Early Look

Thursday, August 18, 2022

Futures	Up/Down	%	Last
Dow	41.00	0.12%	34,004
S&P 500	6.25	0.15%	4,283
Nasdaq	15.50	0.12%	13,509

 

 

U.S. futures edging higher modestly, paring yesterday’s late day losses after minutes from the July FOMC monetary policy meeting hinted at a balancing act that would see rate hikes continue despite a weakening economy. Major U.S. stock indexes finished Wednesday’s session lower, with yields higher and the dollar mixed and only energy finishing the day in the green behind rising oil prices. U.S. data today includes the August Philadelphia Fed survey, existing home sales, the U.S. leading index, and initial jobless claims. In Asian markets, The Nikkei Index declined -280 points to 28,942, the Shanghai Index dipped -14 points to 3,277, and the Hang Seng Index fell -158 points to 19,763. In Europe, the German DAX is up 117 points to 13,744, while the FTSE 100 is down a few points to 7,511. In tech overnight, shares of Cisco Systems (CSCO) rise following quarterly results.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -31.16 points, or 0.72%, to 4,274.04

·     The Dow Jones Industrial Average fell -171.69 points, or 0.50%, to 33,980.32

·     The Nasdaq Composite dropped -164.43 points, or 1.25%, to 12,938.12

·     The Russell 2000 Index declined -33.22 points, or 1.64% to 1,987.31

 

Economic Calendar for Today

·     8:30 AM ET                  Weekly Jobless Claims…est. 265K

·     8:30 AM EST                Continuing Claims…est.

·     8:30 AM ET                  Philly Fed Index for August…est. (-5.0)

·     10:00 AM ET                Existing Home Sales M/M for July…est. 4.89M

·     10:00 AM ET                Leading Index for July…est. (-0.5%)

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

·     1:20 PM ET                   Fed’s George speaks on economic outlook

 

Earnings Calendar:

·     Earnings Before the Open: BJ EL KSS LYTS OSIS SLQT SPTN TPR

·     Earnings After the Close: AMAT ATGN BILL LTRX NVGS ROST

 

Other Key Events:

·     Needham FinTech & Digital Transformation Conference (virtual), 8/17-8/18

·     Truist Atlanta Bank Summit (virtual)

 

 

Macro	Up/Down	Last
Nymex	1.04	89.15
Brent	1.37	95.02
Gold	6.70	1,783.40
EUR/USD	-0.0011	1.0169
JPY/USD	0.17	135.18
10-Year Note	-0.009	2.886%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -3.9 vs -4.5 last week; Bulls rise to 33.3% from 32.2%; Neutrals fall to 29.5% from 31.2%; Bears rise to 37.2% from 36.7%

·     Eurozone July final CPI was confirmed at a new record high of 8.9% in July of 2022, compared to 8.6% in June and 2.2% a year earlier; core CPI +4.0% vs +4.0% y/y prelim

·     Australia’s July labor market report showed total employment fell -40.9k (vs. expectations of a +25k rise. The unemployment rate unexpectedly fell 0.1%pts to 3.4% (a 48-year low) because fewer people were involved in the search for work (participation rate declined 0.4pts to 66.4%).

·     U.S. and Taiwan to start negotiations for a bilateral trade and investment initiative this fall. The pact will “deepen our trade and investment relationship, advance mutual trade priorities based on shared values, and promote innovation and inclusive economic growth for our workers and businesses,” said Deputy U.S. Trade Representative Sarah Bianchi – WSJ

 

Sector News Breakdown

Consumer

·     Bath & Body Works (BBWI) Q2 EPS $0.52 vs. est. $0.44; Q2 sales -51% y/y to $1.62B vs. est. $1.61B; ending store count 1,773, estimate 1,776; said Q2 Direct sales from continuing operations $366.9M, -9.9% y/y; said company is pursuing several initiatives to improve financial performance; sees year EPS $2.70-$3.00 vs. est. $2.92

·     GameStop chairman Ryan Cohen’s RC Ventures has filed for the right to sell his 9.45M shares of Bed Bath & Beyond (BBBY) through JP Morgan Securities as per form 144 filing. “RC Ventures directly beneficially owned 9,450,100 Shares, including 1,670,100 Shares underlying certain call options, constituting approximately 11.8% of the Shares outstanding – 13-D filing

·     Tesla (TSLA) said it has slashed the delivery waiting time for its Model 3 and Model Y cars in China; the waiting time for the rear-wheel drive Model Y sport utility vehicle is now four to eight weeks, while buyers of other versions of the SUV and Model 3 sedans need to wait for 12 to 20 weeks. Tesla previously said a buyer in China had to wait for eight to 24 weeks

·     Brinker (EAT) downgraded to Sector Weight from Overweight at KeyBanc

 

Energy, Industrials and Materials

·     Canadian Solar (CSIQ) Q2 EPS $1.07 vs. est. $0.53; Q2 revs $2.31B vs. est. $2.23B; total module shipments recognized as revenues in the second quarter of 2022 were 5.06 GW, up 37% y/y; raises 2022 revenue view $7.5B-$8B from $7B-$7.5B (est. $7.25B)

·     Phillips 66 (PSX) submitted a proposal to acquire all common units of DCP Midstream (DCP) it does not already own for $34.75 per unit; Phillips said the transaction would be structured as a merger of DCP w/an indirect subsidiary of Phillips 66 with DCP Midstream as the surviving entity.

·     Winnebago (WGO) increases quarterly dividend 50%, announces new share repurchase plan of up to $350M of the company’s common stock

·     First Solar (FSLR) upgraded to Equal Weight from Underweight at Morgan Stanley

 

Healthcare

·     Henry Schein (HSIC) announces $400M increase to buyback

·     QuidelOrtho (QDEL) announces $300M share repurchase authorization

·     PerkinElmer (PKI) downgraded to Hold from Buy at Stifel following CFO exit

·     Perrigo (PRGO) said that an August 16 notice of dismissal of claims and impending trial against the branded companies that manufactured Zantac (ranitidine) did not involve the company.

 

Technology, Media & Telecom

·     Cisco Systems (CSCO) Q4 adj EPS $0.83 vs. est. $0.82; Q4 revs $13.1B vs. est. $12.73B; sees fy 2023 revenue growth of 4% to 6% y/y (est. $52.79B) and guides year EPS $3.49-$3.56 vs. est. $3.53; sees Q1 rev growth 2%-4%

·     Keysight Technologies (KEYS) Q3 adj EPS $2.01 vs. est. $1.78; Q3 revs $1.38B vs. est. $1.35B; sees Q4 adj EPS $1.94-$2.00 vs. est. $1.89 and sees Q4 revs $1.38B-$1.4B vs. est. $1.38B; sees FY 22 rev growth expected to approach 9%

·     Synopsys (SNPS) Q3 non-GAAP EPS $2.10 vs. est. $2.04; Q3 revs +18% y/y to $1.25B vs. est. $1.23B; raises FY revs to $5.06B-$5.09B from $5.0B-$5.05B prior (est. $5.03B); guides Q4 adj EPS $1.80-$1.85 vs. est. $1.73 and revs $1.26B-$1.29B vs. est. $1.26B

·     Wolfspeed (WOLF) Q4 EPS loss (-$0.02) vs. est. loss (-$0.10); Q4 revs $228.5M vs. est. $207.8M; sees Q1 EPS loss (8c)-(2c) vs. est. loss (-$0.07) and revs $232.5M-$247.5M vs. est. $225.8M; Q4 GAAP gross margin of 34.5%, compared to 30.0%; Q4 non-GAAP GM of 36.5% vs. 32.2%

·     Analog Devices (ADI) downgraded to Hold from Buy at Needham

·     GigaCloud (GCT) 29.04M share IPO priced at $12.25