Morning Preview: October 30, 2024

Early Look

Wednesday, October 30, 2024

Futures

Up/Down

%

Last

Dow

-111.00

0.26%

42,338

S&P 500

9.25

0.15%

5,880

Nasdaq

32.50

0.15%

20,728

 

 

Overseas markets are mostly lower in both Europe and Asia, but U.S. futures are looking slightly higher for S&P and Nasdaq, helped by positive sentiment around Mega cap technology after GOOGL earnings last night impressed (thanks to strength in its cloud business and YouTube ad sales), sending shares higher by over 5%, while investors also awaited crucial data to gauge the strength of the economy and the labor market. The Nasdaq Composite continues to roll on, closing at a record high on Tuesday, marking its 11th win in last 13 trading days and remains on pace for an 8th straight week of gains. Still, there are plenty of heavy weigh earnings results coming up in tech including MSFT, META tonight and AAPL, AMZN tomorrow night. The S&P 500 was mixed on Tuesday as 9 of 11 S&P sectors finished negative and NYSE breadth was more than 2:1 margin decliners leading. Attention remains on earnings as well as economic data today with ADP private payrolls and Q3 GDP data along with PCE Q3 inflation data. A strong auction of seven-year Treasury notes helped bond yields pause their recent ascent, helping pare recent losses in interest rate sensitive sectors. Gold climbed to a fresh record and volatility in the rates market was the highest in about a year with the October payrolls report. In Asian markets, The Nikkei Index advanced 373 points to 39, 277, the Shanghai Index fell -20 points to 3,266, and the Hang Seng Index declined -320 points to 20,380. In Europe, the German DAX is down -115 points to 19,362, while the FTSE 100 is down -16 points to 8,202. Overnight AMD shares fall over -8% in the chip sector on results and Dow component CAT slides this morning on EPS miss.

 

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 9.40 points, or 0.16%, to 5,832.92.
  • The Dow Jones Industrial Average fell -154.52 points, or 0.36%, to 42,233.05.
  • The Nasdaq Composite gained 145.56 points, or 0.78%, to 18,712.75.
  • The Russell 2000 Index declined -5.98 points, or 0.27% to 2,238.09.

Economic Calendar for Today

  • 7:00 AM ET MBA Mortgage Applications Data
  • 8:15 AM ET ADP Private Payrolls for October…est. +114K (prior +143K)
  • 8:30 AM ET                  Gross Domestic Product (GDP) for Q3…est. +3.0%
  • 8:30 AM ET GDP Price Deflator for Q3…est. +2.0%
  • 8:30 AM ET                  Consumer Spending for Q3
  • 8:30 AM ET PCE Prices Q/Q for Q3 M/M and Y/Y
  • 8:30 AM ET                  Core PCE Prices Q/Q and Y/Y for Q3…est. +2.1%
  • 10:00 AM ET                Pending Home Sales M/M for September…est. +1.0%
  • 10:30 AM ET                Weekly DOE Inventory Data

Earnings Calendar:

  • Earnings Before the Open: ABBV ADP ALE ARCC ARVN AVNS AVT AXTA BG BIIB BLKB BPMC CAT CDW CHEF CLH CMCO COCO CRMD CVEO CWEN DAN DAY DRS EAT EXTR EXC FLEX FTV GEHC GHC GPI GPN GTES HES HESM HR HUM ITCI ITW KEX KHC LLY MHO MLM MNRO MTRN NAVI NBIX NR OIS OMCL OMF OPCH OSK OTIS PSN PUMP REYN ROCK SCL SHAK SITC SITE SLGN SMMT TX THRM TW UE UTHR VMC VRSK WING XPO ZBH
  • Earnings After the Close: ACAC ACHC AEIS AFL AIN ALGT ALKT ALL ALTR AM AMGN AMWL AR ATEC AWK AX BECN BHE BIO BKNG BNL CACC CERS CF CFLT CGNX CHRW CLX CNMD CNXN CODI COIN COKE COLM COMP CORT CRK CTSH CVNA CW CWST DASH DAWN EBAY EIG EPR EQIX EQR ETD ETSY FAT FCPT FND FORM FRT FTAI GDDY GEN GRBK HBB HCC HLF HLI HOOD HTGC HUBG HVT INFA INVH IRT IRTC JAKK KLAC KMPR KRG LAB LMND LPLA LUNG MAA MATX MAX MCW MDXG MET META MGM MMSI MPWR MSFT MSTR MTW MUSA MYRG NC NNBR NOVA NSA NTGR NVST NXT NYMT OHI OLED ORN PAYC PCOR PCTY PEN PPC PRU PSA PSMT RCKY RELY RGR RIG RIOT ROKU RSI RWT RYAN SBUX SCI SFM SNBR SPXC STAA STEM SUM TDOC TENB THG TRUP TTMI TWI TWLO UDR UFI VTR WEAV WHD WHG WSC WTS ZIMV

 

 

Macro

Up/Down

Last

Nymex

0.69

67.90

Brent

0.58

71.70

Gold

14.50

2,795.60

EUR/USD

0.0022

1.0842

JPY/USD

-0.43

152.93

10-Year Note

-0.054

4.22%

 

World News

  • The euro zone economy grew faster than expected last quarter as GDP in the 20 countries sharing the euro grew by 0.4% in Q3 from the previous three months, beating expectations for 0.2% but still showing some weakness as industry was in recession and household consumption barely grew, Eurostat data showed.
  • U.S. crude oil and fuel stocks fell last week, citing American Petroleum Institute figures on Tuesday. Crude stocks fell by 573,000 barrels in the week ended Oct. 25, gasoline inventories fell by 282,000 barrels, and distillate stocks fell by 1.46 million barrels.
  • The European Union has decided to increase tariffs on Chinese-built electric vehicles to as much as 45.3% at the end of its highest profile trade investigation that has divided Europe and prompted retaliation from Beijing. Just over a year after launching its anti-subsidy probe, the European Commission will set out extra tariffs ranging from 7.8% for Tesla to 35.3% for China’s SAIC, on top of the EU’s standard 10% car import duty.
  • The Bank of Japan has commenced its two-day policy session, but the ongoing multiparty political negotiations surrounding the Prime Ministerial election are the primary focus for the Japanese yen.

Sector News Breakdown

Consumer

  • Caesar’s Entertainment (CZR) Q3 adj EBITDA $1.0B vs est. $1.001B on revs $2.9B vs est. $2.924B; closes sales of World Series of Poker brand to NSUS Group for $500Mm.
  • Cheesecake Factory (CAKE) Q3 EPS $0.61 vs. est. $0.49; Q3 revs rose 4.2% y/y to $865.5M vs. est. $866.2M; Q3 comp restaurant sales at The Cheesecake Factory restaurants increased 1.6% y/y vs. est. 1% and vs. 2.4% y/y.
  • Chipotle Mexican Grill (CMG) shares fall; Q3 adj EPS $0.27 vs est. $0.25 on revs $2.794B vs est. $2.799B, comps +6.0% vs est. +6.3%; sees FY comps +mid-high-single digit and +285-315 new company-operated restaurant openings; sees FY25 +315-345 new company-operated restaurant openings.
  • Estee Lauder Companies (EL) announced the Board of Directors’ appointment of Stephane de La Faverie as its new President and CEO and member of its Board of Directors, effective January 1, 2025. de La Faverie will succeed Fabrizio Freda, who announced his intention to retire earlier this year
  • Meritage Homes (MTH) Q3 EPS $5.34 vs. est. $4.96; Q3 revs $1.59B vs. est. $1.58B; Q3 homes closed 3,94; Q3 average sales price on orders of $406,000 was down 6% y/y; Home closing gross margin of 24.8% decreased 190 bps in the third quarter of 2024 from 26.7% in the prior year due to higher lot costs.
  • Mondelez (MDLZ) Q3 adj EPS $0.99 vs est. $0.85, EBIT $1.153B vs est. $1.505B, op mgn 12.5%; expects FY constant currency EPS +high-single-digit vs est. +9.5%; sees organic net revs high end +3-5%.
  • Modine Manufacturing (MOD) Q2 adj EPS $0.97 vs est. $0.92, adj EBITDA $99.8Mm vs est. $94.4Mm on revs $658Mm vs est. $646.91Mm; says data center outlook continues to improve.

Energy,

  • Caterpillar (CAT) Q3 adj EPS $5.17 vs. est. $5.34; Q3 revs fell -4.2% y/y to $16.11B vs. est. $16.38B; Q3 miss comes as higher borrowing costs and sticky inflation led to a slowdown in machinery demand, forcing the company’s dealers to moderate product restocking; says outlook for Q4 rev sales and revenues to be slightly lower.
  • Edison International (EIX) Q3 core EPS $1.51 vs. est. $1.38; Q3 revs $5.2B vs. est. $5.01B; narrows FY24 core EPS view to $4.80-$5.00, from $4.75-$5.05 and vs. est. $4.94.
  • EQT Corp. (EQT) Q3 adj EPS $0.12 vs est. $0.06, adj EBITDA $832Mm vs est. $736.11Mm on revs $1.28B vs est. $1.316B; sees Q4 total sales volume 555-605 BCFE and CAPEX $630-730Mm.
  • First Energy (FE) Q3 EPS $0.85 vs. est. $0.90; narrows FY24 adj EPS view to $2.61-$2.71 from $2.61-$2.81; raises 2024 capital investment plan to $4.6B from $4.3B; affirms targeted 6%-8% long-term annual operating earnings growth.
  • First Solar (FSLR) Q3 EPS $2.91 vs est. $3.14 on revs $887.668Mm vs est. $1.075B; guides FY sales $4.1-4.25B vs prior $4.4-4.6B and est. $4.44B, op Inc $1.48-1.54B vs prior $1.5-1.6B and est. $1.557B and EPS $13.00-13.50 vs prior $13.00-14.00 and est. $13.47.
  • ONEOK (OKE) Q3 EPS $1.18 vs. consensus $1.23; Q3 adj Ebitda $1.54B vs. est. $1.569B; Q3 capex $468M; reported 7% increase in Rocky Mountain region NGL raw feed throughput volumes, a 5% increase in Rocky Mountain region natural gas volumes processed and a 22% increase in Natural Gas Pipelines segment adjusted EBITDA.
  •  

Financials

  • Visa (V) Q4 adj EPS $2.71 vs. est. $2.58; Q4 revs $9.62B vs. est. $9.49B; Q4 payments volume up 8%; Q4 transactions processed increased 10% to 61.5B; Q4 cross-border volume excluding intra-Europe up 13% on a constant dollar basis; increases quarterly cash dividend 13% to $0.590 per share; sees FY net rev growth on adjusted constant dollar basis high single-digit to low double-digit.
  • Chubb (CB) Q3 adj EPS $5.72 vs. est. $4.98; Q3 revs $12.28B vs. est. $12.54B; said Q3 Core operating income and EPS were up 14.3% and 15.6%, respectively, in the quarter, supported by double-digit growth in both P&C underwriting and investment income; Book and tangible book value per share are up 11.1% and 16.7% year-to-date, and our core operating ROE is 13.6%.
  • Essex Property (ESS) Q3 core FFO/SHR $3.91 vs est. $3.88; raises FY core FFO/SHR $15.50-15.62 vs est. $15.56, sees same-property revs 3.1-3.4% and same-property NOI 2.3-2.9%.
  • BXP Properties (BXP) Q3 FFO/SHR $1.81 vs est. $1.81 on revs $859.2Mm vs est. $834.62Mm; sees FY FFO/SHR $7.09-7.11 vs est. $7.12.
  • Reddit (RDDT) Q3 EPS 16c vs (-$0.13) loss y/y; Q3 revenue $348.4M vs. est. $312.83M; Q3 global DAU up 47% y/y to 97.2M; guides Q4 revs $385m-$400M vs. est. $357.9M.
  • Udemy (UDMY) Q3 adj EPS $0.07 vs est. $0.01, adj EBITDA $11.6Mm vs est. $5.14Mm on revs $195.4Mm vs est. $192.66Mm; guides Q4 revs $193-196Mm vs est. $195.83Mm, adj EBITDA mgn approx 6.0% and diluted wtd shares 149Mm.
  • Unum Group (UNM) Q3 adj EPS $2.13 vs. est. $2.10; Q3 revs $3.22B vs. est. $3.26; sees FY24 adjusted operating income growth 10%-15%; Q3 book value per common share $59.36

Healthcare

  • AtriCure (ATRC) Q3 adj EPS ($0.17) vs est. ($0.19), adj EBITDA $7.9Mm vs est. $6.61Mm on revs $115.9Mm vs est. $112.3MM; sees FY revs $459-462Mm vs est. $458.11Mm, adj EBITDA approx $26-29Mm vs est. $26.94Mm and adj EPS ($0.80)-($0.74) vs est. ($0.79).
  • BioMarin (BMRN) Q3 adj EPS $0.91 vs est. $0.52 on revs $746Mm vs est. $700.18Mm; guides FY revs $2.79-2.825B vs prior $2.75-2.825B and est. $2.802B, adj op mgn 26.5-27.5% vs prior 26-27% and adj EPS $3.25-3.35 vs prior $3.10-3.25 and est. $2.07.
  • DaVita Inc. (DVA) Q3 adj EPS $2.59 vs. est. $2.73; Q3 revs $3.26B vs. est. $3.25B; backs FY24 adjusted EPS view $9.25-$10.05 vs. est. $9.79 and backs FY24 free cash flow view $950M-$1.2B.
  • EyePoint (EYPT) 12.73M share Secondary priced at $11.00.
  • GE Healthcare (GEHC) Q3 adjusted EPS $1.14 vs. est. $1.05; Q3 revs $4.9B vs. est. $4.86B; sees outlook FY adjusted eps in range of $4.25 to $4.35 vs. est. $4.25; sees FY organic revenue growth trending toward lower end of range of 1% to 2% y/y.
  • Stryker (SYK) Q3 adj EPS $2.87 vs. consensus $2.77; Q3 revs $5.5B vs. est. $5.37B; Q3 Organic net sales increased 11.5%; reported operating income margin of 19.7% for Q3; sees FY24 adjusted EPS $12.00-$12.10, consensus $12.01; sees FY24 organic net sales growth to be in the range of 9.5%-10%.
  • 10X Genomics (TXG) Q3 EPS ($0.30) vs est. ($0.34) on revs $151.64Mm vs est. $158.63Mm; guides FY revs $595-605Mm vs est. $636.59Mm and prior $640-660Mm.

Industrials and Materials

  • Allison Transmission (ALSN) Q3 EPS $2.27 vs. est. $2.01; Q3 revs $824M vs. est. $787.77M; said given Q3 results and current end markets conditions, they are raising FY24 guidance midpoints”. Sees FY24 Net Income $675M-$725M; Adjusted EBITDA $1.115B-$1.175B; Net Cash Provided by Operating Activities $740M-$800M.
  • Enovix (ENVX) Q3 adj EPS ($0.17) vs est. ($0.20), adj EBITDA ($21.6Mm) vs est. ($27.24Mm) on sales $4.317Mm vs est. $4.11Mm; sees Q4 revs between $8M-410M and eps loss (-0.15-$0.21).
  • FMC Corp. (FMC) Q3 adj EPS $0.69 vs. est. $0.53; Q3 revs $1.07B vs. est. $1.04B; sees FY24 EPS adjusted $3.16-$3.52, vs. consensus $3.28; sees FY24 revenue $4.33B-$4.44B, consensus $4.36B; increases target restructuring savings range to $125M-$150M of adjusted EBITDA net benefit.
  • OI Glass (OI) Q3 adj EPS ($0.04) vs est. $0.04 on sales $1.7B vs est. $1.761B; sees FY adj EPS $0.70-0.80 down from prior view of $1.00-$1.25 and below est. $1.13.
  • Republic Service Group (RSG) Q3 adj EPS $1.81 vs. consensus $1.61; Q3 revs $4.08B vs. consensus $4.12B; says expects revenue to be near the low end of its full-year 2024 guidance range.
  • Werner Enterprises (WERN) Q3 adjusted EPS $0.15 vs. est. $0.21; Q3 revs fell -9% y/y to $745.7M vs. est. $765.22M; Q3 Operating margin of 2.4%, down 220 basis points; non-GAAP adjusted operating margin of 2.9%, down 220 basis points; Q3 Operating income of $17.6 million, down 54%.

Technology, Media & Telecom

  • Advanced Micro Devices (AMD) Q3 adj EPS $0.92 vs est. $0.92 on revs $6.819B vs est. $6.709B, gr mgn 50%; sees Q4 revs $7.2-7.8B vs est. $7.544B and adj gr mgn approx 54%.
  • Alphabet (GOOGL) Q3 EPS $2.12, tops consensus $1.84; Q3 revs Ex-tac $74.55B, above est. $72.88B; Q3 Google cloud rev. $11.35B, vs. est. $10.79B; Q3 Google advertising revenue $65.85B in-line with ests; Google Search & Other Revenue $49.39B also in-line and YouTube ads revenue $8.92B vs. est. $8.89B
  • Qorvo (QRVO) Q2 adj EPS $1.88 vs est. $1.85 on revs $1.047B vs est. $1.028B, adj gr mgn 47%; guides Q3 revs $875-925Mm vs est. $1.056B, adj gr mgn approx 45% and adj EPS $1.10-1.30 vs est. $1.92.
  • Snap Inc. (SNAP) Q3 adj EPS $0.08 vs. est. $0.05; Q3 revs rose 15% y/y to $1.37B vs. est. $1.36B; authorizes up to $500M stock repurchase program; Q3 Daily active users grow 9% y/y to 443M, beating analyst estimates of 441M; guides Q4 revs $1.51B-$1.56B vs. est. $1.56B.
  • Unisys (UIS) Q3 adj EPS ($0.89) vs est. $0.13 on revs $497Mm vs est. $486.5Mm; reit FY guide, sees constant currency revs (1.5%) – 1.5% vs est. -0.82% and adj op mgn 6.5-8.5%.
  • Varonis Systems (VRNS) Q3 adj EPS $0.10 vs est. $0.07 on revs $148.068Mm vs est. $141.64Mm; sees Q4 revs $162-167Mm vs est. $162.98Mm and adj EPS $0.13-0.14 vs est. $0.14.

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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.