Morning Preview: April 23, 2024

Auto PostDaily Market Report

Early Look

Tuesday, April 23, 2024

Futures

Up/Down

%

Last

Dow

91.00

0.24%

38,559

S&P 500

15.25

0.31%

5,063

Nasdaq

62.00

0.36%

17,412

 

 

S&P futures edge higher, adding to Monday’s strong gains as earnings season heats up, following better earnings results this morning from GM, GE, NVS, PEP, SPOT, SAP among many others. Investors bracing for the onslaught of mega cap earnings tonight and the remainder of the week with TSLA, Visa (V) and TXN tonight followed by likes of GOOGL, MSFT and META the next few days in tech. Reminder $183B of 2-yr (4/23 $69B a second record amount in a row vs $66B prior month), 5-yr (4/24 $70B another new record amount after prior month $67B) and 7-yr auction on Thursday this week. In Asian markets, The Nikkei Index gained 113 points to 37,552, the Shanghai Index fell -22 points to 3,021, and the Hang Seng Index jumps 317 points to 16,828. In Europe, the German DAX is up 194 points to 18,054, while the FTSE 100 is up 42 points to 8,066. Economic data also heats up this week with key PCE inflation data on Friday. Gold prices went down another 1.2% this morning after tumbling 2.75% on Monday given quiet headlines in the Middle East this past weekend.

 

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 43.39 points, or 0.87%, to 5,010.62.
  • The Dow Jones Industrial Average rose 254.17 points, or 0.67%, to 38,240.57.
  • The Nasdaq Composite gained 169.29 points, or 1.11%, to 15,451.31.
  • The Russell 2000 Index advanced 19.82 points, or 1.02% to 1,967.47.

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, April-Flash
  • 9:45 AM ET                  S&P Global Services PMI, April-Flash
  • 9:45 AM ET                  S&P Global Composite, April-Flash
  • 10:00 AM ET                New Home Sales M/M for March
  • 10:00 AM ET                Richmond Fed Manufacturing for April
  • 1:00 PM ET                   US Treasury to sell $66B in 2-year notes.
  • 4:30 PM ET                   API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: AEYE AUB BANC CBU DCOM DGX DHR FCF FCX FI GATX GE GM HAL HRI IVZ JBLU KMB LMT LXQ MSCI NEE NEP NVR ONB OPCH PEBO PEP PHM PII PM R RTX SHW UPS WBS WRB XRX
  • Earnings After the Close: ADC AGR APAM BKR BUSE CSGP EGP ENPH ENVA EQR EQT EWBC FFIC HA HIW IEX KREF LRN MANH MAT MTDR PEB QCRH RNST ROIC RRC RUSHA SASR STLD STX TRMK TSLA TXN V VBTX VLTO WFRD WSBC ZWS

 

 

Macro

Up/Down

Last

Nymex

-0.18

81.73

Brent

-0.03

86.97

Gold

-30.00

2,316.40

EUR/USD

0.0003

1.0658

JPY/USD

-0.06

154.78

10-Year Note

-0.008

4.614%

 

World News

  • Chinese regulators are inspecting the use of a cross-border mechanism to invest in debt-laden local governments’ offshore bonds, Reuters reported citing two sources, indicating a ramping up of efforts to contain financial risks in a loosely regulated part of the market. The move comes after offshore debt issuances by the local governments, who already owe more than $9 trillion, surged in recent months.
  • Overall business activity in the euro zone expanded at its fastest pace in nearly a year this month as the HCOB’s preliminary composite euro zone Purchasing Managers’ Index (PMI), compiled by S&P Global, bounced to 51.4 this month from March’s 50.3, well ahead of expectations in a Reuters poll for 50.7.

Sector News Breakdown

Consumer

  • General Motors (GM) Q1 adj EPS $2.62 vs. est. $2.12; Q1 sales rose 7.6% y/y to $43.01B vs. est. $42.19B; Q1 Cruise net sales and revenue $25M, and automotive net sales and revenue $39.21B, +7% y/y; sees FY24 EPS $9.00-$10.00, up from prior $8.50-$9.50 (est. $9.04) and raises FY adj free cash flow $8.5B-$10.5B, from $8B-$10B; also boosts year adj Ebit view and yearly net income outlook.
  • Hibbett, Inc. (HIBB) announces definitive agreement to be acquired by JD Sports Fashion Plc for $87.50 per share in cash, in a $1.1B transaction; price represents a 21% premium to the April 22, 2024, closing price.
  • PepsiCo (PEP) Q1 core EPS $1.61 vs. est. $1.52; Q1 revs rose 2.3% y/y to $18.25B vs. est. $18.07B; by segment revs: Frito-Lay North America revenue $5.68B, +1.7% y/y, Quaker Foods North America revenue $593M, -24% y/y, and PepsiCo Beverages North America revenue $5.87B vs. $5.80B y/y; still sees core EPS at least $8.15 (est. $8.16) and still sees organic revenue at least +4% vs. est. +4.17%.

Energy, Industrials and Materials

  • Cleveland Cliffs (CLF) Q1 EPS ($0.14) vs est. $0.22 on revs $5.2B vs est. $5.345B, adj EBITDA $414Mm vs est. $434.2Mm; reports new $1.5B share buyback program; maintained all its previously guided expectations for full-year 2024; Q1 mix was richer than originally anticipated and expects to benefit in Q2 from lower costs under our guidance.
  • Crane Inc. (CR) Q1 adj EPS $1.22 vs. est. $1.13; Q1 sales rose 10% y/y to $565.3M vs. est. $547.2M; Q1 adj operating margin 17.1% vs. 18.5% y/y; raises full year EPS guidance to $4.75-$5.05.
  • First Solar (FSLR) upgraded to Outperform from In Line at Evercore ISI with a $227 price target and SunPower (SPWR) was downgraded to In Line from Outperform at Evercore ISI with an unchanged price target of $6.
  • GE Aerospace (GE) forecasts FY operating profit $6.2B-$6.6B vs. forecast $6B-$6.5B; raised its full-year profit forecast on strong demand for jet-engine parts and services as carriers keep their older planes in the air to tide over a shortage of new commercial aircraft.
  • Halliburton (HAL) Q1 adj EPS $0.76 vs. est. $0.74; Q1 revs rose 2.2% y/y to $5.80B vs. est. $5.66B; Q1 Completion and Production revenue $3.37B, -1.1% y/y, and Drilling and Evaluation revenue $2.43B, +7.2% y/y; said North America revs fell -7.9% y/y to $2.55B.
  • Hexcel Corp. (HXL) Q1 EPS $0.44 vs. est. $0.41; Q1 revs $472.3M vs. est. $473.8M; reaffirms FY24 EPS $2.10-$2.30 (est. $2.22) and reaffirms FY24 revenue view of $1.925B-$2.025B (est. $1.98B); affirms FY24 free cash flow of greater than $200M, Capital expenditures less than $100M, effective tax rate of 22.0%.
  • Nucor Steel (NUE) Q1 EPS $3.46 vs. est. $3.65; Q1 revs $8.14B vs. est. $8.26B; said expects Q2 earnings to decrease compared to Q1 (est. $3.63) saying the largest driver for the expected decrease in earnings is the decreased earnings of the steel mills segment, primarily due to lower average selling prices partially offset by modestly increased volumes.
  • Packaging Corp. (PKG) Q1 adj EPS $1.72 vs est. $1.68 on sales $1.98B vs est. $1.909B; sees Q2 EPS $2.07 vs est. $2.22.
  • Simpson Manufacturing (SSD) Q1 EPS $1.77 vs est. $1.92, adj EBITDA $117.3Mm vs est. $130.4Mm on sales $530.579Mm vs est. $549.85Mm; sees FY op mgn 20.0-21.5%, says continue to expect low single digit growth in US housing starts with European housing starts below prior year.

Financials

  • AGNC Investment (AGNC) Q1 EPS $0.59 vs est. $0.57 on NII -$30Mm, $8.84 tangible net book value per share.
  • Ameriprise Financials (AMP) Q1 EPS $8.39 vs. est. $8.20; Q1 revs $4.15B vs. est. $4.12B; raises quarterly dividend 10% to $1.48 per share; Q1 Assets under management and administration reached $1.4 trillion, up 15%.
  • Cadence Bank (CADE) Q1 adj EPS $0.62 vs est. $0.55 on adj revs $437.7Mm vs est. $427.18Mm.
  • Equity Lifestyle (ELS) Q1 normalized FFO $0.78 vs. est. $0.77; Q1 revs $386.6M vs. est. $387.14M; sees FY24 normalized FFO $2.84-$2.94 vs. consensus $2.90; Core MH base rental income for the quarter ended March 31, 2024 increased 6.4% compared to the same period in 2023.
  • Globe Life (GL) Q1 EPS $2.67 vs. est. $2.79; Q1 revs $1.41B vs. $1.42B (vs. $1.32B y/y); Q1 net income as an ROE 21.3%; sees FY24 net operating EPS $11.50-$12.00, vs. consensus $11.60; Q1 net investment income $282.6M vs. $257.1M.
  • RBB Bancorp. (RBB) Q1 EPS $0.43 vs est. $0.34 on NII $24.877Mm vs est. $25.08Mm, revs $28.25Mm vs est. $27.69Mm; announces appointment of Lynn Hopkins as CFO.
  • RLI Corp. (RLI) Q1 operating EPS $1.89 vs est. $1.60 on gross premiums written $468.675Mm vs est. $460.05Mm.
  • TrustCo Bank (TRST) Q1 EPS $0.64 vs est. $0.60 on NII $36.578Mm vs est. $38.4Mm; loans reach another all-time high, says credit quality remains solid.

Healthcare

  • Abeona Therapeutics (ABEO) said the FDA declined to approve its treatment for a rare skin blistering condition; the FDA issued a "Complete Response Letter" (CRL) requesting certain additional information to satisfy a critical part of any pharmaceutical product application.
  • Danaher (DHR) Q1 adj EPS $1.92 vs. est. $1.71; Q1 revs $5.8B vs. est. $5.62B; sees Q2 revenue down mid-single digits and sees FY24 revenue down low-single digits.
  • HealthStream Inc. (HSTM) Q1 EPS $0.17 vs est. $0.11 on revs $72.8Mm vs est. $71.88Mm, adj EBITDA $17.1Mm vs est. $15.72Mm; reaffirms guidance for FY.
  • Medpace Holdings (MEDP) Q1 EPS $3.20 vs est. $2.47 on revs $511Mm vs est. $512.69Mm; guides FY revs $2.15-2.20B vs est. $2.185B, EBITDA $415-445Mm vs est. $416.98Mm.
  • Novartis (NVS) shares rise after the company raised its full-year guidance following better-than-expected first-quarter results; said 2024 net sales were set to grow by a high-single to low double-digit percentage and added that adjusted operating income was expected to grow by a low double-digit to mid-teens percentage.
  • Vertex Pharma (VRTX) and Treefrog Therapeutics announce licensing agreement and collaboration to optimize production of vertex’s cell therapies for type 1 diabetes.

Technology, Media & Telecom

  • AAPL’s (AAPL) iPhone shipments in China fell 19% in Q1, the worst performance since 2020; the co’s market share in the world’s largest smartphone market fell 15.7% in Q1, down from 19.7% a year ago; Apple lost its crown as the biggest smartphone seller in China to rival Vivo, sliding to third place in the quarter, followed by Huawei whose market share jumped to 15.5% from 9.3% a year earlier. https://tinyurl.com/mryh4sy6
  • Cadence Desigen Systems (CDNS) Q1 adj EPS $1.17 vs. est. $1.13; Q1 revs in-line at $1.01B; raises 2024 guidance for revs to $4.56B-$4.62B vs. prior $4.55B-$4.61B and EPS $5.88-$5.98 from prior $5.87-$5.97; posts record first quarter backlog of $6.0B and cRPO of $3.1B; sees Q2 adj EPS $1.20-$1.24 below consensus $1.43 on lighter revs.
  • Calix Inc. (CALX) Q1 EPS $0.00 vs est. $0.20 o revs $226.3Mm vs est. $228.14Mm; guides Q2 revs $197-203Mm vs est. $232.76Mm and adj EPS $0.03-0.09 vs est. $0.24.
  • SAP AG (SAP) Q1 EPS EUR loss (-0.71) vs. EUR 0.35 last year and revs rose 8% y/y to EUR 8.04B vs. EUR 7.44B last year; Q1 cloud revenue growth of 24% at 3.93 billion euros ($4.19 billion); sees FY24 EUR 17.0 – 17.3 bln cloud revenue at constant currencies (2023: EUR 13.66 bln), up 24% to 27% at constant currencies.
  • SoftBank (SFTBY) will reportedly invest nearly $1 billion in AI push, tapping Nvidia’s (NVDA) chips. In addition to working on a less advanced model, the company will start developing a world-class generative intelligence model as early as next year.
  • Spotify (SPOT) Q1 revenue EUR 3.64B vs. EUR 3.04B last year; Q1 MAUs 615M vs. 515M last year; guides Q2 Total MAU 631M; Total Premium Subscribers 245M v 246Me; guides Q2 Rev EU3.80B v EU4.02Be; Op EU250M v EU175Me; Q1 gross margin 27.6% vs. 25.2% last year; Q1 free cash flow EUR 207M vs. EUR 57M last year.
  • Vertex (VERX) announces $250M convertible senior notes offering.

_________________________________________________________________

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.

Live Trading

Open an Account

Paper Trading

Register