Early Look

Thursday, August 1, 2024

U.S. futures are higher, building on yesterday’s big gains following the dovish FOMC policy outlook from Chairman Powell, looking to start August higher after closing out a mixed July. July concluded with mostly big gains for the month, as the S&P 500 rose 1.13%, the Dow jumped 4.41% and the Russell 2000 index was the big winner rising over 10% for the month while the Nasdaq lost -0.75%, helped paring losses after a big 2.6% jump yesterday. Gold prices closed at record highs of $2,473 to end July (up 4% for month), after Federal Reserve Chair Jerome Powell hinted that an interest rate cut could be on the table as early as September if inflation stays in line with expectations. The U.S. dollar added to losses following rate cut hopes and a surge in the Japanese yen, rising 1.9% yesterday alone after the Bank of Japan raised rates to the highest level since 2008 (DXY fell -1.7% for July). Treasury yields ended at the lows of the month on Wednesday, as the 10-yr slipped over 7bps to 4.107% (down 23.5 bps in July), the lowest since March 11^th and now down for three consecutive months (57.6 bps during that stretch and 88 bps off 52-week high 4.987% on 10/19). The 2-year yield declined 38.1 bps in July to close at 4.337% (down over 70-bps in 3-months), lowest since February 1^st. Oil prices jumped on Wednesday as tensions in the Middle East rise on killing of top Hamas leader, with WTI posting its biggest daily gains since Oct 2023, up 4.26% but still fell -4% for July and brent fell -7% on the month. In Asian markets, The Nikkei Index tumbled -975 points to 38,126 after the near 2% move higher for the yen yesterday, the Shanghai Index dipped -6 points to 2,932, and the Hang Seng Index fell -39 points to 17,304. In Europe, the German DAX is down -156 points to 18,352, while the FTSE 100 slips -7 points to 8,360. Next up this morning the Bank of England (BoE) central bank meeting and several U.S. economic data points, along with more earnings (60% of S&P 500 have been released so far). Oil rose further after surging as Iran was reported to have ordered a retaliatory strike on Israel for killing a Hamas leader on its soil.

• The Dow Jones Industrial Average rose 99.46 points, or 0.24%, to 40,842.79.
• The Nasdaq Composite surged 451.98 points, or 2.64%, to 17,599.40.
• The Russell 2000 Index advanced 11.34 points, or 0.51% to 2,254.48.

• 8:30 AM ET                  Weekly Jobless Claims…est. 236K
• 8:30 AM ET                  Continuing Claims…est. 1.856M
• 8:30 AM ET                  Nonfarm Productivity for Q2 Prelim…est. +1.7%
• 8:30 AM ET                  Unit Labor Costs Prelim Q2…est. +1.8%
• 9:45 AM ET S&P Global Manufacturing PMI, July-Final…prior 49.5
• 10:00 AM ET                Construction Spending M/M for June…est. +0.2%
• 10:00 AM ET ISM Manufacturing PMI for July…est. 48.8
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data

• Earnings After the Close: AAPL ADPT AEE AEL AES ALTR AMH AMZN ASUR ATRO AXTI BCOV BECN BFAM BFLY BIO BKNG BOOM BZH CABO CC CE CIVI CLX COIN CPS CPT CTRA CUBE CWST DASH DKNG FORM DRH ED EOG FDP FND FOXF GDDY GEN HASI HCC HUBG IAS INTC IRTC LASR LEG LNT LOCO MARA MATW MCHP MMSI MP MPWR MSI MSTR MTD MTZ NET NXT OLED OPEN PCOR POST PRU REG RGA RGNX RMD RNG ROKU RYAN SEM SGHT SKT SMSI SNAP SPT SQ SWN TNDM TROX TWLO UPLD VIR VREX VRTX VTR WK WSC X XHR XPOF ZEUS ZYME

• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 19.7 vs 11.5 last week. Bulls rise to 44.9% from 43.2%, Neutrals rise to 29.9% from 25.1%, Bears fall to 25.2% from 31.7%.
• Chinese July Caixin Manufacturing PMI (final): 49.8 vs 51.5 consensus and lowest since October.

• Cheesecake Factory (CAKE) Q2 adj EPS $1.09 vs. consensus $1.00; Q2 revs $904M vs. est. $908.88M; Q2 comp restaurant sales at The Cheesecake Factory restaurants increased 1.4% y/y vs. est. 1%.
• eBay Inc, (EBAY) Q2 adj EPS $1.18 vs. consensus $1.13; Q2 revenue $2.6B vs. est. $2.53B; forecasts Q3 net revs $2.50B to $2.56B, vs. est. $2.54B; Q2 adj operating margins 27.9%; Q2 Gross Merchandise Volume of $18.4 billion, up 1% on an as-reported and FX-Neutral basis.
• Etsy Inc. (ETSY) Q2 EPS $0.41 vs. est. $0.45; Q2 revs $647.8M vs. consensus $629.57M; Q2 Consolidated GMS was $2.9B, down -2.1% y/y down 1.9% on a currency-neutral basis; Q2 Etsy marketplace GMS was $2.5B, down -3.2% year-over-year and down 2.9% on a currency-neutral basis; sees 2024 adjusted EBITDA at least equal to 2023.
• Host Hotels (HST) Q2 EPS $0.34 vs est. $0.34, AFFO/shr $0.57 vs est. $0.56, adj EBITDA $476Mm vs est. $462.53Mm; sees FY adj EBITDA $1.615-1.675B vs prior $1.64-1.7B and est. $1.674B and AFFO/shr $1.90-1.98 vs prior $1.97-2.05 and est. $2.02.
• MGM Resorts (MGM) Q2 adj EPS $0.86 vs. est. $0.61; Q2 revs $4.327B vs. consensus $4.22B; 2Q MGM China Adjusted Property EBITDAR of $294M increase of 40% y/y as market share remained in the mid-teens; 2Q net income attributable to MGM Resorts of $187M and 2Q consolidated Adjusted EBITDAR of $1.2B; Q2 MGM China revenue was up 37% to $1.02B, Las Vegas Strip Resorts revenue was up 2.7% to $2.21B and regional ops revs at $927.1M.
• VICI Properties (VICI) Q2 AFFO/shr $0.57 vs est. $0.57 on revs $957Mm vs est. $952.4Mm.
• Li Auto Inc. (LI) said that it delivered 51,000 vehicles in July 2024, setting a new monthly delivery record and representing an increase of 49.4% y/y. This brought the Company’s total deliveries in 2024 to 239,981. As of July 31, 2024, its cumulative deliveries reached 873,345 vehicles, ranking first among China’s emerging new energy auto brands.
• Nio (NIO) announced July delivery results. Nio delivered 20,498 vehicles in July. The deliveries consisted of 11,964 smart electric SUVs, and 8,534 smart electric sedans. Cumulative deliveries of Nio vehicles reached 557,518 as of July 31.
• XPENG (XPEV) delivered 11,145 Smart EVs, up 1% year-over-year and 4% over the prior month. Out of the total July deliveries, 1,459 were XPENG X9s, bringing X9’s cumulative total to 14,602 units since its launch in January this year and extending its leadership of both the all-electric MPV and three-row model segments in China. Overall, XPENG delivered 63,173 Smart EVs in the first seven months of 2024, a 20% increase from last year.

• Enovix Corp. (ENVX) Q2 EPS loss (-$0.14) vs. est. loss (-$0.23); Q2 revs $3.8M vs. est. $3.69M; says to receive milestone payments associated with building & testing prototype batteries for IOT device along a path toward mass production; said on track to execute upon our goal of over $35 mln in annualized savings; sees Q3 EPS loss (-$0.23-$0.17) vs. est. loss (-$0.20) and revs $3.5M-$4.5M.
• Transocean (RIG) Q2 EPS loss (-$0.15) vs. est. loss (-$0.10); Q2 adj Ebitda $284M vs. est. $245.5M; Q2 revs $861M vs. est. $862.6M; Q2 Backlog as of July Fleet Status Report was $8.64B.

• Aflac Inc. (AFL) Q2 adj EPS $1.83 vs. consensus $1.60; Q2 revenue $5.1B vs. consensus $4.31B; U.S. net earned premiums increased 2.1% to $1.5B in 2Q vs. prior y/y; average yen/dollar exchange rate in the second quarter of 2024 was 155.70, or 11.7% weaker than the average rate of 137.53 in the second quarter of 2023.
• Allstate (ALL) Q2 adj EPS $1.61 vs est. $0.37on revs $15.7B vs est. $14.147B, premiums earned $13.34B vs est. $13.41B.
• Everest Group (EG) Q2 EPS $16.85 vs. consensus $16.59; Q2 revenue $4.227B vs. consensus $4.02B; had $4.7B in gross written premium in Q2 with y/y growth of 12.8%2 for the Group, 16.5% for Reinsurance, and 5.8% for Insurance; Q2 GAAP combined ratio 90.3% for Group, 88.9% for Reinsurance and 94.4% for Insurance.
• Fair Isaac (FICO) Q3 adj EPS $6.25 vs est. $6.32 on revs $447.849Mm vs est. $445.5Mm; sees FY revs $1.7B vs est. $1.707B and adj EPS $23.16 vs est. $23.63.
• MetLife (MET) Q2 adj EPS $2.28 vs. est. $2.12; Q2 adj revs $18.68B vs. est. $18.76B; Q2 Book value of $33.30 per share, down 5 percent from $34.92 per share at June 30, 2023; Q2 Return on equity (ROE) of 15.2%; Q2 Premium, fees and other rev. $13.55B.

• Cigna (CI) Q2 adj EPS $6.72 vs. est. $6.41 and Q2 revenue $60.52B vs. consensus $58.33B; backs FY24 adjusted EPS view at least $28.40, consensus $28.50 and backs FY24 revenue view at least $235B vs. consensus $235.51B.
• Evolus Inc. (EOLS) Q2 adj op Inc $1.1Mm vs est. ($0.389)Mm on revs $66.9Mm vs est. $65.8Mm, adj gr mgn 71.5%; guides FY revs $260-270Mm vs est. $262.5Mm, sees adj op Inc positive for Q4, FY25; sees total net revs at least $700Mm by 2028.
• Exact Sciences (EXAS) Q2 EPS ($0.09) vs est. ($0.32) on revs $699.264Mm vs est. $690Mm; guides FY revs $2.81-2.85B vs prior $2.81-2.85B and est. $2.829B and adj EBITDA $335-355Mm vs prior $325-350Mm and est. $327.54Mm.
• Jazz Pharma (JAZZ) Q2 EPS $5.30 vs. consensus $4.77; Q2 revs $1.02B vs. consensus $1B; boosts FY24 EPS view to $19.20-$20.30 from $18.15-$19.35 (est. $18.51) and narrows FY24 revenue view to $4.0B-$4.1B from $4.0B-$4.2B; posts Q2 15% y/y revs increase from combined key growth drivers: Xywav(R) , Epidiolex(R) and Rylaze(R).
• Regeneron (REGN) Q2 adj EPS $11.56 vs. consensus $10.61; Q2 revenue revs rose 12% y/y to $3.55B vs. est. $3.38B; Q2 Dupixent(R) global net sales (recorded by Sanofi) increased 27% to $3.56 billion y/y; Q2 U.S. net sales for EYLEA(R) HD and EYLEA(R) increased 2% to $1.53 billion versus second quarter 2023, including $304 million from EYLEA HD.
• Teladoc (TDOC) Q2 adj EPS ($0.28) vs est. ($0.35), adj EBITDA $89.481Mm vs est. $74.2Mm on revs $642.444Mm vs est. $649.7Mm; withdrawing outlook for 2024 and three-year outlook.
• TransMedics Group (TMDX) Q2 EPS $0.35 vs est. $0.21 on revs $114.3Mm vs est. $98.97Mm; sees FY revs $425-445Mm vs est. $401.43Mm.

• Albemarle (ALB) Q2 adj EPS $4.00 vs. est. $0.48 while sales fell -40% y/y to $1.43B vs. est. $1.33B; Q2 adj EBITDA fell -63% y/y to $386.4M vs. est. $277M; Maintaining full-year outlook considerations; notably, the previously published $15/kg scenario is expected to apply even assuming lower July market pricing persists for the remainder of the year.
• CH Robinson Worldwide (CHRW) Q2 EPS $1.05 vs. est. $0.96 and revs rose 1.9% y/y to $4.48B vs. est. $4.54B; Adjusted operating margin increased 600 basis points to 25.9%; Q2 operating expenses decreased 4.4% to $509.3M.
• Corteva (CTVA) Q2 adj EPS $1.83 vs est. $1.73, adj EBITDA $1.92B vs est. $1.845B on sales $6.17B vs est. $6.159B; guides FY net sales $17.2-17.5B vs est. $17.372B, adj EBITDA $3.4-3.6B vs est. $3.481B and cuts adj EPS to $2.60-2.80 from $2.70-$2.90 prior and vs est. $2.77.
• FMC Corp. (FMC) Q2 EPS $0.63 vs. est. $0.55; Q2 revs $1.04B vs. est. $1.04B; Q2 adj Ebitda $202M vs. est. $186.7M; guides FY24 revs $4.3B-$4.5B vs. est. $4.43 and EPS $3.02-$3.64 vs. est. $3.48.
• Ingersoll Rand (IR) Q2 adj EPS $0.83 vs est. $0.75 on revs $1.81B vs est. $1.8B; guides up for FY revs +6-8% vs est. +7.3%, adj EBITDA $2.01-2.06B vs est. $2.039B and adj EPS $3.27-3.37 vs est. $3.30.

• Applied Materials Inc (AMAT) was rejected for funding under the Chips act for a research and development center in Silicon Valley, Bloomberg reported on Thursday. Commerce Department officials rejected the chipmaking equipment maker’s bid to gain U.S. funding for a $4 billion facility in Sunnyvale, California.
• ANSYS Inc. (ANSS) Q2 adj EPS $2.50 vs est. $1.92 on revs $594.1Mm vs est. $549.3Mm, adj op mgn 44.9%.
• Arm Holdings (ARM) Q1 adj EPS $0.40 vs est. $0.34 on revs $939Mm vs est. $902.7Mm; sees Q2 revs $780-830Mm vs est. $804.1Mm and adj EPS $0.23-0.27 vs est. $0.27; sees FY revs $3.8-4.1B vs est. $4.02B and adj EPS $1.45-1.65 vs est. $1.58.
• Cognizant Technology (CTSH) Q2 adj EPS $1.17 vs. consensus $1.12; Q2 revs $4.9B vs. consensus $4.8B; raises FY24 adjusted EPS view to $4.62-$4.70 from $4.50-$4.68 (est. $4.62) while narrows FY24 revenue view to $19.3B-$19.5B from 18.9B-$19.7B (est. $19.4B).
• Confluent (CFLT) Q2 adj EPS $0.06 vs est. $0.05 on revs $235Mm vs est. $229.96Mm, adj op mgn 0.6%; sees Q3 subscription revs $233-234Mm and adj EPS $0.05 vs est. $0.05; sees FY subscription revs $910Mm and adj EPS $0.20 vs est. $0.21.
• Lam Research (LRCX) Q2 EPS $8.14 vs. consensus $7.58; Q2 revs $3.87B vs. consensus $3.82B; guides Q3 EPS $7.22-$8.72 vs. consensus $8.00 and revs $3.75B-$-$4.35B vs. consensus $4.02B; Q2 U.S. GAAP gross margin of 47.5%, U.S. GAAP operating income as a percentage of revenue of 29.1%.
• PTC Inc. (PTC) Q3 adj EPS $0.98 vs. est. $0.96; Q3 revenue $519M vs. est. $533.54M; said delivered solid ARR and cash flow, with year-over-year ARR growth in the low double-digits and cash flow growth above 20%; raises FY24 adjusted EPS view to $4.85-$5.21 from $4.60-$5.10 and narrows FY24 rev view to $2.2B-$2.22B from $2.2B-$2.24B.
• Qualcomm (QCOM) Q3 adj EPS $2.33 vs est. $2.25 on revs $9.39B vs est. $9.22B; sees Q4 revs $9.5-10.3B vs est. $9.71B and adj EPS $2.45-2.65 vs est. $2.45; sees FY adj EPS midpoint $10.08 vs est. $9.90; after rising on results, shares reversed lower overnight after the co warned of a hit from the U.S. revoking one of its export licenses for sanctioned Chinese telecom firm Huawei saying they will see an impact in Q4 and Q1.
• Tenable (TENB) Q2 adj EPS $0.31 vs est. $0.24 on revs $221.2Mm vs est. $218.44Mm; guides Q3 revs $222-224Mm vs est. $228.18Mm and adj EPS $0.28-0.30 vs est. $0.29; sees FY revs $889-895Mm and adj EPS $1.16-1.19 vs est. $1.10.
• Western Digital (WDC) Q4 adj EPS $1.44 vs est. $1.17 on revs $3.764B vs est. $3.74B, gr mgn 35.9%; sees Q1 revs $4.0-4.2B vs est. $4.222B and adj EPS $1.55-1.85 vs est. $1.74.
• Zeta Global (ZETA) Q2 adj EBITDA $38.5Mm vs est. $35.5Mm on revs $228Mm vs est. $212.4Mm; sees Q3 adj EBITDA $46.8-47.3Mm vs est. $44.79Mm and revs $237.2-241.2Mm vs est. $230.43Mm; sees FY adj EBITDA $174.5-176.5Mm vs est. $170.30Mm and revs $920-930Mm vs est. $900.45Mm.
• The EU Commission on Thursday said it had unconditionally approved the $14 billion takeover of networking gear maker Juniper Networks (JNPR) by Hewlett Packard Enterprise (HPE).