Early Look

Wednesday, August 10, 2022

Futures	Up/Down	%	Last
Dow	68.00	0.21%	32,805
S&P 500	9.25	0.22%	4,133
Nasdaq	32.50	0.25%	13,063

 

 

A big day ahead for U.S. markets with all eyes on the CPI inflation data at 8:30 AM ET, as markets hold steady overnight. U.S. futures got a little pop after reports China’s military had “completed various tasks” around Taiwan but will conduct regular patrols, it said on Wednesday, potentially signaling an end to days of war games. At 8:30 AM today, economists are expecting some cooling in the pace of headline CPI, with ests to rise +8.7% YoY for July vs +9.1% previous and M/M expected to rise +0.2% vs. prior month +1.3%. However, core CPI is expected to tick higher to 6.1% YoY vs 5.9% previous (ex food & energy) and M/M expected to rise +0.5% from +0.7% (also note July PPI is on Thursday and UoM inflation expectations data on Friday). The S&P fell for a 4^th straight day on Tuesday while the Nasdaq slumped a 3^rd straight following the second straight revenue outlook warning in the semiconductor sector (MU after NVDA the day prior). A sharp spike to the inflation report could extend those market losses on fears the Fed will ramp up its aggressive interest rate hikes, while a decline in prices could spur a short-term rally. Gold prices, Bitcoin and Treasury yields all edge down slightly ahead of the report. In corporate news, TSLA CEO Elon Musk sold 7.92 million shares of the electric vehicle maker thru 8/5-8/9 worth $6.9 billion, six U.S. securities filings showed on Tuesday. Oil prices slip as Bloomberg reports Transneft getting ready to resume flow via Druzhba Southern leg. In Asian markets, The Nikkei Index fell -180 points to 27,819, the Shanghai Index fell -17 points to 3,230, and the Hang Seng Index dropped -392 points or 1.96% to 19,610. In Europe, the German DAX is up about +0.2% to 13,560, while the FTSE 100 is up slightly around the 7,500 level.

Economic Calendar for Today

·     7:00 AM ET                  MBA Mortgage Applications Data

·     8:30 AM ET                  Consumer Price Index (CPI) M/M for July…est. +0.2%

·     8:30 AM ET                  Consumer Price Index (CPI) Y/Y for July…est. +8.7%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) M/M for July…est. +0.5%

·     8:30 AM ET                  CPI Ex: Food & Energy (core) Y/Y for July…est. +6.1%

·     10:00 AM ET                Wholesale Inventories M/M for June…est. 1.9%

·     10:30 AM ET                Weekly DOE Inventory Data

·     1:00 PM ET                   US Treasury to sell $33B in 10-yr notes

·     2:00 PM ET                   Federal Budget for July…est. (-$194B)

 

Earnings Calendar:

·     Earnings Before the Open: ATRO AWH BHG DO FOXA HAE JACK WEN WHF WWW XERS

·     Earnings After the Close: AOSL APP ASYS AVT BLBD BMBL BROS CACI CCAP CDXC COOK DIS ENS EVLV FOSL GETY HLTH ICAD LNDC MQ MSGM MTTR PLSE PXLW RRGB SEMR SOND SONO VCSA VZIO WRAP

 

Other Key Events:

·     Cowen Internet & Media Bus Tour, 8/8-8/10, in San Francisco

·     Cowen 8th Annual Communications Infrastructure Summit, 8/8-8/11, in CO

·     Jefferies Industrial Conference, 8/9-8/10, in New York

·     Oppenheimer 25th Annual Technology, Internet & Comm Conference (virtual), 8/9-8/10

·     UBS Financial Services Conference, 8/8-8/10, in WI

·     UBS Genomics 2.0 & MedTech Innovations Summit, 8/9-8/10, in CA

·     William Blair Insurance & Banking Technology Conference (virtual), 8/10-8/12

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -17.59 points, or 0.42%, to 4,122.47

·     The Dow Jones Industrial Average fell -58.13 points, or 0.18%, to 32,774.41

·     The Nasdaq Composite tumbled -150.53 points, or 1.19%, to 12,493.93

·     The Russell 2000 Index declined -28.31 points, or 1.46% to 1,912.89

 

 

Macro	Up/Down	Last
Nymex	-1.28	89.22
Brent	-1.15	95.16
Gold	-3.10	1,809.20
EUR/USD	0.0017	1.0228
JPY/USD	-0.19	134.95
10-Year Note	-0.011	2.786%

 

 

World News

·     China’s producer price index (PPI) rose 4.2% year-on-year for July, the National Bureau of Statistics (NBS) said, after a 6.1% uptick in June (estimate was 4.8% in a Reuters poll.)

·     China’s consumer price index (CPI) increased 2.7% from a year earlier, after a 2.5% gain in June vs. expected estimate seen at 2.9% in July.

·     Hungary’s biggest refiner said it has paid Russia’s transit fee to Ukraine to resolve a dispute that has led to a halt in oil flows to central Europe – Bloomberg

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) CEO Elon Musk has sold 7.92 million shares of the electric vehicle maker thru 8/5-8/9 worth $6.9 billion, six U.S. securities filings showed on Tuesday. Musk said the transaction was “important to avoid an emergency sale of Tesla stock in the event that Twitter (TWTR) forces this deal to close and some equity partners don’t come through.”

·     Celsius Holdings (CELH) Q2 EPS $0.12 vs. est. $0.08; Q2 revs rose 137% y/y to $154M vs. est. $148.74M; North America revenue increased 171% to $145.4M, up from $53.6M in Q1 2021

·     Darling Ingredients (DAR) Q2 EPS $1.23 vs. est. $1.27; Q2 revs rose 38% y/y to $1.65B vs. est. $1.44B; backs FY22 combined adjusted EBITDA view $1.55B-$1.6B

·     Grocery Outlet (GO) 2Q EPS $0.20 vs est. $0.15on sales $897.7Mm vs est. $860.2Mm, comps +11.2%; adj EBITDA $60.1Mm vs est. $54.9Mm; guides FY22 +28 net new stores, sales $3.46-3.48B vs prior $3.39-3.42B and est. $3.41B, comps +8.0-8.5% vs prior +5.5-6.5%, gross margin 30.6%, adj EBITDA $218-223Mm vs prior $213-220Mm and est. $219.3Mm

·     Manchester United Ltd.’s (MANU) former director Michael Knighton, is planning to submit a bid to buy the operator of the U.K.-based football club from the Glazer family, according to a report in the Manchester Evening News. https://on.mktw.net/3vVzjlP

·     PLBY Group (PLBY) Q2 EPS loss (-$0.18) vs. est. loss (-$0.12) on revs rose 31% y/y to $65.4M vs. est. $70.9M; Q2 Direct-to-consumer revenue grew 59% year-over-year, to $44.6M

·     Purple Innovation (PRPL) 2Q adj EPS ($0.11) vs est. ($0.07) on revs $144.1Mm vs est. $155.8Mm; guides FY revs $570-590Mm vs est. $652.6Mm, sees 2H gr margin to improve vs 2Q and exit year with gr margin 37-38%, sees FY ($15Mm)-($5Mm) vs prior range $21-27Mm and est. $9.34Mm

·     RealReal (REAL) 2Q adj EPS ($0.40) vs est. ($0.44) on revs $154Mm vs est. $154Mm; GMV $454Mm, adj EBITDA ($28.8Mm) vs est. ($30Mm); TTM active buyers 889,000 +22%, orders 934,000 +39%, avg order value $486 -7%, GMV from repeat buyers 85% roughly flat to prior year

·     Red Rock Resorts (RRR) Q2 EPS $0.26 vs. est. $0.54; Q2 revs fell -1% y/y to $422.2M vs. est. $404.45M; Q2 adj EBITDA from Las Vegas operations was $203.9M, a decrease of 8% or $18.7M, from $222.6M in the same period of 2021

·     Sweetgreen (SG) Q2 EPS loss (-$0.36), in-line with ests; Q2 revs rose 45% y/y to $124.9M vs. est. $130.4M; sees FY22 revenue $480M-$500M below consensus $530.1M and sees FY22 adjusted EBITDA view of ($45M) to ($35M); educed its corporate support center employees by 5%

·     Wynn Resorts (WYNN) Q2 EPS loss (-$1.14) vs. est. loss (-0.94); Q2 revs $908.8M vs. est. $980.9M; operating rev from Wynn Macau Were $58.6M for Q2, a decrease of $125.4M from $184.0M for the 2Q of 2021; operating revenues from our Las Vegas operations were $561.1 mln for q2 of 2022, an increase of $206.0 mln from $355.1 mln for q2 of 2021

·     Shift Technologies, Inc. (SFT), a leading end-to-end ecommerce platform for buying and selling used cars, and CarLotz, Inc. (LOTZ), a leading consignment-to-retail used vehicle marketplace, entered into a definitive agreement to combine in a stock-for-stock merger. The combined company will continue to trade on Nasdaq under the ticker SFT.

 

Energy

·     Array Technologies (ARRY) 2Q adj EPS $0.09 vs est. $0.03 on revs $424.9Mm vs est. $336.9Mm; guides FY revs $1.30-1.50B vs est. $1.4B and adj EPS $0.25-0.35 vs est. $0.31

·     Bloom Energy (BE) Q2 adj EPS loss (-$0.20) vs. est. loss (-$0.17); Q2 revs $243.2M vs. est. $229.38M; backs FY22 revenue view $1.1B-$1.15B vs est. $1.13B

·     Plug Power (PLUG) 2Q EPS ($0.30) vs est. ($0.21) on revs $151.3Mm vs est. $165.9Mm; reaffirms FY revs guide $900-925Mm

·     Southwest Gas (SWX) Q2 adj EPS $0.23 vs. est. $0.56; Q2 revs $1.15B vs. est. $1.04B; 2022 guidance update reflects near-term macroeconomic pressures and increased operating expenses

·     The American Petroleum institute showed a build of 2.15M barrels of oil for the latest week; gasoline inventories show a draw of 627K barrels, distillate inventories show a build of 1.37M barrels and Cushing inventories show a build of 910K barrels.

 

Financials

·     CoinDesk (COIN) Q2 EPS loss ($4.98) vs. est. loss ($2.65); Q2 revs fell -31% y/y to $808.3M vs. est. $832.23M; expect subscription and services rev to be modestly higher in q3 compared to q2; said qtrly trading volume $217B vs $462B; taking steps to streamline operating cost structure, including recalibrating hiring plans, optimizing vendor spend, among others

·     H&R Block (HRB) 4Q adj EPS $3.51 vs est. $1.24 guides FY23 revs $3.535-3.585B vs est. $3.499B and adj EPS $3.70-3.95 vs est. $3.68; sees double digit adj EPS growth annually thru 2025; announced new share repurchase authorization of $1.25B avail thru FY25

·     Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1,429.7 billion at July 31, 2022, compared to $1,379.8 billion at June 30, 2022. This month’s increase in AUM primarily reflected the positive impact

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,449.0 billion, an increase of 4.2% versus previous month-end. The firm experienced net long-term outflows of $5.2 billion in the month.

·     Flywire Corp. (FLYW) 2Q adj EBITDA ($6.1Mm) vs est. ($6.7Mm) on revs $56.5Mm vs est. $49.1Mm; guides 3Q revs $94-98Mm vs est. $88.5Mm, sees FY revs $283-294Mm vs est. $263.7Mm and adj EBITDA $13-17Mm vs est. $12.1Mm

·     Cohen & Steers, Inc. (CNS) preliminary assets under management of $94.0 billion as of July 31, 2022, an increase of $6.1 billion from assets under management at June 30, 2022.

·     Riot Blockchain (RIOT) said it delays its earnings report to sort out how much crypto rout devalued its assets

·     Welltower (WELL) 2Q adj FFO/shr $0.86 vs est. $0.85; reported total portfolio yr/yr same-store NOI +8.7%; guides 3Q avg blended same-store NOI +7-9%, normalized FFO/shr $0.82-0.87 vs est. $0.89

 

Healthcare

·     Cano Health (CANO) Q2 EPS loss (-$0.03) vs. est. loss (-$0.05); Q2 revs rose 101% y/y to $689.4M vs. est. $712.6M; Total membership of 281,525, including 163,947 Medicare capitated members, an increase of 80% and 47%, respectively y/y; sees year member ship 300k-305k

·     Exelixis (EXEL) 2Q adj EPS $0.28 vs est. $0.23 on revs $419.3Mm vs est. $410.2Mm; guides FY revs $1.525-1.625B vs est. $1.594B, net product revs $1.325-1.425B, COGS 5-6% of net product revs, R&D exp $725-775Mm, SG&A $400-450Mm, tax rate 20-22%

·     Halozyme Therapeutics (HALO) Q2 EPS $0.53 vs. est. $0.50; Q2 revs rose 12% y/y to $152.4M vs. est. $138.78M; now sees 2022 operating income $240m-$265m, had seen $350m-$380m

·     Invitae Group (NVTA) Q2 adj EPS loss (-$0.68) vs. est. loss (-$0.76); Q2 revs rose 17.5% y/y to $136.6M vs. est. $136.85M; recently announced realignment plan is expected to extend company’s cash runway to end of 2024; reiterating its financial guidance for 2022

·     Masimo (MASI) Q2 adj EPS $1.35 vs. est. $1.20; Q2 revs $565.3M vs. est. $540.56M; sees FY22 EPS $4.34-$4.57 vs. est. $4.52 and revs $1.985B-$2.045B below consensus $2.06B

 

Industrials & Materials

·     Axon Enterprises (AXON) 2Q adj EPS $0.44 vs est. $0.39 on revs $286Mm vs est. $259Mm; guides FY revs $1.07-1.12B from prior $1.05-1.1B vs est. $1.08B; adj EBITDA high end $190-200Mm vs est. $197.4Mm, adj FCF $125-145Mm

·     Maxar Technologies (MAXR) 2Q GAAP EPS $0.41 vs est. $0.14 on revs $438Mm vs est. $455.3Mm; adj EBITDA $119Mm vs est. $119.9Mm

 

Technology, Media & Telecom

·     Akami Tech (AKAM) 2Q adj EPS $1.35 vs est. $1.31 on revs $903.3Mm vs est. $898.1Mm; adj EBITDA $388Mm vs est. $385.8Mm; says it expects operating margin to remain under 30% in near term; expects macro headwinds will dampen growth rates/profitability next several qtrs.

·     Dolby Labs (DLB) 3Q adj EPS $0.68 vs est. $0.59 on revs $289.6Mm vs est. $294Mm; guides 4Q revs $295-325Mm vs est. $326.8Mm and adj EPS $0.68-0.83 vs est. $0.87

·     IAC Inc. (IAC) 2Q GAAP EPS ($10.02), revs $1.36B vs est. $1.38B, Angi revs $516Mm -23%, Dotdash revs $490Mm +568%; adj EBITDA $37.4Mm vs est. $39.7Mm

·     Magnite Inc. (MGNI) Q2 EPS $0.14 vs. est. $0.17; Q2 revs rose 20% y/y to $137.8M vs. est. $124.6M; sees total capital expenditures for 2022 to be approximately $45 mln

·     Roblox (RBLX) Q2 EPS loss (-$0.30) vs. est. loss (-$0.21); July DAUs 58.5m, +26% y/y; Q2 bookings $639.9M vs. est. $657.2M; 2Q Average Daily Active Users Were 52.2M, Up 21%; 2Q Hours Engaged Were 11.3B, up 16%

·     SailPoint (SAIL) 2Q adj EPS ($0.02) vs est. ($0.09) on revs $134.3Mm vs est. $123.5Mm; not providing guidance for 3Q or FY

·     Trade Desk (TTD) Q2 adj EPS $0.20 vs. est. $0.21; Q2 revs $377M vs. est. $365.25M; sees Q3 revenue at least $385M vs. est. $381.14M; sees Q3 adjusted EBITDA approximately $140M

·     Unity Software (U) 2Q adj EPS ($0.18) vs est. ($0.21) on revs $297Mm vs est. $298.7Mm; guides 3Q revs $315-335Mm vs est. $298.7Mm and adj loss from ops ($35Mm)-($50Mm); sees FY revs $1.3-1.35B and adj loss from ops ($95Mm)-($115Mm);

·     Ziff Davis (ZD) 2Q adj EPS $2.81 vs est. $1.41 on revs $337.4Mm vs est. $348.6Mm; guides FY revs $1.41-1.435B vs est. $1.5B and adj EPS $6.57-6.77 vs est. $6.62