Early Look

Friday, April 29, 2022

Futures	Up/Down	%	Last
Dow	-156.00	0.46%	33,672
S&P 500	-36.25	0.84%	4,247
Nasdaq	-149.50	1.11%	13,305

 

 

S&P futures are pulling back -0.90% to 4,245.75 and Nasdaq futures down slightly more around 1%, giving back some of yesterday’s big gains as shares of Amazon and Apple each fall following quarterly results and/or guidance. AMZN drops around 9% or 250 points at $2,640 after guides 2Q operating income/loss between loss of $1.0B and income of $3.0B and Q2 revs seen $116B-$121B below est. $125.5B. Meanwhile, Apple falls over 2% despite stronger quarterly results, a dividend increase, and stock buyback ($90B) as warns y/y Q3 revenue growth to be impacted by COVID, does not provide specific guidance other than sees $4B-$8B in constraints in Q3. Chip giant INTC also slides after issuing lower Q2 guidance citing demand weakness in its largest end market of PCs, as well as increased supply-chain uncertainty. Elon Musk sold roughly $4 billion worth of TSLA stock in the two days after agreeing to buy Twitter Inc. for $44 billion, according to regulatory filings made public late Thursday. European stocks rally after China promised to aid its economy with stimulus. Meanwhile, the dollar snapped its 6-day winning streak, slipping further. In Asian markets, The Nikkei Index surges 1.75% or 461 points to 26,847, the Shanghai Index gains 2.4% to move back above 3,000 (3,047 close), and the Hang Seng Index spikes 4% or 813 points to 21,089 after China’s top leaders pledged more support to spur economic growth and vowed to contain Covid outbreaks (lifting shares of U.S. listed China stocks early). In Europe, the German DAX is higher by nearly 1% at 14,110, while the FTSE 100 gains a few points to 7,520.

 

Another heavy dose of economic data this morning: March Personal Spending and Income data due at 8:30 along with PCE, Core PCE inflation data; at 9:45 AM Chicago PMI (est. 62.0 after 62.9 prior) and at 10:00 AM, the University of Michigan Confidence Apr-F (est. 65.7). As for Thursday data, America’s economy shrank for the first time in nearly two years as the Gross Domestic Product or GDP declined at an annual rate of 1.4% in the first quarter of the year, below ests for a rise of +1.4% and after clocking 6.9% growth in the fourth quarter of 2021. Worries about higher interest rates ahead of next week’s FOMC meeting as well as slower global growth have been pressuring stocks, especially growth shares, and the Nasdaq is down more than 9% for the month so far and 20% YTD.

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 103.54 points, or 2.47%, to 4,287.50

·     The Dow Jones Industrial Average rose 614.46 points, or 1.85%, to 33,916.39

·     The Nasdaq Composite surged 382.59 points, or 3.06%, to 12,871.53

·     The Russell 2000 Index advanced 33.91 points, or 1.80% to 1,917.94

 

Economic Calendar for Today

·     8:30 AM ET                  Personal Income m/m for March…est. +0.4%

·     8:30 AM ET                  Personal Spending m/m for March

·     8:30 AM ET                  PCE Price Index m/m for March…

·     8:30 AM ET                  PCE Price Index y/y for March

·     8:30 AM ET                  Core PCE Price Index m/m for March…est. +0.3%

·     8:30 AM ET                  Core PCE Price Index y/y for March…est. +5.3%

·     8:30 AM ET                  Employment Cost Index for Q1

·     9:45 AM ET                  Chicago PMI for April…est. 62.0

·     10:00 AM ET                University of Michigan Confidence, Apr-F…est. 65.7

·     1:00 PM EST                Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: AB ABBV AON B BLMN CBOE CHTR COWN DCOM GTLS HON IRMD LYB MOG/A NMRK NWL PIPR PSX SLCA SYNH UNBK VRTS WETF WPC WY XOM

 

 

Macro	Up/Down	Last
Nymex	0.85	106.25
Brent	1.74	109.33
Gold	26.30	1,917.70
EUR/USD	0.0077	1.0571
JPY/USD	-0.65	130.20
10-Year Note	+0.01	2.873%

 

 

World News

·     China’s top leaders pledged more support to spur economic growth and vowed to contain Covid outbreaks (lifting shares of U.S. listed China stocks early). Shares of BABA, BIDU, JD, PDD surge overnight as the Chinese Communist Party’s Politburo pledged to deliver on economic targets and support healthy growth of internet platform companies, according to a statement following a quarterly economic meeting chaired by President Xi Jinping.

·     Russia’s central bank lowered its key interest rate to 14% in a sharper-than-expected move on Friday and said it saw room for cutting rates further this year; the central bank met after it unexpectedly cut the key rate to 17% earlier in April following an emergency rate increase to 20% days after Russia sent tens of thousands of troops into Ukraine on Feb. 24.

·     Germany signaled it wouldn’t oppose a European Union embargo on Russian oil but expressed skepticism that it’s the most effective means of damaging President Vladimir Putin. Russia offers a dual-payment plan to allow trade with India – Bloomberg

 

Sector News Breakdown

Consumer

·     Amazon (AMZN) shares fell -9%; sales $116.4B vs est. $116.3B, says pandemic and Ukraine war have brought unusual growth and challenges; AWS sales $18.44B vs. $13.5B year ago, advertising service sales $7.88B; sees 2Q operating income/loss between loss of $1.0B and income of $3.0B, assumes Prime Day in 3Q22; Q2 revs seen $116B-$121B below est. $125.5B

·     Elon Musk sold roughly $4 billion worth of Tesla Inc. (TSLA) stock in the two days after agreeing to buy Twitter Inc. for $44 billion, according to regulatory filings made public late Thursday. Musk reported selling a total of more than 4.4 million shares on Tuesday and Wednesday at prices between around $870 and $1,000 a share, the filings show.

·     Beazer Homes (BZH) Q2 EPS $1.45 vs. est. $1.04; Q2 revs $508.51M vs. est. $488.87M; Homebuilding gross margin was 23.5%, up 570 basis points; Net new orders of 1,291, down 30.4% on a 9.2% decrease in average community count to 119 and a 23.4% decrease in orders/community/month to 3.6

·     Columbia Sportswear (COLM) 1Q EPS $1.03 vs. est. $0.86 on sales $761.5Mm vs est. $762.7Mm; guides FY EPS $5.70-6.00 vs est. $5.75

·     Fortune Brands (FBHS) 1Q adj EPS $1.31 vs est. $1.26 on revs $1.9B vs est. $1.89B; announces plans to separate into two publicly traded companies via tax-free spin of cabinets business; says raising midpoint of FY EPS guide by $0.05 to $6.40-6.60 vs est. $6.40

·     Sono Motors (SEV) 10M share Secondary priced at $4.00

 

Energy

·     Chevron (CVX) Q1 adj EPS $3.36 (biggest profit since 2012) vs. est. $3.27; Q3 revs $54.37B vs. est. $47.94B; 1q net production 3.06m boe/day; 1q downstream earnings $331m and 1q upstream earnings $6.93B; 1q Permian basin unconventional production grew to record 692,000 barrels of oil equivalent per day; raised 2022 Permian basin unconventional guidance to 700,000-750,000 barrels per day; FY cap-ex, announced acquisitions expected to be more than 50% higher y/y

·     Exxon (XOM) boosts share buyback program to up to $30B through 2023; Q1 adjusted EPS $2.07 vs. est. $2.12; Q1 revs $90.5B vs. est. $92.73B

·     First Solar (FSLR) Q1 EPS loss (-$0.41) vs. est. loss (-$0.42); Q1 revs $367M vs. est. $592.6M; backs year EPS and sales view of 0c-60c and $2.4B-$2.6B respectively

·     Southwestern (SWN) 1Q adj EPS $0.40 vs est. $0.38 on revs $2.94B; total production 425 BCFE (4.7 BCFE/day); sees 2Q total production 418-434 BCFE

 

Financials

·     Robinhood (HOOD) shares fall -10%; Q1 EPS loss (-$0.45) vs. est. loss (-$0.36); Q1 revs $299M vs. est. $355.78M; said Q1 monthly active users decreased 10% to 15.9M for March, compared with 17.7M y/y; said decline was primarily attributable to users with lower balances, who are engaging less in the current market environment; Q1 ARPU fell -62% to $53, compared with $137 in Q1

·     Digital Realty (DLR) 1Q core FFO/shr $1.67 vs est. $1.66 on revs $1.1B vs est. $1.125B, adj EBITDA $603Mm vs est. $597Mm; reiterates FY core FFO/shr guide of $6.80-6.90 vs est. $6.86

·     Hartford Financial (HIG) Q1 core EPS $1.66 vs. est. $1.54; Q1 revs $5.39B vs. est. $5.57B; net investment income was flat in first quarter 2022 compared with the prior year period; Q1 book value per diluted share of $46.36 declined 10% from $51.36 at dec 31, 2021; Q1 consolidated earned premiums $4,651 mln vs $4,353 mln reported last year

·     Principal Financial (PFG) Q1 EPS $1.63 vs. est. $1.56; assets under management, or AUM, of $714B managed by PFG, which is included in assets under administration, or AUA, of $1.6T

·     Western Union (WU) Q1 EPS $0.51 vs. est. $0.43; Q1 revs $1.2B vs. erst. $1.16B; cuts FY22 adj EPS view to $1.75-$1.85 from $1.90-$2.00 (est. $1.93) and lowers FY22 GAAP revenue view to (9%) to (11%) from down in the mid-single digit

·     CubeSmart (CUBE) 1Q adj FFO/shr $0.58 vs est. $0.58; guides 2Q adj FFO/shr $0.59-0.60 vs est. $0.60; sees FY adj FFO/shr $2.37-2.42 vs est. $2.42

 

Healthcare

·     Accolade (ACCD) shares plunge -25%; Q4 EPS loss (-$0.51) vs. est. loss (-$0.36); Q4 revs $93.7M vs. est. $91.5M; sees Q2 revenue $81M-$83M vs. est. $85.91M; sees Q2 adjusted EBITDA loss $20M-$22M; noted a large customer said they would be ending their service relationship with ACCD after end of 2022

·     Avantor (AVTR) 1Q adj EPS $0.38 vs est. $0.36 on sales $1.95B vs est. $1.93B

·     Bio Rad Labs (BIO) 1Q adj EPS $4.94 vs est. $3.40 on revs $700.1Mm vs est. $675.1Mm; continues to anticipate adj currency-neutral revs growth +1-2% for FY vs est. -0.3%

·     Dexcom (DXCM) Q1 EPS $0.32 vs. est. $0.52; Q1 revs rose 25% y/y to $628.8M vs. est. $623.3M; guides year revs $2.82B-$2.94B

·     Gilead Sciences (GILD) Q1 EPS $2.12 vs. est. $1.81; Q1 revs $6.6B vs. est. $6.28B; sees FY22 EPS at $6.20-$6.70 vs. est. $6.50; sees FY22 product sales $23.8B-$24.3B; guides year EPS to $3.00-$3.50, below prior view $4.70-$5.20; Veklury sales increased by 5% to $1.5B for Q1 y/y

·     Seagen (SGEN) 1Q EPS ($0.74) vs est. ($0.99) on revs $426Mm vs est. $403.8Mm; sees FY net product sales $1.48B

·     Stryker (SYK) Q1 EPS $1.97 vs. est. $1.95; Q1 revs $4.3B vs. est. $4.18B; qtrly organic net sales increased 9.2%; sees FY22 organic net sales growth towards the high end of our guidance range of 6% to 8%; sees year EPS lower end of guidance range $9.60-$10.00 vs. est. $9.76

·     Trupanion (TRUP) 1Q EPS ($0.22) vs est. ($0.17) on revs $206Mm vs est. $202Mm, total enrolled pets +34%

·     Zymeworks (ZYME) shares rise over 50% overnight after saying investment firm All Blue Capital approaches the co with a $773M acquisition offer, or non-binding offer of $10.50 per share in cash

 

Industrials & Materials

·     Honeywell (HON) Q1 adjusted EPS $1.91 vs. est. $1.86; Q1 revs $8.38B vs. est. $8.29B; raises FY22 adjusted EPS view to $8.50-$8.80 from $8.40-$8.70 (est. $8.60) and narrows FY22 revenue view to $35.5B-$36.4B from $35.4B-$36.4B

·     L3Harris Technologies (LHX) Q1 adj EPS $3.12 vs. est. $2.87; Q1 revs $4.1B vs. est. $3.9B; FY22 adjusted EPS $13.35-$13.65 vs. est. $13.59; sees FY22 revs $17.3B-$17.7B vs. est. $17.57B

·     U.S. Steel (X) Q1 adj EPS $3.05 vs. est. $2.95; Q1 revs $5.23B vs. est. $5.27B; Q1 net $882M; Steel shipments 3.69 million tons vs. 3,911 y/y, estimate 3.7 million; flat-rolled steel average realized price per ton $1,368, +54% y/y, estimate $1,429

·     Terex (TEX) Q4 EPS $0.74 vs. est. $0.46; Q1 revs $1.0B vs. est. $961.1M; reaffirms year EPS view $3.55-$4.05 vs. est. $3.84; says continue to experience global supply chain disruptions and significant inflationary pressures due to pandemic and geopolitical risks

·     Clearwater Paper (CLW) Q1 EPS $0.97 vs. est. $0.87; Q1 revs $488M vs. est. $481.7M; says resuming previously approved buyback and sees Q2 adjusted EBITDA of $54M-$64M

·     Celanese (CE) Q1 adj EPS $5.54 vs. est. $4.52; Q1 revs $2.5B vs. est. $2.26B; guides Q2 EPS about $4.50 vs. est. $4.14

·     Eastman Chemical (EMN) 1Q adj EPS $2.06 vs est. $2.11 on revs $2.714B vs est. $2.5B; reaffirms prior guide of FY adj EPS $9.50-10.00 vs est. $9.62

·     Century Aluminum (CENX) Q1 adj EPS $0.59 vs. est. $0.34; Q1 revs $753.6M vs. est. $731.13M; Q1 shipments of primary aluminum increased 5% sequentially

 

Technology, Media & Telecom

·     Apple Inc. (AAPL) Q1 EPS beat $1.52 vs. est. $1.43; Q1 revs $97.28B vs. est. $93.89B; iPhone revs rose 5% y/y beat at $50.57B vs. est. $47.88B; services revs up 17% y/y to $19.82B vs. est. $19.72B; Mac revs rose 15% y/y to $10.44B vs. est. $9.23B; raises dividend and announces stock buyback of up to $90B in shares, warns y/y Q3 revenue growth to be impacted by COVID, does not provide specific guidance other than sees $4B-$8B in constraints in Q3

·     Intel Inc. (INTC) 1Q adj EPS $0.87 vs est. $0.81 on revs $18.4B vs est. $18.3B; reaffirms FY revs guide; guides Q2 EPS $0.70, below est. $0.83 and revs about $18B vs. est. $18.3B citing demand weakness in its largest end market of PCs, as well as increased supply-chain uncertainty

·     Altice USA (ATUS) Q1 EPS $0.43 vs. est. $0.31; Q1 revs fell -2.3% y/y to $2.42B vs. est. $2.44B; executing accelerated fiber deployment over next 4 yrs across optimum, Suddenlink footprint, expecting to reach 6.5 mln fiber passings by end of 2025; expects to continue to accelerate investments in key growth initiatives, increasing cash capex to approximately $1.7B-$1.8B

·     Five9 Inc. (FIVN) 1Q adj EPS $0.22 vs est. $0.13 on revs $182.8Mm vs est. $171Mm; guides 2Q revs $179-180Mm vs est. $174Mm and adj EPS $0.17-0.19 vs est. $0.15; sees FY revs $770-773Mm vs est. $756.7Mm and adj EPS $1.22-1.24 vs est. $1.14

·     KLA-Tencor (KLAC) 3Q adj EPS $4.83 vs est. $4.82 on revs $2.29B vs est. $2.2B; guides 4Q adj EPS $4.93-6.03 vs est. $5.30 and revs $2.3-2.55B vs est. $2.35B

·     Knowles (KN) Q1 EPS $0.35 vs. est. $0.30; Q1 revs $201.4M vs. est. $200.2M; guides Q2 EPS $0.30-$0.34 vs. est. $0.34; Q2 revs $195M-$205M vs. est. $211.2M; anticipates that weak Chinese market demand and supply chain challenges will persist through the first half of 2022

·     Roku Inc. (ROKU) 1Q EPS ($0.19) vs est. ($0.18) on revs $805Mm vs est. $718Mm; added 1.1Mm incremental active accounts to reach 61.3Mm, ARPU rose to $42.91; guides 2Q net revs $805Mm vs est. $815.7Mm; sees FY net revs +35% y/y vs est. +34.4%

·     Atlassian Corp. (TEAM) 3Q adj EPS $0.47 vs est. $0.32 on revs $740Mm vs est. $700.7Mm; guides 4Q revs $710-725Mm vs est. $710Mm and adj EPS $0.24 vs est. $0.30

·     Western Digital (WDC) Q3 adj EPS $1.65 vs. est. $1.42; Q3 revs $4.38B vs. est. $4.08B; guides Q4 EPS $1.60-$1.90 vs. est. $1.70 and revs $4.5B-$4.7B vs. est. $4.56B; Cloud represented 40% of total revenue and Client accounted for 40% of total revenue

·     Zendesk (ZEN) 1Q adj EPS $0.12 vs est. $0.15 on revs $388.3Mm vs est. $384.6Mm; guides 2Q revs $402-408Mm vs est. $404.6Mm, sees FY revs $1.685-1.71B vs est. $1.69B