Early Look
Tuesday, October 15, 2024
Futures |
Up/Down |
% |
Last |
Dow |
-21.00 |
0.05% |
43,342 |
S&P 500 |
1.00 |
0.02% |
5,909 |
Nasdaq |
-3.50 |
0.02% |
20,615 |
S&P futures (Spuz) are looking flat around 5,909 after the index closed at its 46th record high of 2024 and the Dow Jones Industrial Average topped/settled at 43,000 for the first time as third-quarter earnings season moved into full swing. The Nasdaq Composite closed 0.9% higher as mega cap tech, and semis continue to push markets higher. U.S. crude futures are tumbling over 5% back below $70 per barrel on Iran supply concerns easing, weak demand. A media report overnight reported that Israel is willing to not strike Iranian oil targets, easing fears of a supply disruption. Both Brent and WTI crude oil prices had settled about 2% lower on Monday but are now down about $5 so far this week. In Asian markets, The Nikkei Index reopened after holiday, rising 304 points to 39,910, but the Shanghai Index tumbled -83 points or 2.53% to settle at 3,201 while the Hang Seng Index declined -774 points or 3.67% to 20,318, pummeled by investors worried that stimulus measures announced will not be able to help the struggling economy. In Europe, the German DAX is up 43 points to 19,552, while the FTSE 100 is down -40 points to 8,250. Earnings start picking up steam with Dow components JNJ and UNH both reporting this morning already (both beat, guidance mixed) and banks up next with GS, Citi, MS, BAC reporting today. Treasury yields edge lower after the bond market was closed Monday for holiday.
Despite the ongoing market rally (major averages looking for 6th straight week of gains), climbing to new all-time highs on Monday for the S&P and Dow, there are several points of concern including the Presidential election in three weeks, a sudden spike in Treasury yields/U.S. dollar despite the Fed cutting rates 50-bpds in September, the uncertainty about the pace of Federal Reserve policy easing for the remainder of the year and escalating geopolitical risks in the Middle East. Note the S&P 500 has gained almost 23% this year, and the benchmark has rallied about 63% in total since hitting a closing low in October 2022! It’s been a good 2-year run with little to few notable pullbacks along the way.
Market Closing Prices Yesterday
- The S&P 500 Index gained 44.82 points, or 0.77%, to 5,859.85.
- The Dow Jones Industrial Average rose 201.36 points, or 0.47%, to 43,065.22.
- The Nasdaq Composite jumped 159.75 points, or 0.87%, to 18,502.69.
- The Russell 2000 Index advanced 14.23 points, or 0.64% to 2,248.64.
Economic Calendar for Today
- 7:45 AM ET ICSC Weekly Retail Sales
- 8:30 AM ET NY Empire Fed Manufacturing for October…est. 3.85 (prior 11.50)
- 8:55 AM ET Johnson/Redbook Weekly Sales
- 11:30 AM ET Fed’s Daly Gives Keynote Remarks
- 4:30 PM ET API Weekly Inventory Data
Earnings Calendar:
- Earnings Before the Open: ACI BAC C ERIC FBK GS JNJ PGR PNC SCHW STT UNH WBA
- Earnings After the Close: EPAC EQBK FULT HWC IBKR JBHT OMC PNFP SGH UAL
Macro |
Up/Down |
Last |
Nymex |
-3.70 |
70.14 |
Brent |
-3.52 |
73.94 |
Gold |
6.50 |
2,672.10 |
EUR/USD |
0.0002 |
1.0911 |
JPY/USD |
-0.71 |
149.04 |
10-Year Note |
-0.008 |
4.065% |
World News
- China may raise an additional 6 trillion yuan ($850 billion) from special treasury bonds over three years to stimulate a sagging economy, local media reported cited by Reuters. The Caixin Global report, which cited sources with knowledge of the matter, comes after Finance Minister Lan Foan on Saturday said Beijing will “significantly increase” debt, although the absence of details on the size and timing of the fiscal measures disappointed some investors.
Sector News Breakdown
Consumer
- Coty (COTY) announces preliminary results: Q1 and reiterates FY25 adj EBITDA outlook for +9-11% YoY growth, supporting stronger EBITDA margin expansion; tight order and inventory management by retailers resulted in Co’s sell-in tracking well below sell-out in several markets in Q1; said it sees first-quarter preliminary like-for-like sales up 4%-5% from the prior year, down from a previous forecast of 6%.
- Etsy (ESTY) downgraded to Sell from Neutral at Goldman Sachs, citing a more selective approach to e-commerce stocks ahead of earnings.
- Homebuilders Meritage Homes (MTH) upgraded to Neutral from Underperform (tgt to $195 from $160) and D.R. Horton (DHI) upgraded to Neutral from Underperform (tgt to $165 from $130) both at Wedbush
Energy, Industrials and Materials
- Boeing (BA) said it has entered into a credit agreement worth $10 billion with a consortium of banks, as the planemaker has $11.5 billion of debt maturing through Feb. 1, 2026. Separately, Boeing files $25B shelf in precursor to possible equity raise.
- Phillips 66 (PSX) said its subsidiary, Phillips 66 Limited, has entered into a definitive agreement to sell its 49% non-operated equity interest in Coop Mineraloel AG to its Swiss joint venture partner. It will receive cash of approximately $1.24 billion consisting of approximately $1.17 billion and an assumed dividend of about $70 million.
- Transocean (RIG) downgraded to Hold from Buy at Benchmark.
Financials
- Bank America (BAC) 3Q EPS $0.81 on revs $25.3B; Q3 net interest income $14B, Q3 provision for credit losses $1.5B; Q3 net charge-offs $1.5B; Q3 noninterest expense $16.5B, up 4%; Q3 consumer banking rev $10.4B, down 1%; Q3 global wealth & investment mgmt rev $5.8b, up 8%.
Healthcare
- Johnson & Johnson (JNJ) Q3 adj EPS $2.42 tops consensus $2.21 on slightly better revs $22.5B vs. consensus $22.16B; cuts FY24 adj EPS to $9.86-$9.96 from $10.00-$10.10 (est. $9.84) but raises FY24 operational revenue view to $89.4B-$89.8B from $89.2B-$89.6B (est. $88.51B).
- UnitedHealth (UNH) Q3 adj EPS $7.15 tops consensus $7.00 on revs $100.82B vs. consensus $99.28B; but its medical cost ratio, the share of premiums paid out to cover expenses, came in at 85.2%, compared with estimates of 84.4%; narrows FY24 adjusted EPS view to $27.50-$27.75 from $27.50-$28.00 vs. est. $27.70.
- CareDx (CDNA) said it sees Q3 revenue $82M-$83M, above consensus $79.53M; said grew Testing Services volume to approximately 44,600, an increase of approximately 16% y/y; testing services revenue is expected to be in the range of $60 million to $61 million, an increase of approximately 26% y/y.
- PTC Therapeutics (PTCT) announces FDA target regulatory action date for Sepiapterin and lancet publication of phase 3 trial results.
Technology, Media & Telecom
- Ericsson (ERIC) earnings beat expectations, as adjusted Ebitda margin increased 530 bps to 12.6%, 280 bps above expectations; free cash flow (FCF) of 12.9 billion kroner compares to the 2.8 billion kronor expected; Q3 core earnings and sales above expectations as demand for 5G gear rebounded in North America.
- Mobileye (MBLY) downgraded to Sector Perform from Outperform at RBC Capital Markets.
- Wolfspeed (WOLF) shares rise 20%; is set to receive $750 million in government grants for its new North Carolina silicon carbide wafer manufacturing plant facility. The U.S. Commerce Department said the preliminary funding required WOLF “to take additional steps to strengthen its balance sheet to better protect taxpayer funds.”
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.