Morning Preview: November 04, 2022

Early Look
Friday, November 4, 2022
Futures |
Up/Down |
% |
Last |
Dow |
198.00 |
0.62% |
32,215 |
S&P 500 |
29.25 |
0.79% |
3,757 |
Nasdaq |
88.50 |
0.82% |
10,816 |
U.S. stocks are attempting to rebound after having fallen all 4-straight trading days this week as the monthly jobs report later this morning will offer a fresh read on the state of the labor market at a time of aggressive Federal Reserve interest-rate increases. Policy makers are looking for signs of reduced wage growth as they work to control inflation. The data, set for 8:30 AM, calls for estimates of +200K job adds for both nonfarm and private payrolls, unemployment rate at 3.6% and average hourly earnings to rise +0.3% M/M. The figures come during signs the job market has cooled somewhat compared with the first half of the year but remains strong. The overall economy, which grew at a 2.6% annual rate in the third quarter, is showing evidence of a slowdown. Markets are getting a boost after a Bloomberg report overnight that China is working on a plan to end a system that banned individual flights for bringing in passengers infected with the COVID-19 virus, citing people familiar with the matter. In Asian markets, The Nikkei Index declined -463 points to 27,199, the Shanghai Index jumped 2.4% to 3,070, and the Hang Seng Index rallied 821 points or 5.36% to 16,161. In Europe, the German DAX is up 190 points or 1.45% to 13,320, while the FTSE 100 rises 1.1% to 7,270.
Market Closing Prices Yesterday
· The S&P 500 Index dropped -39.80 points, or 1.06%, to 3,719.89
· The Dow Jones Industrial Average fell -146.51 points, or 0.46%, to 32,001.25
· The Nasdaq Composite tumbled -181.86 points, or 1.73%, to 10,342.94
· The Russell 2000 Index declined -9.41 points, or 0.53% to 1,779/73
Economic Calendar for Today
· 8:30 AM ET Nonfarm payrolls for October…est. +200K
· 8:30 AM ET Private Payrolls for October…est. +200K
· 8:30 AM ET Manufacturing Payrolls for October…est. +15K
· 8:30 AM ET Unemployment Rate for Oct…est. 3.6%
· 8:30 AM ET Average Hourly Earnings M/M for October…est. +0.3%
· 1:00 PM ET Baker Hughes Weekly rig count data
Earnings Calendar:
· Earnings Before the Open: ACMR ADNT AEX AMCX AMRX AXL CAH CBOE CNK D DKNG DUK ESNT EVRG FLR FUBO FWONA GTES GTN HSY HUN IMGN KOP LAMR MBUU MOG/A OSG OWL PAYA PNM PPL QRTEA RUTH SYNH TILE VST WPC
Macro |
Up/Down |
Last |
Nymex |
2.86 |
91.03 |
Brent |
2.45 |
97.12 |
Gold |
22.30 |
1,653.20 |
EUR/USD |
0.0039 |
0.9789 |
JPY/USD |
-0.51 |
147.76 |
10-Year Note |
+0.018 |
4.14% |
Sector News Breakdown
Consumer
· Carvana (CVNA) 3Q EPS ($2.67) vs est. ($1.94) on revs $3.386B vs est. $3.7B, qtrly units sold 102,570 -8%
· DoorDash (DASH) 3Q adj EBITDA $87Mm vs est. $59Mm on revs $1.7B vs est. $1.63B, total marketplace GOV +30% y/y to $1.35B; guides 4Q adj EBITDA $85-120Mm vs est. $93.3Mm; sees 4Q marketplace GOV $13.9-14.2B; says expect growth in contribution profit in US restaurant marketplace will continue to fund investment initiatives
· Expedia (EXPE) Q3 adj EPS $4.05 vs. est. $4.12; Q3 revs $3.62B vs. est. $3.6B; 3Q record qtrly rev and adjusted ebitda, which exceeded $1b for the first time; Air revenue increased 61% in the third quarter of 2022; Lodging revenue increased 25% in the third quarter of 2022
· Monster Inc. (MNST) Q3 EPS $0.60 vs. est. $0.59; Q3 revs rose 15.2% y/y to $1.62B vs. est. $1.65B; announces new $500M share repurchase program
· Starbucks (SBUX) 4Q adj EPS $0.81 vs est. $0.72 on revs $8.4B vs est. $8.3B, comps +7% global (+11% US, +double-digit international ex China, -16% China)
· Nikola Corp (NKLA) files for resale of up to 43.23 mln shares of common stock by the selling stockholder
Energy
· Ameren (AEE) Q3 EPS $1.74 vs. est. $1.73; Q3 revs $2.31B vs. est. $1.89B; narrowed 2022 EPS $4.00-$4.15 vs. consensus $4.07
· Coterra Energy (CTRA) 3Q adj EPS $1.42 vs est. $1.37 on revs $2.52B vs est. $2.37B, adj FCF $1.77B; guides FY discretionary cash flow approx $5.6B at recent strip prices, capital budget $1.7B, FCF approx $3.9B at current strip prices with majority returned to shareholders
· EOG Resources (EOG) Q3 EPS $4.86 vs. est. $3.73; Q3 revs $7.5B vs. est. $7.21B; announces new position in Utica combo, raises regular dividend 10% and declares $1.50 per share special dividend; total company crude oil production in Q3 of 465,100 boepd was above the midpoint of the guidance range and up less than 1% compared with 2Q
· Exxon Mobil Corp. (XOM) is considering leasing or selling unused office space at the sprawling Houston-area campus set to become its global headquarters next year, part of its ongoing effort to cut billions in structural costs. – WSJ
Financials
· Block (SQ) 3Q adj EBITDA $327Mm vs est. $192Mm on revs $4.52B vs est. $4.44B; Q3 adj EPS $0.42 vs. est. $0.22; 3Q transaction-based revenue $1.52B, vs. est. $1.51B
· Coinbase (COIN) Q3 EPS loss (-$2.43) vs. est. loss (-$2.40); Q3 revs $590.3M vs. est. $649.2M and Q3 transaction revs $365.9M; 3Q Monthly Transacting Users down -16.4% y/y to 8.5M; provides FY23 commentary: pressure on transaction revs to persist
· PayPal (PYPL) shares fall -11%; Q3 EPS $1.08 vs. est. $0.96; Q3 revs $6.85B vs. est. $6.82B; Q3 total Payment Volume, or TPV, of $337.0B, growing 9% and 14% FXN; raises FY22 EPS view to $4.07-$4.09 (est. $3.93) and sees net revenues expected to grow about 8.5% on a spot basis and about 10% FXN (est. $27.81B); TPV expected to grow about 8.5% on spot basis and 12.5% FXN
· Paylocity (PCTY) 1Q EPS $0.54 on revs $253.3Mm vs est. $239.9Mm; sees 2Q revs $257-261Mm vs est. $254.7Mm and FY revs $1.122-1.127B vs est. $1.09B
· Rocket Companies (RKT) Q3 adj EPS loss (-$0.08) vs. est. loss (-$0.03); Q3 revs $1.3B vs. est. $1.09B; sees Q4 adj revs $600M-$750M below est. $1.09B; Rocket earned $96 million in the third quarter, down 93% from $1.4 billion a year earlier
· Trupanion (TRUP) 3Q EPS loss ($0.32) vs est. ($0.28) on revs $233.8Mm vs est. $230.1Mm; signs agreement to acquire Pet expert to continue European expansion (does not expect material impact to 2022 results because of the acquisition)
· Cboe (CBOE) reported futures avg daily volume for October of -2.1%; Futures avg daily volume -2.1%; European equities average daily trading volume +25.1%; Global FX average daily notional volume +24.4%; Multiply listed Options average daily trading volume +9.7%
Healthcare
· Apellis (APLS) shares fell overnight after announces plans to submit 24-month phase 3 data to the FDA for Pegcetacoplan NDA for Geographic Atrophy (GA)
· Amgen Inc. (AMGN) 4Q adj EPS $4.70 vs est. $4.44 on revs $6.65B vs est. $6.56B, adj op margin 52.5%; guides FY revs $26-26.3B vs est. $26.14B, adj EPS $17.25-17.85 vs est. $17.50 with tax rate 13.5-14.5%
· BioNTech SE (BNTX) shares rise after the WSJ reported that China agreed to approve the biotechnology company’s COVID-19 vaccines for foreign residents in China. China’s agreement was announced by German Chancellor Olaf Scholz in a news conference in Beijing https://on.wsj.com/3NAUhxV
· CareDX (CDNA) Q3 EPS loss (-$0.06) vs. est. loss (-$0.14); Q3 revs $79.3M vs. est. $82.6M; cuts FY22 revenue view $320M-$325M from $325M-$335M (est. $327.79M) citing lower Q3 revenue and a higher than anticipated shift in payer mix to commercial payors
· Exact Sciences (EXAS) 3Q EPS ($0.84) vs est. ($1.08) on revs $523Mm vs est. $502.9Mm; sees FY revs $2.025-2.042B vs est. $2.01B
· IGM Biosciences (IGMS) files $400M mixed securities shelf
· Illumina (ILMN) 3Q adj EPS $0.34 vs est. $0.30 on revs $1.12B vs es.t $1.11B, gr margin 64.3%; sees FY adj EPS $2.35-2.50 vs est. $2.78
· Insulet (PODD) Q3 EPS $0.45 vs. est. $0.15; Q3 revs $340.8M vs. est. $312.4M; now expects gross margin of 63% to 64%, including a charge of $36.8M; boosts FY22 revenue growth view to 18%-19% from 14%-17%
· The European Commission today approved Sanofi (SNY) and AstraZeneca’s (AZN) preventative antibody treatment for RSV in infants. The single-dose passive immunization, called nirsevimab, has been sanctioned for use in the general infant population — encompassing all healthy, ill, and preterm babies. It will be a while yet before the FDA considers following suit, but the approval is significant nonetheless – STAT News
· Teva Pharma (TEVA) said it is looking for a new chief executive officer after Kare Schultz confirmed he will step down when his contract expires next year. Mr. Schultz said Thursday that he chose not to renew his contract, which expires in November 2023 – WSJ
· TransMedics Group (TMDX) 3Q EPS ($0.25) vs est. ($0.41) on revs $25.7Mm vs est. $18.9Mm; sees FY revs $80-85Mm vs est. $75.7Mm
Industrials & Materials
· Airbus (EADSY) – China’s state aircraft buying agency officially signed orders to buy 140 Airbus planes worth about $17 billion on Friday, China Aviation Supplies Holding said in a statement
· Air Lease (AL) exec says aircraft deliveries this quarter were lower than expected; says continue to expect supply chain challenges to extend for the next couple of years; Q3 adjusted EPS $1.32, above consensus $0.92 and revs $561.3M vs. est. $575.29M
· Celanese (CE) Q3 adj EPS $3.94 vs. est. $3.98; Q3 revs $2.3B vs. est. $2.25B; sees Q4 adj EPS $1.50-$2.00, below consensus $3.10 saying will be challenged by typical winter seasonality in addition to continued demand weakness in certain end-markets and customer destocking
· Corteva Inc. (CTVA) Q3 adj EPS loss (-$0.12) vs. est. loss (-$0.23); Q3 revs $2.78B vs. est. $2.6B; expects record demand for grain and oilseeds in 2022; affirmed full year 2022 net sales guidance of $17.2B-$17.5B; 2022 operating eps is expected to be in the range of $2.45-$2.60 per share
· MasTec (MTZ) Q3 adj EPS $1.34 vs est. $1.27; Q3 revs $2.5B vs. est. $2.55B; cuts FY22 adjusted EPS view to $3.02 from $3.09 (est. $3.08) and raises FY22 revenue view to $9.7B from $9.2B (est. $9.32B); Record 18-Month Backlog of $11.2 Billion, a Sequential Increase of $222 Million and a $2.7 Billion Increase Over the Same Quarter Last Year
· Westlake Corp (WLK) files mixed securities shelf
Media & Telecom
· GoDaddy (GDDY) Q3 EPS $0.63 vs. est. $0.58; Q3 revs $1.03B vs. est. $1.04B; sees Q4 revs $1.03B-$1.05B vs. est. $1.06B and year $4.08B-$4.1B vs. est. $4.11B; ARR for core platform grew 2% year-over-year to $2.3 billion in Q3
· iHeart Radio (IHRT)
· Live Nation (LYV) Q3 EPS $1.39 vs. est. $1.03; Q3 revs $6.15B vs. est. $5.1B; said momentum is strong with early signs pointing to continued growth in 2023 across our businesses. Ticket sales for shows in 2023 are pacing even stronger than they were heading into 2022
· Warner Brothers Discovery (WBD) Q3 EPS loss (-$0.95) vs. est. loss (-$0.21); Q3 revs $9.82B vs. est. $10.36B; qtrly global DTC subscribers were 94.9M, an increase of 2.8 million versus 92.1 million subscribers at Q2
Technology
· Appian Corp. (APPN) 3Q adj EPS ($0.43) vs est. ($0.23) on revs $117.9Mm vs est. $116.1Mm, adj EBITDA ($22.9Mm) vs est. ($14.3Mm); guides 4Q adj EPS ($0.42)-($0.36) vs est. ($0.17);
· Atlassian Corp. (TEAM) Q1 adj EPS $0.36 vs. est. $0.38; Q1 revs $807M vs. est. $806.38M; guides Q2 revs $835M-$855M below consensus $879.2M; Quarterly GAAP operating margin of (4)% and non-GAAP operating margin of 18%
· Bill.com Holdings (BILL) Q1 EPS $0.14 vs est. $0.06; Q1 revs $229.9M vs est. $210.69M; sees Q2 EPS $0.12-$0.14 vs est. $0.08 and revs $241.5-244.5M vs est. $237M; raises FY2023 EPS $0.48-$0.59 from $0.23-$0.38 and vs est. $0.34 and ups FY23 revs to $994-1007M vs est. $970.56M
· Cloudflare (NET) 3Q adj EPS $0.06 vs est. $0.00 on revs $253.9Mm vs est. $250.6Mm; guides 4Q adj EPS $0.04-0.05 vs est. $0.01 and revs $273.5-274.5Mm vs est. $273.6Mm
· DropBox (DBX) Q3 EPS $0.43 vs. est. $0.37; Q3 revs rose 7.4% y/y to $591M vs. est. $585.7M; Q3 ARR of $2.431 billion, Up 9.6% y/y; on a constant currency basis, up 10.2% y/y; GAAP and Non-GAAP Operating Income of $89.3M and $186.7M, up 15.5% and 16.0% y/y
· Microchip (MCHP) 2Q adj EPS $1.46 vs est. $1.44 on revs $2.07B vs est. $2.06B, gross margin 67.4Mm; guides 3Q net sales $2.135-2.177B vs est. $2.08B and EPS $1.03-1.07 vs est. $1.01 GAAP
· Mercado Libre (MELI) Q3 EPS $2.56 vs est. $2.37 and Q3 revs $2.69B vs est. $2.69B
· Motorola Solutions (MSI) Q3 adj EPS $3.00 vs. est. $2.88; Q3 revs $2.4B vs. est. $2.31B; raises FY22 EPS view to $10.17-$10.22 from $10.03-$10.13 (est. $10.08); for FY expects revenue growth of between 9.25% and 9.5%; record q3 ending backlog of $13.5 bln, up 19% versus a year ago
· Skyworks Solutions (SWKS) 4Q adj EPS $3.02 vs est. $2.90 on revs $1.41B vs est. $1.4B; sees 1Q revs $1.3-1.35B vs est. $1.5B and adj EPS $2.59 at mid-point vs est. $3.14
· Synaptics (SYNA) 1Q adj EPS $3.52 vs est. $3.06 on revs $448.1Mm vs est. $450.7Mm; guides 2Q revs $350-380Mm vs est. $446.1Mm
· Twilio (TWLO) shares fall -15%; Q3 revs rose 33% y/y to $983M vs. est. $972.2M; Q3 EPS loss (-$0.27) vs. est. (-$0.36); More than 280,000 Active Customer Accounts as of September 30, 2022, compared to more than 250,000 Active Customer Accounts as of September 30, 2021; guides Q4 revs $995M-$1.01B vs. est. $1.07B
· Upland Software (UPLD) 3Q adj EPS $0.50 vs est. $0.41 on revs $79.5Mm vs est. $78.4Mm; sees 4Q revs $74.1-80.1Mm vs est. $78.8Mm and FY revs $312.6-318.6Mm vs est. $316.1Mm
· Viavi Solutions (VIAV) 1Q adj EPS $0.23 vs est. $0.23 on revs $310.2Mm vs est. $325.7Mm; guides 2Q and EPS $0.10-0.12 vs est. $0.24 and net revs $261-281Mm vs est. $332.7Mm
· Yelp Inc. (YELP) 3Q EPS $0.13 vs est. $0.22 on revs $309Mm vs est. $308.1Mm; sees FY revs $1.185-1.195B vs est. $1.13B; says board authorized additional $250Mm stock repurchase
Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.