Early Look

Thursday, December 7, 2023

Futures	Up/Down	%	Last
Dow	-64.00	0.18%	36,048
S&P 500	1.25	0.02%	4,557
Nasdaq	36.50	0.23%	15,851

 

 

S&P futures (Spuz) are flat at 4,555, the key floor level the last 2-weeks, and trading in the narrowest of ranges overnight of less than 10-points (4,557.25 high and 4,548.75 low). The Japanese yen was stronger overnight vs. rival currencies, moving 1.45% or 2.21 to 145.15 vs. the USD dollar as Japanese bonds rallied after their 30-year bond auction saw the weakest in years/poor demand. We are heading into the end of year as earnings, Fed meetings, begin to slow down as well as news. Not much overnight outside of the movement in the currency market (JPY), some data out of China (see below) and a handful of earnings releases. Today’s focus will be on data again and see if the S&P (SPX) can hold the 4,550 level yet again, while it has had trouble cracking above 4,600, stuck in this trading band. Yesterday, U.S. stocks ended lower behind weakness in energy names as WTI crude fell below $70 per barrel for the 1^st time in 5-months, while a cooling jobs market reinforced expectations that the Federal Reserve could start cutting interest rates early next year. In Asian markets, The Nikkei Index dropped -587 points to 32,858, the Shanghai Index dipped -2 points to 2,966, and the Hang Seng Index declined -117 points to 16,345. In Europe, the German DAX is down -29 points to 16,627, while the FTSE 100is down a few points to 7,507.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -17.81 points, or 0.39%, to 4,549.37.

·     The Dow Jones Industrial Average fell -69.80 points, or 0.19%, to 36,054.76.

·     The Nasdaq Composite dropped -83.20 points, or 0.58%, to 14,146.71.

·     The Russell 2000 Index declined -4.08 points, or 0.22% to 1,851.96.

 

Economic Calendar for Today

·     7:30 AM ET                  Challenger Job Layoffs for November

·     8:30 AM ET                  Weekly Jobless Claims…est. 222K

·     8:30 AM ET                  Continuing Claims…est. 1.91M

·     10:00 AM ET                Wholesale Inventory M/M for October… (-0.2%)

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

·     3:00 PM ET                   Consumer Credit for October…est. $9.0B

 

Earnings Calendar:

·     Earnings Before the Open: CIEN DG GMS HOFT LQDT MEI SCWX

·     Earnings After the Close: AVGO COO CURV DOCU GWRE HCP MTN PL SMAR SWBI

 

Other Key Events:

·     Benchmark Annual Discovery Conference, 12/7, in New York

·     DA Davidson Financials Institutions Bison Select Conference, 12/7 in New York

·     Goldman Sachs 15th Annual Industrials Week, 12/4-12/7, in London

·     Goldman Sachs First Annual “Year-Ahead” Catalyst Clinic, 12/4-12/8 (virtual)

·     Roth MKM 6th Annual Sustainability Private Capital Event, 12/6-12/7 (virtual)

·     San Antonio Breast Cancer Symposium, 12/5-12/9, in San Antonio, TX

·     Truist Securities Gaming, Lodging, Leisure, and Restaurants Summit, 12/7 in Boston, MA

 

 

Macro	Up/Down	Last
Nymex	0.61	69.99
Brent	0.73	75.03
Gold	0.80	2,048.70
EUR/USD	0.0005	1.0768
JPY/USD	-2.21	145.11
10-Year Note	+0.032	4.153%

 

 

World News

·     China Trade Data: Exports in U.S. dollar terms rose in Nov by 0.5% from a year ago, contrary to expectations for a -1.1% decline; Imports fell in U.S. dollar terms by 0.6%, missing expectations for a 3.3% increase.

·     ECB Villeroy: Issue of possible rate cut could be raised in 2024 but not right now; disinflation happening quicker than exp no plans to chance the French 2024 growth outlook of 0.9%; there is a slowdown but not a recession.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 19.9 vs 29.2 last week. Bulls fall to 47.3% from 48.8%, Neutrals fall to 25.3% from 31.7%, Bears rise to 27.4% from 19.6%.

 

Sector News Breakdown

Consumer

·     ChargePoint (CHPT) Q3 EPS ($0.43) vs est. ($0.22) on revs $110.283Mm vs est. $122.41Mm, adj gr mgn -18%; plans to achieve positive adj EBITDA Q4 2024.

·     Chewy Inc. (CHWY) Q3 adj EPS $0.15 vs est. ($0.06), adj EBITDA $82.1Mm vs est. $66.27Mm, adj EBITDA mgn 3% on revs $2.74B vs est. $2.752B; announces David Reeder to join as CFO.

·     Duckhorn Portfolio (NAPA) Q1 EPS $0.15 vs. est. $0.16; Q1 revs $102.5M vs. est. $103.1M; sees FY24 EPS $0.67-$0.69 vs. est. $0.68 and revs $420M-$427M vs. est. $430.2M

·     GameStop (GME) Q3 EPS loss (-$0.01) vs. est. loss (-$0.08); Q3 revs $1.078 below consensus $1.18B; hardware and accessories sales fell to $579M, down from $627M y/y and software sales declined to $321M from $352M.

·     Nikola (NKLA) to offer $100M of stock and $200M of convertible notes.

·     Oxford Industries (OXM) Q3 adj EPS $1.01 vs est. $0.96 on revs $327Mm vs est. $324.65Mm, gr mgn 62.9%; guides Q4 net sales $403-423Mm vs est. $403.26Mm, adj EPS $1.83-2.03 vs est. $2.09; sees FY net sales $1.57-1.59B vs est. $1.569B and cuts FY24 adjusted EPS view to $10.10-$10.30 from $10.30-$10.60 (est. $10.32).

·     Sportsman Warehouse (SPWH) Q3 EPS loss (-$0.01) vs. est. loss (-$0.12); Q3 revs fell -5.3% y/y to $340.6M vs. est. $324.04M; Q3 comp store sales decreased (-11.4%) y/y; Q3 adj EBITDA fell -44% y/y to $16.2M vs. est. $9.13M; no plans to open new stores in FY24; guides Q4 sales $365M-$390M and comp sales down (11%-6%).

 

Energy, Industrials and Materials

·     Chevron Corp. (CVX) unveiled its 2024 capital-expenditure budget, calling for expenses of about $16B, up from $14B this year, mostly to boost production in U.S. shale projects. Said it plans to spend about two-thirds of this year’s budget on U.S. projects, including about $6.5B to develop Chevron’s U.S. shale portfolio.

·     Greif Inc. (GEF) Q4 EPS $1.56 vs. est. $1.29; Q4 revs $1.31B vs. est. $1.34B; providing only a low-end guidance estimate based on the continuation of demand trends reflected in the past year and the current price/cost factors in paper packaging and services.

·     Northrop Grumman (NOC) raised its share-buyback authorization to $3.8 billion after saying it had authorized an additional $2.5 billion for repurchasing company stock.

 

Financials

·     HCI Group (HCI) 1M share Spot Secondary priced at $78.00.

·     Moody’s cut its outlook for eight Chinese banks to negative from stable, a day after unveiling a bearish stance on the nation’s sovereign bonds due to concern over the level of debt.

 

Healthcare

·     AbbVie (ABBV) to acquire Cerevel Therapeutics (CERE) for $45.00 per share in cash for a total equity value of approximately $8.7 billion. Proposed acquisition adds robust pipeline of assets focused on best-in-class potential for psychiatric and neurological disorders where significant unmet needs remain https://tinyurl.com/2tp962z9

·     Bristol Myers (BMY) announces an additional $3 billion share repurchase authorization.

·     Wave Life Sciences (WVE) announces $100M ordinary shares offering.

 

Technology, Media & Telecom

·     Braze Inc. (BRZE) Q3 adj EPS ($0.05) vs est. ($0.13) on revs $123.956Mm vs est. $117.27Mm; sees Q4 revs $124-125Mm vs est. $119.84Mm, adj op Inc -$8Mm to -$7Mm vs est. -$8.283Mm and adj EPS ($0.05)-($0.04) vs est. ($0.07); says on track to meet profitability targets for FY24 and FY25.

·     C3.ai (AI) Q2 EPS loss (-$0.13) vs. est. loss (-$0.18); Q2 revs rose 17% y/y to $66.4M vs. est. $64.3M; sees Q2 revenue $74M-$78M vs. est. $77.7M; lowers FY24 loss from operations to ($135M)-($115M) vs. prior guidance of ($100M)-($70M).

·     Couchbase Inc. (BASE) Q3 EPS ($0.34) vs est. ($0.18) on revs $45.813Mm vs est. $43.10Mm and ARR $188.7Mm, sees Q4 revs $46.2-46.8Mm vs est. $46.35Mm, ARR $198-202Mm and adj EBIT loss ($8.2)Mm-($7.4)Mm vs est. ($8.592)Mm.

·     Alphabet (GOOGL) shares rose early after Google said it developed a new artificial-intelligence (AI) system more powerful than any currently on the market, including technology developed by ChatGPT creator OpenAI. The Alphabet unit said the algorithm, Gemini, wouldn’t be widely available until early next year – WSJ.

·     Semtech (SMTC) Q3 adj EPS $0.02 vs est. ($0.13), EBITDA $28.1Mm vs est. $19.6Mm on revs $200.9Mm vs est. $204.49Mm; guides Q4 net sales $180-200Mm vs est. $211.8Mm, gr mgn 47-49%, op mgn 7.1-9.1%, adj EBITDA $20-29.4Mm vs est. $24.45Mm.

·     Sprinklr, Inc. (CXM) Q3 EPS $0.06 vs est. $0.07 on revs $186.325Mm vs est. $180.41Mm; sees Q4 revs $187.5-189.5Mm vs est. $188.26Mm and adj EPS $0.08-0.09 vs est. $0.08.

·     Veeva Systems (VEEV) Q3 EPS $1.34 vs. est. $1.30; Q3 revs +12% y/y to $616.5M vs. est. $615.97M; sees Q4 EPS $1.30 on revs $620M-$622M vs. est. $1.28/$623.18M; said Q4 subscription services revenues of $494.9M, up 12% y/y.

·     Verint (VRNT) Q3 EPS $0.65 vs. est. $0.57; Q3 revs $218.5M vs. est. $215.9M; sees FY24 EPS $2.65 mid-point vs. est. $2.62 and sees FY24 revenue $910M, plus/minus 2% vs. est. $907.3M; said SaaS ARR up 11% Y/y driven by solid bookings and renewals.