Early Look

Thursday, November 9, 2023

Futures	Up/Down	%	Last
Dow	43.00	0.12%	34,214
S&P 500	2.25	0.07%	4,402
Nasdaq	-17.50	0.11%	15,369

 

 

U.S. stocks are looking at a modest bounce, continuing the upward momentum as investors await more Fed speakers today, the last of three bond auctions at 1:00 PM (30-yr) and weekly jobless claims. Mega tech has helped this latest rally that has seen the Nasdaq Composite rise 9-straight days and the S&P 500 rally 8-straight trading sessions, helped by likes of Microsoft (MSFT) which has moved back near all-time highs with its 9-day win streak. Bitcoin prices rise +3.25% to $36,750, moving to 18-month highs – moves comes on growing optimism that the launch of an ETF tracking the Cryptocurrency is imminent. In Asian markets, The Nikkei Index jumped 489 points to 32,646, the Shanghai Index was little changed at 3,053, and the Hang Seng Index slipped -57 points to 17,511. In Europe, the German DAX is up 60 points to 15,289, while the FTSE 100 rises 25 points to 7,428. China inflation data overnight came in better than expected, while Dow component Disney (DIS) shares rise following better earnings results and reports that the Hollywood strike has reached a tentative agreement.

 

Market Closing Prices Yesterday

·     The S&P 500 Index edged higher 4.43 points, or 0.10%, to 4,382.81.

·     The Dow Jones Industrial Average fell -39.80 points, or 0.12%, to 34,112.80.

·     The Nasdaq Composite gained 10.56 points, or 0.08%, to 13,650.41.

·     The Russell 2000 Index declined -19.08 points, or 1.10% to 1,714.07.

 

Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 218K

·     8:30 AM ET                  Continuing Claims…est. 1.82M

·     9:30 AM ET                  Fed’s Bostic and Barkin Speak on Survey Data

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

·     2:00 PM ET                   Fed’s Powell Speaks on Panel at IMF Conference

 

Earnings Calendar:

·     Earnings Before the Open: AGRX APRN BDX CCOI DGII DNUT EPC EYE GDRX GOCO HBI HE IHRT IRWD KELYA MTSI NTLA OPTN RBC RDNT SCSC SN SOHO SPH STXS TAST TDG TPR TUSK UP USFD UTZ VERX VRCA VVV WD WRK WWW YETI

·     Earnings After the Close: AAOI ACHR ACHV AIRG AKLI ALRM ARLO ASH AXDX BLNK BRCC BW CANO CLNE CLPT DOCS DV ETON EVBG EVLV FARM FLO GDOT GRPN HOLX HYFM ILMN JYNT KRT LAW LGF/A MODN MTD NGL NWSA ORGO OUST PAR PHUN PLBY PLUG POWW PRPL PX RPAY SENS SMLR SOUN SYNA TCON TELA TMCI TTD TWOU U VZIO WRAP

 

Other Key Events:

·     Baird Global Industrials Conference 2023, 11/7-11/9, in Chicago, IL

·     Bank America West Coast Payments Tour, 11/8-11/9, in San Francisco, CA

·     Deutsche Bank Access AutoTech Conference 11/9 (virtual)

·     Truist Securities BioPharma Symposium, 11/8-11/9, in New York

·     China CPI, PPI data for October

 

 

Macro	Up/Down	Last
Nymex	0.43	75.76
Brent	0.46	80.00
Gold	-5.10	1,952.70
EUR/USD	-0.0024	1.0684
JPY/USD	0.20	151.16
10-Year Note	+0.029	4.537%

 

 

World News

·     China Oct CPI falls (-0.1%) m/m vs flat consensus; falls (-0.2%) y/y vs (-0.1%) consensus; and China Oct PPI falls (-2.6%) y/y vs (-2.7%) consensus.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 15.4 vs -26 last week. Bulls rise to 42.6% from 24.3%, Neutrals rise to 30.2% from 25.4%, Bears fall to 27.2% from 50.3%.

·     Federal Reserve Bank of Chicago President Austan Goolsbee said the U.S. central bank will need to pay close attention to the effects of higher longer-term bond yields to make sure they don’t slow the economy more than expected over the coming year, the Wall Street Journal reported.

·     Fed’s Harker: Repeats preference to hold rates steady; rates should remain high as the inflation battle goes on; does not see near-term rate cuts; time to take stock of past rate hikes and their impact; next Fed meeting could go either way; Fed remains data dependent; labor market is seeing better balance; not forecasting a recession though growth is likely to cool.

 

Sector News Breakdown

Consumer

·     Instacart (CART) Q3 EPS loss (-$20.86) vs. est. loss (-$12.97); Q3 revs $764M vs. est. $736.88M; said Q3 GTV grew to $7,494M, up 6% y/y and orders to 66.2M, up 4% y/y representing continued improvement compared to year-over-year growth in Q2 and Q1; sees Q4 adj Ebitda $165M-$175M vs. est. $155.6M; Ad and other revs rose 19%, while transaction revenues were up 12%.

·     Lyft Inc. (LYFT) Q3 EPS $0.24 vs est. $0.13, adj EBITDA $92Mm vs est. $82.61Mm on revs rose 10% y/y to $1.16B vs est. $1.142B; sees Q4 EBITDA $50-60Mm vs est. $48.75Mm; Lower prices helped Lyft serve 22.4 million active riders, which jumped 10% compared with a year earlier.

·     MGM Resorts (MGM) Q3 adj EPS $0.64 vs. est. $0.59; Q3 revs $4B vs. est. $3.87B; announces new $2B share repurchase program; Q3 operating income was $370M compared to operating loss of $1.0B the prior year; Q3 Las Vegas Net revenues of $2.1B down from $2.3B prior year qtr; MGM China net revenues $813M vs. $87M y/y.

·     Topgolf Callaway (MODG) Q3 EPS $0.20 vs. est. $0.12; Q3 revs $1.04B v. est. $1.06B; guides Q4 revs below consensus and lowers FY23 EPS view to $0.39-$0.43 from prior $0.63-$0.69 and cuts FY23 revenue view to $4.24B-$4.26B from $4.42B-$4.47B (est. $4.42B).

·     Utz Brands (UTZ) Q3 adj EPS $0.17 on revs $371.9M vs. est. $370.46M; cuts FY23 revenue growth view to 2%-3% from 3%-5%, and organic net sales growth of 3% to 4% (previously 4% to 6%).

·     Beyond Meat (BYND) Q3 EPS loss (-$1.09) vs. est. loss (-$0.89); Q3 revs declined -9% y/y to $75.31M vs. est. $86.5M; backs FY23 revenue view $330M-$340M (vs. est. $361.5M) and sees FY23 capex $10M-$15M.

 

Energy

·     Atmos Energy (ATO) Q4 EPS $0.80 vs est. $0.72, CAPEX $2.8B for FY; sees FY24 EPS $6.45-6.65 and CAPEX approx $2.9B.

·     Bloom Energy (BE) Q3 adj EPS $0.15 vs est. ($0.04) on revs $400.268Mm vs est. $369.2Mm; says well-positioned to meet FY23 goals.

·     Helmerich & Payne (HP) Q4 EPS $0.77 vs. est. $0.75; Q4 revs $659.61M vs. est. $664.85M; expects capital expenditures for fiscal year 2024 to range between $450 and $500M.

·      

 

Financials

·     Affirm Holdings (AFRM) Q1 adj op Inc $60Mm on revs $497Mm vs est. $444.44Mm; sees Q2 GMV $6.7-6.9B, revs $495-520Mm vs est. $501.97Mm; sees FY GMV more than $24.25B and revs as % of GMV like FY23.

·     Cohen & Steers, Inc. (CNS) preliminary assets under management of $72.2 billion as of October 31, 2023, a decrease of $3.0 billion from assets under management at September 30, 2023.

·     Envestnet (ENV) Q3 adj EPS $0.56 vs est. $0.54, adj EBITDA $67.2Mm vs est. $65.12Mm on revs $316.8Mm vs est. $317.66Mm; cuts FY23 adj EPS view to $1.98-$2.01 from $2.09-$2.15 and lowers FY23 revenue view to $1.237B-$1.242B from $1.252B-$1.259B.

·     Fair Isaac (FICO) Q4 adj EPS $5.01 vs. est. $5.21; Q4 revs $390M vs. est. $389.42M; sees FY24 adj EPS $22.45 vs. est. $23.58 and sees FY24 revenue $1.675B, in-line with ests.

·     Fleetcor Technologies (FLT) Q3 adj EPS $4.49 vs. est. $4.51; Q3 revs $970.9M vs. est. $979.15M; guides mid-point of Q4 below consensus and sees 2023 adj EPS $16.82-$17.12 vs. est. $17.02; sees revenue $3.774B-$3.804B vs. est. $3.81B.

 

Healthcare

·     Jazz Pharmaceuticals (JAZZ) Q3 adj EPS $4.84 vs. est. $4.90; Q3 revs $972M vs. est. $966.26M; backs FY23 adj EPS view $18.15-$19.00 (est. $18.66) and narrows FY23 revenue view to $3.75B-$3.875B from $3.725B-$3.875B (est. $3.83B).

·     Natera Inc. (NTRA) operating income -$111Mm vs est. -108.5Mm on revs $268.3Mm on est. $259.25Mm; sees revs $1.035-1.05B vs est. $1.033B, sees FY 43-44%.

·     Verastem Inc. (VSTM) Q3 EPS ($0.75) vs est. ($0.84).

 

Industrials & Materials

·     Corteva (CTVA) Q3 adj EPS loss (-$0.23) vs. est. loss (-$0.25); Q3 sales down -7% to $2.59B vs. est. $2.67B; and adj Ebitda $18M; expects to record total pre-tax restructuring and asset related charges of $410M-$460M thru 2024; ceasing operations in select manufacturing lines at other locations; says FY outlook for Brazil ops revised due to lower-than-expected corn planted area.

·     Genpact (G) Q3 adj EPS $0.76 vs est. $0.73 on revs $1.14B vs est. $1.169B; sees FY adj EPS $2.89 vs est. $2.92 and revs $4.45B vs est. $4.595.

·     Spirit AeroSystems (SPR) prices 9.09M share secondary offering at $22.00; separately, was upgraded to OP from Peer Perform.

·     TransDigm Group Inc. (TDG) said it agreed to buy the Electron Device Business from TJC L.P.’s Communications & Power Industries for $1.39 billion in cash. The EDC makes components and subsystems for the aerospace and defense markets.

·     Virgin Galactic (SPCE) Q3 net loss ($104.6M) vs. est. loss (-$137.3M) and Q3 revs $1.73M, vs. est. $1.14M; guides Q4 revs about $3M above prior view $1M and est. $2.7M; said its cash position “remains strong,” with cash and equivalents of $1.1 billion as of Sept. 30.

 

Technology, Media & Telecom

·     Disney (DIS) Q4 adj EPS $0.82 vs. est. $0.69; Q4 revs rose 5.4% y/y to $21.24B vs. est. $21.4B; Q4 Disney+ subscribers 150.2M, vs. est. 147.07M; continue to aggressively manage cost base, increased annualized efficiency target to $7.5B vs. $5.5B prior; said expect to grow FCF in FY24 significantly vs FY23, approaching levels last seen pre-pandemic; continue to expect that combined streaming businesses will reach profitability in Q4’24.

·     Media/Streaming sector (PARA, DIS, CMCSA) rise on better DIS results as well on reports Hollywood’s actors’ union reached a tentative deal with studios to end its strike, as the Associated Press reported.

·     AppLovin (APP) Q3 EPS $0.30 vs est. $0.27, adj EBITDA $419.3Mm vs est. $355.93Mm on revs $864Mm vs est. $797.64Mm; announces transition of President and CFO.

·     Arm Holdings (ARM) Q2 EPS $0.36 vs est. $0.26; Q2 revs $806M vs est. $746.9M; sees FY2023 EPS $1.00-$1.10 vs est. $1.04 and sees FY23 revenue $2.96-3.08B vs est. $2.96B; says semiconductor industry remains vulnerable to changes in external macroeconomic context.

·     Duolingo (DUOL) Q3 EPS $0.06 vs. est. loss (-$0.10); Q3 revs $137.62M vs. est. $131.5M; Q3 total bookings rose 49% y/y to $153.6M, and paid subs rose 60% y/y to 5.8M; monthly active users, MAUs, were 83.1M, an increase of 47% y/y and DAUs rose 63% y/y to 24.2M; guides Q4 revenue $145M-$148M above consensus $140.87M.

·     HubSpot (HUBS) Q3 adj EBIT $90.2Mm vs est. $88.77Mm on revs $557.577Mm vs est. $534.1Mm; Q3 adj EPS $1.59 vs. est. $1.23.

·     IonQ (IONQ) Q3 EPS ($0.22) vs est. ($0.18) on revs $6.136Mm vs est. $4.998Mm; sees FY revs $21.2-22Mm vs est. $19.14Mm.

·     Liveramp Holdings (RAMP) Q2 adj EPS $0.43 vs est. $0.24 on revs $160Mm vs est. $152.36Mm, adj gr mgn 75%; sees Q3 revs $165Mm vs est. $163.11Mm; sees FY revs $632-637Mm vs est. $625.06Mm.

·     Take-Two interactive (TTWO) Q2 EPS ($3.20) on revs $1.3B vs est. $1.433B; guides Q3 net revs $1.29-1.34B vs est. $1.439B; sees FY net revs $5.37-5.47B vs est. $5.521B and net bookings $5.45-5.55B.

·     Twilio (TWLO) Q3 adj EPS $0.58 vs est. $0.35 on revs $1.03B vs est. $989.28Mm; sees Q4 revs $1.03-1.04B vs est. $1.024B, adj op Inc $115-125Mm and adj EPS $0.53-0.57 vs est. $0.36.

·     Snap (SNAP) has laid off nearly 20 product managers, the latest shakeup at the photo-sharing app after several top departures over the last three months, the Information reported.

·     The European Court of Justice ruled in favor of Google LLC, Meta Platforms, and TikTok on Thursday, which faced stricter rules by the Austrian regulators seeking to impose stringent regulations targeting “illegal content” on their digital platforms.