Early Look

Thursday, November 17, 2022

Futures	Up/Down	%	Last
Dow	-218.00	0.65%	33,373
S&P 500	-27.25	0.70%	3,940
Nasdaq	-80.50	0.69%	11,659

 

 

U.S. futures currently just off morning lows, down -27 points or -0.69% at 3,941 (off highs 3,990.25), extending yesterday’s pullback while the dollar is rebounding. The S&P 500 fell on Wednesday as investors weighed a gloomy holiday quarter update from Target (TGT) that pressured retail stocks and another revenue waring in the chip sector sunk volatile semiconductor stocks. Last night Republicans were projected to win a majority in the U.S. House of Representatives on Wednesday, holding the majority with at least 218 seats, setting the stage for two years of divided government. In Asian markets, The Nikkei Index declined -97 points to 27,930, the Shanghai Index dipped -4 points to 3,115 and the Hang Seng Index fell -210 points to 18,045. In Europe, the German DAX slips -15 points to 14,218, while the FTSE 100 drops -43 points or -0.6% to 7,307. Looking ahead, highlights today include US Building Permits, US Philly Fed, Speeches from BoE’s Pill, Fed’s Bostic, Bullard, Bowman, Mester, Kashkari, Jefferson, Evans in another full slate of commentary. Treasury yields remain lower, oil prices under pressure and stocks starting the day in the red ahead of an onslaught of economic data.

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -32.94 points, or 0.83%, to 3,958.79

·     The Dow Jones Industrial Average slid -39.09 points, or 0.12%, to 33,553.83

·     The Nasdaq Composite dropped -174.75 points, or 1.54%, to 11,183.66

·     The Russell 2000 Index declined -36.04 points, or 1.91% to 1,853.17

 

Economic Calendar for Today

·     8:00 AM ET           Fed’s Bullard Discussed the Economy and Monetary Policy

·     8:30 AM ET           Weekly Jobless Claims…est. 225K

·     8:30 AM ET           Continuing Claims…est. 1.50M

·     8:30 AM ET           Housing Starts M/M for October…est. 1.41M

·     8:30 AM ET           Building Permits M/M for October…est. 1.512M

·     8:30 AM ET           Philly Fed Business Index for November…est. (-6.2)

·     9:40 AM ET           Fed’s Mester Speaks at Financial Stability Conference

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

·     10:40 AM ET         Fed’s Jefferson and Kashkari Take Part in Panel Discussion

·     11:00 AM ET         Kansas City Fed Manufacturing for Nov…prior (-22)

·     1:45 PM ET            Fed’s Kashkari Takes Part in Moderated Q&A

 

Earnings Calendar:

·     Earnings Before the Open: BJ BRC BV DXLG KSS M NJR

·     Earnings After the Close: AMAT AMSWA BRBR CLFD DLB ESE GEOS GPS HAYN HP KEYS MATW NGVC PANW POST ROST UGI WWD

 

Other Key Events:

·     Craig Hallum 13th Annual Alpha Select Conference, 11/17 in NY

·     Credit Suisse Equity Forum, 11/15-11/17, in Switzerland

·     Deutsche Bank Industrials Conference, 11/16-11/17, in NY

·     Deutsche Bank 2022 Gaming, Lodging, Leisure & Restaurants 1:1 Conference, 11/17-11/18

·     Jefferies Consumer Conference, 11/16-11/17, in Miami, FL

·     JMP Securities Financial Services Conference, one day in NY

·     Oppenheimer Virtual Internet Bus Tour, 11/17-11/18

·     REITWorld 2022 Annual Conference, 11/15-11/17, in San Francisco, CA

·     Wolfe Research Healthcare Conference, 11/16-11/18, in NY

 

 

Macro	Up/Down	Last
Nymex	-1.58	84.01
Brent	-1.36	91.50
Gold	-9.70	1,7661.0
EUR/USD	-0.0054	1.0338
JPY/USD	0.35	139.88
10-Year Note	+0.038	3.732%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -6.7 vs -21.9 last week. Bulls rise to 33.5% from 25.1%; Neutrals fall to 26.3% from 27.9%; Bears fall to 40.2% from 47%

·     UK Finance Minister Hunt starts autumn fiscal statement to Parliament; UK’s Hunt: our plan will tackle cost of living crisis, rebuild economy; we will take difficult decisions to tackle inflation; Bank of England has done an outstanding job, has my whole-hearted support; we will not change BOE remit; unfunded tax cuts are as risky as unfunded spending

·     Ukrainian Infrastructure Minister says the Black Sea grain initiative will be extended for 120-days, via Reuters; Russia will not cut off the Black Sea grain deal, via Tass citing the Deputy Foreign Minister.

·     North Korea fired an unspecified ballistic missile toward East Sea, according to the South Korean military cited by Yonhap.

 

Sector News Breakdown

Consumer

·     Ali Baba (BABA) raises share repurchase authorization by $15B; Q2 adj EPS $1.82 vs. est. $1.64; Q2 revenue rose 3% y/y to $29.12B vs. est. $29.45B; Q2 adj Ebitda $5.08B

·     Bath & Body Works (BBWI) 3Q adj EPS $0.40 vs est. $0.20 on sales $1.6B vs est. $1.56B; sees 4Q EPS $1.45-1.65 vs est. $1.55; raises FY22 EPS view to $3.00-$3.20 from $2.70-$3.00

·     Bowlero Corp. (BOWL) 1Q adj EBITDA $65.3Mm vs est. $64.5Mm on revs $230.3Mm vs est. $223.3Mm, comps +19.9%

·     Copart (CPRT) Q1 adj EPS $0.51 vs. est. $0.56; Q1 revs $893.4M vs. est. $898.8M

·     Copa Holdings (CPA) Q3 EPS $2.91 vs. est. $2.64; Q3 revs $809.4M vs. est. $799.8M; Passenger traffic, measured in terms of revenue passenger mile increased by 0.8% compared to 3Q19, while capacity decreased by 0.6%

·     Advance Auto Parts (AAP) downgraded to Neutral from Buy at Guggenheim

 

Energy, Industrials and Materials

·     SQM (SQM) posted Q3 net profit of $1.1B, driven by high prices of lithium used in electric vehicle (EV) batteries and revs surged more than four-fold to $2.95B (vs. est. $2.78B); says average lithium prices rose to record levels of over $56,000/tonne during the quarter; forecasts global lithium demand will grow by at least 40% this year on rising EV sales in China

·     Helmerich & Payne (HP) 4Q EPS $0.42 vs est. $0.45 on revs $631Mm vs est. $589Mm; sees FY gr CAPEX $425-475Mm, depreciation approx $400Mm, R&D exp about $28Mm, G&A exp about $195Mm, cash tax approx $190-240Mm

·     Arconic (ARNC) announces $200m share buyback

·     Diamondback Energy (FANG) entered into a definitive purchase agreement to acquire all leasehold interest and related assets of Lario Permian, a wholly owned subsidiary of Lario Oil & Gas Company, in exchange for 4.18M FANG shares and $850M of cash

·     Hillenbrand (HI) 4Q adj EPS $1.05 vs est. $1.01 on revs $750M vs est. $729M; sees 1Q adj EPS $0.85-0.93 vs est. $1.03; guides FY revs $3.28-3.41B vs est. $3.04B and adj EPS $4.10-4.50 vs est. $4.18

·     First Solar Inc. (FSLR) the biggest US panel manufacturer, plans to build a $1.1 billion factory in Alabama, a major domestic investment that follows passage of a landmark climate law. The plant in Lawrence County is expected to be operational by 2025

 

Financials

·     I3 Verticals (IIIV) Q4 EPS $0.39 vs. est. $0.36; Q4 revs $85.3M vs. est. $79.6M; sees FY23 EPS $1.50-$1.62 vs. est. $1.62 and revs $350M-$380M vs. est. $346M

·     Silvergate Capital (SI) said that CEO Alan Lane will provide a mid-quarter business update at Oppenheimer’s 5th Blockchain & Digital Assets Summit at 2:55 p.m. on Thursday, November 17

·     Robinhood (HOOD) said Oct net cumulative funded accounts at the end of October were 22.9M, up approximately 30,000 from September. Monthly active users at the end of October were 12.5M, up 0.3M from the end of September. Assets under custody at the end of October were $70.2B, up 9% from the end of September. Net deposits were $1.6B in October, translating to a 30% annualized growth rate relative to September AUC

 

Healthcare

·     Ardelyx, Inc. (ARDX) said an FDA advisory committee voted that the benefits of Xphozah outweighed the risks “for the control of serum phosphorus in adult patients with chronic kidney disease on dialysis.” The Committee voted 9-4 in favor of Xphozah, or tenapanor, as a monotherapy and voted 10-2 in favor of Xphozah in combination with phosphate binders

·     Immunic (IMUX) reports new data from Phase 2 EMPhASIS trial of Vidofludimus Calcium in relapsing-remitting multiple sclerosis supporting the drug’s neuroprotective potential. data show encouraging signals for Vidofludimus Calcium for preventing or delaying confirmed disability

·     Ormat Technologies Inc (ORA) 3.8M share secondary priced at $90.00 per share

·     Privia Health (PRVA) 5M share Secondary priced at $23.50

·     Tenaya Therapeutics (TNYA) 22.6M share Spot Secondary priced at $2.60

 

Technology, Media & Telecom

·     Nvidia Corp. (NVDA) Q3 adj EPS $0.58 vs. est. $0.70; Q3 overall revs -17% y/y to $5.93B vs. est. $5.79B; Q3 gaming revs down -51% y/y to $1.57B vs. est. $1.32B; guides Q4 revs $6.0B plus/minus 2% vs. est. $6.09B; Q4 Gaap and non-Gaap gross margins are expected to be 63.2% and 66.0%, respectively, plus or minus 50 basis points

·     Cisco Systems (CSCO) Q1 adj EPS $0.86 vs. est. $0.84; Q1 revs $13.63B vs. est. $13.31B; slightly raises sees FY revs view to +4.5%-6.5% from prior 4%-6% (est. +5.1%) and guides Q2 revs up 4.5%-6.5% vs. est. 4.2% and EPS $0.84-$0.86 vs. est. $0.85

·     NetEase Inc (NTES) shares fall -5% after Activision Blizzard’s (ATVI) game development and publishing unit says it would be suspending most Blizzard game services in mainland China, as its current licensing agreements with NTES ends in January. NTES says ending of the license agreements would have no “material impact” on its results

·     Global-E online (GLBE) Q3 EPS loss (-$0.41) vs. est. loss (-$0.30); Q3 revs $105.6M vs. est. $100.92M; sees FY revs $404.7M-$410.7M from prior $406M-$416M and Q4 revs $135.5M-$141.5M vs. est. $150M

·     Kulicke and Soffa (KLIC) 4Q adj EPS $1.19 vs est. $0.98 on revs $286.3Mm vs est. $277Mm, adj op margin 25.7%; sees 1Q net revs $155-195Mm vs est. $244Mm and adj EPS $0.18-0.22 vs est. $0.81; raises quarterly dividend to 19c from 17c per share

·     Sonos (SONO) 4Q adj EPS ($0.32) vs est. ($0.41) on revs $316.3Mm vs est. $291.5Mm; sees FY23 revs $1.7-1.8B vs est. $1.72B, gross margin 45.0-46.0%, adj EBITDA $145-180Mm vs est. $181.3Mm, adj EBITDA margin $8.5-10%; authorized repurchase program of up to $100 million