Early Look

Thursday, October 17, 2024

Major U.S. stock indexes bounced back on Wednesday following a selloff in the prior session, led by strength in financials (all time highs XLF) on bank earnings and a jump in Dow transports at 52-week highs on better earnings (UAL, JBHT). The Dow Jones Industrial Average finished up by 337.28 points, or 0.8%, at a record high of 43,077.70. Meanwhile, Treasury yields finished lower as the 2, 10, and 30-yr yields closed at their lowest levels in almost two weeks. The party continued overnight as US equity futures gained following TSMC’s earnings and target raise for 2024 revenue growth.

In Asian markets, the Nikkei Index slipped 0.69% to 38,911, the Shanghai Index faded 33.56 to 3,169 and the Hang Seng Index gave back about 208 points to 20,079 as investors continued to wrestle with views on China stimulus efforts. In Europe, the German DAX is higher by about 163 to 19,596 while the FTSE 100 added almost 360 to 35,019. WTI crude futures held a slight overnight gain at $70.48 after a round of US strikes against Houthis in Yemen, natgas was better by a touch to $2,376 and gold also gained by about $11.50, or +0.43%, to $2,703.

• The Dow Jones Industrial Average rose 337.28 points, or 0.79%, to 43,077.70.
• The Nasdaq Composite gained 51.49 points, or 0.28%, to 18,367.08.
• The Russell 2000 Index advanced 36.86 points, or 1.64% to 2,286.68.

• 8:30 AM ET                  Continuing Claims…est. 1.865M (prior 1.861M)
• 8:30 AM ET                  Philly Fed Business Survey for October…est. 3.0 (prior 1.7)
• 8:30 AM ET                  Retail Sales M/M for September…est. +0.3% (prior +0.1%)
• 8:30 AM ET                  Retail Sales Less Autos M/M for September…est. +0.1%
• 9:15 AM ET                  Industrial Production M/M for September…est. (-0.2%) vs. prior +0.8%
• 9:15 AM ET                  Capacity Utilization for September…est. 77.8% (prior 78%)
• 10:00 AM ET                Business Inventories M/M for August…est. +0.3% (prior +0.4%)
• 10:00 AM ET NAHB Housing Market Index for October…est. 42 (prior 41)
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 4:00 PM ET                   Net Long-term TIC Flows for August

• Earnings After the Close: CCK FNB HBCP IRIDQ ISRG MCB NFLX OCFC OZK PINE WAL WDFC

• The US struck Iran-supported Houthis overnight in Yemen with B-2 stealth bombers, targeting weapons storage areas, marking the first time the stealth bombers had been deployed against the Houthis.

• Tesla (TSLA) EU weighs using Elon Musk empire revenue for potential X fine; UE may add sales from SpaceX, Neuralink to calculate any fine.
• MSG Sports (MSGS), MSG Entertainment (MSGE) and Sphere Entertainment (SPHR) enter pact with Abu Dhabi

• CSX Corp. (CSX) Q3 EPS $0.46 vs est. $0.48 on revs rising 1% y/y to $3.62B vs est. $3.673B; still forecasts FY CAPEX about $2.5B; Q3 Operating income of $1.35 billion increased 7% compared to the same period in 2023. CSX’s operating margin was 37.4% for the quarter, increasing 180 basis points year-over-year; says lower revenue & impacts from recent storms likely to reduce sequential operating margin in Q4, limiting 2h margin expansion.
• Kinder Morgan (KMI) Q3 adj EPS $0.25 vs est. $0.27, adj EBITDA $1.88B vs est. $1.933B on revs $3.699B vs est. $3.975B; sees FY adj EBITDA about 2% below budgeted $8.16B vs est. $8.022B and adj EPS about 4% below budgeted $1.22 vs est. $1.20.
• PPG Industries (PPG) Q3 adj EPS $2.13 vs est. $2.15 on sales $4.575B vs est. $4.648B; maintains FY sales and EPS guide, sees organic sales flat and adj EPS at low end $8.15-8.30 range vs est. $8.22.
• Steel Dynamics (STLD) Q3 adj EPS $2.05 vs. est. $1.97; Q3 adj EBITDA $557.1M vs. est. $531.3M; Q3 sales $4.34B vs. est. $4.17B; said constructive regarding outlook for 2025 metal market dynamics; said plans to begin operating aluminum flat rolled mill mid-2025.

• Discover Financial (DFS) Q3 EPS $3.69 vs. est. $3.39; Q3 net income $965M vs. est. $821.1M; Q3 Net interest margin (NIM) 11.4% vs. 11.2% q/q, provision for credit losses $1.5B, -12% y/y on higher charge-offs; outlook FY loan growth down low to mid-single digits.
• Equifax (EFX) Q3 adj EPS $1.85 vs. est. $1.83 on in-line revs of $1.44B; said non-mortgage business, which was about 80% of Equifax revenue in Q3, delivered very strong broad-based 10% local currency revenue growth; guides Q4 adj EPS $2.08-$2.18, below est. $2.20 and sees FY24 EPS $7.25-$7.35 below prior forecast $7.35.
• First industrial (FR) Q3 FFO/SHR $0.68 vs est. $0.66 on revs $167.645Mm vs est. $169.49Mm; sees FY FFO/SHR $2.61-2.65 vs est. $2.62.
• Rexford Industrial (REXR) Q3 core FFO $0.59 vs. est. $0.58; Q3 revs $241.84M vs. est. $239.86M; sees 2024 core FFO $2.33-$2.35, vs. consensus $2.34; Q3 Same Property Portfolio NOI increased 2.6% and Same Property Portfolio Cash NOI increased 5.3% y/y; Average Same Property Portfolio occupancy of 96.9%.
• SL Green Realty (SLG) Q3 EPS ($0.21) vs est. ($0.50), FFO $1.13 vs est. $1.24.
• Cohen & Steers (CNS) Q3 adj EPS $0.77 vs est. $0.78 on revs $133.203Mm, adj op mgn $35.7%; ending AUM $91.8B, avg AUM $86.2B

• Glaukos Corporation (GKOS) announced that the second Phase 3 confirmatory pivotal trial for Epioxa, its next-generation corneal cross-linking iLink therapy for the treatment of keratoconus, successfully met the study’s pre-specified primary efficacy endpoint
• Sanofi (SNY) in talks with French government to address concerns on Opella deal. Officials raised concerns about a potential sale of a controlling stake in Sanofi’s consumer health business to private-equity firm Clayton Dubilier & Rice.

• Crown Castle (CCI) Q3 AFFO $1.84 vs. consensus $1.80, while revs $1.65 vs. consensus $1.64B; Q3 adj Ebitda $1.075B vs. est. $1.056B; still forecasts FY AFFO $3.01B-$3.06B vs. est. $3.02B and still forecasts FY FFO $2.86B-$2.89B.
• Nokia (NOK) has laid off close to 2,000 employees in China and is in process of laying off further 350 employees in Europe per co. spokesperson.
• Nvidia (NVDA), Intel (INTC), AMD (AMD) shares rise premarket after TSMC (TSM) posts jump in profit.
• Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships effecting companies such as AAPL, AMZN, MSFT, DUOL, CMCSA, CMCSK, GOOG, GOOGL, NFLX.