Early Look

Thursday, August 3, 2023

Futures	Up/Down	%	Last
Dow	-52.00	0.15%	35,351
S&P 500	-10.25	0.22%	4,527
Nasdaq	-52.50	0.34%	15,420

 

 

U.S. stock futures are pointing to a lower open as Treasuries extend yesterday’s sell-off, pushing the 10-year yield to fresh highs and denting shares of growth stocks ahead of a busy day of economic data and key large cap earnings releases. U.S. stocks and bonds suffered a wave of selling pressure Wednesday as Treasury yields touched the highest levels of the year and major indexes toward their worst session in months. After yesterday’s sell-off the 10-year treasury yield rose as high as 4.13%, its highest since November after better ADP jobs data and Fitch downgraded the U.S. government’s top credit rating, cutting the United States to AA+ from AAA. Meanwhile the S&P 500 snapped a streak of over 47-days without a decline of over 1% with Technology, Communications, and Consumer Discretionary the biggest losers while the Nasdaq Composite posted its worst day in 5-months falling over 2%. Today another heavy dose of earnings with two behemoths after the close with Apple (AAPL) and Amazon (AMZN) results. In Asian markets, The Nikkei Index tumbled -548 points to 32,159, the Shanghai Index rose 18 points to 3,280, and the Hang Seng Index declined 96 points to 19,420. In Europe, the German DAX is down -111 points or -0.7% to 15,908, while the FTSE 100 is down -55 points or -0.7% to 7,506.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -63.34 points, or 1.38%, to 4,513.39.

·     The Dow Jones Industrial Average fell -348.16 points, or 0.98%, to 35,282.52.

·     The Nasdaq Composite tumbled -310.47 points, or 2.17%, to 13,973.45.

·     The Russell 2000 Index declined -27.33 points, or 1.37% to 1,966.83.

 

Economic Calendar for Today

·     7:30 AM ET            Challenger Job Layoffs for July

·     8:30 AM ET            Weekly Jobless Claims…est. 227K

·     8:30 AM ET            Continuing Claims…est. 1.70M

·     8:30 AM ET            US Nonfarm productivity for Q2…est. +2.0%

·     8:30 AM ET            Unit Labor Costs for Q2…est. +2/6%

·     9:45 AM ET            S&P Global Composite, July-Final

·     9:45 AM ET            S&P Global Services PMI, July-Final

·     10:00 AM ET          Factory Orders M/M for June…est. +2.2%

·     10:00 AM ET          ISM Non-Manufacturing PMI for July…est. 53.0

·     10:30 AM ET          Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ACIW ALNY APD APO BALL BALY BCRX BDC BDX BLD BRKR BV CARS CGNX CI CMI COMM COP DCO DIN DINO DLX DNB DOC ENOV EPC EXPE FOUR FUN GCI GEL GOLF H HAS HEP ICE IDCC IRM ITT JOUT KOP KTB LAMR LAUR LNG MDU MGPI MMP MRNA MTSI MUR MYE NS ONEW PBF PBH PBI PH PLNT PNW PWR PZZA REGN SABR SHAK SNDR SRE STWD SUP TGNA TPX TRGP UNIT VC VMC W WBD WCC WD WLK WMS WRK XRAY

·     Earnings After the Close: AAPL AAOI ABNB ACTG AEIS AGS ALTR AMGN AMZN APLE APPN ATROAXTI BE BECN BGS BIGC BIO BKNG BWXT CABO CARD CDXS CHUY COIN COLD CPK CPS SPT CRSR CRUS CTVA CUBE DBX DEN DH DKNG DLB DOCN DRH DVA EB ED EGLE ENV EOG EXR FIGS FND FNKO FOXF FTNT GDDY GDOT GEN GH GHLD GILD GPRO HASI HAYN HTGC IAS III INVE IRTC IVR KTOS LASR LOCO LTHM MCHP MP MSI MTZ MWA NET OLED OPEN OSUR PBPB PCTY PGNY PLYA POST POWI PTCT QLYS RDFN REG RGA RMD RRR RYAN SEM SKT SNDX SPT SQ STEM SWN SYK STNA TMDX TNDM TPC TPIC TRUP TXG UDMY UPLD VCTR VIR WERN WISH WK WW XPOF YELP ZEUS

 

 

Macro	Up/Down	Last
Nymex	-0.29	79.20
Brent	-0.28	82.92
Gold	-5.10	1,969.90
EUR/USD	-0.0014	1.0923
JPY/USD	-0.38	142.94
10-Year Note	+0.064	4.143%

 

 

World News

·     China Caixin July Services PMI 54.1 vs. est. 52.4 and slightly above previous 53.9; and Caixin July Composite PMI 51.9 vs. prior 52.5.

·     Australia’s services sector contracted in July, as the Judo Bank Australia Services Performance of Manufacturing Index fell to 47.9 in July from 50.3.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 27.7 vs 20.8 last week. Bulls rise to 49% from 44.9%, Neutrals fall to 29.7% from 31%, Bears fall to 21.3% from 24.1%.

 

Sector News Breakdown

Consumer

·     Boot Barn Holdings (BOOT) Q1 EPS $1.13 vs est. $0.84 on revs $383.7Mm vs est. $321.99Mm; guides FY total sales $1.715-1.748B vs est. $1.707B and EPS $5.05-5.35 vs est. $4.87 on weighted avg diluted shares 30.6Mm.

·     Central Garden & Pet (CENT) Q3 adj EPS $1.75 vs est. $1.48 on revs $1.02B vs est. $1.026B; guides FY adj EPS $2.55 or better vs est. $2.36.

·     Cheesecake Factory (CAKE) Q2 EPS $0.87 vs. est. $0.82; Q2 revs $866.2M vs. est. $880M; Q2 comparable restaurant sales at cheesecake factory restaurants increased 1.5% y/y.

·     Clorox Inc. (CLX) Q4 adj EPS $1.67 vs est. $1.18 on revs $2.0B vs est. $1.877B, gr mgn 42.7%; guides FY24 net sales +0-2% and organic sales +2-4%, gr mgn +150-175bps, SG&A 15-16% of net sales, advertising, & sales 11% of net sales, effective tax rt 24%, adj EPS $5.60-5.90 vs est. $5.63.

·     Costco (COST) Reports July Total SSS +3.0% YoY (ex-gas and FX); U.S. comp store sales growth +4.5% (ex-gas and FX) v +2.0% YoY.

·     DoorDash (DASH) Q2 EPS ($0.44) vs est. ($0.41) on revs $2.13B vs est. $2.06B, adj EBITDA $279Mm vs est. $214.5Mm; guides Q3 marketplace GOV $15.8-16.2B and adj EBITDA $220-270Mm vs est. $190.92Mm; sees FY marketplace GOV $64.2-65.2B.

·     Host Hotels (HST) Q2 AFFO/shr $0.53 vs est. $0.56 on revs $1.393B vs est. $1.424B; guides FY revs $5.246-5.338B vs est. $5.344B and AFFO/shr $1.82-1.89 vs est. $1.89.

·     MGM Resorts (MGM) Q2 adj EPS $0.59 vs. est. $0.54; Q2 revs $3.942B vs. est. $3.82B; Q2 MGM China outperformed Macau market recovery with adjusted property ebitda and net revenues surpassing Q2’19; Q2 Las Vegas revs $2.1B was flat y/y.

·     QuantumScape (QS) announces $300 mln stock offering for working capital, general purposes.

·     Shopify Inc. (SHOP) Q2 adj EPS $0.14 vs. est. $0.05; Q2 revs $1.69B vs. est. $1.62B; Q3 gross merchandise vol (GMV) $55B vs. est. $53.43B; said sees Q3 rev growth low-twenties percentage and sees Q3 gross margin up 2% to 3% vs Q2.

·     TripAdvisor (TRIP) Q2 EPS $0.34 vs. est. $0.35; Q2 revs rose 18% y/y to $494M vs. est. $472.7M; said has initiated a series of actions to reduce costs, most notably headcount within the Tripadvisor Core segment, including corporate G&A.

·     Zillow Group (Z) Q2 revenue $506M tops consensus $472.14M; said Q2 residential revenue decreased 3% y/y to $380M, as the company delivered a better-than-expected number of connections to Premier Agent partners; Q2 avg monthly unique visitors 226.0M, EST 233.3M.

 

Energy

·     Ameren (AEE) Q2 EPS $0.90 vs. est. $0.80; Q2 revs $1.76B vs. est. $1.68B; backs FY23 EPS view $4.25-$4.45, vs. consensus $4.37.

·     APA Corp. (APA) Q2 adj EPS $0.85 vs. est. $0.75; Q2 revs $1.96B vs. est. $1.71B; Q2 profit fell -59% hurt by lower energy prices; said on track to deliver total adjusted oil production growth of more than 10% for the year, driven by U.S. and Egypt performance.

·     Marathon Oil (MRO) Q2 adj EPS $0.48 vs. est. $0.46; Q2 revs $1.51B vs. est. $1.52B; said originally provided 2023 production guidance ranges remain unchanged with the Company’s full year 2023 total Company oil equivalent production trending above the midpoint of guidance; said Q3 total company oil and oil equivalent production are both expected to be at or above high end of annual guidance ranges.

·     Occidental Petroleum (OXY) Q2 adj EPS $0.68 vs. est. $0.71; Q2 Realized NGLs price per barrel $19.08 and realized oil price per barrel $73.59; Q2 production of 1,218 MBoed exceeded mid-point of guidance by 42 MBoed; full-year production guidance raised to 1,210 MBoed.

·     SunRun (RUN) Q2 reported EPS $0.25 on revs $590.2Mm vs est. $631.16Mm; guides Q3 solar energy capacity installed growth 255-275 megawatts and FY solar energy capacity installed growth 10-15%; sees net subscriber value materially higher in 2H23 vs 1H23; said sees lower storage installations in Q3.

·     Williams Energy (WMB) Q2 adj EPS $0.42 vs est. $0.38, adj EBITDA $1.611B; guides FY adj EBITDA $6.4-6.8B vs est. $6.568B.

 

Financials

·     Lincoln National (LNC) Q2 adj EPS $2.02 vs. est. $1.85; Q2 revs $2.929B vs. est. $4.64B; said shifting to a more capital-efficient business mix and executing against our strategic objectives — High-quality and diversified investment portfolio positions us well for the future.

·     MetLife (MET) Q2 adj EPS $1.94 vs. est. $1.87; Q2 revs $16.6B vs. est. $16.9B; 2Q Net Investment Income $5.1B, 2Q Book Value Per Share $34.92 down -7% y/y, 2Q Premiums, Fees, Other Rev $13.59B; Return on equity (ROE) of 5.4%.

·     PayPal (PYPL) Q2 adj EPS $1.16 vs. est. $1.06; Q2 revs $7.3B vs. est. $6.61B; Q2 TPV $376.5B, up 11% on spot, FX-neutral basis; sees Q3 adj EPS $1.22-$1.24 above est. $1.11; sees Q3 net revenues are expected to grow ~8% on a spot and FXN basis to ~$7.4B; reported an adjusted operating margin of 21.4% for Q2, below the 22% outlook given previously.

·     Realty Income (O) Q2 AFFO/shr $1.00 vs est. $1.02 on revs $1.02B vs est. $948.36Mm.

·     Robinhood (HOOD) Q2 EPS $0.03 vs. est. loss (-$0.01); Q2 revs rose 10% y/y to $486M vs. est. $430.88M; sees Gaap total operating expenses for full-year 2023 to be in range of $2.33B-$2.41B; assets under custody increased 13% sequentially to $89 bln at qtr-end; said net deposits were $4.1 bln at qtr-end.

·     Public Storage (PSA) Q2 core FFO $4.28 vs. est. $4.20; Q2 revs $1.12B vs. est. $1.12B; said posted record customer move-in volume growth of 13.6%, stabilized same store NOI growth of 6.6%, and non-same store lease-up NOI growth of 20%.

·     Simon Property Group (SPG) Q2 FFO/shr $2.88 vs est. $2.92 on revs $1.37B vs est. $1.249B; domestic NOI +3.3%, portfolio NOI +3.7%; occupancy 94.7%; reported retailer sales per sq ft $747 for trailing 12 months; raising dividend $0.15 or 8.6% y/y, declared $1.90 for Q3; guides FY FFO/shr $11.85-11.95 vs est. $11.91 (an increase of $0.02/shr at the mid-point).

 

Healthcare

·     Agios Pharmaceuticals, Inc. (AGIO) has entered into an exclusive worldwide license agreement with Alnylam Pharmaceuticals, Inc. (ALNY) under which Agios will acquire the rights to develop and commercialize Alnylam’s novel preclinical siRNA targeting TMPRSS6.

·     American Well Corp. (AMWL) Q2 EPS ($0.33) vs est. ($0.22) on revs $62.4Mm vs est. $65.9Mm, subscription revs $28Mm, gr mgn 39%; guides FY revs $257-263Mm vs est. $276.71Mm, adj EBITDA $(165)Mm – $(160)Mm vs est. $(157.22)Mm.

·     Aravive (ARAV) shares fall -47% after its Phase 3 AXLerate-OC trial evaluating the safety and efficacy of Batiraxcept in platinum-resistant ovarian cancer did not meet its primary endpoint of progression-free survival.

·     Cigna (CI) Q2 adj EPS $6.13 vs. est. $6.02; Q2 revs $48.62B vs. est. $47.31B; reaffirms FY23 adjusted EPS view $24.70 and revenue view $190B vs. est. $191.69B; sees 2023 Cigna healthcare medical care ratio of 81.5% to 82.3%; q2 medical care ratio of 81.2% vs 80.7%.

·     Coherus Biosciences (CHRS) Q2 adj EPS ($0.38) vs est. ($0.33) on sales $58.7Mm vs est. $53.9Mm; guides FY product revs exceed $275Mm.

·     Community Health (CYH) Q2 EPS loss (-$0.22) vs. est. loss (-$0.27); Q2 revs $3.115B vs. consensus $3.04B; On a same-store basis, admissions increased 4.8% and adjusted admissions increased 4.9%, compared to the same period in 2022.

·     McKesson (MCK) Q1 adj EPS $7.27 vs. est. $5.87; Q1 revs $74.48B vs. est. $70.28B; increases quarterly dividend to 62c from 54c and board approves $6B increase to share repurchase program; raises FY24 adjusted EPS view to $26.55-$27.35 vs. est. $26.63.

 

Industrials & Materials

·     Albemarle (ALB) Q2 adj EPS $7.33 vs. est. $4.44; Q2 revs $2.4B vs. est. $2.43B; raises FY23 adjusted EPS view to $25.00-$29.50 from $20.75-$25.75 (est. $23.31) and boosts FY23 revenue view to $10.4B-$11.5B from $9.8B-$11.5B (est. $10.12B) citing rising lithium prices and vol.

·     CF Industries (CF) Q2 EPS $2.70 vs est. $2.25 on sales $1.775B vs est. $1.8B, adj EBITDA $857Mm.

·     CH Robinson Worldwide (CHRW) Q2 EPS $0.90 vs. est. $0.83; Q2 revs fell -35% y/y to $4.42B primarily due to lower pricing in its ocean and truckload services but above est. $4.23B; said Q2 operating expenses decreased 5.2%.

·     Curtiss-Wright (CW) Q2 adj EPS $2.15 vs est. $1.90 on revs $704Mm vs est. $648.5Mm, adj op mgn 16.4%; guides FY adj sales $2.73-2.79B vs est. $2.705B, adj op mgn 17.4-17.6% and adj EPS $8.90-9.15 vs est. $8.87.

·     FMC Corp. (FMC) Q2 adj EPS $0.50 vs. est. $0.61; Q2 revs $1.01B vs. est. $1.02B; lowers FY23 adjusted EPS to $5.86-$6.80 vs. consensus $6.43 and backs FY23 revenue view $5.2B-$5.4B; lowers FY free cash flow outlook to a midpoint of break even.

·     Ingersoll Rand (IR) Q2 adj EPS $0.68 vs. est. $0.60; Q2 revs $1.69B vs. est. $1.58B; raises FY23 adj EPS view to $2.70-$2.80 from prior $2.64-$2.74 and boosts FY23 revenue growth view to 12%-14% from 7%-9%.

·     Modine Manufacturing (MOD) Q1 adj EPS $0.85 vs est. $0.44 on revs $622.4Mm vs est. $575.99Mm, adj EBITDA $80.4Mm vs est. $47.33Mm; guides FY net sales +6-11% vs est. +7.28% and adj EBITDA $280-295Mm vs est. $231.43Mm.

·     Spirit Airlines (SAVE) Q2 adj EPS $0.29 missed the $0.32 estimate saying demand for peak summer travel period has been softer than expected, resulting in lower fare levels on routes we serve; Q2 revenue $1.43B, below consensus $1.47B.

 

Technology, Media & Telecom

·     Etsy Inc. (ETSY) Q2 adj EBITDA $166.2Mm vs est. $160.61Mm on revs $628.9Mm vs est. $619.14Mm; guides Q3 GMS $2.95-3.10B, revs $610-645Mm vs est. $632.43Mm, adj EBITDA mgn 27-28%.

·     HubSpot (HUBS) Q2 adj EPS $1.34 vs. est. $0.99; Q2 revs $529.1M vs. est. $505.3M; said Q2 average Subscription Revenue Per Customer was $11,432, up 2% y/y; sees FY23 adj EPS $5.24-$5.29 vs. est. $4.84 and revs $2.116B-$2.122B vs. est. $2.09B.

·     Qualcomm (QCOM) Q3 adj EPS $1.87 vs. est. $1.81; Q3 revs $8.45B vs. est. $8.51B; sees Q4 adjusted EPS $1.80-$2.00 vs. est. $1.91 and revs $8.1B-$8.9B vs. est. $8.7B; Revenue at Qualcomm’s handset chip business fell 25% to $5.26B.

·     Qorvo (QRVO) Q1 adj EPS $0.34 vs est. $0.15 on revs $651Mm vs est. $639.77Mm, adj gr mgn 42.9%; guides Q2 revs $$985Mm-$1.015B vs est. $959.78Mm, adj gr mgn 45-46%, adj EPS approx $1.75 at midpoint of revs guide vs est. $1.62.

·     Unity Software (U) Q2 revs $533.5M vs. est. $515.5M and sees Q3 revs $540M-$550M vs. est. $543.9M; boosts year revenue to $2.12B-$2.20B, from $2.08B to $2.2B; said for Q2, Customers who generated $100K+ revenue 1,330.

·     Altice USA (ATUS) Q2 EPS $0.17 vs est. $0.07 on revs $2.324B vs est. $2.323B, adj EBITDA $921.7Mm

·     ANSYS Inc. (ANSS) Q2 adj EPS $1.60 vs est. $1.49 on revs $496.6Mm vs est. $491.13Mm, adj op mgn 36.4%; guides Q3 adj revs $453.7-473.7Mm vs est. $525.25Mm, adj EPS $1.18-1.31 vs est. $1.91; sees FY adj revs $2.257-2.327B vs est. $2.286B and adj EPS $8.39-8.88 vs est. $8.67.

·     Equinix Inc. (EQIX) Q2 EPS $2.21 vs est. $2.06, AFFO/shr $8.04 vs est. $7.84 on revs $2.02B vs est. $2.019B, adj EBITDA $901Mm vs est. $902.59; sees FY revs $8.171-8.251B vs est. $8.23B, adj EBITDA $3.66-3.72B vs est. $8.23B, adj EBITDA mgn 45% and AFFO $31.51-32.15 vs est. $31.80.

·     Cognizant Technology (CTSH) Q2 adj EPS $1.10 vs est. $0.99 on revs $4.9B vs est. $4.837B, adj op mgn 14.2%; guides FY revs $19.2-19.6B vs est. $19.454B, adj EPS $4.25-4.48 vs est. $4.27.

·     Confluent (CFLT) Q2 adj EPS flat vs. est. loss (-$0.06); Q2 revs $189M vs. est. $165.9M; raises FY23 EPS view to (5c)-(2c) form (20c)-(14c) and vs. est. loss (15c) and boosts FY23 revenue view to $767M-$772M from $760M-$765M.

·     DXC Technology (DXC) shares fell on miss; Q1 adj EPS $0.63 vs est. $0.82 on revs $3.45B vs est. $3.558B, adj EBIT mgn 6.5%.