Early Look

Wednesday, November 30, 2022

Futures	Up/Down	%	Last
Dow	21.00	0.06%	33,878
S&P 500	7.25	0.20%	3,969
Nasdaq	41.50	0.36%	11,566

 

 

U.S. stocks trading up slightly ahead after finishing lower on Tuesday ahead of an upcoming speech by U.S. Federal Reserve Chair Jerome Powell later today (1:30 PM). Powell is scheduled to speak on the economic outlook, inflation, and the labor market before a Brookings Institution event. According to Fed futures, there is now about a 70% chance of a 50-bps hike at the Dec. 13-14 FOMC meeting and a 30% chance of a 75-bps hike. In addition to Powell, a busy day of data with ADP Private Payrolls at 8:15 AM, Q3 GDP, inflation, and spending data at 8:30 AM and manufacturing, JOLTs, and Housing data at 10:00 AM. Also lots of interest today at the NY Times Dealbook Summit today in NY between 8:00 AM-6:00 PM – with several high profile speakers set to speak (Fink, Chew, Hastings, Jassy, Zuckerberg) – but one of close attention is FTX founder and former CEO Sam Bankman-Fried, who is still scheduled to speak. The U.S. dollar eased from a one-week high on Wednesday ahead of a speech by Federal Reserve Chair Jerome Powell, on course for its biggest monthly loss since late 2010, falling 4.3% thus far in November. Cryptocurrency- exposed stocks climb as Bitcoin rose to a two-week high near $17,000, the speech by Fed Chair Jerome Powell. In Asian markets, The Nikkei Index slipped -58 points to 27,968, the Shanghai Index edged higher 1 point to 3,151, and the Hang Seng Index advanced 392 points to 18,597. In Europe, the German DAX is up 46 points to 14,401, while the FTSE 100 rises 40 points to 7,553.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -6.31 points, or 0.16%, to 3,957.63

·     The Dow Jones Industrial Average rose 3.07 points, or 0.01%, to 33,852.53

·     The Nasdaq Composite dropped -65.72 points, or 0.59%, to 10,983.78

·     The Russell 2000 Index advanced 5.59 points, or 0.31% to 1,836.55

 

Economic Calendar for Today

·     7:00 AM ET           MBA Mortgage Applications Data

·     8:15 AM ET           ADP Employment data for November…est. 200K

·     8:30 AM ET           Gross Domestic Product (GDP) for Q3-2^nd estimate…est. +2.7%

·     8:30 AM ET           GDP Consumer Spending for Q3

·     8:30 AM ET           GDP Price Deflator for Q3…est. +4.1%

·     8:30 AM ET           PCE Prices Prelim Q3…

·     8:30 AM ET           Core PCE Prices Prelim for Q3…est. +4.5%

·     8:30 AM ET           Advance Goods Trade Balance for October

·     9:45 AM ET           Chicago PMI for November…est. 47.0

·     10:00 AM ET         Pending Home Sales for October…est. (-5.0%)

·     10:00 AM ET         JOLTs Job Openings for October…est. 10.3M

·     10:30 AM ET         Weekly DOE Inventory Data

·     1:30 PM ET            Fed’s Powell Discusses the Economic Outlook and the Labor Market

·     2:00 PM ET            U.S. Federal Reserve Releases Beige Book

 

Earnings Calendar:

·     Earnings Before the Open: BBW DCI HRL LESL TITN WOOF

·     Earnings After the Close: ASYS BOX CRDO CRM ESTC FIVE GNSS LZB NCNO NTNX OOMA OKTA PSTG PVH SMTC SNOW SNPS SPLK VSTO YEXT

 

Other Key Events:

·     Credit Suisse 26^th Annual Technology Conference, 11/28-12/1, in Arizona

·     Credit Suisse Industrials Conference, 11/30-12/2, in FL

·     Jefferies Aerospace & Defense Tour, 11/28-11/30, in Phoenix, AZ

·     Piper Annual Healthcare Conference, 11/29-12/1, in NY

·     China Caixin Manufacturing PMI for November

·     NY Times Dealbook Summit in New York

 

 

Macro	Up/Down	Last
Nymex	1.82	80.02
Brent	2.23	85.36
Gold	11.30	1,775.00
EUR/USD	0.0029	1.0356
JPY/USD	0.18	138.87
10-Year Note	-0.015	3.733%

 

 

World News

·     China official manufacturing purchasing managers index fell to 48.0 in November, down from 49.2 in October, the National Bureau of Statistics said – lower than the 48.9 reading expected by economists and the lowest level since April, when Shanghai was locked down.

·     Euro zone inflation eased far more than expected in November, as Consumer prices in the 19 countries sharing the euro grew by 10.0% this month after a 10.6% increase in October, coming in well below expectations for 10.4%

·     U.S. advances to World Cup round of 16 with 1-0 win over Iran

 

Sector News Breakdown

Consumer

·     Wayfair (W) said it recorded a low single-digit sales increase in the U.S. over the same period last year; said November revenue trends strengthened relative to the lower quarter-to-date trends it previously disclosed.

·     Foot Locker Inc (FL) says Andrew Page to step down as chief financial officer following fourth quarter earnings report; company commences search for successor

·     Tesla (TSLA) retail sales in China also nearly doubled in November from a year earlier, according to data from China Merchants Bank International; Retail sales for BYD Co Ltd. totaled 152,863 vehicles from Nov. 1 to Nov. 27, logging a nearly 83% increase in average daily sales

·     Hormel Foods (HRL) Q4 EPS $0.51 vs. est. $0.50; Q4 revs $3.3B vs. est. $3.38B; Q4 operating margin 11.2%; Sees FY net sales $12.6B-$12.9B vs. est. $13.01B and EPS $1.83-$1.93 vs. $2.01

·     Xpeng (XPEV) warned that its vehicle deliveries could more than halve in the current three-month period and reported a wider loss for Q3 due to a rise in expenses; said it expects its vehicle deliveries in the fourth quarter ending Dec. 31 to be between 20,000 and 21,000, about 49.7% to 52.1% lower than the 41,751 units delivered last year – but shares jumped overnight

 

Energy, Industrials and Materials

·     Boeing (BA) edges higher after U.S. Senate Commerce Committee chair Maria Cantwell drafts proposal granting exceptions for co’s two MAX variants if they include safety enhancements

·     Compass Minerals (CMP) 4Q adj EBITDA $35Mm vs est. $35.7Mm on revs $249.4Mm vs est. $227.1Mm; guides FY23 salt revs $895Mm-$1.125B, EBITDA $175-275Mm; sees FY23 plant nutrition revs $200-240Mm, EBITDA $55-70Mm

·     Livent (LTHM) and NTU Singapore announce research partnership to accelerate innovation in sustainable lithium battery technologies

·     Nutrien (NTR) downgraded to Neutral from Overweight at Piper Sandler and cut price tgt to $93 from $115 citing recent Q3 earnings miss and a cut in guidance

·     American Petroleum Institute said crude oil stock change in the United States decreased to -7.85 barrels in November 25 from -4.82 BBL in the previous week

 

Financials

·     Intuit (INTU) 1Q adj EPS $1.66 vs est. $1.22 on revs $2.6B vs est. $2.5B; sees 2Q revs approx +8-9% vs est. +14.5% and adj EPS $1.41-1.45 vs est. $2.06; sees FY revs $14.035-14.25B vs est. $14.529B and adj EPS $13.59-13.89 vs est. $13.75

·     LPL Financial (LPLA) downgraded to equal-weight at Morgan Stanley and removes the broker-dealer from its ‘Financials’ Finest’ list, with private-equity group Blackstone (BX) added

 

Healthcare

·     Horizon Therapeutics (HZNP) confirms that it is engaged in highly preliminary discussions with Amgen (AMGN), Janssen Global Services (JNJ), and Sanofi (SNY) which may or may not lead to an offer being made for the entire share capital of the company. There can be no certainty that any offer will be made for the company

·     Horizon Pharma (HZNP) is fielding takeover interest, according to people familiar with the matter, as large pharmaceutical companies compete for fast-growing medicines to fuel sales. – WSJ reported. https://on.wsj.com/3ilvJO0

·     A new study found that Eisai and Biogen’s (BIIB) experimental Alzheimer’s drug lecanemab moderately reduced cognitive decline after a year and a half. The study assessing it as a treatment for people with early forms of Alzheimer’s was published by the New England Journal of Medicine – but many had brain bleeds, swelling or other side effects

·     Aspen Aerogels (ASPN) 25.26M share Spot Secondary priced at $9.50

·     MDxHealth (MDXH) cuts FY22 revenue view to $36.5M-$37.5M from $40M-$42M (est. $40.53M)

·     X4 Pharmaceuticals (XFOR) announces top-line results from 4WHIM Global, pivotal phase 3 trial of once-daily, oral Mavorixafor in WHIM Syndrome

 

Technology, Media & Telecom

·     Crowdstrike (CRWD) Q3 adj EPS $0.40 vs. est. $0.31; Q3 revs $580.9M vs. est. $573.82M; Q3 record net new ARR from emerging products and a record number of customers; sees 4q adj EPS $0.42-$0.45 vs. est. $0.34 and revs $619.1M-$628.2M below est. $634.8M; raises year EPS outlook while affirms year revenue outlook

·     Hewlett Packard Enterprises (HPE) 4Q adj EPS $0.80 vs est. $0.56 on revs $7.87B vs est. $7.42B; sees 1Q adj EPS $0.50-0.58 vs est. $0.49; guides FY23 adj EPS $1.96-2.04 vs est. $2.03; says committed to returning at least $500Mm in share buybacks in FY23

·     NetApp (NTAP) Q2 adj EPS $1.48 vs. est. $1.33; Q2 revs $1.66B vs. est. $1.68B; sees Q3 adj EPS $1.25-$1.35 below consensus $1.44 and revs $1.525B-$1.675B vs. est. $1.71B; cuts FY23 EPS view to $5.30-$5.50 from $5.40-$5.60 (est. $5.52) and cuts FY23 rev growth to 2%-4% from 6%-8%

·     Workday (WDAY) 3Q adj EPS $1.01 vs est. $0.84 on revs $1.6B vs est. $1.59B; raises low end of FY subscription revs guide to $5.555-5.557B, raises FY adj op margin guide to 19.2%; Q3 subscription revenue $1.43B, up 22.3% y/y; announces $500M share buyback

·     Synopsys (SNPS) announced that it has appointed Shelagh Glaser as CFO, effective December 2. Previous CFO Trac Pham, who announced his planned retirement in December 2021

·     Netflix’s (NFLX) “Wednesday” Netflix season 1 “achieves 341M hours in first week .. This likely makes it the largest week 1 viewership of any TV show in its history, and is higher than any single week of Stranger Things, Dahmer, or Bridgerton says KeyBanc