Morning Preview: April 30, 2024

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Early Look

Tuesday, April 30, 2024

Futures

Up/Down

%

Last

Dow

-8.00

0.02%

38,551

S&P 500

-7.25

0.14%

5,139

Nasdaq

-20.00

0.11%

17,884

 

 

U.S. equities are edging lower in overnight trading as investors digest the heavy dose of earnings overnight/this morning and await key results from tech/retailing giant Amazon (AMZN) tonight after the close. We get lots of industrial related earnings this morning (MMM, TT, ETN, IT, others) as well as diabetes giant LLY. Main U.S. indexes closed modestly higher on Monday led by strength in consumer discretionary (thanks to TSLA) while communication services were the weakest group. Treasury yields edge slightly higher with the 10-yr at 4.63% while gold tumbles and oil is higher. Investors also look toward what the Federal Reserve would say about the interest rate outlook at the conclusion of its policy meeting on Wednesday (no changes expected/outlook will be closely watched). Note the S&P 500 hit an intraday high of 5,123.49 on Monday, while stalling just shy of its rising 50-day moving average, which ended around 5,126. The benchmark index then finished at 5,116.17, up just 0.32%. In Asian markets, The Nikkei Index advanced 470 points to 38,405, the Shanghai Index fell -8 points to 3,104, and the Hang Seng Index gained 16 points to 17,763. In Europe, the German DAX is down -72 points to 18,045, while the FTSE 100 is up 36 points to 8,183. In addition to the earnings onslaught this week, and the FOMC meeting tomorrow, jobs data also key this week with ADP tomorrow and Nonfarm payrolls on Friday. Heading into the final trading day of April, the S&P is -2.6% for the month, the Nasdaq -2.4% MTD, the Dow -3.55% MTD and Russell 2000 -5.1% MTD.

 

Market Closing Prices Yesterday

  • The S&P 500 Index climbed 16.21 points, or 0.32%, to 5,116.17.
  • The Dow Jones Industrial Average rose 146.43 points, or 0.38%, to 38,386.09.
  • The Nasdaq Composite gained 55.18 points, or 0.35%, to 15,983.08.
  • The Russell 2000 Index advanced 16.21 points, or 0.70% to 2,016.03.

Economic Calendar for Today

  • 7:45 AM ET                  ICSC Weekly Retail Sales
  • 8:30 AM ET                  Employment Cosi for Q1
  • 8:55 AM ET                  Johnson/Redbook Weekly Sales
  • 9:00 AM ET                  Monthly Home Price M/m for February
  • 9:00 AM ET                  CaseShiller 20 city for February
  • 9:45 AM ET                  Chicago PMI for April
  • 10:00 AM ET                Consumer Confidence for April
  • 4:30 PM ET                   API Weekly Inventory Data

Earnings Calendar:

  • Earnings Before the Open: ACIW ADM AMT APD ARCB ATI AWI BGC CECO DAN DTM EAT ECL EPD ETN ETRN FELE FNMA FSS GEHC GPK HEES HUBB INCY IPGP IT ITW KBR KO LDOS LGIH LLY MAC MLM MPC MPLX NXRT OMF PAG PEG PNM PYPL SIRI TAP THC TKR TMHC TREE TWIN VNCE ZBRA
  • Earnings After the Close: AMD AMZN ASH ATEN AX BGFV BLKB BXC BXP CACC CC CHK CLX CZR DBRG DENN EIX ENLC EQH ESS EXEL EXR GANF FSP GORO GPOR HI HURN HYLN INVH JBGS LRG LC LEG LFUS LMND LPLA LUMN MATX MDLZ MDXG MMSI NARI OI OKE OINS PK POWL PRU PSA QUAD RCKY ROOT RSG RWT RYI SBUX SILK SKT SMCI SON STAG SWKS SYK TMDX TTI TXG UDR UNM USNA VNOM VOYA WERN WPC WTTR ZYXI

Other Key Events:

  • Jefferies Logistics & Transportation Conference 4/30-5/1, in CA

 

 

Macro

Up/Down

Last

Nymex

0.23

82.86

Brent

0.13

88.53

Gold

-29.60

2,328.10

EUR/USD

0.0012

1.0731

JPY/USD

0.57

156.90

10-Year Note

+0.022

4.634%

 

World News

  • China April Caixin Manufacturing PMI 51.4 vs. est. 51.0 and vs. previous 51.1; the highest reading since Feb 2023. China Non-Manufacturing PMI 51.2 vs. est.52.2 (prior 53.0) and Composite PMI 51.7 vs. prior 52.7.
  • Euro zone inflation holds at 2.4%, keeping June rate cut in play as economy grows.
  • Japan’s industrial production rose by 3.8% MoM (est. 3.3%; prev. -0.6%) in March, its first positive on-year increase in three months, but on a y/y basis, contraction quickened to 6.7% (est. -6.3%; prev. -3.9%).
  • Japan Retail sales rose 1.2% YoY in March (est. 2.4%, prev. 4.7%), the MoM fell -1.2% (est. -0.2%, prev. 1.7%).
  • Late Monday, the U.S. Treasury said it expects to borrow $243 billion in the second quarter, $41 billion more than the January estimate largely due to lower cash receipts.

Sector News Breakdown

Consumer

  • Chegg Inc. (CHGG) Q1 adj EBITDA $46.7Mm vs est. $44.08Mm on net revs $174.4Mm vs est. $174.1Mm, adj gr mgn 75%; guides Q2 net revs $159-161Mm vs est. $173.58Mm, gr mgn 70-71% and adj EBITDA $38-40Mm vs est. $46.25Mm; announced the appointment of Nathan Schultz as President and Chief Executive Officer, effective June 1.
  • Restaurant Brands (QSR) reports additional $300M investment to modernize Burger King
  • Simply Good Foods Company (SMPL) announced that the companies have entered into a definitive agreement under which Simply Good Foods will acquire OWYN for $280M in cash.
  • Yum China (YUMC) Q1 EPS $0.71 vs. est. $0.65; Q1 revs $2.96B vs. est. $3.05B; Q1 operating profit reaches $374M with core operating profit growing to $396M; said digital ordering accounted for approximately 89% of total co sales in Q1; said total stores have surpassed milestone of 15,000 with record first quarter openings of 378 net new stores; said Q1 Total system sales grew 6% year over year ex forex; targets for 2024 fiscal year remain unchanged from prior period’s disclosures.

Energy, Industrials and Materials

  • 3M (MMM) Q1 EPS $2.39 vs. est. $1.96; Q1 revs $7.72B vs. est. $7.13B; posted a 21% rise in quarterly profit as price hikes and cost cuts offset the impact from slow sales; anticipate combat arms earplugs settlement will achieve a more than 99.9% participation level; on track to exit all PFAs manufacturing by year-end 2025; sees FY24 adjusted EPS $6.80-$7.30 vs. consensus $7.00 and sees FY24 revenue down 0.25% to up 1.75%.
  • Air Products (APD) Q2 adj EPS $2.85 vs. est. $2.72; Q2 revs $2.93B vs est. $3.07B; sees Q3 adjusted EPS $3.00-$3.05 vs. consensus $3.30; backs FY24 adjusted EPS view $12.20-$12.50 (est. $12.31), while sees FY24 capital expenditures $5B-$5.5B.
  • Crown Holdings (CCK) Q1 adj EPS $1.02 vs est. $0.96 on sales $2.784B vs est. $2.932B; affirms FY guidance.
  • Eaton (ETN) Q1 adj EPS $2.40 vs. est. $2.29; Q1 revs $5.9B vs. est. $5.91B; sees Q2 adjusted EPS $2.52-$2.62 vs. est. $2.50 and sees Q2 organic growth of 6.5-8.5%; raises FY24 adjusted EPS view to $10.20-$10.60 from $9.95-$10.35 (est. $10.25) and boosts FY24 organic growth guidance from 6.5-8.5% to 7%-9% (est. $24.98B).
  • Flowserve (FLS) Q1 adj EPS $0.58 vs. est. $0.47; Q1 revs $1.09B vs. est. $1.04B; guides FY revs +4-6% vs est. $+5.79%, adj EPS $2.50-2.70 vs prior $2.40-2.60 and est. $2.54.
  • Mosaic Co (MOS) said that Saudi Arabia’s flagship mining firm Ma’aden would acquire the U.S.-based company’s stake in a phosphate production joint venture by issuing shares worth about $1.5B; Ma’aden will issue about 111 million shares to buy the 25% stake Mosaic owns in a joint venture with them called Ma’aden Wa’ad Al Shamal Phosphate Co.
  • Transocean (RIG) Q1 adj EPS loss (-$0.03) vs. est. loss (-$0.14); Q1 revs $767M vs. est. $787.04M; said secured a 365-day extension on Deepwater Asgard at a rate of $505,000 per day; said finalized a $1.8B debt refinancing transaction, enabling them to improve near-term liquidity.
  • Woodward (WWD) Q2 adj EPS $1.62 vs est. $1.32 on sales $835.343Mm vs est. $807Mm; sees FY sales $3.15-3.3B vs est. $3.243B and adj EPS $5.00-5.40 vs est. $5.36.

Financials

  • HSBC’s (HSBC) CEO Noel Quinn, who steered the bank through a tumultuous period and doubled down on its focus on Asia–will be leaving after almost five years at the helm; Q1 profit that came above Wall Street’s estimates.
  • Everest Group (EG) Q1 op EPS $16.32 vs. est. $16.01; Q1 revs $4.13B vs. est. $3.92B; Q1 Group underwriting income increased 50% y/y to a quarterly record of $409M with a combined ratio of 88.8%, driven by both of our underwriting franchises; $4.4B in gross written premium with y/y growth of 17.2% for the Group, 20.4% for Reinsurance, and 9.8% for Insurance.
  • Welltower (WELL) Q1 normalized FFO/shr $1.01 vs est. $0.95; sees FY normalized FFO/shr $4.02-4.15 vs est. $4.05.

Healthcare

  • Aurinia Pharmaceuticals Inc. (AUPH) said the FDA has approved a label update for LUPKYNIS. The updated label no longer includes language indicating that the safety and efficacy of LUPKYNIS has not been established beyond one year. The label now includes three-year data from the AURORA 2 double-blind, placebo-controlled extension study.
  • GE HealthCare (GEHC) Q1 adj EPS $0.90 vs. est. $0.91; Q1 revs $4.6B vs. est. $4.8B; reaffirms FY organic revenue growth of approximately 4% y/y; adjusted EBIT margin in the range of 15.6% to 15.9% and reaffirms adjusted EPS in the range of $4.20-$4.35, representing 7% to 11% growth versus adjusted EPS of $3.93 for 2023.
  • Hologic, Inc. (HOLX) announced that it signed a definitive agreement to acquire Endomagnetics Ltd, a privately held developer of breast cancer surgery technologies, for approximately $310 million, subject to working capital.
  • Medifast (MED) Q1 adj EPS $0.66 vs est. $0.78 on revs $174.74Mm vs est. $168.9Mm; guides Q2 revs $150-170Mm vs est. $175.1Mm and EPS $0.05-0.40 vs est. $0.67.
  • Qiagen (QGEN) Q1 adj EPS $0.46 vs. est. $0.44; Q1 revs fell -5% y/y to $459M vs. est. $457.3M; says on track to achieve 2024 guidance; adjusted operating income margin rose to 25.7% from 25.6% in the year-ago period on realized efficiency gains.

Technology, Media & Telecom

  • Samsung Electronics (SSNLF) said Q1 operating profit came in at 6.6 trillion won ($4.8 billion), up from the 640 billion won ($465 million) it earned during the same period last year while revenue rose by nearly 13% to 71.9 trillion won ($52 billion), driven by higher prices for memory chips and robust sales of its flagship Galaxy S24 smartphones.
  • Amkor Technologies (AMKR) Q1 EPS $0.24 vs est. $0.11 on revs $1.366B vs est. $1.357B, gr mgn 14.8%; sees Q2 net sales $1.4-1.5B vs est. $1.389B and EPS $0.14-0.30 vs est. $0.16; sees FY CAPEX approx $750Mm.
  • Coursera (COUR) Q1 adj EPS $0.07 vs est. $0.01 on revs $169.1Mm vs est. $170.43Mm, adj gr mgn 54%; sees Q2 revs $162-166Mm vs est. $177.82Mm and adj EBITDA ($2Mm) to $2Mm vs est. $4.756Mm; sees FY revs $695-705Mm vs est. $736.45Mm and adj EBITDA $24-28Mm (approx 4% adj EBITDA mgn) vs est. $29.7Mm.
  • F5 Networks (FFIV) Q2 EPS $2.91 vs. est. $2.86; Q2 revs $681M vs. est. $685.4M; raises FY24 EPS growth rate view to 7%-9% from 6%-8% and sees FY24 revenue growth that is flat to down 2% compared to fiscal year 2023, consistent with its prior outlook for fiscal year 2024 revenue growth of "flat to low-single-digit decline" compared to the prior year.
  • Harmonic (HLIT) Q1 EPS $0.00 vs. est. loss (-$0.01); Q1 revs $122.1M vs. est. $121.7M; sees Q2 EPS loss (-17c)-(-12c) vs. est. $0.05 and revs $125M-$140M vs. est. $139.53M.
  • Lattice Semiconductor (LSCC) Q1 adj EPS $0.29 vs est. $0.28 on revs $140.815Mm vs est. $140.14Mm; sees Q2 revs $120-140Mm vs est. $140.46Mm.
  • MicroStrategy (MSTR) Q1 adj EPS ($8.26) vs est. $0.34 on revs $115.246Mm vs. est. $121.73Mm; now hold 214,400 bitcoins at an average purchase price of $35,180 per bitcoin.
  • NXP Semiconductors (NXPI) Q1 EPS $3.24 vs. est. $3.16; Q1 revs $3.13B vs. est. $3.13B; sees Q2 adj EPS $3.00-$3.41 vs. consensus $3.16 and guides Q2 revenue $3.03B-$3.23B vs. est. $3.13B; Q1 GAAP gross margin was 57.0 percent, GAAP operating margin was 27.4 percent.
  • Paramount Global (PARA) said the Board of Directors of Paramount Global announced that Bob Bakish, President, and CEO, is stepping down from his role as CEO and from the Board of Directors; Q1 adj EPS $0.62 vs. est. $0.36; Q1 revs $7.69B vs. est. $7.73B; Q1 net operating cash flow $260M, free cash flow $209M.
  • Rambus (RMBS) Q1 EPS $0.30 vs est. $0.44 on revs $117.9Mm vs est. $132Mm; guides Q2 licensing billings $61-67Mm, product revs $52-58Mm, contract & other revs $17-23Mm.
  • Sanmina (SANM) Q2 adj EPS $1.30 vs est. $1.20 on revs $1.835B vs est. $1.858B; sees Q3 revs $1.8-1.9B vs est. $1.974B and adj EPS $1.22-1.32 vs est. $1.36.
  • SBA Communications (SBAC) Q1 AFFO $3.29 vs. est. $3.30; Q1 revs $657.86M vs. est. $669.97M; lowers FY24 FFO view to $13.09-$13.46, from $13.15-$13.51 and cuts FY24 revenue view to $2.67B-$2.71B from $2.657B-$2.697B (est. $2.69B).
  • Sensata Technologies (ST) Q1 adj EPS $0.89 vs. est. $0.85; Q1 revs $1.007B vs. est. $986.52M; guides Q2 adj EPS $0.89-$0.95 vs. est. $0.92; Q2 revs seen $1.025B-$1.055B vs. est. $1.04B; announced that Jeff Cote, CEO and President of Sensata Technologies, has informed the Board he plans to retire as CEO and President.

_________________________________________________________________

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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