Early Look

Thursday, April 28, 2022

Futures	Up/Down	%	Last
Dow	275.00	0.83%	33,501
S&P 500	60.25	1.45%	4,241
Nasdaq	258.50	1.99%	13,267

 

 

It’s looking like a solid start to the trading day, with U.S. futures jumping across the board, led by the Nasdaq which is pointing to a 2% advance. Technology stocks are poised to gain as investors cheered earnings from Meta Platforms (up over 18%) on improving DAUs (despite slowing rev growth) and awaits results from Twitter, Apple, and Amazon later today. Sentiment has been abysmal as noted in this weeks AAII poll where Bulls fall -2 to 16.4% but Bears 59.4% (+15), highest since 70% in March 2009. The Nasdaq enters todays trading down -20% YTD and -12% for April so far, with semiconductors (SOX) down -26% YTD and -15.5% MTD as rising interest rate fears, and impact on production has taken a toll. An amazing sight to see in the currency markets as the U.S. dollar surges over 1.5% against the Japanese yen (last around 130.35 after stalling near 131), highest since early 2000 after the Bank of Japan launches unlimited fixed-rate JGB buying every day to keep 10-year yields near zero. The yen trades off worst levels after official comments that Japan will take appropriate action on FX if needed, describing the latest moves as warranting extreme concern. U.S. stocks rose Wednesday afternoon to recover some losses after the major equity indexes slid a day earlier, as concerns over inflation and global economic growth stirred up further volatility across risk assets. With just three trading days left in April, the S&P 500 is tracking toward a monthly decline of 7.8%. A busy morning of economic data coming up with Weekly Jobless Claims est. 180K and Q1 GDP est. to show a rise of only +1.1% with high inflation as GDP Price deflator est. +7.3% and core PCE Prices est. +5.4%. In Asian markets, The Nikkei Index jumped 1.75% or 475 points to 26,847, the Shanghai Index gains +0.58% to 2,975, and the Hang Seng Index jumps 1.65% or 329 points to 20,276. In Europe, the German DAX is up 1.3% or 180 points to 13,975, while the FTSE 100 rises +0.9% to near 7,500.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 8.76 points, or 0.21%, to 4,183.96

·     The Dow Jones Industrial Average rose 61.75 points, or 0.19%, to 33,301.93

·     The Nasdaq Composite dipped -1.81 points, or 0.01%, to 12,488.93

·     The Russell 2000 Index declined -6.44 points, or 0.34% to 1,884.04

 

Economic Calendar for Today

·     8:30 AM ET        Weekly Jobless Claims…est. 180K

·     8:30 AM EST       Continuing Claims…est. 1.403M

·     8:30 AM ET         Gross Domestic Product (GDP) for Q1…est. +1.1%

·     8:30 AM ET         GDP Consumer Spending for Q1

·     8:30 AM ET         GDP Deflator for Q1…est. +7.3%

·     8:30 AM ET         PCE Prices Q1-A…est.

·     8:30 AM ET         Core PCE Prices for Q1-A…est. +5.4%

·     10:30 AM ET       Weekly EIA Natural Gas Inventory Data

·     11:00 AM Et        Kansas City Manufacturing for April

 

Earnings Calendar:

·     Earnings Before the Open: ABG ABMD AEP AIMC ALNY AOS ASPN BAX BC BTU CARR CAT CHD CMCSA CNX DPZ DTE EME EXLS FCFS FCN FLWS FTV GVA HAYW HNI HSII HSY HUN IP IPG IRM KBR KDP KEX KIM LAZ LECO LH LUV LLY MA MDC MCD MO MRK MTSI NLSN NOC OSTK OTIS PATK PBF PBI PCG PHM PNM POR PTEN RLGY RS SAH SIRI SRCL SWK TFX TMO TPX TROW TW TWTR TXT ULBI VC VIRT VLY WEX XEL

·     Earnings After the Close: ACCD AJG ATUS BIO BY BZH CAMP CE CENX CG COLM COOP CPT CUBE CUZ DLR DXCM EB FBHS FSLR GILD HAYN HOOD HUBG INTC KLAC KN LADR LPLA MHK MTX NATI NOV NWE OIS OMCL PFG POWI RMD ROKU RWT SGEN SKYW SM SSNC SWN SYK TEX TRUP ULCC VRSN WDC WU X ZEN ZYKI

 

 

Macro	Up/Down	Last
Nymex	0.36	102.38
Brent	0.17	105.49
Gold	-0.20	1,888.50
EUR/USD	-0.0049	1.10505
JPY/USD	1.97	130.39
10-Year Note	+0.002	2.821%

 

 

World News

·     Bank of Japan: BOJ Rate Decision: Short term target rate unchanged at -0.1%, 10 YJGB yield target unchanged at around zero %; BOJ will be conducting unlimited fixed rate ops every day unless it thinks its highly likely no bids will be submitted; inflation expectation have increased mainly in the short term

·     AAII Sentiment reading shows: AAII Bulls -2 to 16.4% But Bears 59.4% (+15), highest since 70% in March 09. Bull/Bear Spread -43, most since March 09 at -51.

·     Japan industrial output 0.3% vs 0.5% est., retail sales 2.0% vs 1.0% est.

 

Sector News Breakdown

Consumer

·     Ford Motor (F) Q1 adj EPS $0.38 vs. est. $0.36; Q1 adjusted EBIT $2.3B; anticipate full-year 2022 adjusted EBIT of $11.5B-$12.5B, up 15% to 25% from 2021, including improvement in operations outside North America; committed to reaching worldwide EV manufacturing capacity of at least 600,000 by the end of 2023; stake in Rivian was valued at $5.1 billion on March 31

·     Cheesecake Factory (CAKE) Q1 EPS $0.45 vs. est. $0.51; Q1 revs $793.7M vs. est. $783.4M; comparable restaurant sales at cheesecake factory restaurants increased 20.7% year-over-year in Q1; reinstates quarterly cash dividend and share repurchase program

·     Churchill Downs (CHDN) Q1 EPS $1.08 vs. est. $1.07; Q1 revs $364.1M vs. est. $344.8M; Record Adjusted EBITDA of $128.5M vs. $110.6M y/y; gaming segment delivered double digit revenue and Adjusted EBITDA growth in first quarter 2022 compared to first quarter 2021

·     Hertz (HTZ) 1Q adj EPS $0.87 vs est. $0.83 on revs $1.8B vs est. $1.74B, says strong demand in second half of 1Q carried over into April, aims to have EV partnerships with all carmakers

·     Las Vegas Sands (LVS) 1Q EPS continuing ops ($0.49) vs est. ($0.24) on revs $943Mm vs est. $1.1B; says pandemic-related restrictions and reduced visitation continue to impact results

·     Mattel Inc. (MAT) Q1 EPS $0.08 vs. est. loss (-$0.04); Q1 revs $1.04B vs. est. $917.9M; ‍​qtrly reported gross margin of 46.4%, a decrease of 70 bps; reiterates 2022 guidance and 2023 goals; said Q1 net sales in N.A. up 26% as reported; net sales in American Girl segment down 22%

·     O’Reilly Auto (ORLY) 1Q EPS $7.17 vs est. $7.48 on revs $3.3B vs est. $3.3B; announces CFO transition plan; backs year EPS and revenue outlook

·     Overstock.com (OSTK) Q1 EPS $0.21 vs. est. $0.22; Q1 revs $536M vs. est. $574.54M; Active customers of 7.4 million, a decrease of 26% y/y; 12-months net revenue per active customer of $356, an increase of 26% y/y; orders delivered of 2.4 million, a decrease of 33% y/y

·     Stanley Black & Decker (SWK) Q1 adj EPS $2.10 vs. est. $1.70; Q1 revs $4.45B vs. est. $4.65B; cuts FY22 EPS view to $9.50-$10.50 from $12.00-$12.50 citing Access Technologies divestiture, Russia business closure, $600M in commodity and transit inflation, incremental pricing action

·     Allison Transmission (ALSN) Q1 EPS $1.30 vs. est. $1.17; Q1 revs $677M vs. est. $644.39M; affirms 2022 sales outlook $2.625B-$2.775B, adj EBITDA outlook $865M-$975M and net income outlook $430M-$520M

 

Energy

·     EQT Corp. (EQT) 1Q adj EPS $0.81 vs est. $0.96 on sales volumes 492 BCFE; raises mid-point of 2022 FCF outlook by approx 50% to $2.35B; sees FY total sales volume 1950-2050 BCFE

·     Helmerich & Payne (HP) Q2 EPS loss (-$0.05) vs. est. loss (-$0.30); Q2 revs $468M vs. est. $446.42M; North America Solutions segment exited the second quarter of fiscal year 2022 with 171 active rigs, up over 10% during the quarter; sees FY22 gross CapEx $250M-$270M

·     Nabors (NBR) Q1 EPS loss (-$22.51), incl non-cash charge of $8.63/shr vs. est. loss (-$10.99); Q1 revs rose 5% to $569M vs. est. $557.5M

 

Financials

·     PayPal Inc. (PYPL) Q1 adj EPS in-line at $0.88; Q1 revs $6.48B vs. est. $6.4B; 2.4M net new active accounts added in Q1; Q1 TPV $323B, up 13% and 15% on FXN basis; lowers FY22 adjusted EPS $3.81-$3.93 from $4.60-$4.75 (est. $4.63); sees year net revenues are expected to grow ~11%-13% on a spot and FXN basis

·     Discover Financial (DFS) Q1 EPS $4.22 vs. est. $3.62; approves repurchase of up to $4.2 billion of common stock; total loans ended quarter at $93.5 bln, up 8% y/y; raises dividend by 20%; credit card loans ended quarter at $73.8B up 10% y/y; qtrly payment services volume was $77.7 bln, up 2% y/y; net interest income for the quarter increased $149 million, or 6%, y/y

·     Aflac (AFL) Q1 adj EPS $1.42 vs. est. $1.37; Q1 revs $5.3B vs. est. $5.12B; in yen terms, Aflac Japan’s net earned premiums were ¥316.4 bln for quarter, or 4.3% lower than a year ago

·     AvalonBay (AVB) 1Q core FFO/shr $2.26 vs est. $2.26; sees 2Q core FFO/shr $2.25-2.37 vs est. $2.36 and FY core FFO/shr $9.38-9.78 vs est. $9.59

·     Fair Isaac (FICO) 2Q adj EPS $4.68 vs est. $3.73 on revs $357Mm vs est. $337.6Mm; guides FY adj EPS $16.08 vs est. $15.20 and revs $1.355B vs est. $1.366B

·     Lending Club (LC) Q1 EPS $0.39 vs. est. $0.24; Q1 revs $289.5M vs. est. $262M; sees Q2 revenue $295M-$305M above consensus $284.81M and sees Q2 net income $40M-$45M; raises 2022 revenue outlook to $1.15B-$1.25B

·     Invitation Homes (INVH) 1Q core FFO/shr $0.40 vs est. $0.40 on revs $532Mm vs est. $533Mm; guides FY AFFO/shr $1.38-1.46 vs est. $1.68

·     Mid-American Apartment (MAA) 1Q core FFO/shr $1.97 vs est. $1.94; guides 2Q core FFO/shr 1.89-2.05 vs est. $1.98, sees FY core FFO/shr $7.92-8.24 vs est. $8.06

·     Raymond James (RJF) Q2 EPS $1.55 vs. est. $1.64; Q2 revs in-line at $2.67B; qtr-end private client group assets under administration of $1.20 trillion, up 17% over March 2021

 

Healthcare

·     Amgen Inc. (AMGN) Q1 adj EPS $4.25 vs. est. $4.10; Q1 revs $6.2B vs. est. $6.07B; backs FY22 adjusted EPS view $17.00-$18.00 vs. est. $17.63 and backs FY22 revenue view $25.4B-$26.5B vs. est. $26.14B; received a notice of deficiency from IRS for 2013-2015 period (IRS has billed Amgen more than $7 billion for taxes it says the biotechnology company owes); sees FY capital expenditures to be approximately $950M

·     Eli Lilly (LLY) Q1 EPS $2.62 vs. est. $2.14; Q1 revs $7.81B vs. est. $6.91B; lowers FY22 EPS view to $8.15-$8.30 from $8.50-$8.65 (est. $8.19) while raises FY22 revenue view to $28.8B-$29.3B from $27.8B-$28.3B (est. $26.8B) – 2022 rev guidance increase reflects additional covid-19 antibodies revenue from sale of 600,000 doses of bebtelovimab to govt in q1

·     Merck (MRK) Q1 adj EPS $2.14 vs. est. $1.83; Q1 revs $15.9B vs. est. $14.68B; raises & narrows full-year 2022 non-gaap eps to be between $7.24 and $7.36, including negative impact from forex of about 2%; raises & narrows full-year 2022 worldwide sales to be between $56.9 bln and $58.1 bln, including negative impact from forex of just over 2%

·     Align Technologies (ALGN) tumbles -20% on miss; 1Q adj EPS $2.13 vs est. $2.22 on revs $973.2Mm vs est. $1B

·     BioMarin (BMRN) Q1 EPS $0.63 vs. est. $0.17; Q1 revs rose 7% to $519.4M vs. est. $507.5M; FY 2022 guidance for Voxzogo net product revenues increased to between $100 mln to $125 mln; remaining guidance reaffirmed

·     Hologic (HOLX) 2Q EPS $1.80 vs est. $1.60 on revs $1.44B vs est. $1.29B; guides 3Q adj EPS $0.67-0.72 vs est. $0.70 and revs $875-915Mm vs est. $893.5Mm; sees FY adj EPS $5.45-5.65 vs est. $5.15 on revs $4.6-4.7B vs est. $4.53B

·     Community Health (CYH) Q1 EPS $0.14 vs. est. $0.13; Q1 revs $3.11B vs. est. $3.13B; on a same-store basis, qtrly admissions decreased 0.3% and adjusted admissions increased 3.2%

·     Molina Healthcare (MOH) Q1 EPS $4.90 vs. est. $4.66; Q1 revs $7.77B vs. est. $7.52B; raises FY22 adjusted EPS view to no less than $17.10 from prior view no less than $17; boosts FY22 premium revenue view to $29.25B from $28.5B (est. $29.83B)

·     Teladoc (TDOC) shares tumble over -30% on results; Q1 adj EBITDA loss $54.5M vs. profit $56.6M y/y; EPS loss (-$41.58) vs. loss/shr ($-1.31); Q1 revs $565.4M vs. est. $568.9M; full year guidance ranges for 2022 revenue, net loss per share and adjusted EBITDA revised to $2.4B-$2.5B and $240M-$265M respectively

 

Industrials & Materials

·     Caterpillar (CAT) Q1 EPS $2.86 vs. est. $2.60; Q1 revs $13.59B vs. est. $13.4B; operating profit margin was 13.7% for q1 of 2022, compared with 15.3% for q1 of 2021; other income (expense) in q1 of 2022 was income of $253 mln, compared with income of $325 mln in q1 of 2021

·     CH Robinson (CHRW) 1Q EPS $2.05 vs est. $1.54, adj op margin 38.1%, revs $6.8B vs est. $5.96B, sees FY CAPEX $90-100Mm

·     Forward Air (FWRD) adj 1Q EPS $1.57 vs est. $1.27; guides 2Q adj EPS $1.10 vs est. $1.48 and revs +18-22% vs est. +15.9%

·     KBR (KBR) Q1 adj EPS $0.62 vs. est. $0.57; Q1 revs $1.71B vs. est. $1.72B; awarded $1.2B of bookings and options providing greater visibility of long-term growth target; raises year EPS and revenue outlook for the year

·     United Rentals (URI) 1Q adj EPS $5.73 vs est. $5.00 on revs $2.5B vs est. $2.45B; guides FY revs $11.1-11.5B from prior $10.65B-$11.05B and vs est. $10.97B

·     Vale (VALE) Q1 net profit fell nearly 20% from a year ago to $4.45B but topped the $4.24B analyst consensus estimate; Q1 adj EBITDA from continuing operations dropped to $6.37B from $8.5B in the year-earlier quarter, and net operating revenues fell 14% Y/Y to $10.8B

 

Internet, Media & Telecom

·     Meta Platforms (FB) shares jump 18%; Q1 EPS $2.72 vs. est. $2.56; Q1 revs $27.91B vs. est. $28.2B; sees Q2 revs $28B-$30B vs. est. $30.63B; guidance assumes FX to be ~3% headwind to y/y growth in 2q; Facebook daily active users (DAUs) 1.96B vs. est. 1.94B, Facebook monthly active users (MAUs) 2.94B vs. est. 2.95B

·     Pinterest (PINS) 1Q adj EBITDA $77Mm vs est. $30Mm on revs $575Mm vs est. $572.5Mm; qtrly global MAUs -9% y/y to 433Mm, saw continued strength in younger demographic, sees FY adj op exp about +10% 2Q

·     Equinix (EQIX) Q1 adj FFO $7.16 vs. est. $7.19; Q1 revs $1.70B vs. est. $1.75B; sees FY22 revenue $7.29B-$7.34B vs. est. $7.24B; sees FY adjusted ebitda to range between $3.344 and $3.374 bln, an adjusted ebitda margin of 46%

 

Technology

·     Qualcomm (QCOM) 2Q adj EPS $3.21 vs est. $2.91 on revs $11.16B vs est. $10.6B; guides 3Q adj EPS $2.75-2.95 vs est. $2.59, sees 3Q revs $10.5-11.3B vs est. $10B; says China shutdown impact on handset biz limited as premium handsets less impacted

·     Nokia Corp. (NOK) posted a Q1 net profit beat as demand for mobile networks remains strong, but cautioned that supply-chain constraints continued to hurt sales; Europe and Latin America had good growth in mobile networks, while sales in North America and greater China declined; Q1 net profit rose to 409M euros from EUR373M y/y and above est. EU340M

·     ServiceNow (NOW) 1Q adj EPS $1.73 vs est. $1.70 on revs $1.72B vs est. $1.7B; guides 2Q subscription revs $1.67-1.675B and FY subscription revs $7.025-7.04B

·     FormFactor (FORM) Q1 EPS $0.49 vs. est. $0.39; Q1 revs $197.2M vs. est. $194.4M; Q2 revs $203M plus/minus $6M vs. est. $202.5M

·     Impinj (PI) 1Q adj EPS $0.09 vs est. ($0.01) on revs $53.1Mm vs est. $51.2Mm; guides 2Q adj EPS ($0.05)-$0.01 vs est. flat and revs $54-56Mm vs est. $52.8Mm

·     NetGear (NTGR) Q1 EPS net loss (-$1.95) on revs $210.6M vs. est. $225.9M; sees Q2 revs $205M-$220M vs. est. $249.3M

·     Tyler Technologies (TYL) Q1 adj EPS $1.90 vs. est. $1.71; Q1 revs $456.1M vs. est. $432.1M; boosts FY22 adj EPS view to $7.48-$7.64 from $7.41-$7.58 (est. $7.49) and reaffirms FY22 revenue view $1.835B-$1.870B

·     Unisys (UIS) Q1 EPS loss (-$0.85) vs. est. loss (-$0.22); Q1 revs $447M vs. est. $435.7M

·     Upwork (UPWK) 1Q EPS ($0.19) vs est. ($0.14) on revs $141.3Mm vs est. $136.3Mm; guides 2Q revs $147-151Mm vs est. $143.5Mm and adj EPS ($0.10)-($0.06) vs est. ($0.08); estimates 1Q Ukraine war revs impact about $1Mm; sees FY revs $590-610Mm vs est. $599.5Mm