Morning Preview: April 26, 2024

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Early Look

Friday, April 26, 2024

Futures

Up/Down

%

Last

Dow

39.00

0.10%

38,327

S&P 500

35.00

0.69%

5,117

Nasdaq

171.50

0.97%

17,738

 

 

U.S. stock futures a much better picture than they looked 24-hours ago as the Nasdaq is pointing to a 1% gain and the S&P (Spuz) +0.7% following strong earnings results from tech/AI giants Microsoft (MSFT) and Alphabet (GOOGL), up 4% and 11% respectively pre-mkt. Yesterday morning at this time, S&P futures were lower at 5,074 after META results weighed on technology only to have markets tumble further, hitting intraday lows Thursday of 5,022.25 after “hotter” Q1 PCE inflation data and softer GDP results lowered the case for Fed rate cuts this year. However, 24 hours later, stocks futures surged to 5,118 (overnight high 5,134) as market enthusiasm over earnings has once again breathed life into investors. Treasury 10-year yield eases a basis point to 4.69% heading into the March Personal income/Spending data and the more current Personal Consumption Expenditures (PCE) report for the month of March. Bespoke Invest tweeted “The Nasdaq 100 ETF $QQQ was down 1.7% on the day at its lows this morning. After-hours, it’s trading up 0.8% versus yesterday’s close." In Asian markets, The Nikkei Index jumped 306 points to 37,934, the Shanghai Index rose 35 points to 3,088, and the Hang Seng Index jumped 366 points to 17,651. In Europe, the German DAX is up 133 points to 18,050, while the FTSE 100 is up 33 points to 8,111. Energy giants Chevron and ExxonMobil each reported earnings this morning (details below).

 

Market Closing Prices Yesterday

  • The S&P 500 Index dipped -23.21 points, or 0.46%, to 5,048.42.
  • The Dow Jones Industrial Average fell -375.12 points, or 0.98%, to 38,085.80.
  • The Nasdaq Composite dropped -100.99 points, or 0.64%, to 15,611.76.
  • The Russell 2000 Index declined -23.21 points, or 0.72% to 1,981.12.

Economic Calendar for Today

  • 8:30 AM ET                  Personal Income M/M for March…est. +0.5%
  • 8:30 AM ET                  Personal Spending M/M for March
  • 8:30 AM ET                  PCE Price Index M/M for March…est. +0.3% (prior +0.3%)
  • 8:30 AM ET                  PCE Price Index Y/Y for March…est. +2.6% (prior +2.5%)
  • 8:30 AM ET                  Core PCE Price Index M/M for March…est. +0.3% (prior +0.3%)
  • 8:30 AM ET                  Core PCE Price Index Y/Y for March…est. +2.7% (prior +2.8%)
  • 10:00 AM ET                University of Michigan Sentiment, April-Final…est. 77.9
  • 10:00 AM ET                University of Michigan 1-yr and 5-yr inflation expectations (prior +3.1% and +3.0% prior)
  • 1:00 PM ET                   Baker Hughes Weekly rig count data

Earnings Calendar:

  • Earnings Before the Open: AON B BALL CHTR CNC EAF FHB HCA POR PSX ROP STEL TNET

 

 

Macro

Up/Down

Last

Nymex

0.56

84.13

Brent

0.38

89.39

Gold

18.30

2,360.80

EUR/USD

0.0001

1.0729

JPY/USD

1.10

156.75

10-Year Note

-0.016

4.69%

 

World News

  • The Bank of Japan (BoJ) made no changes to interest rates or their previous March statement, saying they will conduct JGB purchases in line with decisions made at March meeting. The BoJ revised down GDP growth forecast for FY2023 (by -0.5% to 1.3%) and FY2024 (by -0.4% to 0.8%). The 2023 inflation forecasts were revised up 0.1% to 3.9% for ‘core’ CPI. The FY 2024 ‘core’ CPI forecasts were revised up by 0.4% to 2.8%.

Sector News Breakdown

Consumer

  • Boston Beer (SAM) Q1 revs rose 3.9% y/y to $426.1M vs. est. $413.2M; Q1 gross margins 43.7% up 570 basis points year over year; said 1Q depletions were flat and shipments increased 0.9%; has not changed its full year guidance.
  • Boyd Gaming (BYD) Q1 adj EPS $1.51 vs est. $1.57 on revs $960.521Mm vs est. $959.16Mm; says impacted by severe weather and increased competitive pressure.
  • Columbia Sportswear (COLM) Q1 EPS $0.71 vs est. $0.35 on net sales $770Mm vs est. $740.02Mm; guides FY net sales $3.35-3.42B vs est. $3.383B and EPS $3.65-4.05 vs prior $3.48-3.85 and est. $3.66.
  • Skechers (SKX) Q1 EPS $1.33 vs est. $1.10 on sales $2.252B vs est. $2.204B; sees Q2 sales $2.1756-2.25B vs est. $2.202B and EPS $0.85-0.90 vs est. $1.08; says have confidence in achieving $10B sales by 2026.

Energy,

  • First Energy (FE) Q1 adjusted EPS $0.55 vs. est. $0.56; Q1 revs $3.3B vs. est. $3.22B; said results are above the midpoint of our guidance, reflecting strong execution across each of our businesses; affirms targeted 6-8% long-term annual operating earnings per share growth and its 2024 operating EPS guidance range of $2.61 to $2.81 per share.
  • Chevron (CVX) Q1 adj EPS $2.93 vs. est. $2.68; Q1 revs $48.72B vs. est. $47.33B; Q1 worldwide production was 12% higher than a year ago; Q1 Net income fell to $5.5 billion, or $2.97 a share, from $6.57 billion, or $3.46 a share, due primarily to lower margins on refined product sales and lower natural-gas realizations.
  • Exxon Mobil (XOM) Q1 adj EPS $2.06, below consensus $2.19 and Q1 revs $83.08B vs. est. $73.2B; Q1 cash flow from operations $14.7B; free cash flow $10.1B; misses Q1 profit estimates, hit by weaker refining margins and lower natural gas prices.

Financials

  • Capital One Financial (COF) Q1 EPS $3.21 vs. est. $3.30; Q1 revs $9.4B vs. est. $9.34B; Q1 provision for credit losses down $174M to $2.7B; Q1 Net interest margin of 6.69 percent, a decrease of 4 basis points; Total non-interest expense decreased 10% to $5.1 billion.
  • Fair Isaac (FICO) Q2 adj EPS $6.14 vs est. $5.81 on revs $433.809Mm vs est. $425.77Mm; sees FY adj EPS $22.80 vs est. $23.77 and revs $1.69B vs est. $1.702B.
  • Hartford Financial (HIG) Q1 core EPS $2.34 vs. est. $2.45; Q1 revs $6.419B vs. est. $6.51B; said Q1 Property & Casualty written premiums rose 9%, driven by Commercial Lines and Personal Lines premium growth of 8% and 13%, respectively. Group Benefits fully insured ongoing premium growth of 2% in Q1; Commercial Lines first quarter combined ratio of 90.1 and underlying combined ratio of 88.4.
  • Principal Financial (PFG) Q1 adj operating EPS $1.65 vs. est. $1.73; Q1 pretax operating profit $472.2M, below est. $505.1M; said remains on track to deliver 2024 outlook; raises dividend to $0.71.

Healthcare

  • Dexcom (DXCM) Q1 adj EPS $0.32 vs est. $0.27 on revs $921Mm vs est. $909.2Mm; sees FY revs $4.2-4.35B vs est. $4.326B, adj gr mgn 63-64%, adj EBITDA mgn 29%.
  • Edwards Lifesciences (EW) Q1 adj EPS $0.66 vs. rest. $0.64; Q1 revs $1.6B vs. est. $1.57B; backs FY24 EPS view $2.70-$2.80 in-line with consensus $2.75 and sees FY24 revenue view at high end of $6.3B-$6.6B range (est. $6.52B); noted it’s planning to spin off its critical care business; Q1 TAVR sales grew 6%; constant currency sales grew 8%; Raising full-year 2024 sales guidance for TMTT and Surgical; confident in TAVR guidance.
  • Gilead Sciences (GILD) Q1 adj EPS ($1.32) vs est. ($1.49) on revs $6.69B vs est. $6.34B; sees FY product sales $27.1-27.5B incl Veklury $1.3B and adj EPS $3.48-3.85 vs est. $3.93.
  • ResMed (RMD) Q3 adj EPS $2.13 vs est. $1.91 on revs $1.2B vs est. $1.167B, adj gr mgn 58.5%.
  • Teladoc (TDOC) Q1 EPS loss (-$0.49 vs. est. loss (-$0.46); Q1 revs rose 2.7% y/y to $646.13M vs. est. $637.29M; sees Q2 EPS loss (45c)-(35c) vs. est. loss )-$0.30) and revs $635M-$660M vs. est. $662.56M; U.S. revenue grew 1% to $547.6 million and International revenue grew 13% to $98.5 million.

Industrials and Materials

  • Carlisle Companies (CSL) Q1 adj EPS $3.72 vs est. $2.82 on revs $1.097B vs est. $996.13Mm, adj EBITDA mgn 24.2%; raising FY outlook to include about 10% revs growth vs est. +6.55% and over 100bps adj EBITDA mgn expansion.
  • Eastman Chemical (EMN) Q1 EPS $1.61 vs. est. $1.43; Q1 revs $2.31B vs. est. $2.29B; backs FY24 EPS view of $7.25-$8.00 vs. est. $7.66 and for 2024 cash from operations to be approximately $1.4 billion.
  • Ingersoll (IR) approved an incremental $1B boost to share buyback.
  • L3Harris Technologies (LHX) Q1 adj EPS $3.06 vs. est. $2.90; Q1 revs $5.21B vs. est. $5.11B; raises FY24 revenue view to $20.8B-$21.3B from $20.7B-$21.3B (est. $21.17B) and boosts FY24 adj EPS to $12.70-$13.05 from $12.40-$12.80; said sees 2024 adjusted segment operating margin guidance increases from ~15% to greater than 15%.
  • Terex Inc. (TEX) Q1 EPS $1.60 vs. est. $1.37; Q1 revs $1.3B vs. est. $1.24B; raises 2024 view to sales $5.2B-$5.4B from $5.1B-$5.3B (est. $5.16B) to reflect their strong first qtr performance; raises 2024 EPS view to $6.95-$7.35 from $6.85-$7.25 (est. $6.98).
  • Weyerhaeuser (WY) Q1 adj EPS $0.16 vs est. $0.15, adj EBITDA $352Mm vs est. $344.2Mm on sales $1.9B vs est. $1.851B; sees Q2 adj EBITDA slightly higher than Q1 level in timberlands, comparable to Q1 in Real Estate, Energy and Natural Resources and slightly higher vs Q1 in Wood Products.

Technology, Media & Telecom

  • Microsoft Corp. (MSFT) Q3 EPS $2.94 vs. est. $2.63; Q3 revs rose 17% y/y to $61.9B above consensus $56.8B; Q3 Intelligent Cloud revenue, which houses the Azure cloud computing platform, rose to $26.7B, compared with analysts’ average estimate of $26.24B; Azure revenue rose 31%, higher than a 29% growth estimate from market research firm Visible Alpha.
  • Alphabet (GOOGL) Q1 EPS $1.89 vs est. $1.51 on revs $80.539B vs est. $78.591B, op mgn 32%; authorized repurchase up to $70B company’s Class A and C shares; says intends to pay qtrly cash dividend in future; YouTube and Cloud to exit 2024 at a combined revenue of $100B – Gene Munster notes this implies 25% growth in each of the next three quarters, compared to YouTube up 21% and 28.4% in March.
  • AppFolio inc. (APPF) Q1 revs $187.4Mm vs est. $178.69Mm, adj op Inc $48.2Mm vs est. $39.25Mm, adj FCF $41Mm; sees FY revs $766-774Mm vs est. $764.75Mm, adj op mgn 23-24%, adj FCF mgn 21-23%.
  • Atlassian (TEAM) Q3 adj EPS $0.89 vs est. $0.62 on revs $1.19B vs est. $1.097B; sees Q4 revs $1.12-1.135B vs est. $1.106B and gr mgn 81%; says Farquhar had decided to step down as Co-CEO.
  • KLA-Tencor (KLAC) Q3 adj EPS $6.07 vs est. $5.01 on revs $2.36B vs est. $2.312B, gr mgn 59.5%; sees Q4 adjusted EPS $6.07 plus/minus 60c vs. est. $5.68 and revs $2.5B, plus/minus $125M vs. est. $2.42B.
  • Intel Corp. (INTC) Q1 adj EPS $0.18 vs est. $0.14 on revs $12.7B vs est. $12.776B; sees Q2 adj EPS $0.10 vs est. $0.25 and revs $12.5-13.5B vs est. $13.572B, sees Q2 gr mgn 40.2%; says confident in plans to drive sequential growth throughout the year, expects to deliver y/y revs and adj EPS growth for FY vs est. revs +5.62% and EPS +27.7%.
  • Roku Inc. (ROKU) Q1 EPS loss (-$0.35) vs. est. loss (-$0.61); Q1 revs $881.5M vs. est. $848.6M; Q1 ARPU $40.65, flat y/y, Streaming Households up 1.6M q/q at $81.6M; sees Q2 revenue $935M vs. consensus $931.4M and guides Q2 adjusted EBITDA $30M; remain confident in our ability to continue to grow adjusted ebitda, and free cash flow in 2025/beyond.
  • Snap Inc. (SNAP) Q1 EPS $0.03 vs. est. loss (-$0.04); Q1 revs rose 21% y/y to $1.195B vs. est. $1.05B; guides Q2 revenue $1.225B-$1.255B above consensus $1.14B, built on the assumption that DAU will be approximately 431 million in Q2; Q1 Daily active users of Snapchat grew to 422 million, beating analyst expectations of 419.6 million.
  • T-Mobile (TMUS) Q1 EPS $2.00 vs. est. $1.87; Q1 revs $19.59B vs. est. $19.81B; said Q1 Postpaid net customer additions of 1.2 million, Postpaid phone net customer additions of 532K vs. est. 477K), and Postpaid phone churn of 0.86%, matches record low for Q1; now expects to add 5.2 million to 5.6 million subscribers in the full-year 2024 compared to its previous forecast of 5 million to 5.5 million subscriber additions.
  • Western Digital (WDC) Q3 adj EPS $0.63 vs. est. $0.21; Q3 revs $3.46B vs. est. $3.36B; sees Q4 adj EPS $0.90-$1.20 vs. est. $0.84 and revs $3.6B-$3.8B below consensus $3.69B.
  • Elon’s Musk xAI is close to having billions of dollars more in its coffers to make its chatbot Grok a more fearsome competitor to OpenAI’s ChatGPT. Musk’s year-old startup is raising $6B at a valuation of $18B not including the investment, according to two people close to the deal – The Information reported.

_________________________________________________________________

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.

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