Early Look
Friday, August 12, 2022
|
Futures |
Up/Down |
% |
Last |
|
Dow |
109.00 |
0.33% |
33,413 |
|
S&P 500 |
16.25 |
0.40% |
4,226 |
|
Nasdaq |
63.50 |
0.48% |
13,375 |
U.S. equities are looking at a higher open as the S&P 500 and Nasdaq remain on track for a fourth straight weekly advance after S&P futures held the 4,200 level late yesterday and in the overnight session. Stocks have been buoyed this week following back-to-back lower than expected inflations reports in the US (CPI and PPI), leading investors to scale back views on how far U.S. interest rates and inflation can climb, while oil recoups some of the previous week’s losses. Odds of a 75-basis points U.S. hike in September were as high as 68% earlier in the week, but are now around 34%, where they were a week ago according to FedWatch. In Asian markets, The Nikkei Index surged 727 points or 2.62% to 28,456 (highest level since January), the Shanghai Index dipped -4 points to 3,276, and the Hang Seng Index gained 93 points to 20,175. In Europe, the German DAX is up 60 points to 13,757, while the FTSE 100 rises about 25 points to 7,493. US listed China stocks lower after 5-US listed China stocks, including SNP and PTR said that they intend to delist their American depositary shares from the NYSE, as U.S. and Chinese regulators remain at loggerheads over audit requirements. In separate filings to the Hong Kong stock exchange, China Life Insurance Co. Ltd. (China), PetroChina Co., China Petroleum & Chemical Corp., Aluminum Corp. of China Ltd., and Sinopec Shanghai Petrochemical Co. said they would apply for the voluntary delisting of their ADSs from the NYSE. Brent crude was headed for a weekly climb of more than 3%, recouping part of last week’s 14% tumble.
Market Closing Prices Yesterday
· The S&P 500 Index slipped -2.97 points, or 0.07%, to 4,207.27
· The Dow Jones Industrial Average rose 27.16 points, or 0.08%, to 33,336.67
· The Nasdaq Composite dropped -74.89 points, or 0.58%, to 12,779.91
· The Russell 2000 Index advanced 6.01 points, or 0.31% to 1,975.26
Economic Calendar for Today
· 8:30 AM ET Import Prices M/M for July…est. (-1.0%)
· 8:30 AM ET Export Prices M/M for July…est. (-1.1%)
· 10:00 AM ET University of Michigan Sentiment, Aug-P…est. 52.5
· 10:00 AM ET UoM Sentiment 1-yr inflation expectations
· 10:00 AM ET UoM Sentiment 5-yr inflation expectations
· 1:00 PM EST Baker Hughes Weekly rig count data
Earnings Calendar:
· Earnings Before the Open: AIRS BR PLXP SNDA SPB
Other Key Events:
· Susquehanna Industrials, Energy & Airlines Conference, 8/11-8/12 in New York
· William Blair Insurance & Banking Technology Conference (virtual), 8/10-8/12
|
Macro |
Up/Down |
Last |
|
Nymex |
-0.83 |
93.51 |
|
Brent |
0.21 |
99.80 |
|
Gold |
-3.70 |
1,803.50 |
|
EUR/USD |
-0.0025 |
1.0292 |
|
JPY/USD |
0.51 |
133.51 |
|
10-Year Note |
-0.022 |
2.866% |
World News
· UK economy contracted by less than feared in June, as the Office for National Statistics said gross domestic product (GDP) fell by 0.6% in June, the biggest contraction since January 2021 but less severe than the 1.3% drop predicted by a Reuters poll of economists.
· U.S. federal agents were looking for documents relating to nuclear weapons when they raided former President Donald Trump’s home in Florida this week, the Washington Post reported on Thursday. It was not clear if such documents were recovered at the former president’s Mar-a-Lago resort in Palm Beach, the Post said. Reuters could not immediately confirm the report.
· San Francisco Federal Reserve Bank President Mary Daly said on Thursday that while a half-percentage-point interest rate hike in September “makes sense,” she is open to the possibility of a bigger hike to fight too-high inflation. “I still think 50 basis points is the case, but I am open to 75 should the data evolve differently,” Daly told Bloomberg TV, saying she does not want to be “head-faked” by the recent improvement in inflation readings
· Investors bought $7.1 billion in equities in the week to Wednesday, with U.S. ‘growth’ stocks recording their largest weekly inflow since December 2021 in a sign that fears over soaring inflation are receding. Tech stocks saw an Investors ploughed $11 billion into U.S equity funds in the week to Wednesday, their largest weekly inflow in eight weeks, but European stocks remained unloved, recording outflows for the 26th straight week – according to Bank America
Sector News Breakdown
Consumer
· Mister Car Wash (MCW) Q2 adj EPS $0.11 vs. est. $0.12; Q2 revs rose 14.2% y/y to $225.2M vs. est. $219.71M; lowers FY22 EPS view to $0.36-$0.39 from $0.44-$0.47 prior and cuts FY22 revenue view to $860M-$880M from $875M-$895M (est. $885.73M)
· Poshmark (POSH) 2Q EPS ($0.29) vs est. ($0.27) on revs rising 9% y/y to $89.1Mm vs est. $87.4Mm; sees 3Q revs $85-87Mm vs est. $88Mm
· Portillo’s (PTLO) 8M share Secondary priced at $23.75
· Lennar (LEN) downgraded to Neutral from Outperform at Wedbush
· Rivian (RIVN) 2Q EPS ($1.89) vs est. ($1.63) on revs $364Mm vs est. $337.5Mm; during qtr produced 4,401 vehicles and delivered 4,467 vehicles; as of June 30,2022, net R1 preorder backlog was about $98,000 from consumers in US and Canada; avg daily preorder rate accelerated in 2Q vs 1Q; expect to be able to add a second shift for vehicle assembly toward end 3Q; 2022 production Target of 25,000 total units produced reaffirmed; now sees FY adj EBITDA ($5.45B) vs est. ($4.9B); supply chain continues to be the limiting factor in production; cuts FY22 adjusted EBITDA target to loss of $5.45B from $4.75B
· Xponential Fitness (XPOF) 2Q adj EPS ($0.07) vs est. $0.14 on revs $59.6Mm vs est. $50Mm, North American comps +25%, North America AUV $480,000; adj EBITDA $17.6Mm vs est. $16.4Mm; guides FY revs $211-221Mm vs est. $213.8Mm with 500-520 new studio openings, adj EBITDA $68-72Mm vs prior $67-71Mm and est. $70.1Mm
Financials
· LegalZoom (LZ) 2Q adj EPS $0.05 vs est. $0.02 on revs $163.9Mm vs est. $161.6Mm; sees 3Q adj revs $149-151Mm vs est. $171.2Mm; sees FY revs $612-616Mm vs est. $653.2Mm
· Payoneer Global (PAYO) 2Q EPS $0.01 vs est. ($0.06) on revs $148.2Mm vs est. $131.5Mm; sees FY revs $580-590Mm vs est. $563.1Mm
· Ryan Specialty Holdings (RYAN) Q2 adj EPS $0.39 vs. est. $0.35; Q2 revs rose 26% y/y to $491.3M vs. est. $460.46M; sees organic revenue growth rate guidance range for full year 2022 is now 16.5% – 18.0%; raising FY22 organic revenue growth rate and adjusted ebitda margin
· SmartRent (SMRT) Q2 EPS loss (-$0.13) vs. est. loss (-$0.11); Q2 revs $42.4M vs. est. $51.5M; guides Q3 revs below consensus and cuts FY22 revenue view to $155M-$180M from $220M-$250M and units Deployed to 190,000-220,000 vs. prior 280,000-320,000
Healthcare
· Co-Diagnostics (CODX) Q2 EPS loss (-$0.08) vs. est. $0.10; Q2 revs $5M vs. est. $20.5M; Operating loss of $4.1 million compared to operating income of $11.8 million a year ago, due to lower sales volumes and continued investments into research and development
· Illumina (ILMN) falls -15%; Q2 adj EPS $0.57 vs. est. $0.65; Q2 revs rose 3% to $1.16B vs. est. $1.22B; says Q2 results did not meet expectations as challenges in a complex macro environment more than offset growth in sequencing runs on its platforms; cuts FY22 adjusted EPS view to $2.75-$2.90 from $4.00-$4.20 and slashes FY22 revenue growth to 4%-5% from 14%-16%
· Hologic (HOLX) announced that the U.S. Court of Appeals for the Federal Circuit has affirmed a 2018 district court ruling that barred Minerva (NERV) from challenging the validity of the patent rights it assigned to Hologic
· Oscar Health (OSCR) Q2 EPS loss (-$0.53) vs. est. loss ($0.48); Q2 revs $1.017M vs. est. $960.6M; Direct and assumed policy premiums of $1.7 billion, a 101% increase YoY; Premiums earned of $995 million, a 88% increase YoY; Medical Loss Ratio of 82.2%, decreased 20 bps YoY
· Novartis (NVS) said following 2 recent patient fatalities in Zolgensma gene therapy co will be updating labeling to specify fatal acute liver failure reported
· ResMed (RMD) Q adj EPS $1.49 vs est. $1.45 on revs $914.7Mm vs est. $913Mm, adj gross margin 57.8%
· Inspire Medical (INSP) 1M share Spot Secondary priced at $215.00
Industrials, Energy & Materials
· Rocket Lab USA (RKLB) 2Q EPS ($0.08) vs est. ($0.06) on revs $55.5Mm vs est. $49.2Mm; sees 3Q revs $60-63Mm vs est. $54.4Mm
· Wheels Up (UP) Q2 EPS loss (-$0.38) vs. est. loss (-$0.34); Q2 revs rise 49% y/y to $425.5M vs. est. $309.2M; Strong demand with prepaid block sales up 187% year-over-year; active members grew 20% y/y to 12,667 in total; Live Flight Legs increased 19% y/y to 21,705 in total
Technology, Media & Telecom
· Chinese chip maker Semiconductor Manufacturing International Corp reported a 42% jump in second-quarter revenue but also said the sector was facing some “panic and uncertainty”. A slowdown in demand for smartphones has driven down prices for certain chips, co-CEO Zhao Haijun told investors
· SK Hynix aims to select a U.S. site for its advanced chip packaging plant and break ground there around the first quarter of next year, two people familiar with the matter said, Reuters reported. The plant, whose estimated cost would be “several billions,” would ramp up to mass production by 2025-2026 and employ about 1,000 workers
· CS Disco (LAW) Q2 adj EPS loss (-$0.23) vs. est. loss (-$0.27); Q2 revs rose 14% y/y to $33.7M vs. est. $33.4M; guides Q3 revs below views and cuts both FY22 revenue view to $132M-$136M from $149M-$153M and FY22 adj EBITDA view to ($60M)-($56M) from ($51.5M)-($43.5M)
· ForgeRock (FORG) Q2 adj EPS loss (-$0.17) vs. est. loss (-$0.21); Q2 revs rose 8% y/y to $47.7M vs. est. $47.19M; Q2 ARR grew 30% y/y to $201.6M and SaaS as a percentage of ARR from new customers was 53% in Q2
· Toast Inc. (TOST) 2Q EPS ($0.11) vs est. ($0.12) on revs $675Mm vs est. $651.3M, ARR $787Mm, GPV $23.3B +62%; adj EBITDA ($33Mm) vs est. ($55.4Mm); guides 3Q revs $700-730Mm vs est. $665Mm, adj EBITDA ($40Mm)-($30Mm) vs est. ($46Mm); sees FY revs $2.62-2.66B vs prior $2.5-2.55B and est. $2.54B and adj EBITDA ($160Mm)-($140Mm) vs prior ($195Mm)-($175Mm)
· Viavi Solutions (VIAV) 4Q adj EPS $0.24 vs est. $0.23 on revs $335.3Mm vs est. $320.9Mm; sees 1Q revs $317-331Mm vs est. $328.4Mm and adj EPS $0.22-0.24 vs est. $0.23
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.