Early Look

Friday, September 1, 2023

Futures	Up/Down	%	Last
Dow	125.00	0.36%	34,915
S&P 500	14.25	0.33%	4,530
Nasdaq	21.50	0.14%	15,559

 

 

After closing out the month of August with modest losses, snapping the 5-month winning streaks for the S&P 500 and Nasdaq, US stocks are looking higher to start September ahead of the important monthly jobs report later at 8:30 AM. August non-farm payrolls expected to rise 170K, private payrolls 150K, the unemployment rate to hold at 3.5% and average weekly earnings consensus 0.3% m/m. Recall earlier this week both weak private payrolls from ADP and JOLTs monthly data helped ease fears of additional Fed hikes. In Asian markets, The Nikkei Index gained 91 points to settle at 32,719, the Shanghai Index rose 13 points to 3,133, and the Hang Seng Index dropped -100 points to 18,382. In Europe, the German DAX is up a few points to 15.950, while the FTSE 100 rises 50 points to 7,489. Reminder it is the last Friday of the summer with the Labor Day holiday in the US on Monday. Strength in technology shares overnight as ESTC, DELL, MDB, NTNX all advance following earnings while AVGO slips on guidance.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dipped -7.21 points, or 0.16%, to 4,507.66.

·     The Dow Jones Industrial Average fell -168.33 points, or 0.48%, to 34,721.91.

·     The Nasdaq Composite gained 15.66 points, or 0.11%, to 14,034.97.

·     The Russell 2000 Index declined -3.54 points, or 0.19% to 1,899.68.

 

Economic Calendar for Today

·     6:00 AM ET                  Fed’s Bostic Speaks on US Monetary Policy

·     8:30 AM ET                  Non-Farm payrolls for August…est. 170K

·     8:30 AM ET                  Private payrolls for August…est. 150K

·     8:30 AM ET                  Manufacturing Payrolls for August…est. 0k

·     8:30 AM ET                  Unemployment Rate for August…est. 3.5%

·     8:30 AM ET                  Average Hourly Earnings M/M for Aug…est. +0.3%

·     9:45 AM ET                  S&P Global Manufacturing, Aug-Final

·     9:45 AM ET                  Fed’s Mester Speaks on Inflation

·     10:00 AM ET                ISM Manufacturing PMI for August…est. 47.0

·     10:00 AM ET                Construction Spending M/M for July…est. 0.5%

·     1:00 PM ET                   Baker Hughes Weekly rig count data

 

 

 

Macro	Up/Down	Last
Nymex	1.05	84.68
Brent	1.04	87.87
Gold	4.30	1,970.20
EUR/USD	0.0004	1.0845
JPY/USD	-0.07	145.46
10-Year Note	+0.019	4.11%

 

 

World News

·     Shanghai eases home-buying mortgage rules, becoming the third of China’s top four first-tier cities to implement such measures.

·     China Aug Caixin Manufacturing PMI (final): 51 vs 49.3 consensus.

·     Japan Q2 Corp Capital Spending: +4.5% y/y vs +8.3% consensus. Japan company profits rose a much stronger-than-expected 11.6% YoY in Q2, up from 4.3% previously. Company sales were also stronger-than-expected lifting to 5.8% YoY.

·     The PBoC cut the FX reserve ratio by a relatively large 2ppts to 4% effective 15 September. The PBoC’s foreign exchange reserve requirement ratio sets the amount of foreign currency deposits banks need to hold as reserves.

 

Sector News Breakdown

Consumer

·     Lululemon (LULU) 2Q adj EPS $2.68 vs. est. $2.54; Q2 revs $2.21B vs. est. $2.17B; Q2 gross margin 58.8%, vs. est. 58.6%; raises FY net rev to $9.51B-$9.57B vs. prior $9.44B-$9.51B and boosts year profit forecast to EPS $12.02-$12.17 vs. prior $11.74-$11.94.

·     Oxford Industries (OXM) Q2 adj EPS $3.45 vs. est. $3.40; Q2 revs $420.32M vs. est. $424.27M; cuts FY24 adjusted EPS view to $10.30-$10.60 from $10.80-11.20 (est. $10.78) and lowers FY24 revenue view to $1.57B-$1.6B from $1.59B-$1.63B; also guides Q3 below consensus.

·     Tilly’s (TLYS) Q2 EPS loss (-$0.04) vs. est. loss (-$0.20); Q2 revs $160M vs. est. $150M; guides Q3 EPS loss (5c-11c) vs. est. loss (-$0.07) and revs $166M-$171M vs. est. $162M; Q2 Net sales from e-com were $30.2M, a decrease of $1.1 million or 3.4%.

·     Lovesac (LOVE) reports preliminary Q2 revenue $154M vs. est. $149.66M; reports preliminary Q2 gross margin 59%. Reports preliminary Q2 net loss $500,000-$1.5M.

·     Fisker (FSR) confirmed that Foxconn (HNHPF) will be producing its $29,900 Pear electric urban lifestyle crossover vehicle at its Lordstown, Ohio facility – TechCrunch.

·     Tesla (TSLA) announced a revamped version of tits cheaper Model 3 comes with a longer range but also a higher price, up about 12% to around $36,000. Tesla also slashed prices on its expensive Model S and Model X cars, which start at about $100,000.

·     In Chinese Autos: XPeng (XPEV) recorded monthly deliveries of 13,690 Smart EVs, a 24% increase over the prior month and a 43% increase year-over-year. Li Auto (LI) delivered 34,914 vehicles in August, up 663.8% year over year, with monthly deliveries for each of the three Li L series models exceeding 10,000 vehicles. Nio (NIO) delivered 19,329 vehicles in August, representing an increase of 81% year-over-year.

 

Energy, Industrials and Materials

·     Eos Energy Enterprises (EOSE) shares soar 50% after announcing that the Department of Energy’s Loan Programs Office has issued an up to $398.6 million conditional commitment to the battery startup.

·     Quanex Building (NX) Q3 EPS $0.96 vs. est. $0.65; Q3 revs $299.6M vs. est. $289.28M; sees FY adj. EBITDA $150M-$155M up from prior $130M-$142M; guides Ft revs $1.125B (in-line).

·     Vestas Wind Systems said that it has signed a conditional agreement for the supply of turbines to an onshore project in the U.S. with a capacity above the company’s current disclosure threshold of 1 gigawatt.

 

Healthcare

·     23andMe (ME) shares rise pre mkt after it received FDA 510(k) clearance to report an additional 41 genetic variants in the BRCA1 and BRCA2 genes that increase risk for breast, ovarian, prostate, and pancreatic cancer.

 

Technology, Media & Telecom

·     Broadcom (AVGO) Q3 adj EPS $10.54 vs. est. $10.43; Q3 revs $8.88B vs. est. $8.87B; Q3 adj Ebitda $5.80B vs. est. $5.71B; guides Q4 revs $9.27B vs. est. $9.28B and sees Q4 Adjusted EBITDA approximately 65% of projected revenue.

·     Dell Inc. (DELL) Q2 adj EPS $1.74 vs. est. $1.14; Q2 revs rose 10% sequentially to $22.9B above consensus $20.85B; ended the quarter with remaining performance obligations of $39 billion, recurring revenue of $5.6 billion, up 8% y/y; 2Q adj. operating income $1.98B, vs. est. $1.5B.

·     Elastic NV (ESTC) Q1 adj EPS $0.25 vs. est. $0.11; Q1 revs rose 17% y/y to $294M vs. est. $284M; Q1 Elastic Cloud revenue of $121M, up 24% y/y (24% in constant currency); boosts FY24 EPS view to $1.01-$1.11 from $0.94-$1.06 and raises FY24 revs to $1.242B-$1.25B from $1.24B-$1.25B.

·     HashiCorp. Inc. (HCP) Q2 adj EPS loss (-$0.10) vs. est. loss (-$0.15); Q2 revs rose 26% y/y to $143.2M vs. est. $138.1M; raises FY24 revs to $571M-$575M, from $564M-$570M, no lower yearly loss view and operating loss $105M-$108M, vs. prior loss view $108M-$113M.

·     MongoDB Inc. (MDB) Q2 adj EPS $0.93 vs. est. $0.46; Q2 revs rose 40% y/y to $423.8M vs. est. $393.35M; sees Q3 adj EPS $0.47-$0.50 vs. est. $0.27 and revs $400M-$404M vs. est. $389.12M; Raises FY24 revenue view to $1.596B-$1.608B from $1.52B-$1.54B, above consensus $1.55B.

·     Nutanix (NTNX) authorized the repurchase of up to $350 million of its Class A common stock; Q2 adj EPS $0.24 vs. est. $0.16; Q2 revs $494.2M vs. est. $475.1M; sees FY24 revenue $2.085B-$2.115B above est. $2.08B and sees FY24 ACV billings $1.075B-$1.095B.

·     PagerDuty (PD) Q2 adj EPS $0.19 vs. est. $0.10; Q2 revs $107.6M vs. est. $104.18M; backs FY24 adjusted EPS view $0.60-$0.65 vs. est. $0.62 and boosts FY24 revenue view to $426M-$430M from $425M-$430M (est. $427.7M).

·     SentinelOne (S) Q2 EPS loss (-$0.08) vs. est. loss (-$0.14); Q2 revs $149.4M tops consensus $141.0M; sees Q3 revenue $156M vs. est. $154.2M; Q2 Annualized recurring revenue (ARR) increased 47% to $612.2M; total customer count grew approximately 30% to over 11,000 customers as of July 31, 2023; Q2 customers with ARR of $100,000 or more grew 37% to 994.