Early Look

Thursday, December 8, 2022

Futures	Up/Down	%	Last
Dow	65.00	0.19%	33,690
S&P 500	11.25	0.29%	3,948
Nasdaq	33.50	0.29%	11,543

 

 

U.S. futures trading in narrow ranges are essentially pivoting the unchanged mark, with the US dollar and Treasury yields partially recovering after yesterday’s slide, as markets await inflation data on Friday morning. After briefly topping its 200-day moving average of 4,050 late last week for the first time since April, the S&P has fallen 5-straight trading days more than 100-points below that level and are down 8 of the last 9 trading days in the process ahead of the FOMC meeting next week. Bespoke noted that it has been the worst first week of December (-4.4%) for the Nasdaq since 1975, in current 5-day losing streak for major averages. Crude benchmarks are consolidating after yesterday’s mid-week pressure, where WTI crude made new 2022 lows below $72 per barrel. Today’s highlights include US Initial Jobless Claims & a speech from ECB‘s Lagarde. In Asian markets, The Nikkei Index slips -111 points to 27,574, the Shanghai Index dips -2 points to 3,197, and the Hang Seng Index rises 635 points to 19,450. In Europe, the German DAX is down -55 points to 14,205, while the FTSE 100 is down about -10 points to 6,478. The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -17.1 vs -15.9 last week. Bulls rise to 24.7% from 24.5%, Neutrals fall to 33.5% from 35.1%, and Bears rise to 41.8% from 40.4%.

Market Closing Prices Yesterday

·     The S&P 500 Index spiked 93.76 points, or 2.46%, to 3,901.06

·     The Dow Jones Industrial Average rose 828.85 points, or 2.59%, to 32,861.80

·     The Nasdaq Composite surged 309.78 points, or 2.87%, to 11,102.45

·     The Russell 2000 Index advanced 40.60 points, or 2.25% to 1,846.92

 

Economic Calendar for Today

·     8:30 AM ET           Weekly Jobless Claims…est. 230K

·     8:30 AM ET           Continuing Claims…est. 1.60M

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

 

Earnings Calendar:

·     Earnings Before the Open: CIEN EXPR GMS HOV LEE LQDT

·     Earnings After the Close: AVGO CHWY CMTL COO COST CURV DOCU DOMO LAKE MTN PHR

 

Other Key Events:

·     Barclay’s Technology, Media & Telecommunications Conference, 12/7-12/8, in San Francisco

·     Cowen 5th Annual Cannabis Conference (virtual), 12/6-12/8

·     Goldman Sachs 14th Annual Industrials Week, 12/5-12/9, in London

·     China Exports, Imports, Trade Balance for November

·     Goldman Sachs Credit Outlook Conference: Insights into 2023 in NY

 

 

Macro	Up/Down	Last
Nymex	0.58	72.59
Brent	0.37	77.54
Gold	-0.90	1,797.20
EUR/USD	-0.000	1.0503
JPY/USD	0.23	136.83
10-Year Note	+0.036	3.444%

 

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) to shorten Shanghai factory shifts, delay new staff hires; facing flagging demand, increased competition in China – Bloomberg

·     Tesla (TSLA): Elon Musk’s bankers are considering providing Musk with new margin loans backed by the U.S. automaker’s stock to replace some of the high interest debt on his Twitter deal, Bloomberg News reported on Wednesday.

·     Duckhorn Portfolio (NAPA) 1Q adj EPS $0.18 vs est. $0.14 on revs $108.2Mm, adj EBITDA $35.7Mm vs est. $31.2Mm; reaffirms FY guide

·     GameStop (GME) Q3 EPS loss (-$0.31) vs. est. loss (-$0.28); Q3 revs $1.18B vs. est. $1.35B; Selling, general and administrative expenses (SG&A) were $387.9 million, or 32.7% of sales, compared to $421.5 million, or 32.5% of sales y/y

·     Oxford Industries (OXM) 3Q adj EPS $1.46 vs est. $1.22 on revs $313Mm vs est. $303.4Mm; sees FY net sales $1.395-1.41B vs est. $1.39B and adj EPS $10.60-10.75 vs est. $10.46

·     Rent the Runway (RENT) 3Q revs $77.4Mm vs est. $72.9Mm, adj EBITDA $6.6Mm vs est. $1.28Mm; guides 4Q revs $72-74Mm vs est. $71.7Mm and adj EBITDA margin 4-5%; sees FY revs $293-295Mm vs est. $287.6Mm

·     Sportsman Warehouse (SPWH) 3Q EPS $0.33 vs est. $0.29 on revs $359.7Mm vs est. $358.7Mm, comps -15%; sees 4Q sales $370-385Mm vs est. $401Mm and EPS $0.25-$0.35 vs. est. $0.40

·     China’s passenger car retail sales in November dropped 9.2% from a year ago amid slumping demand; China’s car makers and dealers sold 1.65 million passenger cars in November, down 10.5% from October, according to data released by the China Passenger Cars Association

 

Energy, Industrials and Materials

·     Exxon Mobil Corp (XOM) said it will raise spending next year closer to the top end of its $20 billion-$25 billion annual guidance and expand investments to curb carbon emissions. Exxon’s spending budget extends a plan set a year ago to spend $21 billion-$24 billion in 2022.

·     Greif Inc. (GEF) Q4 EPS adj EPS $1.83 vs. est. $1.94; Q4 sales $1.49B vs. est. $1.58B; Adjusted EBITDA of $218.7M rose $7.4M; Total debt decreased by $309.5M

·     Mercer international (MERC) downgraded to Sector Perform at RBC Capital saying while continue to like the longer-term story, we see near-term headwinds for the business that dampen our enthusiasm for the shares over a one-year horizon

·     The US Strategic Petroleum Reserve (SPR) moved down for the 65th consecutive week to its lowest level since 1984. The 35% decline in reserves this year is the largest on record by a wide margin, according to Charlie Bilello

 

Financials

·     NYT reports that federal prosecutors are investigating whether FTX founder Sam Bankman-Fried and his hedge fund orchestrated trades in a way that led to the collapse of two cryptocurrencies in May – TerraUSD and Luna. Terra and Luna saw more than $50 billion in market value wiped out when they collapsed in May. That contributed to a wider crypto crash, and eventually the implosion of FTX.

·     Principal Financial (PFG) was downgraded to underperform from neutral at Credit Suisse on valuation grounds, with the broker preferring the investment manager’s peer Voya (VOYA).

·     Plaid has joined the wave of technology companies trimming their forces, announcing plans Wednesday to lay off about 260 workers

 

Healthcare

·     Design Therapeutics (DSGN) reported first in human data for their lead geneTAC, DT-216, in Friedreich’s ataxia.

·     Prometheus (RXDX) announces $250M common stock offering

·     Replimune Group (REPL) announces $125M common stock offering

 

Technology, Media & Telecom

·     Alphabet Inc.’s (GOOGL) Google, Oracle Corp. (ORCL), Amazon.com Inc. (AMZN), and Microsoft Corp. (MSFT) will share a $9 billion hybrid contract to provide secure cloud services for the Pentagon worldwide, the Department of Defense said Wednesday.

·     C3.ai (AI) 2Q adj EPS ($0.11) vs est. ($0.16) on revs $62.4Mm vs est. $60.9Mm; guides 3Q revs $63-65Mm vs est. $66.8Mm and adj loss from operations ($29Mm)-($25Mm) vs est. ($26.3Mm); sees FY revs $255-270Mm and adj loss from ops ($98Mm)-($85Mm) vs est. ($93.5Mm)

·     HashiCorp. (HCP) 3Q adj EPS ($0.13) vs est. ($0.31) on revs $125.3Mm vs est. $111.1Mm; sees 4Q revs $123-125Mm vs est. $119.9Mm and adj EPS ($0.23)-($0.21) vs est. ($0.30)

·     Verint Systems (VRNT) Q3 EPS $0.69 vs. est. $0.59; Q3 revs $226M vs. est. $227.2M; announces new $200 mln share buyback program; sees FY23 EPS $2.50 vs. est. $2.48 and sees FY23 revenue $900M, plus/minus 2% vs. est. $921.0M

·     Alphabet Inc.’s (GOOGL), Google plans to combine the team working on the mapping service Waze with the group overseeing the company’s Maps product, as the search giant faces pressure to streamline operations and cut costs.