Early Look

Tuesday, October 4, 2022

Futures	Up/Down	%	Last
Dow	441.00	1.50%	29,982
S&P 500	66.25	1.80%	3,756
Nasdaq	253.50	2.24%	11,538

 

 

S&P futures are breaking out to the upside early, rising +1.8% to 3,755 (currently near overnight highs), extending yesterday’s gains and trading to its best levels since Sept 23^rd. The move overnight follows a big-time rally on Monday for U.S. stocks as investors were happy to start the new month and quarter, putting a dismal August and September behind them, as Treasury yields eased off levels not seen in roughly a decade. After the dust settled, the Dow rose 2.66%, the S&P 500 gained 2.59% and the Nasdaq was up 2.27%. S&P futures rose for only the 8th time in last 10-sessions on Monday, bouncing off lowest levels since November 2020 overnight (Spuz hit low 3,571.75 Sunday night before ending just below 3,700 late day). Stocks got a boost yesterday on weaker manufacturing data, raising hopes that a slowing economy could lead the Fed to “pause” the aggressive rate hike cycle going forward. There have been several signs of slowing inflation in recent weeks including crude oil down 40% from March high, used car prices down 13%YTD, global freight rates down 57% YTD, rents down in Sept, 1st decline this year (yoy% increase at lowest level since May 2021) and home prices down 6% from peak in June. Crude prices are steady ahead of today’s OPEC JTC meeting, and tomorrow’s OPEC+ meeting. The street has been pricing in the potential for a 1mn bpd cut. In Asian markets, The Nikkei Index spikes 776 points or nearly 3% to 26,992, the Shanghai Index slipped -16 points to 3,024, and the Hang Seng Index fell -143 points to 17,079. In Europe, the German DAX surges 385 points to over 3% to 12,600, while the FTSE 100 rises 140 points to 7,050. The British Pound gains +0.4% vs. the dollar to 1.1365 (after hitting record lows last Monday of 1.0327).

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 92.81 points, or 2.59%, to 3,678.43

·     The Dow Jones Industrial Average rose 765.38 points, or 2.66%, to 29,490.89

·     The Nasdaq Composite gained 239.82 points, or 2.27%, to 10,815.44

·     The Russell 2000 Index advanced 44.15 points, or 2.65% to 1,708.87

 

Economic Calendar for Today

·     7:45 AM ET             ICSC Weekly Retail Sales

·     8:55 AM ET             Johnson/Redbook Weekly Sales

·     10:00 AM ET          Durable Goods Orders M/M for Aug…prior (-0.2%)

·     10:00 AM ET          Factory Orders M/M for August…est. 0.0%

·     10:00 AM ET          JOLTs Job Openings for August…est. 10.775M

·     4:30 PM ET             API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AYI

·     Earnings After the Close: SAR SGH

 

Other Key Events:

·     Fed’s Logan Gives Welcoming Remarks at Event on Technology – 9:00 AM

·     Williams Gives Opening/Closing Remarks at Work Culture Event – 9:00 AM

·     Fed’s Mester Speaks at Conference on Payment System – 9:15 AM

·     Fed’s Daly Speaks to the Council on Foreign Relations – 1:00 PM

·     American Academy of Ophthalmology, 9/30-10/4 in Chicago

·     Chardan 6th Annual Genetic Medicines Conference, 10/3-10/4 in NY

·     RBC Capital Pharmaceutical CDMO Conference (virtual), 10/3-10/4

 

 

Macro	Up/Down	Last
Nymex	0.66	84.29
Brent	0.90	89.76
Gold	16.70	1,718.70
EUR/USD	0.0071	0.9895
JPY/USD	0.20	144.73
10-Year Note	-0.072	3.58%

 

 

Sector News Breakdown

Consumer

·     Poshmark Inc. (POSH) has agreed to be bought by South Korean internet company Naver in a $1.2 billion deal, the companies announced. Under the terms of the deal, Naver will pay $17.90 in cash per share, representing a 15% premium https://on.mktw.net/3fFQTF6

·     Rivian Automotive Inc (RIVN) said produced 7,363 vehicles in Q3, delivered 6,584 vehicles in Q3 and says figures remain in line with the Co’s expectations, believes it is on track to deliver on 25,000 annual production guidance previously provided

·     Utz Brands (UTZ) announces CEO Succession Plan; Dylan Lissette to Become Executive Chairman of the Board, Effective December 15, 2022. Howard Friedman, Current COO of Post Holdings, to Join as Chief Executive Officer; company reaffirms fiscal year 2022 outlook

·     Bed Bath & Beyond Inc.’s (BBBY) bondholders are organizing, looking to protect their investments in the struggling retailer as it looks for ways to ease its debt during a slump in sales, according to people with knowledge of the matter – WSJ reported https://on.wsj.com/3Rx1zU2

 

Energy, Industrials and Materials

·     Saudi Aramco reiterated its warning that producers’ spare capacity is running low. OPEC+ ministers are scheduled to discuss supply Wednesday

·     Acuity Brands (AYI) Q4 adj EPS $3.95 vs. est. $3.59; Q4 revs rose 12% y/y to $1.11B vs. consensus $1.08B; posted higher profit and sales for its fiscal fourth quarter, citing strong demand across its end markets even as the lighting company raised prices.

·     AeroClean (AERC) and Molekule announced they have entered into a definitive agreement to combine the companies in an all-stock merger. The combined company is expected to generate approximately $45M of revenues in FY22 on a pro forma combined basis

·     Mosaic Company (MOS) announced that North American Phosphates was negatively impacted by damage caused by Hurricane Ian. Significant flooding and high winds were experienced throughout central Florida during the storm

·     Olin Corp (OLN) announced that it expects to cease methylene chloride and chloroform production at its Stade, Germany facility by third quarter 2023. Olin will continue to produce both products at its Freeport, Texas facility.

 

Financials

·     Bank OZK (OZK) boosts dividend to 33c per share up 3.13%

·     Mastercard (MA) on Tuesday will debut a new piece of software that helps banks identify and cut off transactions from fraud-prone crypto exchanges, CNBC reported on Tuesday.

 

Healthcare

·     Bluebird Bio Inc’s (BLUE) collaborates with market-access platform, Real endpoints (RE), to provide health plans with access to outcome-based agreement for BLUE’s Zynteglo to treat beta-thalassemia

·     Rocket Pharmaceuticals (RCKT) 6.8M share Spot Secondary priced at $14.75

·     Kalvista Pharmaceuticals (KALV) announces termination of kvd824 phase 2 Komplete trial for prophylactic treatment of hereditary angioedema; safety signals observed will not yield targeted product profile; no impact on Sebetralstat expected safety profile or phase 3 Konfident trial

·     Pfizer (PFE) announces Results from Phase 3 TALZENNA trial, first PARP inhibitor to demonstrate clinical benefit in combination with XTANDI® in metastatic castration-resistant prostate cancer (mCRPC). Study achieves primary endpoint of radiographic progression-free survival

 

Technology, Media & Telecom

·     AXT Inc. (AXTI) shares fell -15%; guides Q3 revs to range $34M-$35M, below prior view $39M-$41M and below consensus of $40M

·     Paramount (PARA) downgraded to Equal Weight from Overweight at Wells Fargo and slash tgt to $19 from $40

·     Meta (META) to Shutter New York Office Amid Cutbacks. Meta Platforms (META) is planning to close one of its offices in New York after scaling down its expansion plans in the city, according to people familiar with the matter.