Morning Preview: November 05, 2024

Early Look

Tuesday, November 5, 2024

Futures

Up/Down

%

Last

Dow

62.00

0.15%

42,018

S&P 500

14.25

0.26%

5,758

Nasdaq

83.50

0.41%

20,169

 

 

U.S. futures are edging higher after finishing mostly lower on Monday as election day is finally here! Participation in early voting was impressive with over 78Mm votes cast (as of data yesterday) though the Presidential election will likely come down to 7 key swing states with MI, PA, WI, NV, AZ, NC, and GA in focus. Key Senate and House elections are also quite important so get out and vote! In stock news overnight, Dow component Boeing (BA) said U.S. West Coast factory workers accepted a new contract offer on Monday, ending a bitter seven-week strike that halted most jet production. Meanwhile, robust China services PMI lifted the mood in Asia, as October Caixin Services PMI: 52 vs 50.3 previous. The data gives an early bounce to commodity prices, industrials and materials. In Asian markets, The Nikkei Index reopened from holiday rising 421 points to 38,474, the Shanghai Index gained 76 points to 3m386, and the Hang Seng Index jumped 439 points to 21,006. In Europe, the German DAX is up 33 points to 19,180, while the FTSE 100 is up about 17 points to 8,201. A busy morning of economic data with S&P Global PMI data and ISM Services PMI along with a $39B 10-year Treasury auction. Weakness in semiconductors overnight as CRUS, LSCC, NXPI, SLAB all declines on results/guidance. Recap of full summary of top earnings and guidance overnight/this morning below.

 

Market Closing Prices Yesterday

  • The S&P 500 Index dipped -16.11 points, or 0.28%, to 5,712.69.
  • The Dow Jones Industrial Average fell -257.59 points, or 0.61%, to 41,794.60.
  • The Nasdaq Composite dropped -59.93 points, or 0.33%, to 18,179.98.
  • The Russell 2000 Index advanced 8.90 points, or 0.40% to 2,219.03.

Economic Calendar for Today

  • 7:45 AM ET ICSC Weekly Retail Sales
  • 8:30 AM ET                  International Trade for September…est. (-$84.1B)
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 9:45 AM ET S&P Global Composite Final, Oct…prior 54.3
  • 9:45 AM ET S&P Global Services PMI, Oct-F…prior 55.3
  • 10:00 AM ET ISM Non-Manufacturing PMI for October…est. 53.8
  • 1:00 PM ET US Treasury to sell $39B in 10-year notes
  • 4:30 PM ET API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: ACDC ADM AGCO APLS APO ARCH BEAM BLD BLDR BR BRKR BVS CEIX CMI CNSL DD DEA EMR EXPD GFS GLDD GOGO HLMN HSIC INGR IT LGIH LIND LPX MPC MPLN MPLX NEO NRP OGE PAYO PINC PMTS PTLO SHC TKR TRGP ULS USAC WLK WLKP XMTR YUM
  • Earnings After the Close: AFG AHT AIZ BBAI BGS CPNG CRC CRCT DVN EXAS FORR GMED GO GPOR IFF IOSP IRBT JKHY KTCC LMB LUMN MASI MCHP MGNX MRC MRCY NCMI NE NHI NOG OUT PAYS QLYS RVLV RYAM SMCI SNDX SWIM TMCI TSLX USPH VSEC WTTR

Other Key Events:

  • Presidential Election voting
  • Obesity Week 11/3-11/6
  • China Imports/Exports for October

 

 

Macro

Up/Down

Last

Nymex

0.25

71.72

Brent

0.33

75.41

Gold

4.70

2,750.90

EUR/USD

0.0023

1.090

JPY/USD

0.05

152.18

10-Year Note

+0.004

4.313%

 

World News

  • The RBA kept rates on hold as expected, in the Statement on Monetary Policy CPI forecasts were trimmed slightly, while the labor market is seen strong. RBA Governor Bullock reiterated that policy would need to remain restrictive for some time, and the bank would not rule anything in or out with upside inflation risks still lingering.

Sector News Breakdown

Consumer

  • Dollar Tree (DLTR) is searching for a new chief executive after Rick Dreiling stepped down from the company’s top role, citing health challenges. “With my health presenting some new challenges over the past two months, the time is right for me to step away and focus on myself and my family,” he said Monday.
  • Goodyear tire (GT) Q3 adj EPS $0.37 vs est. $0.21 on sales $4.8B vs est. $4.943B; now sees $1.5B gross run-rate gains from Goodyear Forward by end 2025.
  • Restaurant Brands (QSR) Q3 adjusted EPS $0.93 vs. est. $1.32; Q3 revs $2.29B below consensus $3.27B; consolidated comparable sales were 0.3% and net restaurants grew 3.8% versus the prior year.
  • Wynn Resorts (WYNN) Q3 adj EPS $0.90 vs est. $1.01, adj EBITDA $527.7Mm vs est. $523.4MM on revs $1.69B vs est. $1.733B; authorized repurchase total up to $1B.

Energy

  • Diamondback Energy (FANG) missed estimates for Q3 profit as the oil and gas firm was hurt by lower prices; reported Q3 adj EPS $3.38 vs. est. $3.98; said macro environment for oil prices, near-term global oil supply & demand dynamics remains volatile at best & tenuous at worst; guides FY capex $2.875B-$3B.
  • Eversource (ES) Q3 EPS $1.13 vs. est. $1.08; Q3 revs $3.06B, in-line with consensus; updating its 2024 non-GAAP recurring earnings projection to a range of $4.52 per share and $4.60 per share from the initial projection of $4.50 per share and $4.67 per share which reflects the impact of higher than anticipated interest expense.  
  •  

Financials

  • AIG Inc. (AIG) Q3 adj EPS $1.23 vs. est. $1.10; Net income per share fell to $0.71, compared with $2.81 last year. AIG said the decrease was due mostly to the deconsolidation of its Corebridge Financial life insurance unit; posted $417 million catastrophe charge for the quarter compared with $462 million a year earlier.
  • AvalonBay (AVB) Q3 core FFO $2.74 vs. consensus $2.71; sees 2025 core FFO $10.99-$11.09 vs. est. $11.02; Same Store Residential revenue increased $20,205,000, or 3.1%, to $671,508,000. Same Store Residential operating expenses increased $11,035,000, or 5.4%, to $214,844,000.
  • MarketAxess (MKTX) announces October volume statistics with a record total average daily volume of $46.2B increased 40% compared to the prior year and increased 2% compared to September 2024.
  • Marqueta Inc. (MQ) Q3 EPS ($0.06) vs est. ($0.05), adj EBITDA $9Mm vs est. $6.34MM on sales $127.97Mm vs est. $128.08Mm; guides Q4 revs +10-12% vs est. +17.4% and adj EBITDA mgn 5-7%.
  • Voya Inc. (VOYA) Q3 adj EPS $1.90 vs. consensus $2.04; Q3 revenue $1.96B vs. est. $1.86B; Total client assets as of Sept. 30, 2024, were $608 billion, up 19% compared with Sept. 30, 2023, primarily due to higher equity market levels; adjusted operating margin for the TTM was 37.9% compared with 33.8% in the prior-year TTM period.

Healthcare

  • CareDX, Inc. (CDNA) Q3 EPS $0.14 vs. est. $0.01; Q3 revs $82.9M vs. est. $80.53; raises FY24 revenue view $327M-$331M from $320M-$328M (est. $325.97M); raises full year 2024 non-GAAP gross margin to be approximately 69%, compared to the prior range of 67% to 68%.
  • Glaukos Corp. (GKOS) Q3 adj EPS ($0.28) vs est. ($0.48) on sales $96.7Mm vs est. $91.49Mm; guides FY revs $377-379Mm vs est. $373.76Mm.
  • Hims & Hers (HIMS) Q3 adj EBITDA $51.1Mm vs est. $38.6Mm on revs $401.6Mm vs est. $382.2Mm; subscriber growth +44%; guides Q4 revs $465-470Mm vs est. $421.12Mm and adj EBITDA $50-55Mm vs est. $40.04Mm.
  • Hologic (HOLX) Q4 adj EPS $1.01 vs est. $1.01 on revs $987.9Mm vs est. $976.69Mm, gr mgn 56.6%, adj op mgn 30%; guides Q1 revs $1.025-1.035B vs est. $1.041B and adj EPS $1.00-1.03 vs est. $1.03; sees FY revs $4.15-4.2B vs est. $4.209B and adj EPS $4.25-4.35 vs es.t $4.32.
  • Illumina (ILMN) Q3 core adj EPS $1.14 vs est. $0.88; Q3 revs $1.1B vs. est. $1.08B; Q3 adj gross margin 68.6%; guides core FY revs to decline -5% y/y.
  • Inspire Medical (INSP) Q3 EPS $0.60 on revs $203.19M above consensus $197.6M; raising full year revenue guidance to $793M-$798M from prior $788M-$798M view and boosted full year earnings per share guidance to $1.20-$1.40, from $0.60-$0.80 previously.
  • Vertex Pharma (VRTX) Q3 adj EPS $4.38 vs est. $4.14 on revs $2.772B vs est. $2.724B; sees FY revs $10.8-10.9B vs prior $10.65-10.85B and est. $10.749B.

Industrials and Materials

  • Archer Aviation (ACHR) entered memorandum of understanding with new Stellantis (STLA) unit to commit up to about $400 mln to scale making of co’s midnight aircraft up to 650 aircraft annually by 2030
  • Boeing (BA) factory workers voted to accept a contract offer and end their strike after more than seven weeks, clearing the way for the aerospace giant to resume production of its bestselling airliner and generate much-needed cash.
  • BWX Technologies (BWXT) and L3Harris (LHX) announced the signing of a purchase agreement for BWXT to acquire L3Harris’ Aerojet Ordnance Tennessee, Inc. business for approximately $100 million; Q3 adj EPS $0.83 vs est. $0.78, adj EBITDA $127Mm vs est. $123.9Mm on revs $672Mm vs est. $658.5Mm; guides FY revs $2.7B vs est. $2.647B, adj EPS $3.20 vs est. $3.19 and FCF $225-250Mm.
  • Celanese (CE) Q3 adjusted EPS $2.44 vs. consensus $2.93; Q3 revs $2.6B vs. consensus $2.7B; implementing additional cost reduction programs expected to realize incremental savings greater than $75 mln by end of 2025; said expects to draw on term loan in Q1’25 for use towards $1.3B maturing debt; intends to reduce dividend by 95% in Q1.
  • Chevron (CVX) expands its exploration acreage in African oil producers including Nigeria and Angola, where it sees the potential for a production revival despite years of decline
  • Cleveland Cliffs (CLF) Q3 EPS adj loss (-$0.33) vs. est. loss (-$0.27); Q3 revs $4.6B vs. est. $4.77B; lowered its full-year 2024 expected capital expenditures range by $50M to $600-$650M, from its previous range of $650M-$700M.
  • DuPont (DD) Q3 adj EPS $1.18 vs. est. $1.03; Q3 revs $3.19B vs. consensus $3.2B; raises FY24 adjusted EPS view to $3.90 from $3.70-$3.80 (est. $3.77); raises FY24 operating EBITDA view to $3.13B from $3.06B-$3.11B but lowers FY24 revenue view to $12.37B from $12.4B-$12.5B (est. $12.44B).
  • Forward Air (FWRD) Q3 revs $655.93M vs. est. $655.8M; Q3 operating margin 3.5%; ended the third quarter in a stronger liquidity position as cash increased $33 million from the previous quarter and liquidity increased $15 million to $460 million; says difficult to forecast the next freight cycle.
  • GXO Logistics (GXO) Q3 adj EPS $0.79 vs est. $0.75, adj EBITDA $223Mm vs est. $221.4MM on revs $3.2B vs est. $3.006B; guides FY organic revs +2-5%, adj EBITDA $805-835Mm vs est. $816.66Mm and adj EPS $2.73-2.93 vs est. $2.77.
  • Huntsman (HUN) Q3 adjusted EPS $0.10 vs est. $0.09; Q3 revs $1.54B vs. est. $1.55B; Q3 adjusted EBITDA of $131M compared to $136M in the prior year period; total volumes for the Company did improve 5% in the quarter versus the prior year with stable margins sequentially.
  • Primoris Service (PRIM) Q3 adj EPS $1.22 vs est. $1.02 on revs $1.649B vs est. $1.583B; guides FY adj EBITDA $405-420Mm vs est. $401.78Mmadj EPS $3.40-3.55 vs est. $3.34.
  • Regal Rexnord (RRX) Q3 adj EPS $2.49 vs est. $2.48, adj EBITDA $337Mm vs est. $351.78Mm on sales $1.477B vs est. $1.521B; guides FY adj EPS $9.15-9.45 vs prior $9.40-9.80 and est. $9.45.

Technology, Media & Telecom

  • Astera Labs (ALAB) Q3 EPS $0.23 vs. et. $0.17; Q3 revs $113.1M vs. est. $97.4M; sees Q4 EPS $0.25-$0.26 vs. est. $0.18 and revs $126M-$130M vs. est. $108.4M.
  • Aspen Technology (AZPN) Q1 adj EPS $0.85 vs est. $1.57 on revs $215.9Mm vs est. $267.63Mm; guides FY bookings $1.17B, revs $1.19B vs est. $1.192B, adj op Inc $514Mm vs est. $516.7Mm and adj EPS $7.52 vs est. $7.47. Separately, Emerson (EMR) said it proposes to acquire remaining outstanding shares of Aspen (AZPN) for $240 per share.
  • Cirrus Logic (CRUS) Q2 adj EPS $2.25 vs est. $2.02 on sales $541.9Mm vs est. $520.48Mm; guides Q3 revs $480-540Mm vs est. $589.79Mm, gr mgn 51-53% and adj op exp $124-130Mm.
  • Fabrinet (FN) Q1 adj EPS $2.39 vs est. $2.38 on revs $804Mm vs est. $770.37Mm; guides Q2 revs $800-820Mm vs est. $793.5Mm and adj EPS $2.44-2.52 vs est. $2.44.
  • Intapp Inc. (INTA) Q1 adj EPS $0.21 vs est. $0.13 on sales $118.81Mm vs est. $117.82Mm; guides Q2 revs $120.5-121.5Mm vs est. $120.75Mm and adj EPS $0.15-0.17 vs est. $0.14; sees FY revs $495.5-499.5Mm vs est. $495.59Mm and adj EPS $0.73-0.77 vs est. $0.62.
  • Lattice Semiconductor (LSCC) Q3 adj EPS $0.24 vs est. $0.24 on revs $127.091Mm vs est. $127.09Mm; sees Q4 revs $112-122Mm vs est. $132.03Mm and adj EPS $0.15-0.23 vs est. $0.26.
  • Nintendo (NTDOY) cut its operating profit forecast for the year to March 2025 by 10% to 360 billion yen ($2.36 billion) below forecast for 391.4B yen; Nintendo sold 4.7 million Switch consoles in the first half of the financial year, down from 6.8 million units in the same period a year earlier; the co lowered its full-year sales forecast for the console, which is in its eighth year on the market, by 7% to 12.5 million units. That would be down 20% from actual Switch sales of 15.7 million units a year earlier.
  • NXP Semiconductors (NXPI) Q3 adj EPS $3.45 vs est. $3.43 on revs $3.25B vs est. $3.252B, adj op mgn 35.5%; sees Q4 revs $3.0-3.2B vs est. $3.355B, adj gr mgn 57-58%, adj op Inc $994Mm-1.12B vs est. $1.182B and adj EPS $2.93-3.33 vs est. $3.64.
  • Palantir (PLTR) Q3 adj EPS $0.10 vs est. $0.09 on revs $725.5Mm vs est. $701.13Mm; guides Q4 revs $767-771Mm vs est. $741.44Mm and adj op Inc $298-302Mm vs est. $254.7Mm; sees FY revs $2.805-2.809B vs est. $2.759B and adj op Inc $1.054-1.058B vs est. $971.04Mm.
  • Sensata (ST) Q3 adj EPS $0.86 vs est. $0.85, adj op Inc $188.4Mm vs est. $182.9Mm on revs $982.8Mm vs est. $983.9Mm; guides Q4 revs $870-900Mm vs est. $957.26Mm, adj op Inc $167.2-175.2Mm vs est. $181.9Mm and adj EPS $0.71-0.76 vs est. $0.85.
  • Silicon Labs (SLAB) Q3 adj EPS loss (-$0.13) vs. est. loss (-$0.21); Q3 revs $166M vs. est. $165.21; sees Q4 adjusted EPS loss (21c)-(1c) vs. consensus 9c and guides Q4 revs $161M-$171M below consensus $186.9M; said progress on inventory destocking and demand recovery remains uneven across our end markets.
  • Teradata (TDC) Q3 EPS $0.69 vs. est. $0.56; Q3 revs $440M vs. est. $416.97M; guides Q4 EPS $0.40-$0.44 vs. est. $0.48 and guides FY24 EPS $2.30-$2.34, consensus $2.25; updates public cloud ARR growth of 18% to 22% year-over-year, in constant currency; said on track to reduce operating expenses by $75M-$80M on annual run rate.

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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.