Early Look

Tuesday, March 28, 2023

Futures	Up/Down	%	Last
Dow	-27.00	0.08%	32,604
S&P 500	-6.25	0.17%	4,000
Nasdaq	-30.50	0.24%	12,758

 

 

U.S. futures are down slightly, at the lows of the overnight session around 4,000 (off overnight high 4,023.75), but still above the prior day low of 3,997.50 as the S&P remains in a tradable range. S&P futures continue to hold between its 50-day moving average (4,026 for Spuz) and above its 200-day moving average (3,940) for roughly a week, looking to make a decisive move in one direction soon. The Dow and S&P 500 ended higher on Monday as a deal for Silicon Valley Bank’s assets helped investor confidence in banks, while a decline in technology shares weighed on the Nasdaq. On the flip side, tech-related growth shares were lower, weighing on the Nasdaq, though remain the biggest S&P winners of 2023. Crypto shares fell Monday after the Commodity Futures Trading Commission said crypto exchange Binance and its CEO and founder Changpeng Zhao have been sued by the CFTC for operating an “illegal” exchange and a “sham” compliance program. Treasury yields rose after three losing sessions as the global banking fears wane. The 10-year yield rose about 15-bps to 3.527% and the two-year yield jumped nearly 23-bps to 4.006%. Investors remain uncertain about the next Fed decision in May, with the CME’s FedWatch tool pricing 55% odds of a pause on rate increases and 45% odds of a 25-basis point hike. The big question remains, can the Fed have its cake and eat it too as they try and fight inflation by raising rates but appear to threaten financial stability in the process. A very tough situation for the Fed that at this point, though stock markets are not expressing much concern, with the S&P 500 trading at higher levels prior the SVB Bank collapse a few weeks ago. In Asian markets, The Nikkei Index gained 41 points to 27,518, the Shanghai Index dipped -6 points to 3,245, and the Hang Seng Index advanced 216 points to 19,784. In Europe, the German DAX is up 23 points to 15,150, while the FTSE 100 rises 15 points to 7,487. Today in D.C, FDIC Chairman Martin Gruenberg and Fed’s Vice Chairman for Supervision Michael Barr will be speaking before a Senate committee on the recent bank failures.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 6.54 points, or 0.16%, to 3,977.53.

·     The Dow Jones Industrial Average rose 194.55 points, or 0.60%, to 32,432.08.

·     The Nasdaq Composite slipped -55.12 points, or 0.47%, to 11,768.84.

·     The Russell 2000 Index advanced 18.75 points, or 1.08% to 1,753.67.

 

Economic Calendar for Today

·     7:45 AM ET             ICSC Weekly Retail Sales

·     8:30 AM ET             Advance Goods Trade Balance for February…est. (-$91.0b)

·     8:55 AM ET             Johnson/Redbook Weekly Sales

·     9:00 AM ET             CaseShiller 20-city Index M/M for January…est. (-0.5%)

·     9:00 AM ET             Monthly Home Price M/M for January

·     10:00 AM ET          Fed’s Barr Appears Before Senate Banking Panel      

·     10:00 AM ET           Richmond Fed Manufacturing for March…prior (-16)

·     10:00 AM ET           Consumer Confidence for March…est. 101.0

·     10:30 AM ET           Dallas Fed Manufacturing for March

·     1:00 PM ET              U.S. Treasury to sell $43B in 5-year notes.

·     4:30 PM ET              API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BTTR CNM IMBI LOVE MKC SNX TSHA WBA

·     Earnings After the Close: ARCT BIOL CALM DNMR EKSO ICAD JEF MU NCNO PLAY PRGS SFT SOL SSKN

 

Other Key Events:

·     Senate Banking to hold March 28^th hearing on SVB collapse.

·     Enterprise Connect Conference & Expo, 3/27-3/30, in Orlando, FL

·     Shop Talk Conference, 3/26-3/30, in Las Vegas

 

 

Macro	Up/Down	Last
Nymex	0.33	73.14
Brent	0.48	78.60
Gold	4.40	1,958.20
EUR/USD	0.0029	1.0825
JPY/USD	-0.63	130.94
10-Year Note	+0.023	3.551%

 

 

Sector News Breakdown

Consumer

·     PVH Corp. (PVH) 4Q adj EPS $2.38 vs est. $1.67 on revs $2.49B vs est. $2.37B; guides FY revs +3-4% (+2-3% constant currency) vs est. +3%, op mgn approx 10% and EPS approx $10.00 vs est. $8.92.

·     Lyft’s (LYFT) two co-founders will step down from managing the company. David Risher, a board member since 2021, will be its new CEO – WSJ.

·     McCormick (MKC) Q1 adj EPS $0.59 vs. est. $0.51; Q1 revs rose 3% y/y to $1.57B vs. est. $1.54B; still sees 2023 adjusted EPS $2.56-$2.61 vs. consensus $2.57.

·     Nikola (NKLA) CFO Kim J. Brady to Retire; Anastasiya Pasterick to succeed as new CFO.

·     Carnival (CCL) upgraded to Equal Weight from Underweight at Wells Fargo.

 

Energy, Industrials and Materials

·     Berkshire Hathaway (BRKA) bought more stock in Occidental Petroleum (OXY) in recent days (3/23-3/27), purchasing 3.66 million shares of the energy company and bringing its ownership to 211.7 million shares, a 23.5% stake, according to a filing late Monday.

·     Albemarle Corp (ALB) shares slip after Liontown Resources snubbed a bid from the co that valued the Australian lithium developer at $3.7B.

·     BP Plc (BP) and Abu Dhabi National Oil Co. will form a natural gas joint venture and have made an offer to take Israel’s NewMed Energy private in a deal worth around $2 billion – Bloomberg.

·     FREYR Battery (FREY) a developer of clean, next-generation battery cell production capacity, has announced that the Company has entered discussions on a potential strategic coalition with Glencore Plc (GLNCY), Caterpillar Inc. (CAT), Siemens AG, and Nidec Corp. to pursue the scale up of sustainable battery solutions across Europe, North America, and beyond.

·     FreightCar America (RAIL) 4Q adj EPS ($0.31) vs est. ($0.12) on revs $129Mm vs est. $118.6Mm, adj EBITDA $1.2Mm vs est. $5.6Mm; guides FY revs $400-430Mm vs est. $501.6Mm, adj EBITDA $15-20Mm vs est. $34.15Mm, railcar deliveries 3,400-3,700.

·     Virgin Orbit (VORB) is extending an unpaid furlough for most of its employees as talks seeking new funding continue, CEO Dan Hart said in an email to employees on Monday.

 

Healthcare

·     Allarity Therapeutics Inc (ALLR) said interim data readouts from ongoing mid-stage studies of its breast cancer drug and ovarian cancer drug is expected to occur at end of 2023.

·     Elevance Health (ELV) upgraded to Outperform from Sector Perform at RBC Capital and raised the price tgt to $572 from $523.

·     Viking Therapeutics (VKTX) announces results from phase 1 clinical trial of dual glp-1/GIP receptor agonist VK2735; phase 2 trial in obesity planned for mid-2023; said VK2735 shown to be safe and well-tolerated in 28-day study.

 

Technology, Media & Telecom

·     Alibaba Group Holding Ltd. (BABA) plans to split its $220 billion business into six main units encompassing e-commerce, media, and the cloud, each of which will explore fundraising or initial public offerings when the time is right.

·     Pinterest, Inc. (PINS) approved a restructuring plan intended to support the Company’s corporate strategy, improve efficiency, and position the business considering the ongoing macroeconomic environment; sees charges $100M-$125M.

·     Paramount (PARA) upgraded to Buy from Neutral at Bank America and raised its tgt to $32 from $24.

·     PagSeguro Digital (PAGS) upgraded to buy from neutral at Citigroup.