Early Look

Tuesday, January 2, 2024

After near record closing highs for major averages last week to close out the year, some profit taking overnight is pushing U.S. futures lower to start 2024. U.S. futures closed out 2023 with big gains: 1) The Nasdaq Composite registered its biggest yearly % gain since 2020, rising 43.4% and posted its ninth straight week of gains last Friday, the longest streak of gains since 10-week run ended March 2019 (the Nasdaq 100 soars 54% in 2023 for best year since 1999). 2) The Dow Jones Industrials recorded its ninth straight weekly gain, longest streak since 9-week run ended February 2019 and ended 2023 +13.7%. 3) The S&P 500 Index recorded its ninth straight weekly gain, longest run since 9-week streak ended January 2004, posting its biggest quarterly % gain since Q4 2020 (+11.24%) and ended 2023 with a 24.23% gain. 4) The Russell 2000 climbed 12.1% for the month, biggest monthly % gain since November 2020, rises + 13.6% for the quarter, and now up seven straight weeks. The Bloomberg dollar index was down (-2.7%) in 2023, the worst year since 2020. Market optimism high heading into the New Year with expectations of roughly 146bps cuts priced into 2024 by the Fed! In Asian markets, The Nikkei Index was closed at 33,464, the Shanghai Index was down -12 points to 2,962, and the Hang Seng Index dropped -258 points to 16,788. In Europe, the German DAX is down -28 points to 16,713, while the FTSE 100 dips -28 points to 7,705. Treasury yields bouncing early up 8-bps to 3.88% for the 10-year along with a bounce in the dollar index (DXY) up +0.6% at 102. Story overnight the push higher for crypto currency as Bitcoin tops $45K.

• The Dow Jones Industrial Average fell -20.56 points, or 0.05%, to 37,689.54.
• The Nasdaq Composite slumped -83.78 points, or 0.56%, to 15,011.35.
• The Russell 2000 Index declined -31.26 points, or 1.52% to 2,027.00.

• 9:45 AM ET                  S&P Global Manufacturing PMI, Dec Final
• 10:00 AM ET                Construction Spending M/M for November

• China’s new home prices in December rose 0.1% after rising 0.05% in November making it the fourth straight monthly rise. The value of new home sales among the 100 biggest real estate companies fell 34.6% from a year earlier to 451.3 billion yuan ($64 billion), compared with a 29.6% decline in November.
• Iran sent a warship to the Red Sea after the US Navy destroyed three Houthi boats during an attack on a Danish-owned container ship, a move which could increase tensions – Bloomberg.
• The yen weakens against most of its major peers after a powerful 7.6-magnitude earthquake struck an area along the west coast of Japan.

• Li Auto (LI) delivered 50,353 vehicles in December 2023, up 137.1% y/y, and achieved its monthly delivery target of 50,000 vehicles.; Q4 deliveries up to 131,805, up 184.6% y/y and total deliveries in 2023 increased by 182.2% year over year to 376,030.
• NIO (NIO) delivered 18,012 vehicles in December 2023, increasing by 13.9% y/y, consisting of 12,048 premium smart electric SUVs, and 5,964 premium smart electric sedans. NIO delivered 50,045 vehicles in the fourth quarter of 2023, representing an increase of 25.0% y/y.
• Xpeng (XPEV) delivered 20,115 Smart EVs, a new record for monthly deliveries, representing a 78% increase y/y; Q4 total vehicle deliveries hit 60,158, exceeding 60,000 quarterly deliveries for the first time and marking 171% increase y/y. Total annual deliveries in 2023 reached 141,601 units, a 17% increase y/y.
• Wynn Resorts (WYNN), Melco (MLCO), Las Vegas Sands (LVS): The Macau gaming industry ended 2023 with recorded gross gaming revenue up 334% y/y to $183.1B patacas ($22.7B). The year ended strong with gross gaming revenue 433% higher in December to $18.57B patacas ($2.30B). The GGR mark was also 16% than the level seen in November, which is likely to alleviate concerns that a new virus in China would hold back traffic.
• Hasbro (HAS) downgraded to Neutral from Buy at DA Davidson and cut tgt to $53 from $60.

• MannKind (MNKD) has sold a 1% royalty interest in sales of the lung-disease treatment Tyvaso DPI to asset manager Sagard in a deal worth up to $200 million to the biopharmaceutical company.

• Apple (AAPL) downgraded to underweight from equal-weight at Barclay’s saying that channel checks show weakness in iPhone volumes, as well as a lack of bounce-back in Macs, iPads. and wearables.
• Nokia (NOK) said it expects to miss its 2023 financial outlook because license-renewal discussions may continue into 2024; said it expects not to achieve financial guidance for net sales, comparable operating margin, and free cash flow.
• Hollywood closed out an up and down 2023 with “Wonka” regaining No. 1 at the box office, strong sales for “The Color Purple” and an overall $9 billion in ticket sales that improved on 2022’s grosses but fell about $2 billion shy of pre-pandemic norms.
• Unity Software (U) downgraded to Underweight from Neutral at Piper.