Early Look

Thursday, September 29, 2022

Futures	Up/Down	%	Last
Dow	-2300.00	0.77%	29,520
S&P 500	-35.25	0.96%	3,696
Nasdaq	-149.50	1.30%	11,405

 

 

S&P futures giving back about half of yesterday’s gains, falling -0.9% and moving back below the 3,700 level as treasury yields bounce, as does the dollar after one day reprieve after more UK turmoil. The 10-year yield rises more than 10 bps to 3.83% and the dollar index (DXY) rises +0.6% to 113.30 after sliding yesterday. After the Bank of England resumed its bond buying program yesterday helped boost market confidence, lift bonds (hurting yields), and the Pound, UK Prime Minister Truss broke her silence overnight on markets slump, and defended her tax cuts, which markets ae not taking well early. Stocks put in a solid rally on Wednesday, rising nearly 2% across the board (more than 3% for Smallcaps) and snapping the 6-day losing streak for both the Dow and the S&P 500 as global bond yields eased. The Bank of England announcement of purchases injected confidence across global assets, lifting sovereign debt and equities as the 10-year fell 23 bps to 3.71% and UK 30-yr bond yields tumbled over 100-bps. In Asian markets, The Nikkei Index rose 248 points to 26,422, the Shanghai Index slipped -3 points to 3,041, and the Hang Seng Index lost -85 points to 17,165. In Europe, the German DAX is down -1.2% to 12,037, while the FTSE 100 falls -0.9% to 6,940. Hurricane Ian weakened as it made landfall in Florida but is still poised to be one of the costliest storms in US history.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 71.38 points, or 1.96%, to 3,718.67

·     The Dow Jones Industrial Average rose 546.77 points, or 1.88%, to 29,681.76

·     The Nasdaq Composite surged 222.13 points, or 2.05%, to 11,051.64

·     The Russell 2000 Index advanced 52.73 points, or 3.17% to 1,715.24

 

Economic Calendar for Today

·     8:30 AM ET           Gross Domestic Product (GDP); Q2 Final…est. (-0.6%)

·     8:30 AM ET           GDP Price Deflator for Q2…est. +8.9%

·     8:30 AM ET           GDP Consumer Spending for Q2

·     8:30 AM ET           Core PCE Prices, Q2-F…est. +4.4%

·     8:30 AM ET           PCE Prices, Q2-Final

·     8:30 AM ET           Weekly Jobless Claims…est. 215K

·     8:30 AM EST         Continuing Claims…est. 1.388M

·     10:30 AM ET         Weekly EIA Natural Gas Inventory Data

·     1:00 PM ET            Fed’s Mester and ECB’s Lane Take Part in Policy Panel

·     4:45 PM ET            Fed’s Mary Daly Speaks at Boise State University

 

Earnings Calendar:

·     Earnings Before the Open: BBY KMX RAD WOR

·     Earnings After the Close: CMTL MU NKE

 

Other Key Events:

·     Bernstein Pan European Strategic Decisions Conference, 9/28-9/29

·     Credit Suisse Education & Healthcare Conference, 9/26-9/30 in Brazil

·     Ladenburg 7th Annual Healthcare Conference, 9/29 in NY

·     Wolfe Utilities, Midstream & Clean Energy Conference 2022, 9/28-9/30 in NY

·     9th annual Milken Institute Asia Summit 9/28-9/30

·     China NBS Manufacturing PMI for September

·     China Caixin Manufacturing PMI for September

 

 

Macro	Up/Down	Last
Nymex	0.10	82.25
Brent	0.07	89.39
Gold	-12.50	1,657.50
EUR/USD	-0.0047	0.9687
JPY/USD	0.54	144.70
10-Year Note	+0.133	3.84%

 

 

World News

·     Euro zone economic sentiment fell sharply and by more than expected in September, data showed on Thursday, as its monthly economic sentiment index fell to 93.7 points in September from a downwardly revised 97.3 in August, compared with a decline to 95.0 forecast

·     Trading volumes for nonfungible tokens (NFTs) has tumbled 97% since January, when the blockchain-bound digital art and collectibles market went from $17 billion to just $466 million in September, according to Bloomberg, citing data from Dune Analytics

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -40.8 vs -43.2 last week. Bulls rise to 20% from 17.7%, Neutrals fall to 19.2% from 21.4%, and Bears fall to 60.8% from 60.9%

 

Sector News Breakdown

Consumer

·     Duckhorn Portfolio (NAPA) Q4 adj EPS $0.08, in-line with consensus; Q4 revs rose 10% y/y to $78M vs. est. $77.54M; sees FY23 adj EPS $0.62-$0.64 vs. est. $0.67; sees FY23 revenue $393M-$401M vs. consensus $400.2M

·     MillerKnoll Inc. (MLKN) 1Q adj EPS $0.44 vs est. $0.33 on sales $1.08B vs est. $1.09B; says given current macroeconomic backdrop, proactively taking additional steps to improve near-term profit and cash flow outlook; on track to deliver $120Mm run-rate cost synergies within three yrs of Knoll acquisition; sees 2Q EPS $0.39-0.45 vs est. $0.55 and sales $1.027-1.076B vs est. $1.084B

·     Starbucks (SBUX) raises quarterly dividend 8.2% to 53 cents/share

·     Vail Resorts (MTN) Q4 adj EPS loss (-$2.70) vs. est. loss (-$2.92); Q4 revs $267.1M vs. est. $262.6M; said expect meaningful growth for FY23 relative to FY22 and strong resort ebitda margin; reported ebitda for fiscal 2023 will be between $893M-$947M

·     Molson Coors (TAP) expands exclusive agreement with the Coca-Cola Company (KO) to launch topo chico spirited line of canned cocktails

·     Toyota Motor (TM) said vehicle production soared 44.3% in August year-on-year, the first increase since March; TM produced 766,683 vehicles worldwide last month, above its target of around 700,000 and above year-ago output of 531,448.

 

Energy, Industrials and Materials

·     Leading OPEC+ members have begun discussions about an oil output cut at the group’s next meeting on Oct. 5, three sources told Reuters. One OPEC source told Reuters a cut was “likely”, while two other OPEC+ sources said key members had spoken about the topic

·     Enerpac Tool Group (EPAC) Q4 adj EPS 37c on revs $151.8M; sees FY23 revenue $565M-$585M, and sees FY23 adjusted EBITDA $113M-$123M

·     First Solar (FSLR) upgraded to Outperform from In Line at Evercore ISI

·     Stellantis NV (STLA) said that it has signed a memorandum of understanding with Siemens AG to jointly develop smart electric vehicle charging infrastructure technologies for the Middle East.

 

Financials

·     Jefferies (JEF) Q3 adj EPS $1.10 vs. est. $0.73; Q3 revs $1.52B vs. est. $1.36B; Annualized return on adjusted tangible equity of 10.0%2; adjusted annualized return on adjusted tangible equity of 14.0%3; Q3 Investment Banking net revenues of $682 million

·     Agree Realty (ADC) 5M share Spot Secondary priced at $66.85

 

Healthcare

·     Axcella Therapeutics Inc. (AXLA) said it saw positive interim results from its ongoing global Phase 2b study to evaluate the safety, tolerability, and efficacy of AXA1125 for the treatment of nonalcoholic steatohepatitis, or NASH.

·     Applied Genetic (AGTC) downgraded to Neutral from Buy at BTIG

·     Catalent (CTLT) files mixed securities shelf

·     SpringWorks Therapeutics, Inc. (SWTX) announced that the first patient has been dosed in a Phase 2 trial evaluating nirogacestat, SpringWorks’ investigational gamma secretase inhibitor, as a monotherapy in patients with recurrent ovarian granulosa cell tumors.

 

Technology, Media & Telecom

·     Apple (AAPL) downgraded to Neutral from Buy with $160 tgt at Bank America

·     Concentrix Corp. (CNXC) 3Q adj EPS $2.95 vs est. $2.97 on revs $1.58B vs est. $1.59B; sees 4Q adj constant currency revs +7% and FY adj constant currency revs approx +9%

·     Charter (CHTR) upgraded to Peer Perform from Underperform at Wolfe Research