Early Look

Tuesday, May 24, 2022

Futures	Up/Down	%	Last
Dow	-213.00	0.67%	31,626
S&P 500	-41.25	1.05%	3,930
Nasdaq	-199.50	1.65%	11.836

 

 

U.S. futures are pointing to a lower open, giving back a bulk of yesterday’s gains with the S&P 500 looking down about 1% or 40 points to 3,930 (high 3,952.75 and low 3,909.75. Stocks are down after social media company Snap Inc. (Snapchat) warned on profits and took the wider tech sector lower, especially comps TWTR, FB, and PINS (SNAP shares down -29%). In Asian markets, The Nikkei Index declined -253 points to 27,748, the Shanghai Index tumbled -2.41% or 75 points to 3,070, and the Hang Seng Index declined -357 points or 1.75% to 20,112. In Europe, the German DAX is down -115 points or -0.8% to 14,060, while the FTSE 100 is down about -0.3% to 7,490. The U.S dollar extends yesterday losses, falling to fresh 1-month lows as the euro tops the 1.07 level following recent comments by ECB President Lagarde on rates. Stocks bounced on Monday as investors snapped up beaten-down shares such as banks after the Dow notched eight straight losing weeks, paced by gains in JPMorgan (JPM), leading the Dow higher and carrying GS and AXP higher as well with the Dow jumping nearly 2%. Bespoke Investment noted of the 98 trading days this year, yesterday was just the 13th time that the S&P 500 traded in positive territory for the entire session. Concerns over the impact of surging inflation on both consumer demand and global economic growth remain. JPMorgan cut its China growth forecast to suggest a contraction of as much as 5.4% for the world’s second largest economy, sees global growth advancing at its slowest pace in two years this quarter and, with just a 0.6% forecast.

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 72.39 points, or 1.86%, to 3,973.75

·     The Dow Jones Industrial Average rose 618.34 points, or 1.98%, to 31,880.24

·     The Nasdaq Composite climbed 180.66 points, or 1.59%, to 11,535.27

·     The Russell 2000 Index advanced 19.50 points, or 1.10% to 1,792.76

 

Economic Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:45 AM ET         S&P Global Manufacturing PMI, May-P…est.57.5

·     9:45 AM ET         S&P Global Services PMI, May-P…est. 55.2

·     10:00 AM ET       New Home Sales M/M for April…est. 750K

·     10:00 AM ET       Richmond Fed Index for May

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ANF, AZO, BBY, CTRN, ECC, EIC, IMBI, RL, SOTK, WOOF

·     Earnings After the Close: A, CAL, EE, INTU, JWN, OOMA, RAMP, TOL, URBN

 

Other Key Events:

·     Berenberg Annual Conference USA 2022, 5/23-5/25, in NY

·     Cowen Future of the Consumer: Sustainable Growth for a New Ecosystem, 5/24-5/25, in NY

·     JPMorgan Global Technology, Media & Communications Conference, 5/23-5/25, in Boston

·     Oppenheimer MedTech, Tools & Diagnostics Summit, 5/34-5/25 (virtual)

·     Truist 23^rd Annual Securities Financial Services Conference, 5/24-5/25 (virtual)

·     UBS Global Healthcare Conference, 5/23-5/25, in NY

·     UBS Global Energy Conference 5/24-5/25 (virtual)

·     Wolfe Global Transportation & Industrials Conference 2022, 5/24-5/26 (virtual)

 

 

Macro	Up/Down	Last
Nymex	-0.56	109.73
Brent	-0.49	112.93
Gold	6.90	1,854.70
EUR/USD	0.0027	1.0718
JPY/USD	-0.52	127.38
10-Year Note	-0.049	2.81%

 

 

World News

·     Kansas City Federal Reserve Bank President Esther George on Monday said she expects the U.S. central bank to lift its target interest rate to about 2% by August, with further action dependent on how both supply and demand are affecting inflation.

·     JPMorgan cut its China growth forecast to suggest a contraction of as much as 5.4% for the world’s second largest economy, sees global growth advancing at its slowest pace in two years this quarter and, with just a 0.6% forecast.

·     German services PMI for May came in at 56.3, vs the forecast 57.1. Mfg was marginally more positive though, moving up to 54.7 from the prior 54.6. French services PMI essentially in line with the consensus at 58.4, but Mfg was a little weaker at 54.5.

 

Sector News Breakdown

Consumer

·     Advance Auto Parts (AAP) 1Q adj EPS $3.57 vs est. $3.59 on sales $3.4B vs est. $3.39B, comps +0.6%, gross margin 44.6% vs est. $45.4%; affirms FY guide, sees FY sales $11.2-11.5B vs est. $11.4B, comps +1-3%, adj EBIT margin 10-10.2%, CAPEX $300-350Mm

·     BellRing Brands (BRBR) announces new share repurchase authorization of $50 million

·     America’s Car-Mart (CRMT) Q4 EPS $4.01 vs. est. $3.10; Q3 revs rose 26% to $352M vs. est. $297.23M; the average sales price increased 24% to $17,860 and unit sales volume dropped 1%.

·     Comfort Systems USA (FIX) increases stock buyback program to up to 1M shares

·     Nautilus (NLS) Q4 EPS loss (-$0.58), in-line with ests as sales rose 28% to $120M, vs. the $121.6M estimate; guides Q1 sales $45M-$55M and year sales $380M-$460M; Expects to exceed 500k JRNY Total Members FY23 and achieve positive adjusted ebitda for 2H’23

·     Skyline Champion (SKY) Q1 sales rose 42.5% to $638.1M vs. est. $561.5M; Q1 EPS $1.51 vs. est. $1.00; homes sold increased 11.1% to 6,580; Total backlog increased to $1.6B; Average selling price per U.S. home sold increased 30.7% to $87,800

·     Walmart (WMT) expands its drone-delivery service to reach 4 million households

 

Energy, Industrials & Materials

·     Albemarle Corp (ALB) improved full-year 2022 guidance primarily due to completion of additional lithium contract renegotiations; raises year sales to $5.8B-$6.2B from prior view $5.2B-$5.6B; sees FY22 adjusted diluted EPS $12.30-$15.00 (up from prior view $9.25-$12.25) and vs est. $10.88, adj EBITDA $2.2-2.5B vs est. $1.97B

·     Canadian Solar (CSIQ) Q1 EPS $0.14 vs. est. loss (13c); Q1 revs rose 15% Y/Y to $1.25B vs. est. $1.31B; sees Q2 revs $2.2B-$2.3B vs. est.$1.75B

·     Boeing (BA) and General Electric (GE) slipped on light volume after Reuters reported jet engine maker CFM International, co-owned by GE and France Safran, facing industrial delays of six to eight weeks in the wake of supply-chain problems

·     Heico (HEI) Q2 EPS $0.62 vs. est. $0.61; Q2 revs $538.8M vs. est. $530.24M; EBITDA $146.6Mm vs est. $141.3Mm; not providing FY EPS or sales guidance now

·     Honeywell (HON) reaffirms both Q2 and FY22 EPS and sales views

·     Nordson (NDSN) 2Q adj EPS $2.43 vs est. $2.29 on sales $635Mm vs est. $644.9Mm; guides 3Q revs and adj EPS comparable to prior year; sees FY adj EPS +18-21% vs est. +17% and revs +8-9% vs est. +9%

·     Navigator Holdings (NVGS) 1Q EPS $0.35 vs est. $0.33, adj EBITDA $55.7Mm vs est. $59.2Mm on revs $119.8Mm vs est. $110.5Mm

·     Exxon Mobil (XOM) shares edged lower after an investor advisory group recommended splitting the role of Chairman and CEO at the biggest U.S. oil major.

 

Financials

·     Marqeta (MQ) upgraded to Overweight from Equal Weight at Morgan Stanley with an unchanged price target of $15

 

Healthcare

·     Dexcom (DXCM) is in talks to acquire Insulet (PODD) to create a diabetes device giant, Bloomberg reported citing people with knowledge of the matter. Talks are ongoing and an agreement could be reached in the coming weeks, but discussions could still be delayed or fall apart https://bit.ly/3yUB7hq

·     INmune Bio (INMB) shares drop after the FDA placed the company’s investigational new drug application to start a Phase 2 trial of XPro in patients with Alzheimer’s disease on clinical hold

·     Caladrius (CLBS) announced that the company has suspended patient enrollment in its Phase 2b study of Xowna, known as the FREEDOM trial, for the treatment of coronary microvascular dysfunction

·     Illumina (ILMN) said it added a companion diagnostic (CDx) indication to its CE-marked in vitro diagnostic TruSight Oncology (TSO) comprehensive (EU) test.

 

Technology, Media & Telecom

·     Snap Inc. (SNAP) tumbles nearly 30% after hours after saying they believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range; also said intends to slow hiring through the end of the year as it looks to manage expenses

·     Zoom Media (ZM) 1Q adj EPS $1.03 vs est. $0.87 on revs $1.074B vs est. $1.073B; sees 2Q adj EPS $0.90-0.92 vs est. $0.87 and revs $1.115-1.12B vs est. $1.11B; sees FY adj EPS $3.70-3.77 vs est. $3.53 and revs $4.53-4.55B vs est. $4.55B

·     Samsung (SSNLF) to spend $360 billion on chips, biotech over 5 Years, Bloomberg reported. The Samsung group plans to raise spending by more than 30% to 450 trillion won (about $360 billion) over the half-decade to 2026 to shore up businesses from chips to drugs, as South Korea’s conglomerates grapple with growing economic and supply shocks https://bloom.bg/3yVkfXC

·     Formfactor, Inc. (FORM) Announces $75 million stock repurchase authorization