Morning Preview: February 15, 2024

Early Look

Thursday, February 15, 2024

Futures

Up/Down

%

Last

Dow

40.00

0.10%

38,534

S&P 500

6.25

0.12%

5,024

Nasdaq

21.50

0.12%

17,902

 

 

U.S. futures are looking at a modestly higher open ahead of a busy day of earnings and key economic data points, looking to gain to yesterday’s strong upward momentum. The S&P 500 Index gained 1% Wednesday to close back above 5,000 on the button, led by industrial stocks, while energy and consumer staples were sector laggards. In Asian markets, The Nikkei Index jumped 454 points to 38,157, the Shanghai Index remains closed for its week-long holiday, and the Hang Seng Index gains 65 points to 15,955. In Europe, the German DAX is up 98 points to 17,043, while the FTSE 100 is flat at 7,568. We get Fed speakers Governor Christopher Waller and Atlanta Fed President Raphael Bostic comments later today while Fed’s Goolsbee comments yesterday proved a launching pad for US stocks with very “dovish” comments. Lots of 13F filings were released in the last few days showing some of the biggest US investors’ newest positions and removed stock positions. In tech stocks, more early gains for semis ahead of NVDA earnings next week, while CSCO slides on a lower outlook. Industrials outperformed on Wednesday (XLI), hitting all-time highs, while DE slipped this morning after cutting its net income forecast. Oil prices slip -0.9% after snapping its 7-day win streak yesterday, while gold bounces.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 47.45 points, or 0.96%, to 5,000.62.
  • The Dow Jones Industrial Average rose 151.52 points, or 0.40%, to 38,424,27.
  • The Nasdaq Composite gained 203.55 points, or 1.30%, to 15,859.15.
  • The Russell 2000 Index advanced 47.93 points, or 2.44% to 2,012.10.

Economic Calendar for Today

  • 8:30 AM ET                  Philly Fed Survey Business Index for February…est. (-8.0)
  • 8:30 AM ET                  Empire Manufacturing for February…est. (-15.0)
  • 8:30 AM ET                  Weekly Jobless Claims…est. +220K
  • 8:30 AM ET                  Continuing Claims…est. 1.88M
  • 8:30 AM ET                  Retail Sales M/M for January…est. (-0.1%)
  • 8:30 AM ET                  Retail Sales – Less Autos for January…est. +0.2%
  • 8:30 AM ET                  Import Prices M/M for January…est. 0.0%
  • 8:30 AM ET                  Export Prices M/M for January…est. (-0.01%)
  • 9:15 AM ET                  Industrial Production M/M for December…est. +0.3%
  • 9:15 AM ET                  Capacity Utilization for December…est. 78.8%
  • 10:00 AM ET                Business Inventories M/M for December…est. +0.4%
  • 10:00 AM ET                NAHB Housing Market Index for February…est. 46
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 4:00 PM ET                   Net Long Term TIC Flows for December
  • 7:00 PM ET                   Fed’s Bostic Speaks on Outlook, Policy

Earnings Calendar:

  • Earnings Before the Open: AGIO ALNY APPN ARCH BPMC CBRE CBZ CGNX COHU CRBG CROX DCO DE DBN DNOW EPAM FUN GEL GEO GPC H HBI IDCC IRDM IRWD ITGR KELYA KNF LECO LH LXP MTRN NS PACB PBF PENN RPRX RS SABR SHAK SN SO SPTN SPWR TRGP USFD VNT WD WEN WST YETI ZBRA
  • Earnings After the Close: AL AMAT AMN ATRC BE BIO BJRI BLZE COIN CPS CWST DASH DBX DKNG DLR ED HASI HTGC IR KNSL LNT LTRPA OPEN PCOR PDFS PRAA PTEN ROKU SKT SWAV TNET TOST TROX TSLX TTD TTOO TXG TXRH ULH YELP

Other Key Events:

  • American Academy of Orthopedic Surgeons (AAOS) Annual Meeting, 2/12-2/16, in San Francisco, CA

 

 

Macro

Up/Down

Last

Nymex

-0.70

75.94

Brent

-0.83

80.77

Gold

5.30

2,009.50

EUR/USD

0.0011

1.0735

JPY/USD

-0.53

150.01

10-Year Note

-0.043

4.224%

 

World News

  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 15.4 vs 26.4 last week. Bulls fall to 42.2% from 49%, Neutrals rise to 31.1% from 28.4%, Bears rise to 26.8% from 22.6%
  • Warren Buffett’s Berkshire Hathaway disclosed in an SEC filing its holdings as of December 31, 2023. Berkshire exited four positions during the fourth quarter, including by size of previous position, DR Horton (DHI), Markel Group (MKL), StoneCo (STNE), and Globe Life (GL). Berkshire increased its stake in three holdings, including by size of previous position, Chevron (CVX), SiriusXM (SIRI), and Occidental (OXY). Berkshire reduced its stake in three holdings, including by size of previous position, HP (HPQ), Paramount Global (PARA), and Apple (AAPL).
  • Japan’s economy unexpectedly contracted again in the October-December period; provisional government data showed Thursday. Provisional gross domestic product contracted 0.4% in Q4 y/y, after contracting 2.9% in the July-September period. This was way below the median estimate for 1.4% growth in a Reuters poll.

Sector News Breakdown

Consumer

  • Nu Skin (NUS) cuts quarterly dividend to $0.06 from $0.39; Q4 EPS $0.37 vs. est. $0.28; Q4 revs $488.6M vs. est. $476.4M; guides FY24 EPS 95c-$1.35 below consensus $2.05 and revs $1.73B-$1.87B vs. est. $2.01B.
  • TripAdvisor (TRIP) Q4 EPS $0.38 vs. est. $0.22; Q4 revs $390M vs. est. $374.4M; Q4 adj Ebitda $84M.
  • Wyndham Hotels (WH) Q4 adj EPS $0.91 vs. est. $0.90; Q4 revs $321M vs. est. $320.7M; Q4 global RevPAR declined 1% in constant currency compared to 2022 reflecting a 4% decline in the U.S. and growth of 7% internationally; sees 2024 adj EPS $4.11-$4.23 vs. est. $4.26 and sees 2024 revenue $1.43B-$1.46B vs. est. $1.46B; increases quarterly cash dividend 9% to 38c per share.
  • Yeti (YETI) Q4 adj EPS $0.90 vs. est. $0.96; Q4 revs $519.8M vs. est. $535.95M; announces $300M share repurchase plan; sees FY24 adjusted EPS $2.45-$2.50 below consensus $2.68 and sees FY24 adjusted sales to increase 7%-9%.

Energy,

  • Deere (DE) Q1 EPS $6.23 vs. est. $5.21; Q1 revs $12.19B vs. est. $10.34B; now expects FY24 net income in the range of $7.50B-$7.75B down from prior $7.75B-$8.25B view; Deere’s net income fell to $1.75B from $1.96B y/y; Net farm income in the U.S. is expected to witness its largest decline since 2006, as it is set to fall 27% to $116 billion.
  • Airbus (EADSY) posted sharply higher revenue and operating profit for 2023, raised its dividend and predicted further growth this year on the back of strong demand for engine services.
  • Antero Resources (AR) authorized a $500 mln share repurchase program; Q4 adj EPS $0.24 vs. est. $0.21; Q4 revs $260.17M vs. est. $257.32M; Q4 Net production averaged 3.4 Bcfe/d, an increase of 6% from the year ago period. 2024 net production is expected to average 3.3 to 3.4 Bcfe/d, including 192 to 204 MBbl/d of liquids.
  • Cleveland-Cliffs Inc (CLF) said it would be indefinitely idling its tinplate production plant located in Weirton, West Virginia in April 2024.
  • Occidental Petroleum (OXY) Q4 adj EPS $0.74 vs. est. $0.71; Q4 revs $7.53B vs. est. $6.95B; qtrly average worldwide realized NGL prices decreased by less than 1% from the prior quarter to $20.93 per barrel; qtrly average worldwide realized crude oil prices decreased by approximately 2% from the prior quarter to $78.85 per barrel.
  • Warrior Met Coal (HCC) Q4 adj EBITDA $163.7Mm vs est. $199.27Mm on revs $363.8Mm vs est. $394.64Mm.

Financials

  • Arch Capital Group (ACGL) Q4 adj EPS $2.49 vs. est. $2.03; Q4 expense ratio 29.9%, combined ratio 78.9%; gross premiums written $4.25B and op income $945M.
  • Capital One Financials (COF) said January net charge-offs 5.71% vs. 3.81% y/y and delinquencies 4.78% vs. 3.65% y/y.
  • Discover Financials (DFS) said January credit card delinquency rate 1.69% vs 1.59% at Dec 2023 end and Jan credit card charge-off rate 2.03% at Jan 2024 end vs 1.98% at Dec 2023 end.
  • Equinix (EQIX) Q4 adj EPS $2.40 vs. est. $2.17; Q4 operating income $346.4M vs. est. $336.7M; sees 2024 AFFO $34.58-$35.31 vs. est. $34.55 and sees 2024 revenue $8.79B-$8.89B vs. est. $8.87B.
  • NerdWallet (NRDS) Q4 adj EBITDA $29.3Mm on revs $133.7Mm vs est. $138.43Mm; guides Q1 revs $155-160Mm vs est. $154.27Mm, adj EBITDA $21-24Mm.

Healthcare

  • Adaptive Biotechnologies (ADPT) Q4 EPS ($0.48) vs est. (0.33), adj EBITDA ($24.7Mm) vs est. ($21.17Mm) on revs $45.784Mm vs est. $48.46Mm; guides FY revs for MRD biz $130-140Mm, no revs guide given for Immune Medicine bi
  • Prime Medicine (PRME) 19.2M share Spot Secondary priced at $6.25.
  • Ventas (VTR) Q4 normalized FFO/shr $0.76 vs est. $0.75; sees FY24 normalized FFO/shr $3.07-3.18 vs est. $3.21; says expect unprecedented demand for senior housing in 2024 and subsequent years.

Industrials and Materials

  • Albemarle (ALB) Q4 adj EPS $5.19 vs est. $1.01, adj EBITDA ($315Mm) vs est. $217Mm on revs $2.356B vs est. $2.18B; sees FY sales $5.5-6.2B vs est. $7.1B; says announced proactive measures expected to unlock over $750Mm cash flow.
  • CF Industries (CF) Q4 EPS $1.44 vs. est. $1.57; Q4 revs $1.57B vs. est. $1.50B; Q4 adj Ebitda $592M vs. est. $617.8M; Cost of sales for Q4 was lower compared to 2022 due primarily to lower realized natural gas costs.
  • Rollins Inc. (ROL) Q4 adj EPS $0.21 in-line with ests on revs rising 14% y/y to $754M vs. est. $753.38M; Organic revenues increased over 7% and acquisition-related revenue increased approximately 7%.
  • Royal Gold (RGLD) Q4 EPS $0.95 vs est. $0.77 on revs $152.7Mm vs est. $140.16Mm, adj FCF $101.1Mm.
  • Summitt Materials (SUM) Q4 adj EPS $0.31 vs est. $0.26 on revs $613.133Mm vs est. $588.79Mm; guides FY24 adj EBITDA $950Mm – 1.01B vs est. $776.68Mm.

Technology, Media & Telecom

  • Cisco Systems (CSCO) Q2 adj EPS $0.87 vs. est. $0.84; Q2 revs $12.8B vs. est. $12.71B; cuts FY 2024 revenue to $51.5-$52.5B, down from prior $53.8-$55.0B and vs. est. $54.33B; lowers FY24 adj EPS to $3.68-$3.74, from prior $3.87-$3.93 and vs. est. $3.87; to cut about 5% of global workforce.
  • AppLovin Corp. (APP) board authorized boost of $1.25B to buyback; Q4 revs $953.3M vs. est. $928.7M; Q4 EPS $0.49 tops $0.35; guides Q1 revenue $955M-$975M vs. est. $923.8M and sees Q1 adjusted EBITDA $475M-$495M.
  • Altice USA (ATUS) Q4 adj EBITDA $903.3Mm vs est. $892.1Mm on revs $2.3B vs est. $2.291B.
  • Fastly (FSLY) Q4 adj EPS $0.01 vs est. ($0.02) on revs $137.777Mm vs est. $139.46Mm; guides Q1 revs $131-135Mm vs est. $135.46Mm, adj op Inc ($14.0Mm)-($10.0Mm) vs est. ($9.8Mm) and adj EPS ($0.09)-(0.05) vs est. ($0.03); sees FY revs $580-590Mm vs est. $586.23, adj op Inc ($20.0Mm)-($14.0Mm) vs est. ($17.26)Mm.
  • HubSpot Inc. (HUBS) Q4 adj EPS $1.76 vs. est. $1.55 as revs rise 24% y/y to $581.9M vs. est. $558.4M; Q4 sub revs rise 24% y/y to $570.2M (est. $545.6M); sees FY24 EPS $6.86-$6.94 vs. est. $6.62 and revs $2.55B-$2.56B vs. est. $2.53B.
  • Informatica (INFA) Q4 adj op Inc $161.9Mm vs est. $141.54Mm on revs $445.2Mm vs est. $432.21Mm; guides Q1 revs $375-395Mm vs est. $388.71Mm, adj op Inc $97-117Mm vs est. $105.63Mm; sees FY revs $1.685-1.705B vs est. $1.679B and adj op Inc $533-553Mm vs est. $517.97Mm.
  • JFrog (FROG) Q4 EPS $0.19 vs. est. $0.12; Q4 revs $97.3M vs. est. $93.04M; sees 2024 EPS $0.58-$0.60 vs. est. $0.53 and revs $424M-$428M vs. est. $421.77M; Q4 Cloud Revenues up 59% in 4Q23; up 50% in Fiscal 2023; Q4 customers with ARR greater than $1 million reached 37 in 4Q23, up 95% y/y.
  • Pegasystems (PEGA) Q4 adj EPS $1.61 vs est. $1.00 on revs $474.233Mm vs est. $413.6Mm; sees FY revs $1.5B vs est. $1.487B and adj EPS $2.75 vs est. $2.43.
  • SoundHound AI (SOUN) shares surge pre-mkt after AI chipmaker Nvidia (NVDA) discloses stake in the company saying they took a stake worth around $3.7 mln in SoundHound.
  • Supermicro (SMCI) initiated with a Buy rating and $1,040 price target saying the provider of server and storage solutions will be a beneficiary of AI-driven demand growth and believes the market for AI servers is "much larger" than factored in Street models.
  • Twilio (TWLO) Q4 adj EPS $0.86 vs est. $0.58, adj op Inc $172.6Mm vs est. $126.26Mm on revs $1.08B vs est. $1.043B; guides Q1 revs $1.025-1.035B vs est. $1.049B, adj op Inc $120-130Mm vs est. $126.03Mm and adj EPS $0.56-0.60 vs est. $0.54.
  • Upwork (UPWK) Q4 revs $183.9Mm vs est. $178.16Mm, adj EBITDA $30.5Mm vs est. $27.41Mm; guides Q1 revs $183-188Mm vs est. $181.63Mm, adj EBITDA $28-32Mm vs est. $20.47Mm and adj EPS $0.17-0.19 vs est. $0.14; sees FY revs $760-780Mm vs est. $778.03Mm, adj EBITDA $125-135Mm vs est. $109.36Mm, adj EPS $0.77-0.81 vs est. $0.71.

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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.