Early Look

Thursday, November 2, 2023

Futures	Up/Down	%	Last
Dow	125.00	0.38%	33,477
S&P 500	21.25	0.50%	4,277
Nasdaq	112.00	0.76%	14,856

 

 

S&P futures are looking higher, building on the momentum from yesterday after the FOMC meeting and Fed Chairman Powell comments, looking to make it a 4^th straight day of gains as the index reclaims its 200-day moving average level (Spuz 200-day 4,266). Treasury yields extended yesterday’s losses after the 10-year yield fell to lows at 4.73% and on track for another decline at 4.71%. Wall Street’s major indexes closed higher on Wednesday with the Nasdaq’s 1.6% advance leading gains, after the U.S. Federal Reserve kept interest rates unchanged and Chairman Powell comments fueled investor optimism rate hikes were done even though the central bank left the door open for more. Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like. In Asian markets, The Nikkei Index jumped 348 points to 31,949, the Shanghai Index fell -13 points to 3,009, and the Hang Seng Index advanced 128 points to 17,230. In Europe, the German DAX surges 230 points to 15,155, while the FTSE 100 rises 90 points to 7,433. The earnings parade continues after one of the busiest nights of the quarter last night will be trumped by today’s volume, headlined with Apple Inc. (AAPL) earnings after the bell tonight (full run down of key earnings below). Also a very busy day of economic data including jobless claims, productivity, durable goods and factory orders ahead of tomorrow’s jobs report.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 44.06 points, or 1.05%, to 4,237.86.

·     The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58.

·     The Nasdaq Composite jumped 210.23 points, or 1.64%, to 13,061.47.

·     The Russell 2000 Index advanced 7.42 points, or 0.45% to 1,669.70.

 

Economic Calendar for Today

·     7:30 AM ET                  Challenger Layoffs for October

·     8:30 AM ET                  Weekly Jobless Claims…est. 210K

·     8:30 AM ET                  Continuing Claims…est.1.8M

·     8:30 AM ET                  Nonfarm Productivity for Q3…est. 4.1%

·     8:30 AM ET                  Unit Labor Costs for Q3…est. +0.7%

·     10:00 AM ET                Durable Goods Orders M/M for September

·     10:00 AM ET                Factory Orders M/M for September…est. 2.4%

·     10:30 AM ET                Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ACIW ADT AEP AGIO ALE ALNY AMR ARHS ARW ATI AVNT BALL BAX BCRX BR BSIG BWA CCLP CI CMI COP COR CROX CURO DINO DLX DNOW DT DUK ENTG ESMT ESNT FLWS FOXA FUN GCI GEL GOLF H HAE HEP HII HWM ICE IDCC IMGN IRM ITRI ITT KBR KTB LAMR LAUR LIND LLY LNG LNTH LYTS MAR MD MDU MRNA MUR NKLA NRG NS NTCT OMCL OWL PBF PBH PENN PGTI PH PLTR PNW PPL PTON PWR PZZA RCM REGN ROCK ROK SBUX SEE SGA SHAK SNDR SO SPGI STRA SWI TAP TFX TPX TRGP VIRT WCC WEN WLK WLKP WMS

·     Earnings After the Close: AAPL ACAD AEYE AIRC ALEX ALGT ALTR AMH APPN AXTI BAND BECN BFLY BILL BKNG BL BOOM BOOT CABO CDXS CHUY COHU COIN COLD CPS CRUS CSTL CUBE CVNA CYTK DBX DKNG DOCN EBS ED EGAN EGLE EVH EXPE FIGS FND FOXF FTNT GDDY GDEN HASI HURN ICFI III IRTC KN KWR LASR LNT LOCO LYV MC MCHP MCW MP MSI MTZ NET OEC OLED OPEN PARA PBYI PEN PLYA PODD QLYS RDFN REG RGA RMAX RPT RYAN SBAC SG SM SPT SPXC SQ SWKS SWN SYK TMST TPIC TRUP UPLD VIAV VIR VTR WW XRAY YELP ZEUS

 

 

Macro	Up/Down	Last
Nymex	1.02	81.46
Brent	0.97	85.60
Gold	8.80	1,996.30
EUR/USD	0.0059	1.0627
JPY/USD	-0.60	150.35
10-Year Note	-0.076	4.715%

 

 

World News

·     DoubleLine Capital CIO Jeff Gundlach, speaking Wednesday on CNBC late yesterday said the mounting federal deficit, which stood at $1.7 trillion, up $320 billion, or 23%, from a year ago as of Sept. 30, according to the Treasury Department, could eventually overwhelm the government’s ability to service its debts. That deficit marks the third highest on record, after fiscal years 2020 and 2021.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -26 vs -13.9 last week. Bulls fall to 24.3% from 29.3%, Neutrals fall to 25.4% from 27.5%, Bears rise to 50.3% from 43.2%.

·     Israel said its forces are pushing deeper into Gaza, including making advances into Gaza City in the north, amid heavy fighting against Hamas militant -Bloomberg.

 

Sector News Breakdown

Consumer

·     AirBnB (ABNB) Q3 revs rose 18% y/y to $3.40B vs. est. $3.37B; guides Q4 revs $2.13B-$2.17B vs. est. $2.18B; said Q3 said its average daily rate (ADR) rose 3% from a year earlier to $161 while ADR in North America fell for the second consecutive time by 1% in the same period.

·     Avis Budget (CAR) Q3 EPS $16.78 vs. est. $14.16; Q3 revs $3.56B vs. est. $3.59B; announces new CFO; Adjusted EBITDA in the Americas was $740M and in International was $196M.

·     Clorox (CLX) Q1 adj EPS $0.49 vs est. ($0.22) on net sales $1.4B vs est. $1.307B; guides FY net sales -mid to high single vs prior +0-2% and est. -3.44%; gr mgn about flat vs prior +150-175bps; adj EPS $4.30-4.80 vs prior $5.60-5.90 and est. $4.47.

·     DoorDash (DASH) Q3 EPS ($0.19) vs est. ($0.40), adj EBITDA $344Mm vs est. $255.14Mm on revs $2.16B vs est. $2.093B; sees Q4 marketplace GOV $17.0-17.4B and adj EBITDA $320-380Mm vs est. $253.34Mm.

·     Elf Beauty (ELF) Q2 EPS $0.82 vs. est. $0.52; Q2 revs $215.5M vs. est. $196.6M; boosts FY24 EPS view to $2.47-$2.50 from $2.19-$2.22 (est. $2.44) and boosts FY24 revenue view to $896M-$9.6M from $792M-$802M (est. $840.7M); CEO said to enter new countries in next quarter.

·     Etsy Inc. (ETSY) Q3 EPS $0.64 vs. est. $0.49; Q3 revs $636.3M vs. est. $629.75M; 3Q Marketplace GMS $2.7B, up 1%, Active Buyers rose 4%; said sees Q4 GMS down low-single digits and Q4 adjusted ebitda margin 26%-27%.

·     Mondelez (MDLZ) Q3 adj EPS $0.82 vs. est. $0.74; Q3 revs $9.03B vs. est. $8.34B; raising 2023 organic net revenue outlook to 14%-15% and adj EPS growth outlook to about 16% vs. prior outlook of +12%.

·     Six Flags Entertainment Corp., (SIX) agreed to merge with its competitor Cedar Fair Entertainment Co. (FUN) in an all-stock deal that will value the combined business at about $8 billion including debt. Investors will receive one share of the new company for each unit in Cedar Fair they hold and 0.58 shares for each Six Flags share. https://tinyurl.com/22c5pn56

·     Starbucks (SBUX) Q4 adj EPS $1.06 vs. est. $0.92; Q4 revs $9.4B vs. est. $8.76B; Q4 Comp Store Sales +8% globally vs. est. +6.5%, +8% in North America and +5% in International; China sales came in just 5% higher – much smaller than the 46% surge seen in the previous quarter.

·     Zillow Group (ZG) Q3 revenue rose 3% y/y to $496M vs. est. $484.44M; Residential revenue of $362 million outperformed both the industry total transaction dollar decline of 14% and the high end of the company’s expectations, decreasing 3% y/y.

 

Energy

·     American Water (AWK) Q3 EPS $1.66 vs est. $1.65 on revs $1.167B vs est. $1.137B; guides FY23 EPS $4.72-4.82 vs est. $4.80; sees FY24 EPS $5.10-5.20 vs est. $5.14; sees long-term EPS CAGR +7-9%, unchanged; sees long-term rate base growth 8-9%, unchanged; sees expectation of customer additions thru acquisitions at CAGR of 2%.

·     APA Group (APA) Q3 adj EPS $1.33 vs est. $1.09, adj EBITDAX $1.433B, FCF $307Mm; sees Q4 production down slightly from Q3, says upstream capital investment in Q4 about $500mm.

·     Edison International (EIX) Q3 adj EPS $1.38 vs est. $1.46; sees FY EPS $4.55-4.85 vs est. $4.71.

·     Marathon Oil (MRO) Q3 adj EPS $0.77 vs est. $0.71 on revs $1.813B vs es.t $1.746B; says originally provided 2023 production and CAPEX guidance ranges remain unchanged; for FY trending to high end of annual 2023 total oil-equivalent production guidance range.

·     SolarEdge (SEDG) Q3 adj EPS $0.55 vs. est. $1.12; Q3 revs $725.3M vs. est. $783.92; guides Q4 revenue $300M-$350M, below consensus $718.73M; said results for Q3 fell short of prior expectations, reflecting a slow market env’t, which has resulted in high inventory of products.

·     Sunrun (RUN) Q3 EPS loss (-$4.92) on revs $563.18M vs. est. $578.54M; storage capacity installed is expected to be in a range of 180 to 200 megawatt hours in Q4; solar energy capacity installed is expected to be in a range of 220 to 245 megawatts in Q4.

·     Williams Energy (WMB) Q3 adj EPS $0.45 vs est. $0.41, adj EBITDA $1.652B vs est. $1.615B; sees FY adj EBITDA $6.6-6.8B vs est. $6.709B.

 

Financials

·     Aflac (AFL) Q3 adj EPS $1.84 vs est. $1.48 on revs $4.95B vs est. $4.329B; Japan net premium income $2.0B, -9.1% y/y, and US net premium income $1.4B vs. $1.4B y/y.

·     AIG Inc. (AIG) Q3 adj EPS $1.61 vs. est. $1.50; Q3 General Insurance combined ratio was 90.5%, an improvement of 680 basis points y/y; General Insurance net premiums written increased 1% year-over-year, or 9% on a comparable basis.

·     AllState (ALL) Q3 adj EPS $0.81 vs est. $0.46, revs $14.5B vs est. $13.183B.

·     Lincoln Financial (LNC) Q3 adj EPS $0.23 vs. est. $1.76; Q3 revs $4.20B vs. est. $4.72B; said quarter did not meet expectations; said expenses increased year-over-year, pressuring earnings across all four business segments.

·     MetLife (MET) Q3 adj EPS $1.97 vs. est. $1.94; Q3 revenue $15.87B vs. est. $17.68B; Q3 premiums, fees, and other revenues of $13.2B down -32% y/y; Q3 net investment income was $4.8B, up 35% y/y.

·     Prudential (PRU) Q3 adj EPS $3.44 vs est. $3.13, BV/shr $70.82, AUM $1.361T.

·     PayPal (PYPL) Q3 adj EPS $1.30 vs. est. $1.22; Q3 revs rose 9% y/y to $7.4B vs. est. $7.39B; Q3 total payments volume increased 13% on FX-neutral basis to $387.7B vs. est. $378B; raised FY adj EPS view to about $4.98 from $4.95 (est. $4.92); cut its annual forecast of adjusted operating margin expansion to 75 basis points from 100 basis points.

 

Healthcare

·     BioMarin (BMRN) Q3 EPS $0.46 vs. est. $0.22; Q3 revs $581.3M vs. est. $608.33M; Alexander Hardy CEO, succeeding Jean-Jacques Bienaime as new CEO; narrows 2023 EPS $1.90-$2.05 from $1.85-$2.10 (est. $1.02) and narrows 2023 revenue $2.39B-$2.47B from $2.38B-$2.50B.

·     Cigna (CI) Q3 adj EPS $6.77 vs. est. $6.67; Q3 revs $49.05B vs. est. $48.2B; raises FY23 adjusted EPS view to $24.75 from $24.70 (est. $24.80) and boosts FY23 revenue view to $192B from $190B (est. $191.85B); Total customer relationships fell to 164M from 178M at the end of December.

·     Eli Lilly (LLY) Q3 EPS $0.10 vs. est. loss (-$0.15); Q3 revs $9.5B vs. est. $8.95B; cuts FY23 EPS view to $6.50-$6.70 from $9.70-$9.90 (est. $6.72) and reaffirms FY23 revenue view $33.4B-$33.9B (vs. est. $33.52B); sees FY23 gross margin percentage of revenue 80%; Q3 Mounjaro’s sales rose to $1.41 billion, beating analysts’ average estimates of $1.31 billion.

·     Exact Sciences (EXAS) Q3 EPS 0c vs/ est. loss (-$0.49); Q3 revs $628.3M vs. est. $614.57M; sees FY23 revenue $2.476B-$2.486B vs. est. $2.46B; said delivered more than 1 million test results, including a record for Cologuard(R) and Oncotype DX(R) tests.

·     McKesson (MCK) Q2 adj EPS $6.23 vs est. $6.15 on revs $77.215B vs est. $76.028B; sees FY adj EPS $26.80-27.40 vs est. $27.20.

·     Tandem Diabetes (TNDM) Q3 EPS loss (-$0.51) vs. est. loss (-$0.34); Q3 revs $193.9M vs. est. $192.7M; cuts FY23 revenue to at least $765M from at least $785M (est. $788.7M); said worldwide installed base increased 11% to approximately 444,000 in-warranty customers y/y; US insulin pump sales $66.4M, -18% y/y and Int’l insulin pump sales $21.7M, -21% y/y.

 

Industrials & Materials

·     Albemarle (ALB) Q3 adj EPS $2.74 vs est. $3.99 on net sales $2.31B vs est. $2.514B, adj EBITDA $453.3Mm vs est. $600.32Mm; guides FY net sales $9.5-9.8B vs prior $10.4-11.5B and est. $10.236B, adj EBITDA $3.2-3.4B vs prior $3.8-4.4B and est. $4.003B; adj EPS $21.50-23.50 vs prior $25.00-29.50 and est. $25.86.

·     CF Industries (CF) Q3 EPS $0.85 vs. est. $1.03; Q3 revs $1.27B vs. est. $1.30B; Q3 adj Ebitda $445M vs. est. $481M; believes that the North American inventory position at the end of the third quarter for all nitrogen products remained below average due to lower import levels and higher export volumes year-to-date.

·     CH Robinson (CHRW) Q3 adj EPS $0.84 vs. est. $0.82; Q3 revs dropped -27.8% y/y to $4.34B vs. est. $4.36B; Q3 operating expenses fell 13.1%, while average headcount declined 13.7%

·     Curtiss-Wright (CW) Q3 adj EPS $2.54 vs est. $2.38 on revs $724Mm vs est. $682.88Mm; sees FY adj sales $2.765-2.815B vs est. $2.773B, adj op mgn 17.4-17.6% and adj EPS $9.00-9.20 vs est. $9.10.

·     Ingersoll Rand (IR) Q3 adj EPS $0.77 vs est. $0.69 on revs $1.739B vs est. $1.687B; sees FY revs +14-16% vs prior +12-14% and est. +14.16%, adj EBITDA $1.73-1.77B vs est. $1.715B and adj EPS $2.81-2.89 vs est. $2.77.

·     Manitowoc (MTW) Q3 adj EPS $0.22 vs. est. $0.06; Q3 revs $520.9M vs. est. $477.18; sees FY net sales $2.175B-$2.225B vs. est. $2.18B; sees FY adj Ebitda $160M-$180M; Q3 Non-new machine sales of $154.7 million, up 21.2% y/y.

·     Werner Enterprises (WERN) Q3 adj EPS $0.42 vs. est. $0.49; Q3 revs $817.7M vs. est. $812.35M; Q3 adj operating margin 5.1%.

 

Technology, Media & Telecom

·     Qualcomm (QCOM) Q4 adj EPS $2.02 vs est. $1.91 on revs $8.67B vs est. $8.509B; sees Q1 revs $9.1-9.9B vs est. $9.2B and adj EPS $2.25-2.45 vs est. $2.25.

·     ANSYS (ANSS) Q3 adj EPS $1.41 vs est. $1.26, adj op mgn 34.1%, deferred revs and backlog $1.206B; reaffirms long-term outlook from 2022-2025 of 12% constant currency ACV growth including tuck-ins and $3B cumulative unlevered operating cash flow.

·     Avnet Inc. (AVT) Q1 EPS $1.61 vs. est. $1.51; Q1 revs -6.1% y/y to $6.34B vs. est. $6.33B; sees Q2 EPS $1.35-$1.45 above est. $1.37 and Q2 revenue $6.00B-$6.30B vs. est. $6.13B.

·     Cognizant Technology (CTSH) Q3 adj EPS $1.16 vs est. $1.09 on revs $4.9B vs est. $4.91B, adj op mgn 15.5%; guides Q4 revs $4.69-4.82B vs est. $4.859B; sees FY revs $19.3-19.4B vs est. $19.483B, adj op mgn approx 14.7% and adj EPS $4.39-4.42 vs est. $4.37.

·     Disney Company (DIS) announced that it will acquire the 33% stake in Hulu, LLC held by Comcast Corp.’s (CMCSA) NBC Universal for $8.61B.

·     DXC Technology (DXC) Q2 adj EPS $0.70 vs. est. $0.67; Q2 revs $3.44B (in-line with ests); sees Q3 adj EPS $0.75-$0.80 vs. est. $0.88 and revs $3.32B-$3.37B vs. est. $3.49B; sees FY24 revenue $13.58B-$13.73B vs. est. $13.89B.

·     EA Inc. (EA) Q2 EPS $1.47 vs est. $1.25 on revs $1.914B vs est. $1.775B; total net bookings $1.82B; sees Q3 net bookings $2.25-2.45B, revs $1.83-2.03B vs est. $2.348B, EPS $0.75-1.01; sees FY net bookings $7.3-7.7B, net revs $7.3-7.7B, EPS $4.10-4.66.

·     Formfactor (FORM) Q3 adj EPS $0.22 vs est. $0.17 on revs $171.6Mm vs est. $167Mm, adj gr mgn 41.8%; sees Q4 revs $160-170Mm vs est. $173.25Mm and adj EPS $0.16-0.24 vs est. $0.20.

·     MercadoLibre (MELI) Q3 revs rose 40% y/y to $3.76B vs. est. $3.56B; Gross margin 53.1% vs. 50.1% y/y; unique active users rose 36% y/y to 119.8M and said payment volume rose 47% y/y to $47.26B; Q3 Gross merchandise volume (GMV) rose 32% y/y to $11.36B.

·     MicroStrategy (MSTR) bought 6,067 bitcoins since the end of Q2 spending $167M and bringing the company’s total holdings to 158,400 bitcoins at the end of October; said Q3 revs rose 3.3% to $129.5M from the same period a year ago.

·     Qorvo (QRVO) Q2 adj EPS $2.39 vs est. $1.77 o revs $1.103B vs est. $1.003B; guides Q3 revs $975Mm – $1.025B vs est. $991.81Mm, adj gr mgn 43-44% and adj EPS $1.65 ad revs midpoint vs est. $1.62; says continue to expect y/y qtrly revs growth in FY24.

·     Roku Inc. (ROKU) Q3 EPS loss (-$2.33) vs. est. loss (-$2.08); Q3 revs rose 20% y/y to $912M vs. est. $855.2M; sees Q4 revenue about $955M vs. est. $956.8M.

·     Super Micro (SMCI) Q1 adj EPS $3.43 vs est. $3.20 on sales $2.12B vs est. $2.064B, adj gr mgn 17%; guides Q2 net sales $2.7-2.9B vs est. $2.435B and adj EPS $4.40-4.88 vs est. $4.06; sees FY sales $10-11B vs est. $10.161B.