Early Look

Wednesday, September 7, 2022

Futures	Up/Down	%	Last
Dow	39.00	0.13%	31,205
S&P 500	6.25	0.17%	3,917
Nasdaq	31.50	0.26%	12,050

 

 

U.S. futures are edging higher early, but only slightly as stocks look to snap their recent slide. The stock downtrend continued Tuesday as the Nasdaq posted its longest losing streak since 2016, falling a 7^th straight session as rising treasury yields, looming interest rate hikes from the Fed, and recession fears work its weigh into market sentiment. The two-year gained 10-bps to 3.499% and the 10-year gain ed nearly 15-bps to 3.339%, in both cases the largest one-day gain in a month, while the Treasury 30-year yield rises to highest level since 2014. WTI crude +0.6% at $97.44; Russia will not supply crude oil, refined products or gas to any nations that introduce price caps, President Vladimir Putin said. In the tech space, Apple (AAPL) is holding its annual iPhone event later this afternoon, with a livestream expected to start at 1:00 PM ET (new phone, update on AirPods and watch expected as well). No easing in the U.S. dollar, as the index rises +0.2% to 110.44 and Treasury yields remain elevated. In Asian markets, The Nikkei Index declined -196 points to 27,430, the Shanghai Index rose a few points to 3,246 and the Hang Seng Index dropped -158 points to 19,044. In Europe, the German DAX is down -0.4% to 12,814, while the FTSE 100 is down -0.6% to 7,256. The yen jumps again nearly 200 bps to 144.50 vs. the US dollar, highest since the last 1990’s, triggering strongest government warnings yet from Japan. Several Fed speakers today include Barkin, Nester, Brainard and Barr along with the Fed beige Book.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -16.07 points, or 0.41%, to 3,908.19

·     The Dow Jones Industrial Average fell -173.14 points, or 0.55%, to 31,145.30

·     The Nasdaq Composite slipped -85.96 points, or 0.74%, to 11,544.91

·     The Russell 2000 Index declined -17.42 points, or 0.96% to 1,792.32

 

Economic Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     8:30 AM ET          International Trade Balance for July

·     10:30 AM ET        Weekly DOE Inventory Data

·     2:00 PM ET           U.S. Federal Reserve Releases Beige Book

·     2:00 PM ET           Fed’s Barr Speaks on Financial System Fairness and Safety

 

Earnings Calendar:

·     Earnings Before the Open: AEO A LOT ASO GIII KFY REVG WLY

·     Earnings After the Close: ASAN AVAV BASE CASY CPRT CURV GME INTA PHR PLAY SKIL SOL VRNT YEXT

 

Other Key Events:

·     Barclay’s CEO Energy-Power Conference, 9/6-9/8, in NY

·     Barclay’s Global Consumer Staples Conference, 9/6-9/8, in Boston, MA

·     Benchmark Consumer/Media/Entertainment Conference, 9/7-9/8, in NY

·     Cowen Annual Global Transportation & Sustainable Mobility Conference (virtual), 9/7-9/9

·     Credit Suisse Asian Technology Conference (virtual), 9/5-9/8

·     Credit Suisse Global Steel & Mining Conference, 9/7-9/8, in London, England

·     Deutsche Bank Annual Aircraft Finance & Leasing Conference, 9/6-9/8, in NY

·     KBW Inc. Insurance Conference, 9/6-9/8, in NY

·     Susquehanna Gambling & Tech Ecosystem Forum (virtual), 9/7

·     Wells Fargo Healthcare Conference, 9/7-9/9, in MA

·     Wells Fargo Leveraged Finance Conference, 9/7-9/9, in Nashville, TN

·     Wolfe Research Tech, Media, Telecom Conference 2022, 9/6-9/8 in San Francisco, CA

 

 

Macro	Up/Down	Last
Nymex	0.48	87.36
Brent	0.61	93.44
Gold	1.90	1,714.80
EUR/USD	-0.0003	0.9900
JPY/USD	1.76	144.55
10-Year Note	-0.008	3.332%

 

 

World News

·     China August Trade Balance: +$79.39b vs+$92.7b consensus; China Aug Exports: +7.1% y/y vs 12.8% consensus

·     UKPM Truss’s plan to tackle high energy bills looking to add about 10% to UK’s national debt, currently the package includes £130 billion to freeze household bills until April 2024 and a discount for businesses that could cost up to £67 billion over 12 months – Bloomberg

·     Russia buying rockets and artillery shells from North Korea to use in Ukraine, according to declassified US intelligence. “This purchase indicates that the Russian military continues to suffer from severe supply shortages in Ukraine, due in part to export controls and sanctions,” the official added. – Financial Times

 

Sector News Breakdown

Consumer

·     Newell Brands (NWL) cuts FY22 EPS view to $1.56-$1.70 from $1.79-$1.86 (est. $1.84) and cuts FY22 revenue view to $9.37B-$9.58B from $9.76B-$9.98B (est. $9.90B) as anticipates higher impact from retailer inventory rebalancing and said experienced a significantly greater than expected pullback in retailer orders and continued inflationary pressures on consumer

·     United Airlines Holdings Inc. (UAL) raised its Q3 revenue growth outlook, citing continued “strong” demand exiting a “robust” summer; now expects revenue to be about 12% above the same period in pre-pandemic 2019, compared with previous growth guidance of about 11%; sees capacity to be down 10% to 11%, compared with previous expectations of down about 11%

·     NIO (NIO) Q2 Non-GAAP EPS of -$0.20 vs. est. loss (-$0.17); Q2 revs of $1.54B (+21.9% Y/Y) beats by $120M; deliveries of vehicles were 25,059 in 2Q22, including 3,681 ES8s, 9,914 ES6s, 4,715 EC6s and 6,749 ET7s, representing an increase of 14.4% Y/Y and decrease of 2.8% Q/Q; sees Q3 deliveries of vehicles to be between 31,000 and 33,000 vehicles, representing an increase of approximately 26.8% to 35.0% from the same quarter of 2021

 

Energy

·     US utilities and energy suppliers in focus including PG&E (PCG), Edison International (EIX) and Sempra Energy (SRE) amid a deepening power crisis in California, where a heat wave is piling pressure on the US state’s power grid.

 

Financials

·     AIG Inc. (AIG) late Tuesday it was looking to raise up to $1.92 billion through the initial public offering of its unit CoreBridge Financial Inc.

·     Marathon Digital Holdings (MARA) announces bitcoin production and mining operation updates for August 2022; says produced 184 Bitcoin in August and total bitcoin holdings increased to 10,311 BTC with a fair market value of $206.7 mln as of August 31

·     Riot Blockchain Inc. (RIOT) said in August 2022, Riot produced 374 Bitcoin, a decrease of approximately 15% as compared to August 2021 production of 441 Bitcoin; as of August 31, 2022, riot held approximately 6,720 BTC, all produced by company’s self-mining operations.

 

Healthcare

·     HealthEquity (HQY) Q2 adj EPS $0.33, in-line with consensus and revs rose 9% y/y to $206.1M vs. est. $203.8M; raises FY23 revs to $834M-$844M from prior $827M-$837M while still sees adjusted EPS $1.23 to $1.32 vs. est. $1.31; 14.5 million Total Accounts, including both HSAs and complementary CDB accounts, an increase of 11% compared to Q2 FY22

·     Equillium (EQ) and Metacrine (MTCR) announced that the two companies have entered into a definitive merger agreement pursuant to which Equillium will acquire Metacrine in an all-stock transaction

·     Ionis (IONS) reports positive results from a 35-week phase 3 NEURO-TTRansform study of Ionis and AstraZeneca’s eplontersen in patients with hereditary transthyretin-mediated amyloid polyneuropathy (ATTRv-PN), according to a statement.

·     Walmart (WMT) and UnitedHealth Group (UNH) collaborate to deliver access to high-quality, affordable health; to begin initial 10-year, wide-ranging collaboration that will start in 2023 with 15 Walmart health locations in Florida, Georgia

·     AstraZeneca (AZN) downgraded to Equal Weight from Overweight at Morgan Stanley

 

Industrials & Materials

·     Airbus (EADSY) downgraded to Buy from Conviction Buy at Goldman Sachs and cuts target to EU145 from EU182 saying Airbus is now expecting a slower ramp-up of A320 deliveries out to 2025, with the first milestone rate of 65 per month shifting six months later due to recent supply chain constraints, now expected in early 2024

·     Nordson Corporation’s (NDSN) board of directors authorizes additional $500 million for share repurchase program

 

Technology, Media & Telecom

·     Apple (AAPL) to hold its iPhone event later today, what to expect: The event, which Apple has titled “Far Out,” will be live-streamed starting at 1 pm EST. Apple’s new phone, the iPhone 14, will have four models including a smaller, 6.1-inch iPhone 14 and iPhone 14 Pro, as well as the larger 6.7-inch iPhone 14 Plus and iPhone 14 Pro Max, according to Bloomberg. The phones will go on sale Sept. 16, about a week earlier than normal, according to Bloomberg.

·     Coupa Software (COUP) shares rose +14% after hours; reported Q2 EPS $0.20 vs. est. $0.09; Q2 revs $211.1M vs. est. $204.02M; guides Q3 non-GAAP EPS to $0.08-$0.10 vs. est. $0.06 on revs $211.0M-$214.0M vs. est. $214.06M and sees Q3 subscription revenues $194.0M-$196.0M; sees year revs $838M-$944M vs. est. $840M

·     GitLab Inc. (GTLB) Q2 EPS loss (-$0.15) vs. est. loss (-$0.23); Q2 revs rose 74% y/y to $101M vs. est. $94.04M; sees Q3 EPS loss (16c)-(15c) vs. est. loss (25c) and sees Q3 revenue $105M-$106M, vs. consensus $103.41M; guides year revs $411M-$414M vs. est. $402.8M

·     Guidewire Software (GWRE) Q4 adj EPS $0.03 vs. est. loss (-$0.02); Q4 revs rose 7% y/y to $244.6M vs. est. $229.5M; guides Q1 revs $190M-$195M vs. est. $187.8M and sees year revs $885M-$895M vs. est. $883.8M

·     UiPath (PATH) shares fell -16% after hours; reports Q2 EPS loss (-$0.02) vs. est. loss (-$0.11); Q2 revs $242.2M vs. est. $230.8M; noted that ARR surpassed $1B in the second quarter fiscal 2023 to reach $1.043B, up 44% y/y; sees Q3 revenue $243M-$245M vs. consensus $269.6M; sees FY23 revenue $1.00B-$1.01B vs. est. $1.09B