Morning Preview: October 31, 2024

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Early Look

Thursday, October 31, 2024

Futures

Up/Down

%

Last

Dow

-207.00

0.49%

42,516

S&P 500

-45.25

0.78%

5,806

Nasdaq

-209.00

1.02%

20,325

 

 

After finishing at the lows on Wednesday afternoon, snapping the 4-day winning streak for the Nasdaq Composite, U.S. futures are looking sharply lower after shares of MSFT and META both decline -3% overnight following earnings/guidance results and ahead of key PCE inflation data later this morning. Meta warned of “significant acceleration” in AI infrastructure investments and Microsoft predicted slower growth in its Azure cloud business, signaling that the company’s already hefty AI investments were not enough to keep pace with capacity constraints. The earnings barrage continues as well with more big-time tech earnings tonight with Apple (AAPL) and Amazon (AMZN) highlighting. There are also a ton of earnings reports this morning/overnight recapped below to see some of the biggest movers. In Asian markets, The Nikkei Index dropped -196 points to 39,081, the Shanghai Index rose 13 points to 3,279, and the Hang Seng Index slipped -63 points to 20,317. In Europe, the German DAX is down -113 points to 19,143, while the FTSE 100 is down -60 points to 8,098. The Bank of Japan maintained ultra-low interest rates on Thursday but said risks around the U.S. economy were somewhat subsiding, signaling that conditions are falling into place to raise interest rates again. USD/JPY has fallen from 153.62 to 152.38 following the central bank news. Gold slips from record highs and Treasury yields are flat.

 

Market Closing Prices Yesterday

  • The S&P 500 Index slumped -19.25 points, or 0.33%, to 5,813.67.
  • The Dow Jones Industrial Average fell -91.51 points, or 0.22%, to 42,141.54.
  • The Nasdaq Composite dropped -104.82 points, or 0.56%, to 18,607.93.
  • The Russell 2000 Index declined -5.05 points, or 0.23% to 2,233.04.

Economic Calendar for Today

  • 7:30 AM ET                  Challenger job layoffs for October
  • 8:30 AM ET                  Weekly Jobless Claims…est. 230K
  • 8:30 AM ET                  Continuing Claims…est. 1.885M
  • 8:30 AM ET                  Personal Income M/M for September…est. +0.3%
  • 8:30 AM ET                  Personal Spending M/M For September
  • 8:30 AM ET PCE Price Index M/M for Sept…est. +0.2% (prior +0.1%)
  • 8:30 AM ET PCE Price Index Y/Y for September…est. +2.1% (prior 2.2%)
  • 8:30 AM ET                  Core PCE Price Index M/M for Sept…est. +0.3% (prior +0.1%)
  • 8:30 AM ET                  Core PCE Price Index Y/Y for September…est. +2.6% (prior 2.7%)
  • 8:30 AM ET                  Employment Cost index Q/Q for Q3
  • 9:45 AM ET                  Chicago PMI for October…est.47.0 (prior 46.6)
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AGIO ALGM ALNY AME ANIK ARW AVNT BALL BAND BDC BGC BMY BSIG BTU BWA CCO CCRD CFR CI CMCSA CMS CNK COP CRAI CWT DFIN DINO DNB DRVN DSGR EL EME ETN ETR FDP FLWS FSS GCI GEL GNRC GPRE GVA GWW H HII ICE IDA IDCC IDXX INSM IP IQV ITRI K KIM KTB KYMR LAUR LAZ LECO LIN LNC LNG MA MBUU MCS MDGL MGPI MIDD MO MRK NCLH NKLA NNN NREF NSP NVAX OGN OWL PATK PBF PH PTON PWR RBLX REGN SABR SIRI SN SO SWI SXC TFX TRN TVTX UBER UNIT UTZ VAL WEC WEN XYL
  • Earnings After the Close: AAPL ACCO AES AMZN ARDX ASUR AXTI BJRI CDXS CNO COHU CON CPS CPT CTRA CUBE CUBI CVCO DORM EMN ERIE FOXF GDYN HALO INTC IR JNPR KWR LMAT LNT LOCO MTZ NINE ONTO RGA RMAX SBRA SEM SKYW SM TNC TREE USCB VIAV VICI VIR WCC WLDN X XEL ZEUS ZYME

 

 

Macro

Up/Down

Last

Nymex

0.37

68.98

Brent

0.22

72.77

Gold

-11.00

2,789.80

EUR/USD

0.0013

1.0869

JPY/USD

-1.04

152.38

10-Year Note

+0.01

4.274%

 

World News

  • Ukraine May consider alternative peace initiatives, such as the ones from China, Brazil and South Africa, in order to “integrate” them into the country’s peace proposal, Volodymyr Zelenskiy’s chief of staff Andriy Yermak said on the president’s website.
  • The Bank of Japan maintained ultra-low interest rates but said risks around the U.S. economy were somewhat subsiding, signaling that conditions are falling into place to raise interest rates again. The central bank also projected inflation would move around its 2% target in the coming years, stressing its resolve to keep raising borrowing costs if the economy sustains a moderate recovery.
  • Euro zone inflation accelerated more than expected in October and could still pick up further in the coming months. Inflation in the 20 countries sharing the euro currency accelerated to 2.0% from 1.7% in September mostly on higher food and energy costs, above expectations for 1.9%. A more closely watched figure which strips out volatile food and energy prices meanwhile held steady at 2.7%, above forecasts for 2.6%, Eurostat said on Thursday.
  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 8.6 vs 7.8 last week. Bulls rise to 39.5% from 37.7%, Neutrals fall to 29.6% from 32.4%, Bears rise to 30.9% from 29.9%.

Sector News Breakdown

Consumer

  • Booking Holdings (BKNG) Q3 adj EPS $83.89 vs est. $77.52 on revs $7.99B vs est. $7.628B; Q3 gross travel bookings $43.4B, an increase of 9% from the prior year quarter. Room nights booked increased 8% from the prior year’s quarter.; forecasts Q4 adj EBITDA $1.6B to $1.65B, vs. est. $1.64B, forecasts Q4 revenue +7% to +9%, est. +6.5%, forecasts Q4 gross bookings +7% to +9%, est. +7% and forecasts Q4 room night +6% to +8%, est. +6.7%
  • Camping World (CWH) 14.634M share Spot Secondary priced at $20.50.
  • Carvana (CVNA) shares jump; Q3 adj EBITDA $429Mm vs est. $326.8Mm on revs $3.655B vs est. $3.452B, adj EBITDA mgn 11.7%; sees Q4 sequential increase in yr/yr growth rate for retail units, sees FY adj EBITDA significantly above high end of previous $1.0-1.2B guide vs est. $1.183B.
  • Clorox (CLX) Q1 adj EPS $1.86 vs. est. $1.39; Q1 revs $1.76B vs. est. $1.65B; raises FY25 adjusted EPS view to $6.65-$6.90 from $6.55-$6.80 (est. $6.65) while continues to expect net sales to be flat to down 2% (est. $6.99B); said organic sales are still expected to be up 3% to up 5%.
  • DoorDash (DASH) Q3 EPS $0.38 vs est. $0.22, adj EBITDA $533Mm vs est. $515.5Mm on revs $2.7B vs est. $2.66B; sees Q4 adj EBITDA $525-575Mm vs est. $544.75MM on gross order value $20.6-21B vs est. $20.53B.
  • eBay (EBAY) shares fall; Q3 adj EPS $1.19 vs est. $1.18 on revs $2.6B vs est. $2.545B, GMV $18.3B; guides Q4 revs $2.53-2.59B vs est. $2.648B and adj EPS $1.17-1.22 vs est. $1.22.
  • Estée Lauder (EL) cuts dividend to 35c per share from 66c; withdraws FY 25 guidance amid a slowdown in demand for luxury beauty products in major markets such as China; Q1 sales $3.36B vs. est. $3.37B; outlook q2 reported & organic net sales to decrease between 8% and 6%.
  • Etsy Inc. (ETSY) shares jump; Q3 EPS $0.45 vs. est. $0.55; Q3 revs $662.41M vs. est. $652.81M; Q3 consolidated results came in roughly as anticipated, with some incremental pressure on Etsy marketplace year-over-year GMS, healthy growth in revenue, and continued strength in our adjusted EBITDA profitability; approves new $1B share buyback program.
  • MGM Resorts (MGM) Q3 adj EPS $0.54 vs. est. $0.61; Q3 revs $4.183B vs. est. $4.21B; Q3 adj Ebitda $1.1B vs. est. $1.15B; Accelerating growth at BetMGM with record 3Q net revenues increasing nearly 20% year-over-year, more than doubling the revenue growth achieved in 2Q.
  • Starbucks (SBUX) Q4 EPS $0.80 vs. est. $1.03; Q4 revs $9.07B vs. est. $9.37B; Q4 North America comp store sales down -6%, International SSS down -9% and reports Global SSS down -7%; said results reflect challenged customer experience; management is developing a plan to get back to Starbucks.

Energy, Industrials and Materials

  • Beacon Roofing (BECN) Q3 EPS $2.30 vs. est. $2.83 on in-line revs $2.77B; Q3 adj Ebitda $325.2M vs. est. $321.8M.
  • CF Industries (CF) Q3 EPS $1.55 vs. est. $1.18; Q3 revs $1.37B vs. est. $1.3B; Q3 average selling prices were higher y/y primarily due to higher average selling prices for ammonia from lower global supply availability due in part to lower natural gas availability in Trinidad and Egypt. Sales volumes in the third quarter of 2024 were like Q3’23 as higher ammonia sales volumes due primarily to the addition of contractual commitments served from the recently acquired Waggaman ammonia production facility were offset primarily by lower UAN sales volumes.
  • CH Robinson Worldwide (CHRW) Q3 EPS $1.28 vs. est. $1.15; Q3 revs rose 7% y/y to $4.64B vs. est. $4.53B driven by higher pricing and volume in its ocean services business; Adjusted gross profits in the company’s ocean freight business rose by 57.4% over a year, driven by a 47% increase in adjusted gross profit per shipment and a 7% increase in shipments, in general.
  • Curtiss-Wright (CW) Q3 adjusted EPS $2.97 vs. est. $2.70; Q3 revs $799M vs. est. $757.13M; boosts FY24 adjusted EPS view to $10.55-$10.75 from $10.40-$10.65 (est. $10.62) and raises FY revenue view to $3.05B-$3.095B from $3.01B-$3.06B (est. $3.05B); said continue to demonstrate solid order activity, yielding an overall book-to-bill of 1.1x in the quarter, highlighted by record quarterly orders within our Defense Electronics segment.
  • Enovix (ENVX) announces $100M common stock offering.
  • Generac (GNRC) shares rise; Q3 adjusted EPS $2.25 vs. est. $1.95; Q3 revs $1.17B vs. est. $1.16B; raises FY24 revenue growth view to 5%-9% from 4%-8%; raises FY adjusted EBITDA margin is now expected to be approximately 17.5 to 18.5% as compared to the previous guidance range of 17.0 to 18.0%
  • Nextracker (NXT) shares rise; Q2 adj EPS $0.97 vs est. $0.61, adj EBITDA $173Mm vs est. $123.92Mm on revs $636Mm vs es t$615.43Mm; guides FY revs $2.85-2.9B vs est. $2.851B, adj EBITDA $625-665MM vs prior $600-650Mm and est. $618.53Mm and adj EPS $3.10-3.30 vs prior $2.89-3.09 and est. $3.10.

Financials

  • Aflac (AFL) Q3 adjusted EPS $2.16 vs. est. $1.68; Q3 revs $2.19B vs. est. $4.42B; shareholders’ equity was $24.8B, or $44.60 per share, at Sept 30; Aflac Japan’s net earned premiums were Y255.4B for Q3; U.S. net earned premiums increased 2.8% to $1.5B in 3q.
  • Allstate (ALL) Q3 adj EPS $3.91 vs est. $2.36 on revs $16.6B vs est. $14.936B.
  • Arch Capital Group (ACGL) Q3 EPS $2.56 vs est. $1.96, gross premiums written $5.44B vs est. $4.564B, adj combined ratio 78.3%.
  • Coinbase (COIN) Q3 revenue $1.2B vs. est. $1.25B; Q3 transaction revenue fell -27% q/q to $573M while average native units grew Q/Q for staking, custody, and on-platform USDC, subscription and services revenue declined 7% Q/Q to $556M, largely due to lower average crypto asset prices. Total operating expenses were $1.0 billion, down 6% Q/Q, while technology & development, general & administrative, and sales & marketing expenses were collectively $873 million, up 3% Q/Q; sees Q4 subscription and services revenue $505M-$580M.
  • MetLife (MET) Q3 adj EPS $1.95 vs. est. $2.17; Q3 revs $18.44B vs. est. $18.66B; Q3 Book value of $39.02 per share, up 33 percent from $29.34 per share at September 30, 2023; return on equity (ROE) of 20.2%.
  • Paycom Software (PAYC) Q3 EPS $1.67 vs. est. $1.61; Q3 revs $452.0M vs. est. $447.0M; sees Q4 revenue $477M-$484M, vs. consensus $483.1M and sees Q4 adjusted EBITDA $184.5M-$191.5M.
  • Prudential (PRU) Q3 adjusted EPS $3.48, in-line with consensus $3.48; Q3 Book value per Common share of $84.47 versus $70.82 per share for the year-ago quarter; adjusted book value per Common share of $98.71 versus $94.19 per share for the year-ago quarter; Assets under management of $1.558 trillion versus $1.361 trillion y/y.
  • Robinhood (HOOD) Q3 EPS $0.17 vs. est. $0.18; Q3 revs $637M vs. est. $657.85M; equity trading volumes surged 51% in July and 61% in August, compared with a year earlier; crypto trading volumes soaring 56% in July and 145% in August from a year earlier; Robinhood’s transaction-based revenue surged 72% to $319 million in the quarter; sees FY24 total operating expenses $1.86B-$1.96B.

Healthcare

  • Amgen Inc. (AMGN) Q3 adj EPS $5.58 vs. consensus $5.11; Q3 revs $8.5B vs. consensus $8.52B; narrows FY24 adjusted EPS view to $19.20-$20.00 from $19.10-$20.10 (est. $19.49) and narrows FY24 revenue view to $33B-$33.8B from $32.8B-$33.8B (est. $33.21B).
  • Bio-Rad Labs (BIO) Q3 adj EPS $2.01 vs est. $1.16 on sales $649.7Mm vs est. $628.17Mm; continues to expect FY adj revs to decline by about 2.4 to 4.0% on currency-neutral basis vs est. -3.6%.
  • Cigna (CI) Q3 adj EPS $7.51 v. est. $7.20; Q3 revs $63.69Mvs. est. $59.35B; backs FY24 adjusted EPS view $28.40, vs. consensus $28.50.
  • Corcept Therapeutics (CORT) Q3 adj EPS $0.41 vs est. $0.28 on revs $182.546Mm vs est. $171.97Mm; raised FY revs guide to $675-700Mm vs est. $661.06Mm and prior $640-670Mm.
  • Envista Holdings (NVST) Q3 adj EPS $0.12 vs est. $0.09, adj EBITDA $54.9Mm vs est. $46Mm on sales $601Mm vs est. $590.3Mm; guides FY core sales -4% to -1% vs est. -2.73% and adj EBITDA mgn 10-12%.
  • Merck (MRK) Q3 adj EPS $1.57 vs. est. $1.50; Q3 revs $16.7B vs. est. $16.46B; cuts FY24 adjusted EPS view to $7.72-$7.77 from $7.94-$8.04 (est. $7.74) and narrows FY24 revenue view to $63.6B-$64.1B from $63.4B-$64.4B, vs. consensus $64.15B after demand for its HPV vaccine fell for a second straight quarter in China.
  • Teladoc (TDOC) Q3 EPS loss (-$0.19) vs. est. loss (-$0.27); Q3 revs $640.5M vs. est. $631.16M; sees Q4 revenue growth 0%-2.5% y/y and sees Q4 adjusted EBITDA margin 12.25%-13.75%; Q3 BetterHelp segment revenue of $256.8 million, down 10% year-over-year, and adjusted EBITDA margin of 5.9%.

Technology, Media & Telecom

  • Meta Platforms (META) shares fell; Q3 EPS $6.03 vs. est. $5.25; Q3 revs $40.59B vs. est. $40.29B; sees Q4 revenue $45B-$48B, vs. consensus $46.31B; anticipate our full-year 2024 capital expenditures will be in range of $38-40B and expect full-year 2024 total expenses to be in range of $96-98B; continue to expect significant capital expenditures growth in 2025; said Q3 family daily active people was 3.29 bln on average for september 2024, an increase of 5% yoy; Q3 advertising rev $39.89B vs. estimate $39.44B.
  • Microsoft Corp. (MSFT) shares fell; Q1 EPS $3.30 vs est. $3.10 on revs $65.6B vs est. $64.508B, intelligent cloud revs $24.1B vs est. $26.68B, Azure and other cloud revs +33%; AI contributed 12 pts to azure rev growth in Q1; predicted slower growth in its Azure cloud business, signaling that the company’s already hefty AI investments were not enough to keep pace with capacity constraints.
  • Confluent (CFLT) Q3 adj EPS $0.10 vs est. $0.05, adj op Inc $15.8Mm vs est. $0.670Mm; adj op mgn 6.3%; sees Q4 subscription revs $245-246Mm and adj EPS $0.05 vs est. $0.05.
  • Equinix (EQIX) Q3 AFFO $9.05 vs. est. $8.70; Q3 revs $2.2B vs. est. $2.2B; sees 2024 AFFO $34.81-$35.22 vs. est. $35.10 and sees 2024 revenue $8.748B-$8.788B vs. est. $8.75B.
  • KLA-Tencor (KLAC) Q1 adj EPS $7.75 vs est. $7.05 on revs $2.842B vs est. $2.758B; guides Q2 revs $2.95B vs est. $2.857B, gr mgn 60% and adj EPS $7.15-8.35 vs est. $7.41.
  • MicroStrategy (MSTR) announces a $21B at-market (ATM) equity offering; Q3 EPS loss (-$1.72), consensus (-14c); Q3 revs $116.1M vs. est. $122.7M. Year-to-date 2024, the Company’s BTC Yield is 17.8%. The Company is revising its long-term target to achieve an annual BTC Yield of 6% to 10% between 2025 and 2027.
  • Monolithic Power (MPWR) Q3 adj EPS $4.06 vs est. $3.97, adj op Inc $220.8Mm vs est. $210.9Mm on revs $620.1Mm vs est. $600.6Mm, adj gr mgn 55.8%; guides Q4 revs $600-620Mm vs est. $602.69Mm and gr mgn 55.2-55.8%.
  • Procore Technologies (PCOR) Q3 EPS ($0.18) vs est. $0.22 on revs $295-885Mm vs est. $287.55Mm, adj gr mgn 85%; guides Q4 revs $296-298Mm vs est. $301.01Mm and adj op mgn 3-4%.
  • Roku Inc. (ROKU) Q3 ARPU $41.10 TTM, flat yr/yr, total revs $1.062B vs est. $1.017B; guides Q4 adj revs $1.14B vs est. $1.11B and EBITDA $30Mm vs est. $32.55MM.
  • Siemens acquires Altair Engineering (ALTR) for $113 per share in cash or $10.6B; Altair suspending quarterly, annual guidance considering the proposed transaction with Siemens.
  • Twilio (TWLO) Q3 adj EPS $1.02 vs est. $0.85 on revs $1.134B vs est. $1.093B; sees Q4 revs $1.15-1.16B vs est. $1.147B and adj op Inc $185-195Mm vs est. $168.04Mm.
  • Universal Display (OLED) Q3 EPS $1.40 vs est. $1.20 on sales $161.627Mm vs est. $165.058Mm; gr mgn 78%; guides FY revs $625-645Mm vs est. $662.9Mm.

_________________________________________________________________

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.

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