US EQUITY OPEN: Indices open within contained ranges as Tech names lead the gains

Analysis details (15:01)

OPEN: Equities opened within contained ranges (DJIA & RUT -0.2%, SPX flat) with outperformance in the tech-heavy Nasdaq 100 (+0.5%) amid gains in the mega-cap names with Costco (COST) (+3.2%) leading the charge after strong earnings. Fed’s Williams (voter) spoke and his remarks were a notable pushback of the dovish Powell on Wednesday, as the NY Fed President said they are not really talking about rate cuts right now. On the data footing, NY Fed Manufacturing in December slumped to -14.5 (the lowest since August) from +9.1, well beneath the expected +2.0 and outside the lower bound of the forecast range (-5.0). Meanwhile, in November, industrial production rose 0.2% M/M (exp. 0.3%), and manufacturing output rose 0.3% (exp. 0.4%). Lastly, December Global Manufacturing flash PMI fell to 48.2 (exp. 49.3, prev. 49.4), while Services rose to 51.3 (exp. 50.6, prev. 50.8) leaving the composite at 51.0 from 50.7. Sectors opened largely in the red, with only Technology and Communication Services the ones in the black, whilst Utilities, Energy, Health, and Real Estate lagging. Elsewhere, the Dollar is firmer with EUR and GBP the G10 laggards, with precious metals (XAU, XAG) lower and spot silver underperforming. Lastly, Treasuries mixed as bear-flattening after hawkish Williams has already nearly faded.

STOCK SPECIFICS

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  General Motors (GM) -1%: Will lay off 1.3k workers from Michigan's Orion and Lansing Grand River plants in the new year.


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  Costco (COST) +3.2%: EPS and revenue beat alongside announcing a special cash dividend of USD 15/shr.


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  Lennar's (LEN) -2.5%: Gross margin on home sales, pricing and backlog all disappointed, but beat on EPS, revenue, new orders, and deliveries. Looking ahead, Q1 guidance is strong on order and delivery units, but weak on pricing and margins.


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  Darden Restaurants (DRI) -2%: Missed on revenue, but profit topped and lifted FY guidance.


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  GE (GE) +1%: Upgraded at Wells Fargo; said Co. combines an "attractive business with high aftermarket mix," as well as solid management team and clean balance sheet.


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  First Solar (FSLR) +2.3% Enphase Energy (ENPH) +1% SunPower (SPWR) +1.7% Sunrun (RUN) +1%: Jefferies initiated coverage with Buy ratings, citing declining solar equipment costs and incentives from the Inflation Reduction Act.


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  Nio (NIO) flat: President said tariffs from EU probe into subsidies for China-made EVs would affect sales forecasts and investments.


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  Steel Dynamics (STLD) +3%: Guides Q4 EPS view above expectations but profitability from steel operations is expected to be lower than sequential Q3 results.


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  BlackRock (BLK) -1.8%: Downgraded at JPM.

15 Dec 2023 - 15:01- EquitiesData- Source: Newsquawk