Early Look

Thursday, August 25, 2022

Futures	Up/Down	%	Last
Dow	106.00	0.32%	33,064,
S&P 500	22.25	0.57%	4,166
Nasdaq	97.50	0.76%	13,027

 

 

U.S. stocks are looking at a higher open, rising ahead of key economic data today and after several measures were taken by China boosting economic stimulus, lifting global markets. China’s State Council announced 19 new policies worth $146b in new funding to boost investment and consumption as well as giving local govt more flexibility to support the real estate sector. In Asian markets, The Nikkei Index rose 165 points to 28, 479, the Shanghai Index climbed 31 points to 3,246, and the Hang Seng Index surged nearly 700-points or 3.63% to settle at 19,968. In Europe, the German DAX is up about 20-points to 13,239, while the FTSE 100 is up a few points to 7, 480. Lot of talk all week about the Fed Jackson Hole event on Friday, but first some key economic data this morning, including a key inflation report. The 2nd estimate of Q2 GDP expected, with est. (-0.8%), and core PCE prices prelim to rise +4.4% at 8:30 AM; also Weekly Jobless Claims (est. 253K after 250K prior week). Mixed results in tech earnings last night with SNOW jumping on beat and raise, CRM sliding on quarter beat but lowered its sales outlook, and NVDA in semis reports in-line with recently lowered guidance but again lowered rev guidance for next quarter. Treasury yields flat with the 10-yr at 3.09% while the dollar dips. Tesla (TSLA) will be in focus as it trades its adjusted 3 for 1 stock split.

Economic Calendar for Today

·     8:30 AM ET           Weekly Jobless Claims…est. 253K

·     8:30 AM EST         Continuing Claims…est. 1.442M

·     8:30 AM ET           Gross Domestic Product (GDP) Q2-P…est. (-0.8%)

·     8:30 AM ET           GDP Price Deflator, Q2-P…est. +8.7%

·     8:30 AM ET           GDP Consumer Spending, Q2-P…est.

·     8:30 AM Et            PCE Prices for Q2-P…est.

·     8:30 AM ET            Core PCE Prices Q2-P…est. +4.4%

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

·     11:00 AM ET          Kansas City Fed Manufacturing for Aug

·     1:00 PM ET             US Treasury to sell $38B in 7-year notes

 

Earnings Calendar:

·     Earnings Before the Open: ANF BURL COTY DG DLTR DXLG HAIN HIBB LANC MBUU MOV PTON SCVL TITN

·     Earnings After the Close: AFRM APLD DELL DOMO ESTC GPS MRVL SUMO ULTA VMW VSCO WDAY

 

Other Key Events:

·     Kansas City Fed Hosts Annual Jackson Hole Forum Aug. 25-27

·     Needham Semiconductor and Semi-Cap 1×1 Conference (virtual), 8/24-8/25

·     Piper Annual MedTech & Diagnostics California Bus Tour, 8/23-8/25, in CA

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 12.04 points, or 0.29%, to 4,140.77

·     The Dow Jones Industrial Average rose 59.64 points, or 0.18%, to 32,969.23

·     The Nasdaq Composite gained 50.23 points, or 0.41%, to 12,431.53

·     The Russell 2000 Index advanced 16.14 points, or 0.84% to 1,935.29

 

 

Macro	Up/Down	Last
Nymex	-0.06	94.83
Brent	0.13	101.35
Gold	14.90	1,776.40
EUR/USD	-0.0012	0.9977
JPY/USD	-0.66	136.45
10-Year Note	-0.023	3.083%

 

 

Sector News Breakdown

Consumer

·     Dollar General (DG) Q2 EPS $2.98 vs. est. $2.93; Q2 revs $9.43B, in-line with consensus; Q2 comp store sales rose +4.6%; board of directors increases share repurchase program; Gross margin 32.3% vs. 31.7% y/y; now expects fiscal 2022 same-store sales to rise 4% to 4.5%, compared with its prior forecast for 3% to 3.5% growth.

·     Guess Inc. (GES) Q2 adj EPS $0.39 vs. est. $0.45; Q2 revs rose 2% y/y and 12% in c/c to $643M vs. est. $629.52M; Gross margin 42.1% vs. 46.8% y/y, estimate 42.6%; sees Q3 revenue down roughly 4.5% in constant currency y/y and cuts year rev view to 1.5% from 4%

·     William Sonoma (WSM) Q2 EPS $3.87 vs. est. $3.54; Q2 revs $2.14B vs. est. $2.02B; Q2 comparable brand revenue growth of 11.3% (est. +5.5%) and 41.1% on 2-year basis; reiterates FY outlook of mid-to-high single digit annual net rev growth, increasing revenues to $10 bln by FY24

·     Victoria’s Secret (VSCO) Q2 adj EPS $1.09 vs. $1.71 last year and Q2 sales fell -6% y/y to $1.52B vs. est. $1.56B; forecasting full year 2022 net sales to decrease in mid to high single digit range; sees Q3 net sales to decrease in high single digit range and operating income is expected to be in range of $10M-$40M compared to $108M y/y; guides Q3 EPS 0c-$0.25 vs. est. $0.83

·     Lordstown Motors (RIDE) files $500M mixed securities shelf

 

Energy, Industrials and Materials

·     CNOOC Ltd. (CEO) more than doubled its first half profits from a year ago as China’s biggest offshore driller benefited from sky-high oil and gas prices; posted 71.9B yuan ($10.5 billion) in profits in the first half of the year, more than doubling the 33.3B yuan earnings y/y

·     Flexsteel Industries (FLXS) confirmed receipt of an unsolicited takeover proposal as CSC Generation Holdings offered to acquire the residential furniture manufacturer for $20.80/share in cash, a ~22% premium to Tuesday’s closing price.

·     Energy Transfer (ET) announced its subsidiary, Energy Transfer LNG Export, LLC, has entered into a 20-year LNG Sale and Purchase Agreement with Shell NA LNG LLC (SHEL) related to its Lake Charles LNG project.

 

Financials

·     Raymond James (RJF) reports client assets under administration $1.189T as of July 31

 

Healthcare

·     Amazon (AMZN) will axe its Amazon Care telehealth business by the end of the year, The Washington Post reported. Amazon Care employees learned about the shutdown in a meeting today, according to the newspaper. https://wapo.st/3pGXyAH

·     Teladoc Health (TDOC) and American Well Corp. (AMWL) shares rose after hours following the WAPO story that Amazon getting rid of its telehealth service Amazon Care

·     BioMarin (BMRN) received conditional approval for its hemophilia gene therapy in Europe, where the company says about 3,200 patients could be eligible to take the drug. The treatment, called Roctavian, has conditional approval for people with severe hemophilia A

 

Technology, Media & Telecom

·     NVIDIA Corp. (NVDA) Q2 EPS $0.51 vs. est. $0.50 and revs reported at $6.7B, in-line with previously reduced guidance; Q2 Data Center revenue rose 61% y/y to $3.81B; sees Q3 revenue $5.9B, plus/minus 2% vs. est. $6.95B; Q3 Gaming and Professional Visualization revenue are expected to decline sequentially, as OEMs and channel partners reduce inventory levels

·     Autodesk (ADSK) Q2 non-GAAP EPS $1.65 vs. est. $1.57; Q2 revs $1.24B vs. est. $1.22B; says well on track to achieve FY23 goals; sees Q3 non-GAAP EPS $1.66-$1.72 vs. est. $1.67; sees Q3 revenue $1.28B-$1.29B vs. est. $1.27B; sees year billings $5.71B-$5.81B after Q2 $1.19B

·     NetApp (NTAP) Q1 adj EPS $1.20 vs est. $1.10; Q1 revs rose 9% y/y to $1.59B vs. est. $1.55B; sees Q2 adj EPS $1.28-$1.38 vs. est. $1.32; sees Q2 revs $1.595B-$1.745B vs. est. $1.66B; sees FY net revs expected to grow in range of 6%-8%

·     Salesforce.com (CRM) Q2 EPS $1.19 vs. est. $1.02; Q2 revs rose 22% y/y and 26% in constant currency to $7.72B vs. est. $7.69B; announces share repurchase program of $10B; sees FY23 EPS $4.71-$4.73 vs. est. $4.75 and year revs $30.9B-$31.0B vs. est. $31.73B

·     Snowflake (SNOW) Q2 EPS loss (-$0.70) vs. est. loss (-$0.01); Q2 revs rose 83% to $497.2M vs. est. $467.25M; sees Q3 product revenue $500M-$505M and adj operating income margin 2%; boosts FY23 product revenue view to $1.905B-$1.915B from $1.885B-$1.9B

·     Splunk (SPLK) Q2 EPS loss ($1.30) vs. est. loss (-$0.35); Q2 revs rose 32% y/y to $799M vs. est. $747.78M; raises FY23 revenue view to $3.35B-$3.4B from $3.3B-$3.35B (est. $3.3B) and raises FY23 adjusted operating margin view to roughly 8% from 2%; Q2 Cloud revenue was $346M, up 59% y/y and 723 customers with total ARR greater than $1 million, up 24% y/y

·     Zuora (ZUO) Q2 adj EPS loss (-$0.03) vs. est. loss (-$0.04); Q2 revs rose 14% y/y to $98.8M vs. est. $97.49M; raises FY23 EPS view to (18c)-(14c) from (19c)-(15c) but lowers FY23 revenue view to $394M-$400M from $402M-$406M (est. $402.8M)