US EARLY MORNING: Equity futures are up, Treasuries little changed; inflation data out of Europe and US are due later; OPEC meetings also in focus

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  EQUITIES: US equity futures are trading moderately higher; APAC stocks were mixed at month-end, with Chinese stocks under pressure following weak PMI data (see below); European equities openened around flat despite cooler than expected French inflation data.


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  BONDS: Treasury yields are little changed ahead of today's PCE data; the complex is on course for its best monthly performance since 2008. There is a very slight bid in EGBs after slower than expected inflation metrics out of France today, and Germany yesterday, ahad of today's Eurozone inflation data.


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  USD: The USD is firming climbing off near three-month lows ahead of today's PCE report. The EUR was trading cautiously after slower French inflation data and soft French GDP. The JPY is higher and on track for its strongest month this year.


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  CRUDE: Oil benchmarks are rallying on reports that today's OPEC/OPEC+ meetings are still set to go ahead, and the group is discussing an additional 1-2mln BPD output cuts next year.

TODAY’S AGENDA: 

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  DAY AHEAD: Eurozone inflation metrics are the highlight of the morning, and follows cooler than expected updates in the month from Germany and France. At pixel time, OPEC and OPEC+ meetings are still scheduled to go ahead today, and sources suggest the group is in talks about additional oil output cuts from 1-2mln BPD. The focus of the US day will be on the PCE metrics for November, where the headline and core rates of inflation are seen easing (primer below). Weekly jobless claims are also out today (continuing claims coincides with the BLS survey window for the jobs report). On the speaker’s front, Fed’s Wiliams (voter), ECB President Lagarde (again) and BoE’s Greene are the highlights.


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  PCE PREVIEW (13:30GMT/08:30EST): The headline is expected to rise +0.1% M/M (prev. +0.4%), though the annual measure is seen easing to +3.0% Y/Y (prev. 3.4%). Core PCE is expected to rise by +0.2% M/M (prev. 0.3%), while the annual measure of core PCE inflation is seen easing to 3.5% Y/Y (prev. 3.7%). The data will be looked to for confirmation that inflation trends have eased - that was the message from the October CPI report, which helped build conviction that inflation was moving back down to the Fed’s 2.0% target. October CPI eased from 3.7% to 3.2%, while core price fell from 4.1% to 4.0% - both below consensus and resulting in expectations for an FOMC December rate hike diminishing significantly. The slower rate of price growth was underpinned by a fall in gasoline prices, which is expected to continue next month. The pace of shelter price gains also eased. “With evidence of easing inflation across both the goods and services sectors, the October CPI report underlines our view that inflation is heading back to the Fed’s target whether or not the recent resilience of the real economy continues,” Capital Economics said, adding that “we continue to expect a further decline in inflation over the coming months, which will bring interest rate cuts onto the agenda before long.” Currently, the market is fully pricing a rate cut next June, though implied money market rates suggest that there isa decent chance of a cut in May.


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  CHINA PMI REVIEW: China's official manufacturing PMI eased to 49.4 in November (exp. 49.7, prev. 49.5), while the non-manufacturing report slipped to 50.2 (exp. 51.1, prev. 50.6); that left the composite measure at 50.4 (prev. 50.7). HSBC expressed concern over the setback in the services sector, particularly in private consumption demand, observing its weakened momentum in November. There's market anticipation for additional support measures, expecting clarity on potential fiscal stimulus and monetary easing. Without further policy backing, there's a perceived challenge for the economy to achieve a 5% growth organically next year.


• Our Day ahead calendar is here; a pdf version can be downloaded here.

EQUITY NEWS:

TECH:

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  Salesforce (CRM) - Better than expected earnings and upbeat guidance helped CRM shares surge almost 9% in US afterhours trading. Q3 adj. EPS 2.11 (exp. 2.06), Q3 revenue USD 8.72bln (exp. 8.72bln). Q3 professional services and other revenue USD 579mln (exp. 621.5mln), Q3 adj. income from operations USD 2.72bln (exp. 2.64bln), Q3 adj. operating margin 31.2% (exp. 30.4%), Q3 FCF 1.37bln (exp. 898.3mln). Sees Q4 revenue between USD 9.18-9.23bln (exp. 9.22bln), and sees Q4 adj. EPS between 2.25-2.26 (exp. 2.17); raises its FY24 EPS outlook to between USD 8.18-8.19 (prev. 8.04-8.06, exp. 8.06), and sees FY24 revenue between USD 34.75-34.8bln (prev. 34.7-34.8bln, exp. 34.80bln).


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  OpenAI, Microsoft (MSFT) - Microsoft secures a non-voting board seat at OpenAI, addressing uncertainties amid CEO changes. The move solidifies ties following a USD 13bln investment and integration of AI models into Microsoft's products, CNBC reports.


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  Adobe (ADBE) - Adobe is set to address EU antitrust concerns in a closed hearing on December 8th regarding its proposed USD 20bln acquisition of Figma, Reuters reported. The EC said the deal might diminish competition in the interactive product design software market, highlighting worries about eliminating Figma as a competitor and reinforcing Adobe's market dominance.


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  Broadcom (AVGO) - Broadcom's CEO is considering strategic options for VMware's End-User Computing and Carbon Black units post-acquisition, Business Insider reports. CEO assured support during the review, with VMware's CEO serving as his technical advisor during the transition to four operational divisions.


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  Synopsys (SNPS) - Q4 adj. EPS 3.17 (exp. 3.04), Q4 revenue USD 1.60bln (exp. 1.58bln). Sees Q1 adj. EPS between USD 3.40-3.45 (exp. 3.05), and sees Q1 revenue between USD 1.63-1.66bln (exp. 1.6bln). For the FY24, sees adj. EPS between 13.33-13.41 (exp. 12.76), and revenue between USD 6.57-6.63bln (exp. 6.6bln). Added that financial targets assume no further changes to export control restrictions or the current US government "Entity List" restrictions.


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  ServiceNow (NOW) - President Chirantan Jitendra Desai sold 3,150 shares at USD 667.47/shr on November 28th for a total USD 2.1mln.


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  Snowflake (SNOW) - Q3 adj. EPS 0.27 (exp. 0.16), Q3 revenue USD 0.73bln (exp. 0.71bln). Raises FY product revenue guidance to 2.65bln (prev. 2.60bln, exp. 2.61bln).


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  Nutanix (NTNX) - Q1 EPS 0.29 (exp. 0.17), Q1 revenue USD 511.1mln (exp. 501.3mln). Q1 ACV Billings +24% Y/Y, Q1 ARR +30% Y/Y. Sees Q2 revenue between USD 545-555mln (exp. 534.1mln), and sees Q2 ACV Billings between USD 295-305mln. Lifts FY24 revenue outlook to between USD 2.095-2.125bln (exp. 2.1bln), sees FY24 ACV billings between USD 1.08-1.10bln.


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  3D Systems (DDD) - Director Thomas Erickson purchased 50,000 shares on November 28th at USD 5.30/shr.


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  AppLovin (APP) - Chairman Adam Foroughi sold 653,619 shares at USD 39.15/shr on November 27th and on November 28th for a total USD 25.6mln.


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  nCino (NCNO) - Q3 EPS 0.14 (exp. 0.11), Q3 revenue USD 121.9mln (exp. 120.6mln). Sees Q4 EPS between 0.11-0.13 (exp. 0.13), and sees Q4 revenue between USD 123.5-125.5mln (exp. 125.7mln).


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  Siltronic AG (SLTCY) - Targets FY28 Revenue above EUR 2.2bln, EBITDA margin to reach the high 30s percentage area. Expects that at least H1'24 will still be burdened by high inventories as chip manufacturers and their customers.


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  Big Tech - The UK initiates an Online Fraud Charter involving 11 major tech companies, aiming to combat scams and fake ads. Representatives from firms like Facebook (META), TikTok, and Google (GOOG) will sign a pledge to implement measures such as verifying advertisers and swiftly removing fraudulent content.


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  ASML (ASML) - Board proposes current Chief Business Officer Foquet as President and CEO.

COMMUNICATIONS:

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  Disney (DIS) - Disney appoints Morgan Stanley CEO James Gorman and ex-Sky chief Jeremy Darroch to its board. Francis deSouza won't seek re-election, citing focus on new tech opportunities.

CONSUMER:

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  PVH (PVH) - PVH returned to profit in Q3, lifts full-year earnings outlook, although the guidance disappointed those who expected better after the performance of its peers of late. Q3 adj. EPS 2.90 (exp. 2.74), Q3 revenue USD 2.36bln (exp. 2.41bln). Calvin Klein Total revenue USD 1.02bln (exp. 1.02bln), with sales of 375.5mln in North America (exp. 369.9mln), and USD 646.7mln internationally (exp. 648mln). Tommy Hilfiger sales revenue USD 1.21bln (exp. 1.25bln), with sales of USD 359.2mln in North America (exp. 344.2mln), and USD 850.7mln internationally (exp. 903.2mln). PVH sees Q4 EPS at USD 3.45 (exp. 3.51), and sees FY EPS around USD 10.45 (prev. 10.35, exp. 10.35); FY revenue growth seen at +1% (prev. +3-4%).


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  Victoria's Secret (VSCO) - Q3 EPS -0.86 (exp. -0.78), Q3 revenue USD 1.27bln (exp. 1.27bln), Q3 comp sales -7%. Exec said it was encouraged by the improving sales trend into the holiday season; North America continued to improve each month throughout the Q3; exec said it was excited with early holiday sales trends in November. Sees Q4 adj. EPS between USD 2.20-2.60 (exp. 2.43), and sees Q4 revenue growth of +2-4%. FY23 adj. EPS seen between 1.85-2.25 (exp. 2.16), and sees FY23 revenue down between 2-3%.


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  Walmart (WMT) - Director and Beneficial Owner of Walmart Robson Walton sold 766,600 shares at USD 156.43/shr between November 27-29th for a total USD 119.9mln.


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  Vista Outdoor (VSTO) - Board rejects Colt CZ Group SE's merger proposal, reaffirms support for acquisition by Czechoslovak Group; The latter acquisition of the Sporting Products business is anticipated in 2024, pending shareholder and regulatory approvals.


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  Ralph Lauren (RL) - CEO Patrice Louvet sold 95,754 shares at USD 124.93/shr on November 27th for a total USD 11.96mln.


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  Autos - UAW union launches bid to organise at Tesla (TSLA) and the entire non-union auto sector, including Toyota (TM), Volkswagen (VWAGY), Rivian (RIVN), Nissan (NSANY), BMW (BMWYY) and Mercedes-Benz (MBG), Reuters reports; notes that the automakers employee around 150k workers at their US assembly plants, similar to the Detroit Three.


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  Costco (COST) - November net sales USD 20.14bln; US core comp sales +3% in November (exp. +4.5%).


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  DraftKings (DKNG) - General Counsel Stanton Dodge sold 123.6K shares on November 29th for a total USD 4.7mln.


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  eBay (EBAY) - eBay and COMC enter a partnership to boost the trading card hobby, including an eBay investment in COMC.


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  Five Below (FIVE) - Q3 EPS 0.26 (exp. 0.24), Q3 revenue USD 736.4mln (exp. 727.5mln), Q3 comp sales +2.5%. Announced a new USD 100mln share repurchase programme. Sees Q4 EPS between 3.64-3.80 (exp. 3.70), and sees Q4 revenue between USD 1.32-1.35bln (exp. 1.34bln). Boosts FY23 EPS outlook to between 5.40-5.56 (exp. 5.45) from 5.27-5.55, and narrows its FY23 revenue outlook to between 3.54-3.57bln (exp 3.6bln) from USD 3.5-3.57bln.


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  La-Z-Boy (LZB) - Q4 adj. EPS 0.74 (exp. 0.62), Q4 revenue USD 511mln (exp. 502.3mln). Raises quarterly dividend +10% to 0.20/shr. Sees Q3 revenue between USD 515-535mln (exp. 533mln).


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  Remy Cointreau (REMYY) - H1 Net EUR 113mln (prev. 223.8mln Y/Y), Op. 169.1mln (exp. 183mln), revenue EUR 636.7mln (prev. 867.1mln Y/Y), Net debt//EBITDA ratio 1.57x (prev. 0.65x Y/Y).

INDUSTRIALS:

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  Boeing (BA) - Canada plans to announce a sole-source contract with Boeing for P-8 Poseidon aircraft, replacing military surveillance planes. Bombardier's call for an open competition was challenged, Reuters reports.


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  Pure Storage (PSTG) - Q3 EPS 0.50 (exp. 0.40), Q3 revenue USD 762.8mln (exp. 763.4mln). Q4 revenue seen at USD 782mln (exp. 919.4mln); FY24 revenue seen at USD 2.82bln (exp. 2.96bln).

ENERGY:

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  Phillips 66 (PSX) - Phillips 66 acknowledged Elliott Investment Management's input, plans to continue discussions.

FINANCIALS:

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  Discover Financial Services (DFS) - Discover will stop accepting new student loan applications from February 1st, and is exploring the sale of its student loans portfolio.

30 Nov 2023 - 09:30- Research Sheet- Source: Newsquawk