without power, and many lives were claimed. Chinese equities continued to rally overnight, with BABA hitting new 52-week highs. In Asian markets, The Nikkei Index tumbled -843 points to 37,808, the Shanghai Index remained closed for Golden Week holiday, but the Hang Seng Index reopened from holiday, surging 1,310points or 6.2% to settle at 22,443. In Europe, the German DAX is down -49 points to 19,163, while the FTSE 100 is up about 16 points to 8,292.

Benjamin Netanyahu vowed to retaliate against Iran after it fired about 200 ballistic missiles at Israel, a severe escalation of hostilities between the adversaries that world powers fear could spiral into a Middle East-wide war. The barrage on Tuesday evening came hours after the US warned an Iranian assault was imminent. Oil prices rebound for a second day, as WTI crude jumps over 3% topping $72 per barrel, above yesterday highs of $71.94 given the significant escalation in Middle East, as Israel entered Lebanon, and Iran fired nearly 200 missiles at Israel, while U.S. support and military aid declared for Israel by The White House. The East and Gulf coast port dockworkers union moves into day 2 of their strike, halting about 50% of all container shipping volumes, impacting everything from autos, materials, clothing, medical supplies, and more. Nike (NKE) shares slide -5% overnight after mixed earnings and withdrew its guidance for the year.

• The Dow Jones Industrial Average fell -173.18 points, or 0.41%, to 42,156.97.
• The Nasdaq Composite dropped -278.81 points, or 1.53%, to 17,910.36.
• The Russell 2000 Index declined -32.93 points, or 1.48% to 2,197.04.

• 8:15 AM ET ADP Private Payroll Employment for September
• 9:00 AM ET                  Fed’s Hammack Gives Welcome Remarks
• 10:05 AM ET                Fed’s Musalem Gives Welcoming Remarks
• 10:30 AM ET                Weekly DOE Inventory Data
• 11:00 AM ET                Fed’s Bowman Gives Keynote Speech
• 12:15 PM ET                Fed’s Barkin Speaks on Economy

• Earnings After the Close: LEVI

• The American Petroleum Institute reports that crude inventories fell 1.5M barrels last week, Cushing rose 700K barrels and gasoline inventories rose 900,000 barrels.

• Cal-Maine (CALM) Q1 EPS $3.06 vs est. $2.33, op Inc $186.957Mm vs est. $107.04Mm on revs $785.871Mm vs est. $614.77Mm; believe any loss of company-owned production assets from Hurricane Helene is minimal and likely immaterial.
• Lamb Weston Holdings (LW) Q1 EPS $0.73 vs. est. $0.72; Q1 revs $1.65B vs. consensus $1.56B; implements restructuring plan, curtailment of production lines while cuts FY25 EPS view to $4.15-$4.35 from $4.35-$4.85 (est. $4.48), affirms FY25 revenue view of $6.6B-$6.8B (est. $6.61B) and lowers FY25 capex view to $750M from $850M.
• Smith & Wesson (SWBI), American outdoor Brands (AOUT): U.S. unadjusted criminal background checks fell 3.9% to 2.17M in September, according to data from the FBI’s National Instant Criminal Background Check System (NICS). Compared to a year earlier, background checks increased 2.9% from 2.1M.

• Diamondback Energy (FANG) forecasts Q3 2024 oil production guidance of 319 – 321 mboe/d and sees Q3 2024 cash CAPEX guidance of $675-$700M; said guidance updated to give effect to the Endeavor Energy Resources merger.
• Duke Energy (DUK) said expects to restore majority of remaining 648,000 customer outages in Carolinas by Friday night.
• EQT Corp. (EQT) forecasts pretax charges $165M-$185M for employee-related costs; said job cuts part of integration following Equitrans purchase; plans to cut workforce by about 15%

• Resource Connection (RGP) Q1 adj EPS $0.06 vs est. $0.03, adj EBITDA $2.32Mm vs est. $1.808Mm on revs $136.935Mm vs est. $137.92Mm, gross margin 36.5%.

• Myriad Genetics (MYGN) announced that the U.S. Patent and Trademark Office has issued a third patent that will strengthen its ability to deliver a tumor-informed, high-definition, molecular residual disease or MRD assay to market.

• Oracle Corp. (ORCL) plans to invest more than $6.5 billion to establish a public cloud region in Malaysia, aiming to meet the country’s growing demand for artificial intelligence and cloud services.
• KKR (KKR) is weighing an offer for ASMPT (ASMVF), a roughly $5B semiconductor and electronics equipment maker, according to a report in Bloomberg.