Early Look

Friday, March 8, 2024

Futures	Up/Down	%	Last
Dow	-66.00	0.17%	38,760
S&P 500	-0.25	0.01%	5,161
Nasdaq	-25.50	0.14%	18,290

 

 

Thursday was another day, another record for the S&P 500 index while the Nasdaq neared its all-time best as the party continues for Wall Street, extending the near 5-month straight rally on Fed rate cut hopes, AI optimism, Bitcoin euphoria, obesity drug strength (NVO, LLY) and no signs of fear (to this point) anywhere. This week alone saw the S&P hit a new record high, gold prices hit new highs, Bitcoin top all-time bests above $69K (has since pulled back a bit) and new record highs for sectors including Industrials (XLI) and of course the poster child sector for “AI” growth Semiconductors (SOX). Investors continue to chase stocks higher. Market sentiment remains overly Bullish as the bull-bear spread in the American Association of Individual Investors (AAII) weekly survey reported yesterday was 29.9 vs 25.2 last week as Bulls rise to 51.7% from 46.5%, Neutrals fall to 26.5% from 32.2% and Bears rise to 21.8% from 21.3%. Also, the Crypto Fear and greed Index 82/100 = Extreme Greed and overall markets Fear and Greed Index: 75/100 = Extreme Greed. No fear at all as the CBOE Volatility index (VIX) remains depressed for months. Some wild times indeed.

 

The highlight today: at 8:30 AM, Nonfarm Payrolls for February data expected with est. at +200K (prior month was +353K), Private Payrolls est. 160K (prior +317K) and manufacturing Payrolls est. +10K. The unemployment rate expected to hold steady at 3.7% and averages wages M/M to rise +0.3% (vs. last month +0.6%). There were a few earnings results overnight in semiconductors which disappointed as Broadcom (AVGO), one of the names in the “AI” space reported better quarterly results, but only reaffirmed its outlook for the year, while MRVL Q1 guidance fell short of consensus sending shares lower overnight. Still the Philly-semi-index (SOX) posted a new record high on Thursday, up 4.8% on the week, 9.3% on the month and nearly 24% for the year with NVDA coming into Friday with a 6-day win streak and up 87% YTD.

 

In Asian markets, The Nikkei Index gained 90 points to 39,688, the Shanghai Index rose 18 points to 3,046, and the Hang Seng Index jumped 123 points to 16,353. In Europe, the German DAX is down 3 points to 17,939, while the FTSE 100 is down =18 points to 7,673. Treasury 10-year yield steady just below 4.08%, on track for weekly decline. That puts the yield on pace to end below its 50-day moving average (DMA), which now resides around 4.11%. The US dollar slid to 2-month lows vs counterparts. The S&P 500 and Nasdaq Comp are looking to make it 17 of the last 19 weeks finishing higher if they can hold this week’s gains in a truly historic run.

 

• The Dow Jones Industrial Average rose 130.30 points, or 0.34%, to 38,791.35.
• The Nasdaq Composite gained 241.83 points, or 1.51%, to 16,273.38.
• The Russell 2000 Index advanced 16.65 points, or 0.81% to 2,084.74.

• 8:30 AM ET                  Nonfarm Payrolls for February…est. 200K
• 8:30 AM ET                  Private Payrolls for February…est. 160K
• 8:30 AM ET                  Manufacturing Payrolls for February…est. 10K
• 8:30 AM ET                  Unemployment Rate for February…est. 3.7%
• 8:30 AM ET                  Average Hourly Earnings for February…est. +0.3%
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• DA Davidson Best-of-Breed Bison Conference 3/8 (virtual)
• China PPI Y/Y, CPI Y/Y and CPI M/M for February

 

 

Macro	Up/Down	Last
Nymex	-0.44	78.49
Brent	-0.32	82.64
Gold	8.80	2,174.00
EUR/USD	-0.0015	1.0931
JPY/USD	-0.96	147.08
10-Year Note	-0.017	4.075%

 

• The Fed’s Mester yesterday said she sees rate cuts this year if inflation keeps cooling: “I will gain confidence when I see inflation continuing to move down,” Mester said. “The FOMC will then be able to start reducing the level of restrictiveness by moving the fed funds rate down. If the economy performs as anticipated, I expect we will find ourselves in that position sometime later this year.”

• Gap Stores (GPS) Q4 EPS $0.49 vs. est. $0.22; Q4 revs rose 1.3% y/y to $4.3B vs. est. $4.22B; Q4 comparable sales at the Gap brand rose 4% and Old Navy saw a 2% increase, while Athleta and Banana Republic sales slumped 10% and 4%, respectively; expects FY24 net sales to be flat compared with $14.89B in 2023 vs. est. +0.48% rise.
• Duckhorn Portfolio (NAPA) Q2 EPS $0.14 vs est. $0.18, adj EBITDA $42.7Mm vs est. $39.76Mm on revs $103Mm vs est. $105.4Mm; sees FY sales $395-411Mm vs est. $420.65Mm, adj EBITDA $145-150Mm vs est. $152.73Mm and adj EPS $0.63-0.65 vs est. $0.67.
• Funko (FNKO) Q4 adj EPS $0.01 vs est. ($0.04), adj EBITDA $23.5Mm vs est. $20.07Mm on revs $291.236Mm vs est. $281.96Mm; sees Q1 net sales $214-227Mm vs est. $239.75Mm and adj EPS ($0.32)-($0.24) vs est. ($0.23.
• Limoneira (LMNR) Q1 EPS ($0.21) vs est. ($0.27) on revs $39.371Mm vs est. $40.58Mm; says continues to explore strategic alternatives to maximize shareholder value.
• Potbelly Corp. (PBPB) Q4 adj EPS $0.02 vs. est. $0.03; Q4 revs $125.75M vs. est. $125.16M; Q4 comp store sales growth 6.3% and sees Q1 comp store sales down -0.25% to +0.5%; sees Q1 adjusted EBITDA $4.4M-$5.2M.
• American Outdoors (AOUT) Q3 EPS $0.08 and revs $53.4M vs.$50.9M last year; 3Q traditional channel sales $28.5M, up 8.1%, Q3 e-commerce channel sales $24.9M, up 1.6% and said continue to believe net sales for fiscal 2024 could exceed fiscal 2023 net sales by as much as 3.5%.
• Traeger Inc. (COOK) Q4 adj EBITDA $13Mm vs est. $10.65Mm on revs $163.749Mm vs est. $153.89Mm; sees FY revs $580-605Mm vs est. $608.33Mm and adj EBITDA $62-71Mm vs est. $69.97Mm.

• Concrete Pumping Holding (BBCP) Q1 adj EBITDA $19.3M vs est. $25.91M on revs $97.711Mm vs est. $98.08M, gr mgn 34.1%; sees FY revs $460-480M vs est. $470.97M and adj EBITDA $122-130M vs est. $131.32M.
• Leidos (LDOS) awarded $158M U.S. Air Force command and control emergency management contract.
• QUANEX (NX) Q1 adj EPS $0.18 vs. est. $0.11; Q1 adj Ebitda $19.3M, and gross margin 21.5% and Q1 sales down -8.7% y/y to $239.2M vs. est. $231.5M; says cautiously optimistic on 2H24; positive long-term view on residential housing market remains intact and sees FY24 sales $1.1B.
• Snap One Holdings (SNPO) Q4 adj EBITDA $29.8Mm on revs $264.388Mm vs est. $266.1Mm; sees FY sales $1.06-1.13B vs est. $1.123B.

• Arcturus Therapeutics (ARCT) Q4 op Inc ($15.139)Mm vs est. ($22.5)Mm on revs $33.989Mm vs est. $37.86Mm, says cash runway extended to Q1 2027.
• MacroGenics (MGNX) announces initiation of phase 1 study of mgc026, MacroGenics’ first topoisomerase I inhibitor-based ADC; said cash, cash equivalents and marketable securities balance of $229.8M end of Dec; sees cash, cash equivalents and marketable securities balance should extend its cash runway into 2026.

• DocuSign (DOCU) Q4 non-GAAP EPS $0.76 vs. est. $0.64; Q4 revs rose 8% y/y to $712.4M vs. est. $699.18M; sees FY25 revenue $2.92B-$2.93B vs. est. $2.9B, FY25 non-GAAP gross margin 81.0%-82.0% and non-GAAP operating margin 26.5%-28.0%; Q4 Billings were $833.1 million, an increase of 13% y/y.
• Domo Inc. (DOMO) Q4 EPS ($0.51) vs est. ($0.05) on revs $80.184Mm vs est. $79.54Mm; guides Q1revs $79-80Mm vs est. $79.46Mm and adj EPS ($0.25) – ($0.21) vs est. ($0.04); sees FY revs $315-323Mm vs est. $323.78Mm and adj EPS ($0.46) – ($0.36) vs est. ($0.06).
• Guidewire Software (GWRE) Q2 adj EPS $0.46 vs est. $0.23 on revs $240.9Mm vs est. $240.9Mm; sees Q3 ARR $815-820Mm, revs $228-234Mm vs est. $235Mm, adj op Inc $4-10Mm vs est. $9.3Mm; sees FY ARR $852-862Mm, revs $957-967Mm vs est. $982.65Mm and adj op Inc $82-92Mm vs est. $89.56Mm.
• Marvell Technology (MRVL) announces $3B addition to stock repurchase plan; Q4 adj EPS $0.46 vs est. $0.46 on revs $1.427B vs est. $1.42B; guides Q1 revs $1.15B +/- 5% vs est. $1.37B, adj gr mgn 62-63%, adj EPS $0.18-0.28 vs est. $0.40.
• MongoDB (MDB) Q4 adj EPS $0.86 vs. est. $0.46; Q4 revs rose 27% y/y to $458.0M vs. est. $435.1M; guides Q1 revs $436M-$440M and EPS $0.34-$0.39 vs. below ests. $447.4M and $0.62 respectively
• Samsara (IOT) Q4 adj EPS $0.04 vs. est. $0.03; Q4 revs $276.3M vs. est. $258.31M; said ended FY24 with $1.1 billion of ARR, growing 39% y/y; sees FY25 adj EPS $0.1-$0.13 on revs $1.186B-$1.196B vs. est. $0.08/$1.18B.
• BigBear.ai Holdings (BBAI) Q4 EPS ($0.14) vs est. ($0.05), adj EBITDA $3.667Mm vs est. $0.4893Mm on revs $40.563Mm vs est. $42.75Mm.

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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.