Early Look

Thursday, November 30, 2023

Futures	Up/Down	%	Last
Dow	160.00	0.45%	35,648
S&P 500	9.25	0.20%	4,568
Nasdaq	38.50	0.24%	16,062

 

 

A strong move overnight for U.S. stock futures, reclaiming much of yesterday afternoon’s pullback ahead of key inflation data later this morning. At 8:30 AM ET, October Personal Spending and income data expected as well as inflation readings for the Oct PCE Price Index M/M (est. +0.1%) and Y/Y (est. +3.0%), and the Core PCE Price Index M/M (+0.2%), and Y/Y (est. +3.5%). A “tamer” reading on the PCE could further boost stock markets as it raises expectations for a faster rate “cut” in early 2024, while a sharply higher reading might undo some of the optimism the Fed will ease on rates sooner than later. Overseas, China PMIs far weaker than expected, which hit risk sentiment briefly. Crude oil fluctuates as traders await OPEC+ decision on potential extension of output curbs. Today marks the last trading day of a tremendous November as the S&P 500 has rallied 8.5% so far this month, while the Nasdaq is up 11%, which would be the biggest monthly advance for both indexes since July 2022. The Dow is up 7.2% in November, which would be its strongest monthly showing since October. In Asian markets, The Nikkei Index rose 165 points to 33,486, the Shanghai Index gained 8 points to 3,029, and the Hang Seng Index advanced 49 points to 17,042. In Europe, the German DAX is up 62 points to 16,229, while the FTSE 100 rises 35 points to 7,459. Bloomberg notes traders are now fully pricing in a rate cut from the ECB by April after data showed euro-area inflation slowed more than expected in November. The euro falls 0.5% while German two-year yields drop 5bps to 2.79%. Shares of Dow component Salesforce (CRM) up over 9% after results and guidance last night lifting tech and the Dow.

Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 220K

·     8:30 AM ET                  Continuing Claims…est. 1.872M

·     8:30 AM ET                  Personal Income M/M for October…est. +0.2%

·     8:30 AM ET                  Personal Spending M/M for October

·     8:30 AM ET                  PCE Price Index M/M for October…est. +0.1% (prior +0.4%)

·     8:30 AM ET                  PCE Price Index Y/Y for October…est. +3.0% (prior +3.45)

·     8:30 AM ET                  Core PCE Price Index M/M for October…est. +0.2% (prior ++0.3%)

·     8:30 AM ET                  Core PCE Price Index Y/Y for October…est. +3.5% (prior +3.7%)

·     9:45 AM ET                  Chicago PMI for November…est. 45.4

·     10:00 AM ET                Pending Home Sales M/M for October…est. (-0.2%)

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

 

Earnings Calendar:

·     Earnings Before the Open: AMWD ASO BBW BIG CBRL DLTH EXPR KIRK KR MOV REX TITN TLYS

·     Earnings After the Close: AMBA AOUT DELL DOMO ESTC IOT MRVL PATH PD TLYS ULTA ZUMZ

 

Other Key Events:

·     OPEC+ meeting scheduled delayed to November 30th from November 26^th

·     Bank America European Tech Fieldtrip, 11/27-12/1 (virtual)

·     BMO Capital Insurance Summit (Virtual), 11/30

·     Piper Annual Healthcare Conference, 11/28-11/30, in NY

·     UBS Global Technology Conference, 11/27-11/30, in Scottsdale, AZ

·     China Caixin Manufacturing PMI for November

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -4.29 points, or 0.09%, to 4,550.60.

·     The Dow Jones Industrial Average rose 13.84 points, or 0.04%, to 35,430.82.

·     The Nasdaq Composite dipped -23.27 points, or 0.16%, to 14,258.49.

·     The Russell 2000 Index advanced 11.00 points, or 0.61% to 1,803.81.

 

 

Macro	Up/Down	Last
Nymex	0.54	78.40
Brent	0.72	83.82
Gold	-10.40	2,056.80
EUR/USD	-0.0057	1.0911
JPY/USD	0.45	147.70
10-Year Note	+0.024	4.296%

 

 

World News

·     Among biggest stories overnight was the Dealbook Conference interview last night with Elon Musk as he lashed out at an advertising boycott against his social-media platform, X, on Wednesday, saying that it could kill the company. “If somebody’s going to try to blackmail me with advertising, blackmail me with money? Go f— yourself. “Don’t advertise,” Musk said during an interview at the New York Times’ Dealbook Summit. “What it’s going to do is it’s going to kill the company, and the whole world will know the advertisers killed the company,” he added.

·     Chinese Nov NBS Manufacturing PMI: 49.4 vs 49.7 consensus and Nov NBS non-Manufacturing PMI 50.2 vs 50.6 previous.

·     Japan Oct Retail Sales dropped (-1.6%) m/m vs 0.4% consensus; 4.2% y/y vs 6% consensus; Japan Oct Industrial Production (prelim) rises 1% m/m vs 0.8% consensus and 0.9% y/y vs 0.4% est.

·     Euro zone inflation tumbled far more than expected this month, as consumer price growth in the 20 nations sharing the euro currency dropped to 2.4% in November from 2.9% in October, well below expectations for 2.7%, as nearly all items.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 29.2 vs 21.7 last week. Bulls rise to 48.8% from 45.3%, Neutrals rise to 31.7% from 31.1%, Bears fall to 19.6% from 23.6%.

 

Sector News Breakdown

Consumer

·     BRP Inc. (DOOO) Q3 adj EPS C$3.06 vs. est. C$3.07; cuts FY24 EPS view to C$11.10-C$11.35 from C$12.25-C$12.75 and lowered its FY24 revenue view to up 4%-5% from up 7%-10%.

·     Costco (COST) November U.S. comp sales ex-gas, FX +4.4% and total Nov comp sales +3.5%.

·     Five Below (FIVE) Q3 EPS $0.26 vs est. $0.24 on sales $736.405Mm vs est. $727.48Mm; sees Q4 net sales $1.32-1.35B vs est. $1.338B, comps +2-3%, EPS $3.64-3.80 vs est. $3.70; announces new $100M share repurchase program.

·     PVH Corp. (PVH) Q3 EPS $2.90 vs. est. $2.74; Q3 revs rose 4% y/y to $2.36B vs. est. $2.41B; guides Q4 adj EPS $3.45 vs. est. $3.51 and sees Q4 sales to decrease 3%-4% y/y; says remains positioned for FY23 double-digit EBIT margin; raises FY23 EPS view to $10.45 from $10.35.

·     Tesla (TSLA) is set to start deliveries of its long-delayed Cybertruck electric pickup on Thursday, after CEO Elon Musk tempered investor expectations citing problems in ramping up production of what he called a “radical” product.

·     Victoria’s Secret (VSCO) Q3 adj EPS ($0.86) vs est. ($0.78) on revs $1.265B vs est. $1.27B, says sales trend in North America continued to improve as planned each month of qtr, excited with early holiday sales trends in November in North American both in stores and online, says November sales and margin result was best monthly performance in nearly two years; guides Q4 net sales +2-4% vs est. +2.73% with adj EPS $2.20-2.60 vs est. $2.44.

 

Energy, Industrials and Materials

·     Ford (F) now anticipates full-year 2023 adjusted earnings before interest and taxes of $10.0 billion to $10.5 billion. That would include $1.7 billion in strike-related lost profits – $1.6 billion of that from the fourth quarter – owing to interruptions in production of high-margin trucks and SUVs and, in turn, vehicle wholesales about 100,000 units lower than planned.

·     OPEC+ is discussing additional output cuts of about 1 million barrels a day as it seeks to overcome internal disagreements and shore up flagging crude prices. Group leader Saudi Arabia has been pressing fellow alliance members to join it in restraining supplies to stave off a renewed oil surplus next year.

 

Financials

·     Discover Financial (DFS) board authorized management to explore the sale of its student loans business, according to a regulatory filing. It will also transfer the servicing of those loans to a third-party provider as it pursues strategic alternatives for the student loan business.

·     Robinhood Markets (HOOD) said it would roll out brokerage services in the United Kingdom as part of an international expansion plan; says British customers will have access to commission-free trading of more than 6,000 U.S.-listed stocks and American Depositary Receipts (ADRs).

·     Royal Bank of Canada (RY) Q4 adjusted diluted EPS C$2.78 vs. C$2.78 last year and Q4 revenue C$13.03B vs. C$12.57B last year; raises quarterly dividend 2% to C$1.38 per share.

 

Healthcare

·     Novo Nordisk (NVO) said it sued one compounding pharmacy and refiled a lawsuit against another after finding their products claiming to contain the active ingredient for its in-demand weight-loss drug Wegovy were impure, some by as much as 33%.

 

Technology, Media & Telecom

·     Salesforce.com (CRM) Q3 adj EPS $2.11 vs. est. $1.88; Q3 revs $8.72B vs. est. $7.95B; sees Q4 2024 EPS $2.25-$2.26 vs est. $2.17 and revs $9.18B-9.23B vs est. $9.21B; raises FY24 EPS view to $8.18-$8.19 from $8.04-$8.06 and narrows FY24 rev view to $34.75B-$34.8B from $34.7B-$34.8B; raises full year fy24 operating cash flow growth guidance to 30% to 33% y/y.

·     Snowflake (SNOW) Q3 adj EPS $0.27 vs. est. $0.16; Q3 revs $734.2M vs. est. $713.06M; said Q3 product revenue grew 34% y/y to $698M; sees Q4 product revenue $716M-$721M.

·     Credo Technology (CRDO) Q2 EPS $0.01 vs. est. $0.00; Q2 revs rose 25% y/y to $44M vs. est. $42.7M; sees Q3 revenue $51.M-$53M vs. est. $51.04M; Q3 GAAP operating expenses are expected to be between $37M and $39M.

·     nCino (NCNO) Q3 adj EPS $0.14 vs est. $0.11 on revs $121.942Mm vs est. $120.63Mm, adj op mgn 17%; guides Q4 revs $123.5-125.5Mm vs est. $125.68Mm, subscription revs $105.5-107.5Mm, adj op Inc $15-16Mm vs est. $16.49Mm, adj EPS $0.11-0.13 vs est. $0.13.

·     Nutanix (NTNX) Q1 EPS $0.29 vs. est. $0.17; Q1 revs $511.1M vs. est. $501.3M; Q1 ACV Billings up 24% y/y to $287.2M and Q1 ARR up 30% y/y to $1.66B; sees Q2 revenue $545M-$555M above consensus $534.1M and guides Q2 ACV billings $295M-$305M.

·     Pinterest (PINS) and Snap Inc. (SNAP) both upgraded to Buy from Hold at Jefferies in social media on the view that both have catalysts for revenue growth upside in fiscal 2024.

·     Pure Storage (PSTG) Q3 adj EPS $0.50 vs est. $0.40 on revs $762.8Mm vs est. $763.36Mm, adj gr mgn 74%, adj op mgn 22.2%; guides Q4 revs $782Mm vs est. $919.42Mm, adj op Inc $150Mm vs est. $197.29Mm, adj op mgn 19%.

·     Synopsys (SNPS) Q4 adj EPS $3.17 vs est. $3.04 on revs $1.599B vs est. $1.585B; guides Q1 revs $1.63-1.66B above est. $1.597B, adj EPS $3.40-3.45 vs est. $3.05; sees FY24 revs $6.57-6.63B vs est. $6.585B and adj EPS $13.33-13.41 vs est. $12.76, op cash flow approx $1.4B.

·     Weibo (WB) announces a $300M convertible senior notes offering.

·     Zuora (ZUO) Q3 adj EPS $0.09 vs est. $0.06 on revs $109.8Mm vs est. $108.7Mm; guides Q4 revs $109.8-111.8Mm vs est. $111Mm and adj EPS $0.04-0.05 vs est. $0.05.