S&P futures down 0.1% Friday morning after a mostly lower Thursday session. US equities are on track for a mixed weekly performance, with tech leading gains. Asian markets were mixed overnight; Hong Kong and China outperformed, while Japan and South Korea lagged. European markets are up ~0.5%. Treasuries weaker with some curve flattening. Dollar Index up 0.2%, Gold up 0.4%, Bitcoin futures down 1.1%, and WTI crude off 0.5%.
Markets await November Nonfarm Payrolls (NFP), expected to show a 215K increase, rebounding from October’s weather and strike impacts. Unemployment rate is expected to hold at 4.1%, while average hourly earnings are forecast to rise 0.3% m/m. This report is seen as pivotal for the Fed’s upcoming decision, with markets pricing a 68% chance of a 25 bp rate cut in December. Focus remains on tech outperformance, holiday shopping commentary, and geopolitical uncertainties like Syria.
Earnings Highlights
- Lululemon (LULU-US): Beat and raised guidance; highlighted accelerated women’s segment growth and a strong holiday season start.
- Ulta Beauty (ULTA-US): Surprised with positive comps, raised guidance, and noted improving prestige trends.
- Victoria’s Secret (VSCO-US): Beat and raised; strength across channels, categories, and brands.
- Petco (WOOF-US): Q3 beat but issued softer Q4 guidance.
- Veeva Systems (VEEV-US): Beat and raised; progress noted on Vault CRM.
- Samsara (IOT-US): Beat and raised but faced high expectations and Q4 revenue guide disappointment.
- Hewlett Packard Enterprise (HPE-US): Strong traditional server performance, though AI orders missed.
- Guidewire (GWRE-US): Beat and guided largely above but only maintained FY ARR outlook.
- DocuSign (DOCU-US): Beat and raised; highlighted IAM momentum.
- GitLab (GTLB-US): Beat and raised guidance.
- Rubrik (RBRK-US): Strong growth in net new ARR.
- Asana (ASAN-US): Beat and raised; highlighted AI Studio expansion as a tailwind.
US equities closed lower on Thursday, with the Dow (-0.55%), S&P 500 (-0.19%), and Nasdaq (-0.18%) declining modestly, while the Russell 2000 (-1.25%) saw sharper losses. The session was uneventful as markets remained in a holding pattern ahead of Friday’s November nonfarm payrolls (NFP) report. The S&P 500 retreated for only the second time in 13 sessions, with mixed sector performance. Decliners included semiconductors, software, managed care, MedTech, chemicals, and steel. Outperformers included airlines, energy, banks, and telecom.
Treasuries were mixed with some curve flattening, the Dollar Index fell 0.6%, Gold ended down 1.0%, Bitcoin futures slid below $100K after briefly crossing $105K, and WTI crude settled 0.4% lower. Initial jobless claims came in higher than expected, while continuing claims dropped unexpectedly. Market sentiment remains anchored around expectations of a December rate cut, with over 75% probability priced in.
Corporate News by GICS Sector
Information Technology
- Synopsys (SNPS-US): Fell 12.4%. FQ4 earnings and margins beat expectations, but revenue was in line. Next-quarter guidance was light, and FY25 revenue guidance came in below estimates due to calendar impacts, sluggish growth outside AI infrastructure, and macro uncertainties.
- nCino (NCNO-US): Declined 12.3%. Q3 non-GAAP EPS and margins exceeded forecasts, but revenue was in line. Q4 guidance midpoints were below consensus, with analysts flagging higher-than-expected mortgage churn. Downgraded at Piper Sandler on valuation concerns.
- Fiserv (FI-US): Dropped 5.5%. Post-close Wednesday, President-elect Trump nominated CEO Frank Bisignano to head the Social Security Administration, raising concerns over leadership continuity.
Consumer Discretionary
- Five Below (FIVE-US): Gained 10.5%. Q3 earnings and revenue beat forecasts, with improved comps and sequential transaction growth. Raised FY guidance. The company also named Winnie Park as CEO.
- American Eagle Outfitters (AEO-US): Fell 14.3%. Q3 sales and margins were light, though EPS beat on cost controls. FY24 guidance was lowered due to non-peak period choppiness and weather headwinds. Analysts noted positive customer responses during Black Friday.
- Lands’ End (LE-US): Declined 13%. Q3 EBITDA slightly missed, with expenses (digital marketing spend) weighing. Q4 sales guidance fell below expectations, despite inline EBITDA forecasts. The stock remains up nearly 70% YTD.
Industrials
- American Airlines (AAL-US): Rose 16.8%. Raised Q4 RASM and EPS guidance, citing stronger than expected revenue performance. Also announced a co-branded card partnership with Citi.
- Southwest Airlines (LUV-US): Gained 2%. Increased Q4 RASM guidance while maintaining ASM and CASM-X forecasts. Highlighted improved unit revenue growth and announced a $750M repurchase program set to launch in Q1.
- AeroVironment (AVAV-US): Dropped 15.9%. Fiscal Q2 sales beat, but EBITDA and EPS missed due to unfavorable mix effects. Funded backlog grew 25% sequentially. FY guidance was reaffirmed.
- Korn Ferry (KFY-US): Down 8.4%. FQ2 earnings and revenue were largely in line, but lower fee revenues from Professional Search/Consulting weighed. Executive Search fees outperformed. Q3 guidance midpoint fell below consensus.
Financials
- Verint Systems (VRNT-US): Surged 23.1%. FQ3 results beat expectations across EPS, EBITDA, and revenue. Analysts highlighted tangible AI-driven business outcomes offsetting seat count declines.
Consumer Staples
- Brown-Forman (BF.B-US): Gained 10.7%. FQ2 results beat across earnings, revenue, and margins. Sequential sales improved in international markets and the Travel Retail channel. FY guidance was reaffirmed.
- Campbell Soup (CPB-US): Fell 6.2%. Fiscal Q1 sales missed expectations in its Meals & Beverages and Snacks segments. EPS beat but faced scrutiny over lower brand support. CEO Mark Clouse will step down in January, with Mick Beekhuizen succeeding him.
- Caleres (CAL-US): Declined 20%. FQ3 results missed across EPS, EBITDA, and revenue. FY25 guidance was cut due to softer seasonal demand and weaker margins stemming from excess inventory.
Communication Services
- GameStop (GME-US) and AMC Entertainment (AMC-US): Both rose after a tweet from Roaring Kitty spurred investor interest.
Health Care
- Patterson Cos. (PDCO-US): Up 4.3%. FQ2 revenue slightly exceeded expectations despite light earnings. Internal sales growth was a highlight, driven by Animal Health. FY guidance was trimmed, and the company announced it is evaluating strategic alternatives.
Eco Data Releases | Friday December 6th, 2024
S&P 500 Constituent Earnings Announcements | Friday December 6th, 2024
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Data sourced from FactSet Research Systems Inc.
