Early Look

Tuesday, February 6, 2024

Futures	Up/Down	%	Last
Dow	-54.00	0.14%	38,412
S&P 500	-6.25	0.14%	4,955
Nasdaq	-21.50	0.12%	17,678

 

 

U.S. futures are looking lower, trading at overnight lows currently after slumping on Monday to start the week, as investors await another heavy dose of earnings results this morning. Bonds and stocks came under renewed pressure on Monday, with 10-year yields climbing about 14 basis points to around 4.16% (after surging last Friday as well) after the ISM Services Index beat estimates led by a surprise jump in prices paid and following comments from Fed Chairman Powell the night prior. Fed swaps have almost wiped out the odds of a March interest-rate move, and the chances of a May cut have also been reduced, but that hasn’t stopped the surge in technology stocks, with mega caps like NVDA, GOOGL, AMZN, META, et remaining market anchors thus far while Smallcaps remains pressured to kick of 2024 (Russell 2000 -4.4% YTD). Citigroup Inc. strategists said this morning investor positioning in U.S. technology stocks is so bullish that any selloff could trigger a wider rout. The Bloomberg Dollar Spot Index advanced to its strongest level since November while crude futures rose. In Asian markets, The Nikkei Index fell -193 points to 36,160, the Shanghai Index jumped 87 points or 3.23% to 2,789, and the Hang Seng Index surged 626 points, or 4% to 16,136. The surge in Asian markets comes after the Shanghai Composite closed Monday at its lowest level since 2020 after a six-day losing streak. Even after Tuesday’s gains, Hong Kong stocks are down 5% this year with Shanghai equities 6% in the red. In Europe, the German DAX is down -23 points to 16,880, while the FTSE 100 rises 30 points to 7,643.

 

• The Dow Jones Industrial Average fell -274.30 points, or 0.71%, to 38,380.12.
• The Nasdaq Composite dropped -31.28 points, or 0.20%, to 15,597.68.
• The Russell 2000 Index declined -25.39 points, or 1.30% to 1,937.24.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 12:00 PM ET                Fed’s Mester Speaks on Economic Outlook
• 1:00 PM ET                   US Treasury to sell $52B in 3-year notes.
• 4:30 PM ET                   API Weekly Inventory Data
• 7:00 PM ET                   Fed’s Harker Speaks on Fed’s Role in Economy

• Earnings After the Close: AAT AB ACT AEIS AFG AIZ AMGN AOSL ARWR ATEN ATO AZEK AZPN CINF CMG CNO CRUS CSL CTSH DEI DIOD ELF ENPH EQH ESS EW EXEL F FRSH FTNT GAIN GILD HIW HRB ICHR IEX INSP JKHY KD KTCC LUMN MODN MRCY MSTR NBR OI OMC PRU REXR SNAP SONO TCS TENB UDR USNA VFC VOYA VREX WERN WU ZWS

• Stephens Regional Banks Investor Trip, 2/6-2/8, in Dallas, TX

 

 

Macro	Up/Down	Last
Nymex	0.44	73.22
Brent	0.38	78.37
Gold	-0.10	2,042.80
EUR/USD	-0.0009	1.0732
JPY/USD	0.02	148.70
10-Year Note	-0.01	4.154%

 

• The 3% gain for Shanghai and over 4% surge for the Hang Seng come after reports of increased ETF buying from a state fund and the CSRC pledged to increase efforts to guide funds and investors into the market, and support listed firms. There were also headlines that President Xi would discuss the stock market with financial regulators.
• The RBA kept rates on hold, as expected by all analysts, but retained their hawkish lean despite some expectation they may pivot to become more neutral. The RBA lowered their headline inflation forecasts to have CPI inflation fall inside their 2% to 3% inflation target by end-2025, they have CPI inflation at 2.8% by end-2025.
• Japanese wage data was softer than expected in December, labor cash earnings rose 1.0% YoY (est. 1.4%, prev. 0.2%), real cash earnings fell -1.9% YoY (est. -1.5%, prev. -3.0%).

• Chegg Inc. (CHGG) Q4 adj EPS $0.36 vs est. $0.36, adj EBITDA $66.2Mm vs est. $63.09Mm on revs $188Mm vs est. $187.35Mm, adj gr mgn 78%; guides Q1 revs $173-175Mm vs est. $183.29Mm, gr mgn 73-74%, adj EBITDA $43-45Mm vs est. $54.26Mm.
• J&J Snack Foods (JJSF) Q1 adj EPS $0.52 vs est. $0.78, adj EBITDA $30.2Mm vs est. $37.18Mm on revs $348.308Mm vs est. $362.88Mm.
• Skyline Champion (SKY) Q3 EPS $0.81 vs est. $0.64, adj EBITDA $66.3Mm vs est. $75.88Mm on net sales $559.5Mm vs est. $499.72Mm, adj EBITDA mgn 11.8%.
• Toyota Motor (TM) raised its full-year operating profit forecast by nearly 9% and revs to Y43.5T from Y43T after its Q3 earnings topped analysts’ estimates thanks to a weaker yen and strong sales of high-margin cars and hybrid vehicles; operating profit for the third quarter ended Dec. 31 was 1.68 trillion yen, beating the average 1.3 trillion yen profit estimate.

• ChampionX (CHX) to increase share repurchase program by $750M; Q4 adj EPS $0.44 vs est. $0.44, adj EBITDA $198.1Mm vs est. $189.18Mm; sees Q1 revs $908-938Mm vs est. $922.57Mm and adj EBITDA $179-189Mm vs est. $179.29Mm.
• Crown Holdings (CCK) Q4 adj EPS $1.24 vs est. $1.43; Q4 revs $2.86B vs. est. $2.96B; guides Q1 adjusted EPS $0.90-$1.00, below consensus $1.43; expects cap expenditures of no more than $500m in each of 2024 and 2025; sees FY24 adjusted EPS $5.80-$6.20 vs. est. $6.80.
• Dupont (DD) Q4 adj EPS $0.87 vs. est. $0.85; Q4 revs $2.9B vs. est. $2.93B; guides Q1 EPS and sales slightly below consensus and sees FY24 adj EPS $3.25-$3.65 vs. est. $3.59 and sees FY24 revenue $11.9B-$12.3B vs. est. $12.3B; announces new $1B share repurchase program and raises dividend 6%.
• FMC Corp. (FMC) Q4 adj EPS $1.07 vs. est. $1.08; Q4 revs $1.15B vs. est. $1.24B; Q4 adj Ebitda $254M vs. est. $268.4M; guides FY24 adjusted EPS $3.23-$4.41 vs. est. $4.38 and sees FY24 revenue of $4.50B-$4.70B vs. est. $4.69; sees 2024 restructuring fully underway and expect to receive $50M-$75M of adjusted ebitda benefit.
• Hillenbrand (HI) Q1 adj EPS $0.69 vs est. $0.68; Q4 revs $773.3M vs. est. $777.5M; Q1 adj Ebitda margin 14.8%; maintaining FY24 adjusted eps of $3.60-$3.95 (est. 3.40) and Q2 adj EPS $0.71-$0.76 (est. $0.84); announcing cost savings and restructuring program in molding technology solutions segment.
• Simpson Manufacturing (SSD) Q4 EPS $1.28 vs est. $1.49 on sales $501.71Mm vs est. $482.98Mm; sees FY24 op mgn 20.5-21.5%.
• Symbotic (SYM) Q1 EPS loss (-$0.02) vs. est. loss (-$0.06); Q1 revs $368.45M vs. est. $368.8M; guides Q2 revenue $400M-$420M vs. est. $403.44M and adjusted EBITDA of $12M-$15M.

• Simon Property Group (SPG) Q4 FFO/shr $3.69 vs est. $3.34 on revs $1.53B vs est. $1.359B; sees FY24 FFO/shr $11.85-12.10 vs est. $12.20; raises dividend 8.3% to $1.95.
• Varonis Systems (VRNS) Q4 EPS $0.27 vs. est. $0.23; Q4 revs $154.10M vs. est. $151.83M; Q4 subscription revs rose to $129.2M from $116.7M y/y; sees Q1 EPS loss (10c)-(9c) vs. est. loss (-$0.01) and revs $111M-$115M vs. est. $116.4M; Sees FY24 revenue $$536M-$546M vs. est. $544.34.

• GE HealthCare (GEHC) Q4 adj EPS $1.18 vs. est. $1.07; Q4 revs $5.2B vs. est. $5.09B; sees FY24 adj EPS $4.20-$4.35, vs. consensus $4.22, sees organic revenue growth of approximately 4% y/y; adj EBIT margin in the range of 15.6% to 15.9%, vs. margin of 15.1% y/y and sees free cash flow of approximately $1.8B.
• Novartis (NVS) to acquire MorphoSys (MOR) for EUR 68 per share, or aggregate of EUR 2.7B; the acquisition, which is subject to customary closing conditions, including a minimum acceptance threshold of 65% of outstanding shares tendered in the takeover offer and regulatory approvals.
• Vertex Pharmaceuticals (VRTX) announces positive results from pivotal trials of Vanzacaftor, Tezacaftor, Deutivacaftor, next-in-class triple combination treatment for Cystic Fibrosis; Q4 adj EPS $4.20 vs. est. $4.10 and revs $2.51B vs. est. $2.51B; provides full year 2024 product revenue guidance of $10.55B-$10.75B; on track to submit new drug applications (NDAs) to FDA by mid-2024 for both vx-548 in acute pain and Vanzacaftor triple in CF.

• Coherent (COHR) Q2 adj EPS $0.36 vs. est. $0.26; Q2 revs $1.13B vs. est. $1.12B; sees FY24 adjusted EPS $1.30-$1.70, vs. consensus $1.28; sees FY24 revenue approximately $4.55B-$4.7B, consensus $4.59B and sees FY24 Non-GAAP gross margin of approximately 36%-38%.
• Fabrinet (FN) Q2 adj EPS $2.08 vs est. $2.03 on revs $712.7Mm vs est. $696.35Mm; sees Q3 revs $705-725Mm vs est. $718.38Mm and adj EPS $2.08-2.15 vs est. $2.11.
• NXP Semiconductor (NXPI) Q4 adj EPS $3.71 tops est. $3.65 as revs rose 3.3% y/y to $3.42B vs. est. $3.39B; Q4 adj gross margin 58.7% vs. 58% y/y; Q4 adj free cash flow rose 14% y/y to $962M; guides Q1 adj EPS $2.97-$3.38 vs. est. $3.17 and revs $3.03B-$3.23B vs. est. $3.17B and forecasts Q1 adj gross margin 57.5% to 58.5% vs. est. 58.1%.
• Palantir (PLTR) Q4 adj EPS $0.08 vs est. $0.08 on revs $608.4Mm vs est. $602.41Mm; guides Q1 revs $612-616Mm vs est. $617.21Mm, adj op Inc $196-200Mm vs est. $170.42Mm; sees FY revs $2.652-2.668B vs est. $2.658B and adj op Inc $834-850Mm vs est. $737.76Mm.
• Rambus Inc. (RMBS) Q4 EPS $0.53 vs. est. $0.45; Q4 revs $122.2M vs. est. $134M; sees 2024 GAAP operating costs and expenses to be between $89M and $85M; sees Q1 license billings revs between $59M-$65M and royalty revs between $43M-$49M.
• Spotify (SPOT) Q4 revenue up 16% at 3.67 bln euros, vs est. 3.72 bln euros; said the number of monthly active users rise 23% to 602M in Q4, topping guidance/forecasts of 601.33M; forecasts Q1 monthly users at 618M, mostly in-line with ests while premium subs rise 15% to 236M vs. est. 235M.
• Taiwanese Semi (TSM) said it will build a second Japanese plant to begin operation by the end of 2027, bringing total investment in its Japan venture to more than $20 billion with the support of the Tokyo government.
• Japan’s industry ministry said it would extend subsidies worth as much as 242.9 billion yen ($1.64 billion) for Bain Capital-backed Kioxia and Western Digital (WDC) to expand memory chip production in Mie and Iwate prefectures.

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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.