Early Look

Monday, January 13, 2025

U.S. futures are looking sharply lower, building on Friday and last week’s losses as the US dollar and Treasury yields extend gains. Stocks got hammered and bond yields climbed alongside the dollar late last week, with traders slashing their bets for Federal Reserve rate cuts this year after a blowout December jobs report. The Dow Jones Industrial Average fell almost 700 points Friday, ending the week lower by -1.9% while the S&P 500 dropped -1.9% on the week and the Nasdaq shed -2.3% as tech stocks were hit hard. All three indexes ended Friday with back-to-back weekly declines. In the bond market, Treasury yields rose Friday after a stronger-than-expected employment report as the 10-year climbed over 8bps to 4.772%, the highest level since Nov. 1, 2023. @jasongoepfert noted “The S&P 500 just suffered its fourth loss greater than -1% in the past ten days. All within 30 days of sitting at a record high. Severe selling clusters tend to make investors nervous. But only 3 of 21 previous signals preceded a loss > -10% a year later.” There are also several companies issuing guidance ahead of the JPMorgan Healthcare Conference and the ICR Exchange retail conference this week.

In Asian markets, The Nikkei Index declined -414 points or 1% to 39,190, the Shanghai Index fell -7 points to 3,160, and the Hang Seng Index fell -190 points to 18,674. In Europe, the German DAX is down -134 points to 20,080, while the FTSE 100 is down -30 points to 8,215. Bitcoin prices -3.65% below $92,000 as risk assets decline amid a rising US dollar and Treasury yields. February gold prices -0.45% at $2,710 an ounce as the dollar index (DXY) tops 110 for the first time since November 2022. Crude oil surges about 2% above $78 per barrel on US-Russia oil sanctions, with some choppiness surrounding Gaza ceasefire talks.

• The Dow Jones Industrial Average fell -696.75 points, or 1.63%, to 41,938.45.
• The Nasdaq Composite tumbled -317.25 points, or 1.63%, to 19,161.63.
• The Russell 2000 Index declined -49.73 points, or 2.22% to 2,189.23.

• 2:00 PM ET                   Federal Budget for December

• Earnings After the Close: AEHR KBH TTAN

• ICR Conference 2025, 1/13-1/15, in Orlando, FL
• JP Morgan 43rd Annual Healthcare Conference, 1/12-1/16, in San Francisco, CA

• Barnes & Noble Education Inc (BNED) files for mixed shelf of up to $100M.
• BMW (BMWYY) car sales slipped last year as a costly recall compounded a slump in demand in China
• Boot Barn (BOOT) reports preliminary Q3 EPS $2.43 vs. consensus $2.05; sees preliminary Q3 revenue $608.2M vs. consensus $593.45M and guides preliminary Q3 same store sales growth of approximately 8.6%.
• Hershey Company (HSY) announced that Michele Buck, Chairman of the Board of Directors, President and Chief Executive Officer, has informed the Board of her intention to retire from the Company effective June 30, 2026. Ms. Buck intends to serve in her existing roles until her successor is appointed.
• Kohls (KSS) said it will close its San Bernardino EFC when lease on that facility expires in May 2025, as well as 27 underperforming stores by April 2025; reaffirms its full year 2024 financial and capital allocation outlook; estimates $60M-$80M pre-tax charges from rationalization.
• Lululemon (LULU) raises Q4 EPS view to $5.81-$5.85 from $5.56-$5.64 (vs. est. $5.66) and raises Q4 revenue view to $3.56B-$3.58B from $3.475B-$3.51B, and now expects gross margin to increase approximately 30 basis points relative to the fourth quarter of fiscal 2023.
• Nordstrom (JWN) reports holiday sales, updates outlook saying it expects 2.5%-3.5% comparable sales growth for fiscal 2024; says net sales increase of 4.9% and a comparable sales increase of 5.8% for nine-week holiday period ended January 4; expects revenue growth of 1.5 to 2.5% in FY24 vs 53-week fiscal 2023

• The Biden administration delayed until June an order for Nippon Steel (NPSCY) to abandon its $14.9 billion bid for U.S. Steel (X), the companies said on Saturday, giving them some time to revive the deal. President Joe Biden blocked the acquisition on national security grounds on Jan. 3^rd.

• LegalZoom (LZ) upgraded to Overweight from Underweight at JPMorgan and raised tgt to $9 from $8.

• Sage Therapeutics, Inc. (SAGE) confirmed that Biogen Inc. (BIIB) has submitted to the Company an unsolicited, nonbinding proposal to acquire all the outstanding shares of Sage Therapeutics not already owned by Biogen for $7.22 per share.
• Exact Sciences (EXAS) guides prelim Q4 revenue $713M vs. est. $694.76M; reports prelim FY24 revenue $2.76B vs. est. $2.74B; plans to launch three new cancer tests in 2025, namely Cologuard Plus, next-generation colorectal cancer screening test, Oncodetect, molecular residual disease test, and Cancerguard, multi-cancer screening test.
• Hologic (HOLX) guides preliminary Q1 revenue $1.022B vs. est. $1.024B; our fiscal Q1 revenue finished in line with our guidance on a constant currency basis, as the strengthening of the U.S. dollar reduced revenue by approximately $9 million compared to when we provided guidance in early November.
• Johnson & Johnson (JNJ) entered into a definitive agreement to acquire all outstanding shares of Intra-Cellular Therapies (ITCI) for $132.00 per share in cash for a total equity value of approximately $14.6 billion.
• Natera (NTRA) reports preliminary Q4 revenue $472M vs. consensus $409.91M; guides preliminary FY24 revenue $1.7B vs. consensus $1.63B.
• RxSight (RXST) sees FY25 revenue $185M-$197M vs. consensus $187.35M; sees FY25 gross profit margin in the 71%-73% range. In addition, the company expects FY25 operating expenses in the range of $165M-$170M, including non-cash stock-based compensation expense guidance in the range of $22M-$25M.

• Shares of chip companies Nvidia (NVDA), Advanced Micro Devices (AMD), and others decline after the U.S. government says it would issue a new regulation designed to control access to U.S.-designed artificial intelligence chips and technology by other countries – curbs will take effect 120 days from publication.