Early Look

Tuesday, November 19, 2024

U.S. futures were higher overnight before geopolitical headlines, sending futures edge lower after Russian President Vladimir Putin signed a revised nuclear doctrine declaring that a conventional attack on Russia by any nation that is supported by a nuclear power will be considered a joint attack on his country. The move comes after the United States allowed Ukraine to fire American-made long-range missiles deep into Russia. Putin’s endorsement of the new nuclear deterrent policy comes on the 1,000th day after he sent troops into Ukraine on Feb. 24, 2022. Markets also pointed to a report from Ukrainian news agency RBC Ukraine citing a military official as saying Kyiv had carried out its first attack inside Russia with an ATACMS missile. In Asian markets, The Nikkei Index gained 193 points to 38,414, the Shanghai Index rose 22 points to 3,346, and the Hang Seng Index climbed 87 points to 19,663. In Europe, the German DAX is down -244 points to 18,944, while the FTSE 100 is down -35 points to 8,073. Earnings this morning from retailers Wal-Mart (WMT) little later while Lowe’s (LOW) already out with results (see below). Bitcoin prices up, the dollar is up, gold is higher, while oil prices slide as Europe’s largest oilfield gradually restarted following a power outage.

• The Dow Jones Industrial Average fell -55.39 points, or 0.13%, to 43,389.60.
• The Nasdaq Composite gained 111.69 points, or 0.60%, to 18,791.81.
• The Russell 2000 Index edged higher by 2.50 points, or 0.11% to 2,306.34.

• 8:30 AM ET                  Housing Starts M/M for October…est. 1.33M
• 8:30 AM ET                  Building Permits M/M for October…est. 1.43M
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: AZEK DLB GBDC KEYS LZB POWL SNEX VREX

• Deutsche Bank Business Services, Leisure, Transport & Retail Conference, 11/19, in London
• Jefferies Consumer Conference, 11/19-11/20, in Miami, FL
• Nareit Annual Conference: REITWorld 2024, 11/18-11/21, in Las Vegas, NV
• Needham Virtual tech Week, 11/19-11/21
• Needham 18th Annual Security, Networking & Communications Conference, 11/19
• RBC Capital Global Technology, Internet, Media and Telecommunications Conference, 11/19-11/20, in New York
• Roth MKM 13th Annual Technology Event, 11/19/11/20, in New York

• Russia says the use of US long-range missiles by Ukraine will lead to “an appropriate and tangible” response. Such an attack inside Russian territory “would represent the direct involvement of the United States and its satellites in hostilities against Russia”, a foreign ministry statement said.

• Archer Daniel Midland (ADM) reports significant drop in Q3 profit amid weak North American crush margins; in nutrition, sees Q4 operating profit will be higher than prior year period, but lower than Q3 of 2024
• Citi Trends (CTRN) announces CEO Appointment Ken Seipel and Q3 Comparable Store Sales Above Guidance; Q3 2024 Preliminary Total Sales of $179.1M, comparable store sales increase of 5.7%.
• Wendy’s Company (WEN) announced the appointment of Ken Cook as Chief Financial Officer, effective December 2, 2024. He will report to President and Chief Executive Officer Kirk Tanner and serve on the Wendy’s Senior Leadership Team.
• Xpeng (XPEV) Q3 revs were 10.10 billion yuan ($1.39 billion), beating estimates of 9.77 billion yuan; reported a loss of 1.90 yuan per ADR, while analysts were expecting a loss of 1.71 yuan per ADR; sees Q4 revs between 15.3 billion yuan and 16.2 billion yuan, compared with analysts’ average estimate of 14.77 billion yuan; unveiled its P7+ executive sedan earlier this month.

• Amcor (AMCR) has agreed to buy Berry Global Group (BERY) in a roughly $8.4 billion stock swap saying it will issue 7.25 shares, worth about $73.59 based on Monday’s closing price, for each share of Berry, a nearly 10% premium to Monday’s closing price of $67.05.
• AeroVironment (AVAV) to acquire BlueHalo in all-stock transaction with EV $4.1B.
• Oil retreated after its biggest gain in more than five weeks as Europe’s largest oilfield gradually restarted following a power outage. Equinor ASA (EQNR) restarted production at the Johan Sverdrup oil field in the North Sea after a power failure halted flows on Monday.
• Energy Recovery (ERII) share repurchase program to purchase up to $50M of company’s outstanding common stock over next 12 months, beginning in Nov 2024.
• Nippon Steel’s (NPSCY) top executives are meeting local officials and workers of U.S. Steel (X) in Pennsylvania as the company makes a post-election push to build support for a $15B takeover that faced bipartisan opposition in Washington, Financial Times reported.
• Sayona Mining (SYAXF) said it will buy U.S.-based Piedmont Lithium (PLL) in an all-stock deal that will consolidate its Canadian operations and strengthen its exposure to the North American electric vehicle sector. Following separate capital raisings by each company, the combined entity will have an estimated pro-forma market capitalization of $623 million, with shareholders of the two companies owning it approximately evenly.
• Symbotic Inc. (SYM) Q4 op Inc $23.091Mm vs est. ($3.21Mm), adj EBITDA $13Mm vs est. $31.05Mm on revs $576.768Mm vs est. $470.3Mm; guides Q1 revs $495-515Mm vs est. $495.73Mm and adj EBITDA $27-31Mm vs est. $42.55MM.
• U.S. defense stocks (GD, LMT, NOX, RTX, LHX) rise premarket after Russia’s nuclear policy update. Russian President Vladimir Putin issues warning to the United States, lowering threshold for nuclear strike. The warning issued days after Joe Biden administration reportedly allowed Ukraine to fire American missiles deep into Russia.

• Incyte (INCY) shares fell overnight after saying it will pause enrollment in ongoing phase 2 study of MRGPRX2 (incb000262) in chronic spontaneous urticaria; decision was made following the observation of certain in vivo preclinical toxicology findings.
• Medtronic (MDT) Q2 revs rose 5.2% y/y to $8.4B vs. est. $8.27B; Guides FY25 adj EPS $5.44 to $5.50, vs. prior view $5.42 to $5.50 (est. $5.45) and organic revenue +4.75% to +5%, vs. prior +4.5% to +5%.
• Omnicell (OMCL) announces $150M convertible senior notes offering.
• Spyre Therapeutics (SYRE) proposed offering of stock & warrants; announces a $200M common stock offering.

• Google-parent Alphabet (GOOGL) shares slip as the U.S. Department of Justice will ask a judge to force GOOGL to sell off its Chrome internet browser, Bloomberg News reported, citing people familiar with the plans. The company plans to appeal once U.S. District Judge Amit Mehta makes a final ruling, which he is likely to do by August 2025.
• Intel (INTC): U.S. officials are racing to deliver billions of dollars of promised manufacturing grants to Intel and others to complete a significant portion of a favored program of President Biden before he leaves office. The Commerce Department has provisionally awarded most of the $39 billion of grant money allocated under 2022’s Chips Act to re-energize U.S. chip production. But nearly $30 billion of that is tied up in complex government negotiations, leaving those deals in limbo as a new administration prepares to take over. – WSJ
• MicroStrategy (MSTR) announces proposed private offering of $1.75B of convertible senior notes.
• Microchip (MCHP) announced that Ganesh Moorthy is retiring as CEO, president and as a member of the board of directors in connection with his 65th birthday at the end of November. The board has appointed Steve Sanghi as interim CEO and president effective immediately.
• Super Micro Computer (SMCI) shares jumped after naming BDO USA as its auditor and said it has submitted a plan to Nasdaq, seeking additional time to regain compliance with the listing rules. SMCI said it will be able to complete annual report for the year ended June 30 and quarterly report for period ended Sept. 30.