Early Look

Tuesday, February 1, 2022

Futures	Up/Down	%	Last
Dow	-48.00	0.14%	34,949
S&P 500	-11.25	0.26%	4,492
Nasdaq	-39.50	0.26%	14,866

 

 

U.S. futures come into the morning down slightly after a wild move higher the last two days, paring losses to end the month as quarterly earnings kick into full-gear this week. Stocks rallied on Monday to end a dismal January, as the S&P 500 posted its largest two gain day since April 2020, and the Nasdaq scored its best 2-day finish to the month since October 1987 according to Bespoke, but both still post their worst month since March 2020. For the month, the S&P fell 5.26% (biggest January drop since 2009), the Dow lost 3.32% (biggest Jan loss since 2016), the Nasdaq shed 8.98% (biggest Jan decline since 2008). With yesterday’s surge, major averages moved back above key technical levels with the S&P reclaiming its 200-day MA of 4,436, and the Philly semi-index (SOX) moved back above its 200-day MA of 3,423. Stocks got a boost as three Federal Reserve presidents dialed back some interest rate expectations for 2022 after latest hawkishness pressured markets. In Asian markets, The Nikkei Index rose 76 points to 27,078, the Shanghai Index remained closed for its week-long holiday, and the Hang Seng Index was also closed. In Europe, the German DAX is up 1.15% to 15,650, while the FTSE 100 gains around 1% to 7,535. Fed officials stressed yesterday they are not going to jam on the brakes on the economy as hikes loom, which helped ease market fears for the time being.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 83.60 points, or 1.89%, to 4,515.45

·     The Dow Jones Industrial Average rose 405.99 points, or 1.17%, to 35,131.46

·     The Nasdaq Composite spiked 469.31 points, or 3.41%, to 14,239.88

·     The Russell 2000 Index advanced 59.94 points, or 3.04% to 2,028.45

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     10:00 AM ET       ISM Manufacturing Index for January…est. 57.5

·     10:00 AM ET       Construction Spending MoM for December…est. +0.6%

·     10:00 AM ET       JOLTs Job Openings for December…est. 10.3M

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ALGM, AQUA, ARCN, BEN, BR. CTLT, ENTG, EPD, GFF, HLNE, LDI, LII, MAN, MDC, NVR, PBI, PHM, PINC, SIRI, SMG, ST, SWK, SXC, TECH, UPS, UTL, XOM, WAT

·     Earnings After the Close: ACT, AMD, APAM, ASH, ATEN, CSGS, EA, EQR, GEOS, GILD, GM, GNW, GOOGL, HMN, HRB, KTCC, LFUS, MANH, MRCY, MSTR, MTCH, OI, PKI, PYPL, PZN, SBUX, SMCI, TENB, UNM, ZWS

 

 

Macro	Up/Down	Last
Nymex	-0.03	88.12
Brent	-0.06	89.20
Gold	10.55	1,807.75
EUR/USD	0.0034	1.1267
JPY/USD	-0.44	114.65
10-Year Note	-0.023	1.759%

 

 

Sector News Breakdown

Consumer

·     PulteGroup (PHM) Q4 EPS $2.51 vs. est. $2.31; Q4 revs $4.36B vs. est. $4.22B; raises share repurchase authorization by $1B; increase comprised a 26% rise in closings, as well as a 10% increase in average sales price; gross margin on home sales rose to 26.8%, up 1.8%; Q4 net new orders down 4% to 6,769 homes

·     Stanley Black & Decker (SWK) Q4 EPS $2.14 vs. est. $2.04; Q4 revs $4.07B vs. est. $4.49B; to begin $4B share repurchase program in Q1; sees FY22 adjusted EPS $12.00-$12.50 above consensus $11.97 and sees FY22 free cash flow $2B

·     Harley-Davidson (HOG) upgraded to Equal Weight from Underweight at Morgan Stanley

·     Nio (NIO) and XPeng (XPEV) reported their January sales numbers. Nio (NIO) said deliveries rose 34% to 9,652 vehicles, while XPeng (XPEV) said deliveries jumped 115% to 12,922; XPEV cumulative deliveries surpassed 150,000 as of January 31, 2022; Li Auto (LI) January 2022 deliveries rise 128% Y/Y to 12,268 vehicles

 

Energy

·     Helmerich & Payne, Inc. (HP) Q1 adj EPS loss (-$0.48) vs. est. loss (-$0.51); Q1 revs $410M vs. est. $392.9M; Q1 North America Solutions had an operating loss of $28.9 million compared to an operating loss of $60.7M during the previous quarter; Q1 Operating gross margins increased by $15.3M to $84.5M as both revenues and expenses increased sequentially. Operating results were still negatively impacted by the costs associated with reactivating rigs

·     Oil-Dri Corporation of America (ODC) announced that it will increase prices for its cat litter products effective April 1.

 

Financials

·     AGNC Investment (AGNC) Q4 EPS loss (-$0.10); $15.75 tangible net book value per common share as of Dec 31, 2021; 1.8% economic return on tangible common equity for the quarter

·     Alexandria Real Estate (ARE) Q4 adj FFO $1.97 vs. est. $1.96; Q4 revs $576.9M vs. est. $424.4M; same property net operating income growth: 5.0% and 7.5% on a cash basis for 4Q21 over 4Q20

·     Annaly Capital Management (NLY) files mixed-securities shelf

·     Credit Acceptance Corp. (CACC) Q4 adj EPS $14.26 vs. est. $12.69; Q4 revs $463.2M vs. est. $459.36M; said its provision for credit losses was $25.9M, down from $92.6M a year ago citing an improvement in its consumer loan performance for the change

·     Financial Institutions, Inc. (FISI) 4Q EPS $1.21 vs est. $1.00, NII $40.9Mm vs est. $40Mm

·     Kemper Corp. (KMPR) adj 4Q EPS ($2.05) vs est. ($0.34) on revs $1.494B vs est. $1.18B

·     Silvergate Capital Corp (SI) agreed to buy Blockchain Payments Network and other intellectual property assets from Meta Platforms Inc’s (FB) digital currency venture Diem Association. Diem said in a separate statement it is shutting down operations with the asset sale. Silvergate issued 1.3 million shares of stock to Diem and paid $50 million in cash for the assets

 

Healthcare

·     ContextLogic (WISH) announced the appointment of Vijay Talwar as CEO and a member of the company’s Board of Directors, effective February 1, 2022. Talwar succeeds Wish’s Founder and former CEO, Piotr Szulczewski, who will continue to serve the company as a member of the Board

·     DLH Holdings (DLHC) 1Q adj EPS $0.22 vs est. $0.48 on revs $152.8Mm vs est. $158Mm, contract backlog $633.6Mm at year-end

 

Industrials & Materials

·     UPS Inc. (UPS) Q4 adj EPS $3.59 vs. est. $3.10; Q4 revs $27.8B vs. est. $27.06B; sees FY22 revenue $102B vs. est. $100.01B; planning capital expenditures to be 5.4% of revenue or approximately $5.5B; expects to deliver its 2023 consolidated revenue and operating margin targets one year early. Sees FY22 adjusted operating margin of approximately 13.7%

·     Axalta Coating (AXTA) Q4 adj EPS $0.30 vs. est. $0.31; Q4 sales rose 5.8% to $1.137B vs. est. $1.14B; sees Q1 EPS $0.22-$0.29 vs. est. $0.37; sees Q1 net sales up about 5%; performance coatings growth expected from continued refinish recovery, continued robust organic growth within industrial coatings in 2022

·     Cabot Corp. (CBT) 1Q adj EPS $1.29 vs est. $1.11 on revs $968Mm vs est. $870.5Mm; guides FY adj EPS $5.50-5.90 vs est. $5.39; remain on track with long-term guidance to generate over $1 billion during the next three years

·     FedEx Corp (FDX) said it suspended its domestic express freight services due to a staff shortage as cases of the Omicron variant of the coronavirus rose; is suspending the economy domestic FedEx express freight, including FedEx two-day freight and FedEx three-day freight services.

·     Graco (GGG) 4Q EPS $0.66 vs est. $0.63 on sales $539.6Mm vs est. $519.5Mm; guides FY22 organic sales +HSD vs est. +7.3%

·     Lithium producers Livent (LTHM) and Albemarle (ALB) both upgraded to Neutral from Underperform at bank America

·     PotlatchDeltic Corp (PCH) Q4 adj EPS $0.59 vs. est. $0.62; Q4 revs $248.4M vs. est. $253.76M; Record Wood Products Adjusted EBITDDA of $393.9M driven by historic lumber prices; Timberlands adj EBITDA of $262.9M was a record level

·     Spire Global (SPIR) released preliminary 4Q numbers ahead of analysts’ targets and guided toward higher 2022 revenue; shares rise

·     Woodward (WWD) 1Q adj EPS $0.56 vs est. $0.80 on revs $542Mm vs est. $589.6Mm; guides FY adj EPS $3.55-3.95 vs est. $3.87; authorizes new $800 million stock repurchase program

·     Flywire (FLYW) upgraded to Strong Buy from Outperform at Raymond James

 

Technology, Media & Telecom

·     AT&T Inc (T) said it will spin off WarnerMedia in a $43 billion transaction to merge its media properties with Discovery Inc (DISCA); AT&T will distribute shares of the new Warner Bros. Discovery as a dividend of $1.11 per share, down from $2.08 per share; AT&T shareholders will own 71% of the new Warner Bros.

·     Cirrus Logic (CRUS) shares rise 9%; 3Q adj EPS $2.54 vs est. $2.14 on revs $548.3Mm vs est. $510.4Mm; guides 4Q revs $400-440Mm vs est. $355.8Mm and gr margin 51-53%

·     Fabrinet (FN) Q2 adj EPS $1.50 vs/ est. $1.46; Q2 revs $566.6M vs. est. $546.03M; sees Q3 adj EPS $1.48-$1.55 vs. est. $1.44; sees Q3 revs $560M-$580M vs. est. $553.39M

·     Harmonic Inc. (HLIT) Q4 EPS $0.16 vs. est. $0.13; Q4 revs $155.8M vs. est. $149.02M; sees Q1 EPS loss (4c-10c) vs. est. $0.05; sees Q1 revs $134M-$149M vs. est. $124.6M

·     NXP Semiconductors (NXPI) 4Q EPS $2.24 vs est. $2.99 on revs $3.04B vs est. $3B; guides3-yr CAGR revs +8-12% from 2021-2024; approved 50% increase in qtrly cash dividend to $0.845/share and $2B share repurchase program; sees Q1 revs $3.03B-$3.18B vs. est. $2.96B

·     Sanmina (SANM) 1Q adj EPS $1.08 vs est. $0.95 on revs $1.76B vs est. $1.65B; guides 2Q revs $1.7-1.8B vs est. $1.65B and adj EPS $0.95-1.05 vs est. $0.95

·     Xometry Inc. (XMTR) prelim 4Q revs $65.5-67.5Mm vs est. $62.7Mm; sees 4Q gross margin ex Thomas 27.3-27.6%; announces $250M convertible senior notes offering

·     The New York Times Co’s (NYT) announced the acquisition of Wordle for an undisclosed price in the low seven figures