Morning Preview: February 08, 2024

Early Look

Thursday, February 8, 2024

Futures

Up/Down

%

Last

Dow

-55.00

0.14%

38,720

S&P 500

-9.25

0.18%

5,006

Nasdaq

-27.50

0.15%

17,814

 

 

U.S. futures are edging slightly lower, but S&P futures (Spuz) still holding above the 5,000 level after topping it early yesterday for the first time on strong earnings results in some large cap names and continued upside momentum given hopes for aggressive Fed rate cuts in coming months. More than half of the S&P 500 companies have reported quarterly results, with 81.2% surpassing profit expectations, compared with a long-term average of 67%, according to Refinitiv. Light day of economic data coming up with weekly jobless claims expected at 8:30 AM. The S&P 500 .SPX notched a new record high on Wednesday bringing the benchmark index a whisker away from 5,000 points, and remains on track for a 5th straight week of gains and 14 of last 15 weeks as well along with the Nasdaq. Bitcoin broke out above $44K late yesterday, its highest price since the post Bitcoin ETF period debut decline and extended gains overnight to $44,800. Among top movers overnight post earnings, Disney (DIS) rises about 6% on results and several other headlines, Arm Holdings (ARM) surges over 20% on its results while PYPL the big loser down over -9% this morning. Chinese equity markets rose again, helped by stimulus while China replaced the head of its securities regulator. Reminder China markets are closed next week for the Lunar Year Holiday. In Asian markets, The Nikkei Index surged 743 points or over 2% to 36,863, the Shanghai Index gained 36 points to 2,765, and the Hang Seng Index declined -203 points to 15,878. In Europe, the German DAX is flat at 16,921, while the FTSE 100 is down a few points to 7,621. The dollar weakens modestly as Treasury 10-year yield eases two basis points to 4.10%. Dovish BoJ comments pushed the yen lower.

 

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 40.83 points, or 0.82%, to 4,995.06.
  • The Dow Jones Industrial Average rose 156.00 points, or 0.40%, to 38,677.36.
  • The Nasdaq Composite gained 147.65 points, or 0.95%, to 15,756.64.
  • The Russell 2000 Index declined -3.27 points, or 0.17% to 1,950.36.

Economic Calendar for Today

  • 8:30 AM ET                  Weekly Jobless Claims…est. 220K
  • 8:30 AM ET                  Continuing Claims…est. 1.878M
  • 10:00 AM ET                Wholesale Inventory M/M for December…est. +0.4%
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 1:00 PM ET                   US Treasury to sell $21B in 30-year notes.

Earnings Calendar:

  • Earnings Before the Open: ABG APO ARES ARW AXTA BAX BDC BTU BWA COP DT DTE DUK FAF GTES HAE HOG HSY ICE IPG ITT K KIM KVUE LITE LNC LQDT MAS MDU NNN NSP OMCL PATK PBH PM RBC RL SNA SPB SPGI SPH SWI TDG THC TPR TPX TROW UAA VERU WEX WMG WMS ZBH
  • Earnings After the Close: AFRM AIRC ATR BILL BYD CLSK DOCS DXCM EGAN EMKR ESE EXPE FARM FE FLO FORR G HAYN IIIV ILMN ITI LEG LGF/A LPTH MHK MOH MSI MTD NWA NET NGVC PCTY PECO PETS PI PINS POWI PRO PXLW RAMP SPSC SYNA TEX TTWO VCTR VRSN

Other Key Events:

  • Oppenheimer 2024 Winter Healthcare CEO and Investor Summit, 2/5-2/8

 

 

Macro

Up/Down

Last

Nymex

0.63

74.49

Brent

0.71

79.92

Gold

-7.70

2,044

EUR/USD

-0.0006

1.0767

JPY/USD

1.04

149.20

10-Year Note

+0.027

4.123%

 

World News

  • Chinese inflation was weaker than expected as headline CPI fell by -0.8% YoY (est. -0.5%; prev. -0.3%), the fastest decline since the financial crisis, but rose 0.3% MoM from January. The core measure which excludes food and energy rose by 0.4% YoY, compared with 0.6% in the preceding two months.
  • The Bank of Japan will likely end its risky asset purchases but avoid raising interest rates rapidly when scaling back monetary support, Deputy Governor Shinichi Uchida said in the strongest hint to date that an end to its massive stimulus was nearing.
  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 26.4 vs 24.6 last week. Bulls fall to 49% from 49.1%, Neutrals rise to 28.4% from 26.4%, Bears fall to 22.6% from 24.5%.

Sector News Breakdown

Consumer

  • Costco Wholesale Corp (COST) said retail month of January comparable sales up 2.7%; reported net sales of $22.08B for the retail month of January, the five weeks ended February 4, an increase of 4.5% from $21.13B last year.
  • Coty Inc. (COTY) Q2 adj EPS $0.25 vs. est. $0.20; Q2 revs $1.73B vs. est. $1.68B; continues to target FY24 adjusted EBITDA margin expansion of 10 to 30 bps; continues to expect FY24 LFL revenue growth of +9-11%.
  • Mattel (MAT) Q4 adj EPS $0.29 vs. est. $0.31; Q4 revs rose 16% y/y to $1.62B vs. est. $1.66B; sees FY24 adj EPS $1.35-$1.45, vs. est. $1.37 and sees adjusted EBITDA $975M-$1.025B; said expects sales to be comparable on a constant currency basis to the $5.44 billion it reported in 2023.
  • O’Reilly Automotive (ORLY) Q4 EPS $9.26 vs est. $9.17 on sales $3.83B vs est. $3.864B, comps +3.4%; guides FY24 comps +3.0-5.0%, revs $16.8-17.1B vs est. $16.798B, gr mgn 51.0-51.5%, EPS $41.05-41.55 vs est. $42.64.
  • Wynn Resorts (WYNN) Q4 adj EPS $1.91 vs. est. $1.15; Q4 revs $1.84B vs. est. $1.74B; Adjusted Property EBITDAR was $630.4M in Q4 , an increase of $435.3M y/y; Operating revenues from Wynn Palace were $524.4M and Operating revenues from Wynn Macau were $386.2M.

Energy,  Industrials and Materials

  • Maersk (AMKBY) warned that container shipping overcapacity would hit profits more than expected this year and that it didn’t see a major boost from the jump in freight rates due to Red Sea disruptions, sending shares lower.
  • Murphy USA (MUSA) Q4 adj EBITDA $275.2Mm vs est. $265.17Mm; guides FY24 fuel vol per store 240-245 vs 242 FY23.

Financials

  • Allstate (ALL) Q4 adj EPS $5.82 vs. est. $3.99; Q4 revs $14.8B vs. est. $12.94B; Q4 net investment income rose 8.4% y/y to $604M, net premiums written rose 10% to $12.64B, combined ratio 89.5% vs. 109.1% y/y and auto combined ratio 98.9% vs. 112.6% y/y.
  • Equifax (EFX) Q4 adj EPS $1.81 vs est. $1.75, adj EBITDA mgn 33.7% on revs $1.327B vs est. $1.313B; guides Q1 revs $1.375-1.395B vs est. $1.41B and adj EPS $1.33-1.43 vs est. $1.82; sees FY24 revs $5.67-5.77B vs est. $5.74B and adj EPS $7.20-7.50 vs est. $8.08.
  • Fleetcor Technologies (FLT) Q4 EPS $4.44 vs. est. $4.48; Q4 revs $937.3M vs. est. $970.15M; increases share repurchase program by $1B; sees Q1 adj EPS $4.02-$4.12 vs. est. $4.42 and sees Q1 revenue $925M-$945M, vs. consensus $979.74M; 2024 outlook for the Company calls for 20% sales growth, organic revenue growth of 8% to 10%, and adjusted net income growth in the mid-teens.
  • Mid-America (MAA) Q4 core FFO $2.32 vs. est. $2.30; Q4 revs $542.25M vs. est. $542.77M; sees 2024 core FFO $8.68-$9.08, vs. consensus $9.11.
  • PayPal (PYPL) Q4 adj EPS $1.48 vs. est. $1.36; Q4 revs $8.03B vs. est. $7.87B; Q4 total payment volume up 15% and 13% FXN to $409.8B; sees FY24 adj EPS in line with $5.10 last year vs. est. $5.48; sees Q1 net rev to grow about 6.5% and 7% foreign-currency neutral basis and Q1 adj EPS to increase mid-single digits y/y.

Healthcare

  • Enanta Pharma (ENTA) Q1 EPS ($1.58) vs est. ($1.23) on revs $18Mm vs est. $21.95Mm; sees current cash and equivalents sufficient to meet requirements through FY27.
  • Kyverna Therapeutics (KYTX) 14.5M share IPO priced at $22.00.
  • McKesson (MCK) Q3 adj EPS $7.74 vs. est. $7.05; Q3 revs $80.9B vs. est. $77.86B; raises FY24 adjusted EPS view to $27.25-$27.65, from prior $26.80-$27.40 (est. $27.32).
  • Molina Healthcare (MOH) Q4 EPS $4.38 vs. est. $4.35; Q4 revs $9.05B vs. est. $8.37B; consolidated MCR for the full year 2023 was 88.1%, consistent with expectation and in line with the Company’s long-term target range; sees FY24 EPS above $23.50 vs. est. $23.57 and sees FY24 revenue $39.6B vs. est. $38.2B.
  • Omega Healthcare (OHI) Q4 AFFO/shr $0.68 vs est. $0.67 on revs $239.32Mm vs est. $233.82MM; sees FY24 AFFO/shr $2.70-2.80 vs est. $2.81.
  • Oscar Health (OSCR) Q4 adj EBITDA ($111.593Mm) vs est. ($120.9Mm); sees FY24 revs $8.3-8.4B vs est. $6.769B, adj EBITDA $125-175Mm.
  • Sana Biotechnology (SANA) 17.3M share Spot Secondary priced at $5.50.
  • STERIS Plc (STE) Q3 adj EPS $2.22 vs. est. $2.17; Q3 revs $1.4B vs. est. $1.35B; narrows FY24 adjusted EPS view to $8.60-$8.70 from $8.60-$8.80 (est. $8.67) and now expects as reported revenue to increase 10-11%, an increase from previous expectations of 9-10%.
  • Viking Therapeutics (VKTX) Q4 EPS loss (-$0.25), in-line with consensus; said end of Q4 held approximately $362M in cash, cash equivalents, and marketable securities; said expect to report topline results from both the VENTURE Phase 2 study and the Phase 1 trial of oral VK2735 in 1Q24.

Technology, Media & Telecom

  • Disney (DIS) boosts cash div 50% and targets $3B buyback in fy24; forecasts FY adj EPS about $4.60, est. $4.27; Q1 Disney+ subscribers 149.6M, est. 151.2M; Q1 EPS $1.22 vs. est. $0.99 and revs $23.5B vs. est. $23.8B; said it cut $500M in costs across its business during the quarter, and that it remains on track to meet/exceed $7.5B by YE; Disney to invest $1.5B in Fortnite maker epic games.
  • Arm Holdings (ARM) Q3 EPS $0.29/$824M vs. est. $0.25/$761M; forecast Q4 midpoints of $875M for sales and $0.30 for EPS above ests $780.3M and $0.21; guides FY revs $3.18B on EPS $1.22 above ests $3.05B/$1.07.
  • Axcelis Technologies (ACLS) Q4 EPS $2.15 vs est. $2.02 on revs $310.3Mm vs est. $297.92Mm, gr mgn 44.4%; guides Q1 revs $242Mm vs est. $284.9Mm, op Inc approx $45Mm vs est. $67Mm and EPS about $1.22 vs est. $1.83; sees FY revs flattish y/y vs est. +5%
  • Confluent (CFLT) Q4 adj EPS $0.09 vs est. $0.05 on revs $213.2Mm vs est. $205.3Mm; guides Q1 revs $211-212Mm vs est. $210.63Mm, subscription revs $199-200Mm, adj op mgn -4%, adj EPS $0.00-0.02 vs est. $0.02; sees FY revs approx $950Mm vs est. $939.11Mm, adj op mgn approx 0%, adj EPS approx $0.17 vs est. $0.17.
  • Digital Turbine (APPS) Q3 adj EPS $0.15 vs est. $0.17, adj EBITDA $25.4Mm vs est. $28.48Mm on revs $142.6Mm vs est. $146.2Mm; sees FY revs $547-553Mm vs est. $572.46Mm, adj EBITDA $90-94Mm vs est. $105.67Mm, adj EPS $0.50-0.54 vs est. $0.61, effective tax rt 25%.
  • Formfactor (FORM) Q4 adj EPS $0.20 vs est. $0.22 on revs $168.2Mm vs est. $165.29Mm, adj gr mgn 42.1%; guides Q1 revs $160-170Mm, adj gr mgn 39.5-42.5%, adj EPS $0.15-0.23 vs est. $0.22.
  • Monolithic Power Systems (MPWR) Q4 adj EPS $2.88 vs est. $2.85 on revs $454Mm vs est. $452.09Mm, adj gr mgn 55.7%, adj op Inc $156.1Mm vs est. $152.17Mm; guides Q1 revs $437-457Mm vs est. $430.81Mm, adj gr mgn 55.4-56%, adj op exp $45.4-47.4Mm.
  • News Corp. (NWSA) Q2 adj EPS $0.26 vs. est. $0.19; Q2 revs rose 3% y/y to $2.59B vs. est. $2.55B; Q2 segment Ebitda $472M vs. est. $417M; says they expect to be a core content provider for generative AI companies; said Q2 rev beat driven by growth in digital subscriptions at business information unit Dow Jones/rebound publishing unit.
  • Paycom (PAYC) Q4 adj EPS $1.93 vs es t$1.78, adj EBITDA $176.6Mm vs est. $171.4Mm on revs $434.6 Mm vs est. $422.53Mm; guides Q1 revs $494-497Mm vs est. $500.51Mm, adj EBITDA $218-222Mm vs est. $233.85Mm; sees FY24 revs $1.86-1.885B vs est. $1.87B, adj EBITDA $720-730Mm vs est. $770.8MM.
  • Qualys Inc. (QLYS) Q4 adj EPS $1.40 vs est. $1.24, adj EBITDA $65.8Mm vs est. $60.73Mm on revs $144.6Mm vs est. $144.82Mm, adj gr mgn 83%; guides Q1 revs $144.5-146.5Mm vs est. $146.22Mm, adj EPS $1.27-1.35 vs est. $1.26; sees FY revs $600-610Mm vs est. $617Mm and adj EPS $4.95-5.27 vs est. $5.32.

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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.