Morning Preview: October 04, 2024

Early Look

Friday, October 4, 2024

Futures

Up/Down

%

Last

Dow

40.00

0.09%

42,357

S&P 500

14.50

0.26%

5,764

Nasdaq

80.75

0.40%

20,071

 

 

U.S. futures are bouncing back after a choppy day of trading Thursday, getting a piece of good news last night after U.S. dockworkers along the East Coast agreed to suspend their strike until January 15th after a partial agreement on pay raises, easing concerns about supply chains and disruptions of goods at ports. However, the upcoming September payroll report at 8:30 AM could change everything. Estimate for the Sept nonfarm payroll report is for a rise of 140K (prior 142K) jobs, private payrolls 125K (prior 118K) and manufacturing payrolls (-5k) vs. prior (-24K); unemployment rate expected to hold at 4.2% and average earnings m/m to rise +0.3% and rise +3.8% y/y. Energy stocks are looking higher in premarket trading, as crude prices surged on concerns of supply disruptions in the Middle East due to the widening regional conflict. WTI crude surged +5.2% to $73.71 a barrel on Thursday, the third consecutive higher close for futures and with today’s gains on track for a nearly 10% gain the last 4-sessions. In Asian markets, The Nikkei Index gained 83 points to 38,635, the Shanghai Index remained closed for its Golden Week holiday, and the Hang Seng Index surged 622 points or 2.82% to settle at 22,736. In Europe, the German DAX is up 37 points to 19,053, while the FTSE 100 is down -33 points to 8,249. Coming into the day, U.S. stock markets are on track for weekly losses, which can all change based on the jobs report.

 

Overnight reports indicated that U.S. dockworkers along the East Coast and in the Gulf of Mexico agreed to suspend their strike that closed major ports and stoked fears of supply chain disruptions until January 15th. The agreement comes after port operators offered a 62% increase in wages the workers could receive over the next six years, according to reports, larger than an earlier proposal of a 50% raise, btu below the 77% raise they were asking for. In a joint statement on Thursday, the International Longshoremen’s Association, which represents 47,000 workers that load and unload cargo containers, and U.S. Maritime Alliance, which represents the port operators, said they had reached a tentative agreement on wages and would extend the prior contract through Jan. 15, 2025.

 

Market Closing Prices Yesterday

  • The S&P 500 Index dipped -9.60 points, or 0.17%, to 5,699.94.
  • The Dow Jones Industrial Average fell -184.93 points, or 0.44%, to 42,011.59.
  • The Nasdaq Composite slipped -6.65 points, or 0.04%, to 17,918.48.
  • The Russell 2000 Index declined -14.86 points, or 0.68% to 2,180.15.

Economic Calendar for Today

  • 8:30 AM ET                  Nonfarm Payrolls for September…est. 140K (prior 142K)
  • 8:30 AM ET                  Private Payrolls data for September…est. 125K (prior 118K)
  • 8:30 AM ET                  Manufacturing Payrolls data for September…est. -5K (prior -24K)
  • 8:30 AM ET                  Unemployment Rate for September…est. 4.2%
  • 8:30 AM ET                  Average Hourly Earnings M/m for September…est. +0.3%
  • 1:00 PM ET                   Baker Hughes Weekly rig count data

 

 

Macro

Up/Down

Last

Nymex

1.32

75.03

Brent

1.18

78.80

Gold

0.80

2,680.00

EUR/USD

0.000

1.1031

JPY/USD

-0.40

146.52

10-Year Note

+0.013

3.863%

 

Sector News Breakdown

Consumer

  • MarineMax (HZO) provides update on impact from hurricane Helene, saying forecasts FY adj. EBITDA low end of $155M to $190M range (consensus is $169.4M).
  • Rivian (RIVN) lowered its full-year production forecast to be between 47,000 and 49,000 vehicles, down from its earlier forecast of 57,000 vehicles and delivered fewer vehicles in Q3 than analysts had expected, at over 10,018 vehicles in the quarter ended Sept. 30, compared with estimates of 12,078.
  • Spirit Airlines (SAVE) shares tumbled after the WSJ reported the company has been in discussions with bondholders over the terms of a potential bankruptcy filing in the wake of its failed merger with JetBlue Airways (JBLU). Spirit has been struggling with losses and declining revenue as it aims to address coming maturities within its $3.3B debt load, including more than $1.1B of secured bonds that are due in less than a year. https://tinyurl.com/yv3sxfvz
  • The European Commission said on Friday it had received enough support from EU members to impose tariffs of up to 45% on Chinese electric vehicle imports (BYDDF, LI, NIO, XPEV) in the bloc’s highest profile trade case, but would continue to negotiate with Beijing.

Energy, Industrials and Materials

  • Apogee Enterprises (APOG) Q2 adj EPS $1.44 vs. est. $1.23 and revs fell -3.2% y/y to $342.4M vs. est. $335.7M; guides adj. EPS $4.90-$5.20, above prior $4.65-$5.00 vs. consensus est. $4.71 and guides revenue -4% to -7%; Q2 adjusted operating margin improves by 110 bps to 12.6%
  • Exxon Mobil (XOM) said a -17% drop in oil prices hit Q3 upstream earnings by $600M-$1B; also indicated weaker refining margins during the quarter would also hurt profits by up to $1B; said a change in gas prices impact Q3 earnings by negative -$200M to +$200M; XOM posted $7.07B in upstream earnings for Q2 and a net profit of $9.1B in the year-ago third quarter, or $2.25 per share
  • Martin Midstream Partners L.P. (MMLP) to be acquired by Martin Resource Management Corporation in an all-cash transaction where holders would receive $4.02 per common unit owned, representing a 34.00% premium to the market closing price prior to MRMC’s initial proposal made on May 24, 2024.

Financials

  • PennyMac Financial Services (PFSI) and PennyMac Mortgage Investment Trust (PMT) said William Chang is stepping down from his positions as Senior Managing Director/Chief Capital Markets Officer for PFSI and Senior Managing Director and CIO for PMT, to pursue other interests in the mortgage banking industry.
  • Elis SA made an informal takeover proposal to U.S. peer UniFirst Corp (UNF), Bloomberg News reported on Thursday, citing people familiar with the matter. UniFirst rejects Elis proposal as US peer Vestis holding talks with Elis, drawing PE interest. https://tinyurl.com/3yxpk72e

Healthcare

  • AbbVie (ABBV) lowered its FY24 forecast for adj profit, citing the impact of $82 million in milestones, and research and development expenses related to acquisitions; now sees range of $10.67-$10.87, compared with its previous forecast of $10.71-$10.91 per share, a regulatory filing showed.
  • Summit Therapeutics (SMMT) announces completion of enrollment in its phase III Harmoni trial in 2l+ EGFRM NSCLC; topline data from Harmoni trial expected in mid-2025
  • Thermo Fisher’s (TMO) Greenville, N.C. plant has been found in breach of US FDA regulations, including twice this year. The FDA’s most recent inspection of Thermo Fisher plant found shortfalls in manufacturing of Sanofi’s and AstraZeneca’s Beyfortus RSV treatment. Sanofi says the FDA findings were addressed and all Beyfortus doses were approved by FDA before they were shipped.

Technology, Media & Telecom

  • Hyundai has agreed to make vehicles equipped with Alphabet’s (GOOGL) Waymo’s self-driving car technology for use in Waymo’s growing autonomous fleet. The first phase of the collaboration will involve the integration of Waymo’s sixth generation fully autonomous system into the Hyundai Ioniq 5 electric SUV.
  • Warner Music (WMG) downgraded to Underperform from Neutral at Bank America.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.