Early Look

Thursday, December 22, 2022

Stock futures edge down slightly after closing higher for a 2^nd consecutive day on Wednesday as investors weigh the path of central bank policy against signs of upbeat economic data. Speaking of, a big morning of economic data coming up with Q3 GDP and PCE, US Jobless Claims all expected at 8:30 AM. In tech, Micron (MU) reported a slight miss for quarterly results last night, while both revenue and margin guidance was much lower than expectations, though shares are down only slightly given the prior 3 revenue warnings issued this year. Volumes are light as expected into the holiday weekend, with no Fed speakers and limited earnings reports. In Asian markets, The Nikkei Index rises 120 points to settle at 26,507, the Shanghai Index fell about -14 points to 3,054, and the Hang Seng Index jumped 518 points to 19,679. In Europe, the German DAX is down -35 points to 14,062, while the FTSE 100 rises 22 points to 7,520. U.S.-listed shares of Chinese companies rise as China’s securities regulator vowed to deepen market reforms and improve the quality of listed companies.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 56.78 points, or 1.49%, to 3,878.40

·     The Dow Jones Industrial Average rose 526.74 points, or 1.60%, to 33,376.48

·     The Nasdaq Composite surged 162.26 points, or 1.54%, to 10,709.37

·     The Russell 2000 Index advanced 28.93 points, or 1.66% to 1,776.94

Economic Calendar for Today

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

·     8:30 AM ET           Continuing Claims…est. 1.683M

·     8:30 AM ET           Gross Domestic Product (GDP) for Q3…est. +2.9%

·     8:30 AM ET           GDP Price Deflator for Q3…est. +4.3%

·     8:30 AM ET           PCE Prices Final for Q3

·     8:30 AM ET           Core PCE Prices Final for Q3…est. +4.6%

·     8:30 AM ET           Consumer Spending for Q3…prior +1.7%)

·     10:00 AM ET         Leading Index for November…est. (-0.4%)

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

·     11:00 AM ET         Kansas City Fed Manufacturing for December…prior (-10)

Earnings Calendar:

·     Earnings Before the Open: APOG KMX PAYX

·     Earnings After the Close: AVO LMNR

World News

·     FTX co-founder Sam Bankman-Fried landed in the US late Wednesday to face a range of criminal charges just as two of his long-time associates said they were cooperating with prosecutors. Caroline Ellison and Gary Wang had pleaded guilty to fraud and were working with federal officials probing the collapse of the crypto exchange

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -32 vs -20.3 last week. Bulls fall to 20.3% from 24.3%, Neutrals fall to 27.4% from 31.1%, Bears rise to 52.3% from 44.6%

·     Russian Defense Minister Sergei Shoigu proposed beefing up the armed forces to 1.5 million combat personnel from 1.15 million. Also brought up raising the age range for mandatory Russian military service to cover Russian citizens aged 21-30.

·     Republican lawmakers proposed legislation that would cut the number of regional Fed banks to five from 12; Senator Toomey also wants regional Fed leaders presidentially appointed – Bloomberg

Sector News Breakdown

Consumer

·     Tesla (TSLA) is now offering a discount of $7,500 (up from $3,750) for anyone that takes delivery of a new/inventory Model Y or Model 3 in the US before the end of this year. Buyers will still also get 10,000 free Supercharger miles

·     MillerKnoll Inc. (MLKN) Q2 adj EPS $0.46 vs. est. $0.41; Q2 revs rose 4% y/y to $1.07B vs. est. $1.05B; guides Q3 EPS $0.40-$0.46 vs. est. $0.39; sees Q3 sales $980M-$1.02B vs. est. $1.02B; sees annualized expense reductions of $30M-$35M

·     Under Armour (UAA) names Stephanie Linnartz as new CEO – comes from Marriott where was president who was responsible for its digital transformation and led loyalty program with over 173M members

Energy, Industrials and Materials

·     Apogee Enterprises (APOG) Q3 EPS $1.07 vs. est. $0.97; Q3 revs rose 10.1% y/y to $368M vs. est. $363.44M; sees year EPS $3.90-$4.05 vs. est. $3.90

Financials

·     Fiserv (FISV) enters new contract with Frank Bisignano as new contract extends term through 2027 and enhances governance features

Healthcare

·     Eli Lilly (LLY) said Thursday it has agreed to expand its collaboration agreement with ProQR Therapeutics (PRQR) on the development and commercialization of new genetic medicines.

·     Lexicon (LXRX) announces topline results from phase 2 proof-of-concept study of LX9211 in Postherpetic Neuralgia

·     ORIC Pharmaceuticals (ORIC) shares rise after the company entered a clinical development collaboration for a potential Phase 2 study of ORIC-533 in multiple myeloma with Pfizer (PFE) and agreed to sell 5.4 million of its common shares at a price of $4.65 per share to Pfizer

Technology, Media & Telecom

·     Micron (MU) Q1 EPS loss (-$0.04) vs. est. loss (-$0.01); Q1 revs $4.09B vs. est. $4.11B; sees Q2 adj gross margin 6%-11% vs. est. 17.8%; sees Q2 adj EPS loss (52-72c) vs. est. (-$0.29); sees Q2 revs $3.6B-$4.0B vs. est. $3.88B; to reduce headcount by 10% during 2023; expects days of inventory (DIO) to peak in current fiscal Q2 and gradually improve over the next few quarters; FY23 CAPEX lowered to $7.0B-$7.5B from earlier $8B and from $12B level in FY22

·     TuSimple (TSP) announces restructuring with a focus on investing in R&D to advance autonomous trucking technology which impacts approximately 350 employees, or 25% of its workforce