Early Look

Wednesday, August 3, 2022

Futures	Up/Down	%	Last
Dow	118.00	0.36%	32,483
S&P 500	14.25	0.35%	4,108
Nasdaq	37.50	0.29%	12,962

 

 

U.S. futures are looking higher as U.S. House of Representatives Speaker Nancy Pelosi left Taiwan on Wednesday after pledging solidarity, angering China over her brief visit to the self-ruled island that Beijing claims as its own. In response thus far to Pelosi’s visit, China began a series of military drills, announced missile tests, cut off natural sand exports, fruit and fish imports and vowed criminal punishment on Taiwan separatists. The situation remains tense now as stocks look to rebound after major averages posted their first consecutive red days in two weeks on Tuesday, though losses were modest over that stretch in comparison to the massive gains seen in July. The S&P 500 retreated, reversing gains, as Treasury yields surged/prices fell, and the yen weakened as the haven trade put on ahead of the speaker’s visit was unwound. The 10-year yield rose to around 2.76%, the 2-year yield roared higher to about 3.07%. Fed officials (Daly, Mester, Evans) continued to ratchet up rate-hike expectations, adding to the losses in fixed income. Oil prices are lower ahead of a meeting of OPEC+ producers later today, where they are expected to keep output steady with spare capacity limited and against the backdrop of fears that a slowdown in global growth will hit fuel demand. In Asian markets, The Nikkei Index rose 147 points to 27,741, the Shanghai Index fell -22 points to 3,163, and the Hang Seng Index climbed 77 points to 19,767. In Europe, the German DAX is higher 38 points to 13,487, while the FTSE 100 is flat at 7,408. Another earnings deluge expected this morning with roughly 338 of the S&P 500 components having reported thus far coming into the day.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -27.44 points, or 0.67%, to 4,091.19

·     The Dow Jones Industrial Average fell -402.23 points, or 1.23%, to 32,396.17

·     The Nasdaq Composite slipped -20.22 points, or 0.16%, to 12,348.76

·     The Russell 2000 Index dipped -0.86 points, or 0.05% to 1,882.45

 

Economic Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     9:45 AM ET          S&P Global Composite PMI, July-F

·     9:45 AM ET          S&P Global Services PMI, July-F

·     10:00 AM ET        ISM Non-Manufacturing PMI for July

·     10:00 AM ET        Durable Goods orders M/M for June

·     10:00 AM ET        Factory Orders M/M for June

·     10:30 AM ET        Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABC ALE BCO BDC BERY BGCP BRY BWA CARD CDW CLDT CLH CRL CVS DAN DNOW DT EDIT EPD ETR EVRI EXC FDP FUN GNRC HZNP ICPT IMXI JLL LAMR LL MCS MPW MRNA MTRN NI NNN NYT ODP OMI PCRX PNW PPL REGN ROCK SBGI SHO SITE SMG SPR SSYS SUN TUP TW UAA UTHR VCEL XHR YUM

·     Earnings After the Close: ACLS ADPT ADTN AEIS AINC ALB ALGT ALL ALR ALSN ANSS APA ATO ATUS AXGN BAND BBSI BHE BKCC BKH BKNG BMRN BNFT CCRN CDAY CDE CDEV CENT CHNG CLX CMLS CORT CPE CW CWAN DHX DMRC DOX DV DXC EBAY ELF ENLC EQH ET EVC FARO FICO FLT FSLY FSR FTNT GAIN GDDY GKOS GMRE GNK HCC HI HOOD HST HUBG IR IVAC KDS KIDS KW LCID LHCG LNC LPI LSI LUMN MBI MCK MED MET MGM MMS MOD MRO MTG NBR NOG NUVA O ORA OUT PAA PAGP PAY PDCE PING PK PLUS PRTK PSNL QRVO QTWO RCII RELY RGLD RGR RM RPD RPT RUN RYAM RYI RYN SBRA SFM SKLZ SM SUM TNDM TPIC TPVG TRUP TTEK TTMI TWNK TWO UDMY UHAL UIS UPLD USX VMEO VNDA VRRM VVV WERN WES WSC WTRS WTS WU XNCR YELL ZETA

 

 

Macro	Up/Down	Last
Nymex	-0.69	93.72
Brent	-0.64	99.90
Gold	-12.20	1,777.60
EUR/USD	0.0018	1.0181
JPY/USD	0.32	133.48
10-Year Note	+0.026	2.767%

 

 

World News

·     St. Louis Federal Reserve President James Bullard said on Tuesday that if inflation does not respond to the Federal Reserve’s interest rate increases by easing as expected, then rates will have to remain “higher for longer.” Bullard also said he expects growth in the second half of this year to pick up from the first half, which featured contractions in overall output in both the first and second quarters.

·     China launched what it calls “targeted military action” due to the Pelosi visit (military exercises right off the Taiwan coast), threatening “independence diehards” and vowing to punish anyone who “offends China,” the outlook for risk gains remains stalled

 

Sector News Breakdown

Consumer

·     Starbucks (SBUX) 3Q adj EPS $0.84 vs est. $0.75 on revs $8.2B vs est. $6.8B, global comps +3%; qtrly rewards members +13% to 27.4Mm in US, adj op margin 16.9%; guidance remains suspended for balance of FY

·     AirBnB (ABNB) shares fall -8%; Q2 EPS $0.56 vs. est. $0.44; Q2 revs rose 58% y/y to $2.1B vs. est. $2.11B; announces $2B share buyback program; sees Q3 revenue $2.78B-$2.88B vs. est. $2.77B; QTRLY gross booking value $17.0 bln, up 27%; expect q3 2022 adj. ebitda to be strongest qtrly adj. ebitda yet, up meaningfully on nominal basis from last year

·     Big 5 Sporting Goods (BGFV) shares fall -15%; Q1 EPS $0.41 vs. est. $0.89; Q2 sales $253.8M vs. est. $294.2M; guides Q3 EPS $0.22-$0.32

·     Caesar’s Holdings (CZR) Q2 cont ops EPS $0.16 vs. est. $0.17; Q2 revs $2.82B vs. est. $2.77B; Same-store Adjusted EBITDA of $978M versus $1.0B for the comparable prior-year period; Caesars Digital same-store Adjusted EBITDA of $69M versus $2M for the comparable y/y

·     Camping Worldwide (CWH) Q2 adj EPS $2.16 vs. est. $1.95; Q2 revs $2.2B vs. est. $2.03B; New and used vehicle inventories were $1.7 billion, an increase of $782.5 million from June 30, 2021

·     Container Store Group (TCS) Q1 adj EPS $0.21 vs. est. $0.17; Q1 revs $262.63M vs. est. $254.85M; guides Q2 EPS $0.20-$0.25 vs. est. $0.34; and lowers FY23 adjusted EPS $1.10 from $1.20-$1.30 while reaffirms its year rev outlook

·     Service Corp. (SCI) 2Q adj EPS $0.84 vs est. $0.82 on revs $991Mm vs est. $948Mm; confirms outlook for FY22

·     Skyline Champion (SKY) Q1 EPS $2.04 vs. est. $1.57; Q1 revs rose 32.3% y/y to $725.9M vs. est. $672.33M; Q1 total backlog increased 14.1% to $1.4B; Average Selling Price Per U.S. Home Sold Increased to $97,000

·     Andersons Inc. (ANDE) 2Q adj EPS $2.39 vs est. $0.98 on revs $4.45B vs est. $3.65B, adj EBITDA $169.3Mm vs est. $96.9Mm

 

Energy

·     Coterra Energy (CTRA) Q2 adj EPS $1.35 vs. est. $1.23; Q2 revs $2.57B vs. est. $2.15B; qtrly oil production averaged 88.2 mboepd; qtrly discretionary cash flow totaled $1,493M; qtrly total equivalent production of 632 mboepd

·     Occidental Petroleum (OXY) 2Q adj EPS $3.16 vs est. $3.02; qtrly total avg global production of 1,147 MBOED, qtrly Permian, Rockies and international avg production 493 MBOED, 279 MBOED, 228 MBOED, respectively; qtrly avg worldwide realized crude oil prices increased by approx 17% sequentially to $107.72/bbl

·     Pioneer Natural Resources (PXD) Q2 adj EPS $9.36 vs. est. $8.80; Q2 revs $6.920B vs. est. $4.54B; Q3 2022 oil production is forecasted to average between 345 to 360 mboepd; Q3 total production is expected to average between 635 to 660 mboepd; now expects its 2022 total capital budget to be $3.6B-$3.8B

·     SolarEdge (SEDG) Q2 EPS $0.95 vs. est. $1.39; Q2 revs $727.8M vs. est. $725.23M; cash flow generated from operating activities was $77.4M, compared with $163.0M prior quarter; sees Q3 revenue $810M-$840M vs. est. $813.27M and gross margin in range of 26% to 29%

·     The American Petroleum Institute said weekly Crude inventories rose +2.165M barrels, Cushing rose +0.653M, Gasoline stockpiles fell -0.204M barrels and Distillates fell -0.351M

·     Warrior Met Coal Inc (HCC) declared a special cash dividend of $0.80 per share

 

Financials

·     PayPal (PYPL) Q2 adj EPS $0.93 vs. est. $0.86; Q2 revs rose 9% to $6.8B vs. est. $6.79B; Q2 Total Payment Volume, or TPV, of $339.8B, growing 9% and 13% FXN; sees Q3 adjusted EPS $0.94-$0.96 vs. est. $0.97; net revenues expected to reach $6.8B, growing about 10% vs. est. $7.02B; announcing an invigorated capital return program, including a new $15 billion share repurchase authorization; fy’22 financial outlook incorporates about $900 million of savings across transactional and non-transactional operating expenses; Elliott Investment management says it is one of PayPal’s largest investors, with an about $2 bln investment

·     Paycom (PAYC) 2Q adj EPS $1.26 vs est. $1.12 on revs $317Mm vs est. $308.8Mm; guides 3Q revs $327-329Mm vs est. $318.7Mm, sees FY revs $1.354-1.356B vs est. $1.334B

·     Prudential (PRU) Q2 adj EPS $1.74, consensus $2.36; qtrly assets under management $1.410 trillion versus $1.730 trillion for year-ago quarter; 2Q Adjusted Book Value Per Common Shr $104.19; 2Q Book Value Per Common Shr $74.72

·     Sofi Technologies (SOFI) Q2 EPS loss (-$0.12) vs. est. loss (-$0.13); Q2 revs rose 57% y/y to $362.527M vs. est. $346.48M; raises FY22 adjusted revenue $1.508B-$1.513B from $1.505B-$1.51B 9est. $1.48B) and expects a continuation of strong growth in the second half of the year

·     Voya Inc. (VOYA) Q2 adj EPS $1.67 vs. est. $1.28; Wealth Solutions full-service recurring deposits were $12.8 billion for the trailing twelve months up 11.2% y/y; Health Solutions annualized in-force premiums were $2.7 billion in the second quarter of 2022, up 9.3%

·     Cardlytics (CDLX) 2Q adj EPS ($0.65) vs est. ($0.47) on revs $75.4Mm vs est. $76.1Mm; sees y/y growth of approx +10-15% in 2H22

·     Unum Inc. (UNM) Q2 EPS $1.91 vs. est. $1.22; Q2 revs $3.04B vs. est. $2.99B; Full-year 2022 outlook increased; after-tax adjusted operating income per share now expected to grow 40%-45% y/y, compared to the previous outlook of an increase of 15%-20%

·     LPL Financial (LPLA) 2Q adj EPS $2.24 vs est. $1.97 on revs $2.04B vs est. $2.12B

·     Robinhood (HOOD) cuts 23% of workforce amid reduced customer activity; Q2 EPS loss (-$0.34) vs. est. (-$0.37); Q2 revs $318M vs. est. $321.2M; qtrly average revenues per user (ARPU) increased to $56 from $53 in Q1; qtrly average revenues per user (ARPU) increased to $56 from $53 in Q1; monthly active users decreased 1.9 mln sequentially to 14.0 mln for June 2022

·     Verisk (VRSK) 2Q adj EPS $1.53 vs est. $1.41 on revs $746.3Mm vs est. $746Mm, adj EBITDA $380.8Mm vs est. $371Mm

 

Healthcare

·     Arcutis Biotherapeutics (ARQT) 7.5M share Spot Secondary priced at $20.00

·     CVS Corp. (CVS) raises FY adj EPS to $8.40-$8.60 from $8.20-$8.40 (est. $8.35); Q2 EPS $2.40, vs. consensus $2.1; Q2 revs $80.6B vs. est. $76.37B

·     Exact Sciences Corp. (EXAS) Q2 EPS loss (-$0.94) vs. est. loss (-$1.07); Q2 revs rose 20% to $521.6M vs. est. $497.5M. Cash, cash equivalents, and marketable securities were $728.0M at the end of the quarter; lowers FY22 revenue view to $1.980B-$2.022B from $1.985B-$2.032B

·     Gilead Sciences (GILD) 2Q adj EPS $1.58 vs est. $1.52 on revs $6.3B vs est. $5.9B; sees FY total product sales $24.5-25B vs est. $24.6B and adj EPS $6.35-6.75 vs prior $6.20-6.70 and est. $6.56

·     Sarepta (SRPT) 3Q adj EPS ($1.18) vs est. ($1.07) on revs $233.5Mm vs est. $230.6Mm; raises FY total revs and net product revs guide to $905-920Mm (vs est. $899.9Mm) and $825-840Mm, respectively

·     STERIS Plc (STE) 1Q adj EPS $1.90 vs est. $1.92 on revs $1.2B vs est. $1.22B; guides FY adj EPS $8.40-8.60 vs est. $8.70 with organic growth +10%

·     Teva (TEVA) is facing “supply disruptions” of ADHD drug Adderall amid soaring demand, Bloomberg’s reported. According to a company spokesperson, the disruptions, which could last into the fall, span branded and generic Adderall and are being caused by issues at one manufacturing facility

 

Industrials & Materials

·     Clearwater Paper (CLW) Q2 EPS $0.86 vs. est. $1.11; Q2 revs $526M vs. est. $498.67M; sees Q3 adj Ebitda $64M-$72M; provides 2022 operational guidance

·     FMC Corp. (FMC) 2Q adj EPS $1.93 vs est. $1.88 on revs $1.45B vs est. $1.33B; sees 3Q revs $1.31-1.39B vs est. $1.28B and adj EPS $1.00-1.20 vs est. $1.59; sees 4Q revs $1.39-1.51B vs est. $1.49B and adj EPS $2.18-2.70 vs est. $2.21; sees FY revs $5.5-5.7B vs est. $5.44B, adj EBITDA $1.36-1.44B vs est. $1.42B and adj EPS $7.00-7.0 vs est. $7.61

·     Generac Holdings (GNRC) Q2 EPS $2.99 vs. est. $2.62; Q2 revs $1.29B vs. est. $1.26B; maintaining its full-year 2022 net sales growth guidance of approximately 36%-40% compared to the prior year on an as-reported basis. Adjusted EBITDA margin, before deducting for non-controlling interests, is still expected to be approximately 21.5%-22.5%

·     Livent Corp. (LTHM) Q2 EPS $0.31 vs. est. $0.29; Q2 revs rose 114% y/y to $218.7M vs. est. $208.4M; raises FY22 revenue to $800M-$860M from $755M-$835M (est. $226.65) and raises FY22 adjusted EBITDA view to $325M-$375M from $290M-$350M

·     Owens Illinois (OI) Q2 EPS $0.73 vs. est. $0.65; Q2 revs $1.8B vs. est. $1.74B; raises FY22 adjusted EPS view to $2.05-$2.20 from $1.85-$2.10 (est. $2.10); expects adjusted free cash flow of at least $400 million and free cash flow of at least $175 million for full year 2022

·     Terex Corp. (TEX) 2Q EPS $1.07 vs est. $0.86 on revs $1.1B vs est. $1.08B; sees FY sales $4.1-4.3B vs est. $4.23B and EPS $3.80-4.20 vs est. $3.74

 

Technology, Media & Telecom

·     Advanced Micro Devices (AMD) shares fell -6%; 2Q adj EPS $1.05 vs est. $1.03 on revs $6.55B vs est. $6.53B, gr margin 46%; sees 3Q revs approx $6.5-6.9B vs est. $6.8B; for FY continues to expect revs approx $26.0-26.6B vs est. $26.18B

·     Alteryx (AYX) 2Q adj EPS ($0.46) vs est. ($0.60) on revs $180.6Mm vs est. $161Mm; sees 3Q revs $191-194Mm vs est. $173.7Mm, ARR $761-764Mm +32%, adj EPS ($0.12)-($0.09) vs est. ($0.18); sees FY revs $770-780Mm vs est. $734Mm, ARR $820-830Mm +29-30%, adj EPS ($0.56)-($0.46)

·     Cirrus Logic (CRUS) 1Q adj EPS $1.12 vs est. $0.83 on revs $393.6Mm vs est. $366.4; sees 2Q revs $450-490Mm vs est. $470.7Mm; announces $500Mm repurchase program

·     COGNEX (CGNX) shares fall -15%; 2Q adj EPS $0.41 vs est. $0.41 on revs $274.6Mm vs est. $276.6Mm; guides 3Q revs $160-180Mm vs est. $290Mm; on June 7, 2022, primary contract manufacturer experienced a fire at its plan in Indonesia

·     Conduent Corp. (CDNT) 2Q adj EPS $0.03 vs est. $0.05 on revs $928Mm vs est. $930Mm; sees FY adj revs $3.85-3.95B vs est. $3.89B, adj EBITDA margin 10.0-10.5% and adj FCF as % of adj EBITDA approx 15%

·     Dish (DISH) Q2 EPS $0.82 vs. est. $0.64; Q2 revs $4.21B vs. est. $4.25B; Q2 net Pay-TV subscribers decreased approximately 257,000, compared to a net decrease of approximately 67,000 in the year-ago quarter; Retail wireless net subscribers decreased by approximately 210,000 in the second quarter, compared to a net decrease of 201,000 in the year-ago quarter

·     EA Inc. (EA) Q1 EPS $1.11 on revs $1.77B up from $0.71 and $1.55B y/y; net bookings for the trailing twelve months were $7.478B, up 22% y/y and live services and other net bookings for the trailing twelve months were up 20% y/y and represent 73% of total net bookings; sees FY23 revenue $7.6B-$7.8B vs. est. $7.99B

·     Infinera (INFN) announces $275M convertible senior notes offering

·     Knowles (KN) Q2 adj EPS $0.33 vs. est. $0.32; Q2 revs $188M vs. est. $199.76M; announces restructuring program within Audio segment; guides Q3 EPS $0.17-$0.21 below the $0.47 estimate and revs $170M-$185M vs. est. $244.25M

·     Match.com (MTCH) 2Q revs $795Mm vs est. $804Mm with adj op Inc $286M vs est. $230.9Mm; sees 3Q total revs $790-800Mm vs est. $885Mm and adj op Inc $255-260Mm vs est. $254Mm

·     Microchip (MCHP) 1Q adj EPS $1.37 vs est. $1.34 on revs $1.964B vs est. $1.952B, gr margin 66.7%; guides 2Q revs $2.023-2.101B vs est. $1.962B and adj EPS $1.42-1.46 vs est. $1.34

·     MicroStrategy (MSTR) announces Separation of Chairman and CEO Roles; Q2 adjusted EPS loss ($92.81) vs ($29.66); Q2 revenue down -2.6% to $122.1M vs. est. $123.3M; As of June 30, 2022, the carrying value of MicroStrategy’s digital assets (comprised of approximately 129,699 bitcoins) was $1.988 billion, which reflects cumulative impairment losses of $1.989 billion since acquisition and an average carrying amount per bitcoin of approximately $15,326

·     Ring Central (RNG) 2Q adj EPS $0.45 vs est. $0.40 on revs $487Mm vs est. $479Mm; maintains FY revs guide $1.99-2.015B vs est. $2.0B, raises FY adj EPS guide to $1.91-1.95 vs est. $1.86

·     Semtech (SMTC) to acquire Sierra Wireless (SWIR) for $31 per share in all-cash transaction in a transaction representing a total enterprise value of approximately $1.2B, subject to customary closing conditions