Morning Preview: July 24, 2024

Auto PostDaily Market Report

Early Look

Wednesday, July 24, 2024

Futures

Up/Down

%

Last

Dow

-179.00

0.44%

40,436

S&P 500

-40.25

0.72%

5,559

Nasdaq

-216.50

1.08%

19,709

 

 

U.S. futures are pointing to a lower open as earnings results from GOOGL and TSLA fail to impress, leading to overnight selling pressure, with the Nasdaq futures down about 1% as major averages finished mixed late yesterday. U.S. stocks slipped late on Tuesday, pushing the S&P 500 and Nasdaq into negative territory in a lackluster trading day, as investors digested the latest quarterly reports from large U.S. companies and waited for the next batch of mega cap reports. The Smallcap Russell 2000 outperformed for a second day, rising over 1% (up 3% this week so far) while the transport index tumbled behind a -12% decline in UPS shares after quarterly results missed on lower guidance. Of the S&P 500’s 11 major sectors, energy was the biggest index point drag, while financials were the biggest boost. In Asian markets, The Nikkei Index declined -439 points or over 1% to 39,154, the Shanghai Index fell -13 points to 2,901, and the Hang Seng Index dropped -158 points to 17,311. In Europe, the German DAX is down -124 points to 18,432, while the FTSE 100 is down -15 points to 8,151. Still no Fed speakers all week ahead of the FOMC meeting next Wednesday and investors also awaiting key GDP data on Thursday and PCE inflation data on Friday. Another big round of earnings this morning with details of some top movers listed below. Oil prices look to bounce off 6-week lows, rising this morning. President Joe Biden is set to address the nation on his decision to drop out of the 2024 race. That’s after Kamala Harris vowed to put her record against Republican Donald Trump in her first rally since launching her bid for the White House.

 

Market Closing Prices Yesterday

  • The S&P 500 Index dipped -8.67 points, or 0.16%, to 5,555.74.
  • The Dow Jones Industrial Average fell -57.35 points, or 0.14%, to 40,358.09.
  • The Nasdaq Composite dropped -10.22 points, or 0.06%, to 17,997.35.
  • The Russell 2000 Index advanced 22.62 points, or 1.02% to 2,243.27.

Economic Calendar for Today

  • 7:00 AM ET MBA Mortgage Applications Data
  • 8:30 AM ET                  Advance Goods Trade Balance for June
  • 9:45 AM ET S&P Global Manufacturing PMI, July-Flash…est. 51.7
  • 9:45 AM ET S&P Global Services PMI, July-Flash…est. 55.0
  • 9:45 AM ET S&P Global Composite, July-Flash
  • 10:00 AM ET                New Home Sales M/M for June…est. 640K
  • 10:30 AM ET                Weekly DOE Inventory Data
  • 1:00 PM ET U.S. Treasury to sell $70B in 5-year notes

Earnings Calendar:

  • Earnings Before the Open: AJX APH BLFY BSX BXMT CFFN CME EVR FI FLEX FTV GD GEV GPI HCSG IP IPG KBR LII LW NAVI NEE NEP ODFL OTIS PB PPBI PRG ROP SBT SFNC SLAB T TDY TEL THC TMHC TMO TNL UCBI VRT WAB WFRD WNC
  • Earnings After the Close: ALGN ALRS AMP AMTB ASGN ATNI BELFA BRKL BWB CASH CBAN CCS CHDN CHE CLB CMG CSL CVLG CYH EGBN EPRT ESRT EW F FAF FSBC GGG GL GSHD GTY HBNC HLX HP IBM INBK INVH KALU KLAC KNX LOB LVS MC MCRI MOH MORN MSA MTH MXL NEM NLY NOW OII ORLY ORN PEB PEGA PI PLXS PTEN QRCH QS RBBN RELL RHI RJF ROL RSG SEIC SJW SLM SSB STC TCBX TER TYL UHS URI VKTX VMI WH WHR WM

 

 

Macro

Up/Down

Last

Nymex

0.59

77.55

Brent

0.54

81.55

Gold

7.90

2,415.20

EUR/USD

-0.0009

1.0842

JPY/USD

-1.02

154.57

10-Year Note

+0.006

4.245%

 

Sector News Breakdown

Consumer

  • Tesla Inc. (TSLA) Q2 adj EPS $0.52 below consensus $0.60; Q2 revs $25.5B vs. est. $24.63B; said plans for new vehicles remain on track; affirms FY24 vehicle production growth rate may be notably lower y/y from 1.85M; Q2 gross margin 18%, vs. Bloomberg est. 17.4%; Q2 auto gross margin 14.65% vs. estimate of 17.86%; said Cybertruck production more than tripled sequentially, remains on track to achieve profitability by end of year in U.S.; said significantly increased deliveries in several markets supplied by gigafactory shanghai in Q2, including South Korea.
  • General Motors (GM) downgraded to Equal Weight from Overweight at Morgan Stanley.
  • Mattel Inc. (MAT) Q2 adj EPS $0.19 vs. est. $0.17; Q2 revs fell -1% y/y to $1.08B vs. est. $1.1B; maintained its full-year profit and sales forecasts, also posted a drop of 18% in advertising and promotional expenses. CEO Kreiz reiterated he was confident in Mattel’s strategy to create long-term shareholder value as a standalone company.
  • Cal-Maine Foods (CALM) Q4 EPS $2.32 vs est. $1.85 on revs $640.789Mm vs est. $608.66Mm; believe demand for shell eggs will remain strong.
  • Red Rock Resorts (RRR) Q2 EPS $0.59 vs est. $0.66, adj EBITDA $201.7Mm vs est. $196.1Mm on revs $486.403Mm vs est. $476.8Mm.

Energy

  • Avantor (AVTR) to replace QuidelOrtho (QDEL) in S&P 400 at open 7/26.
  • Enphase Energy (ENPH) Q2 adj EPS $0.43 vs est. $0.48 on revs $303.5Mm vs est. $309.9Mm, adj op Inc $61.14Mm vs est. $37.8Mm; guides Q3 revs $370-410Mm vs est. $403.52Mm, adj gr mgn 47-50%, adj op exp $79-83Mm, adj tax rt 17-19%.
  • EQT Corp. (EQT) Q2 adj EPS (-$0.08) vs est. (-$0.20), adj EBITDA $464Mm vs est. $407.43Mm; sees Q3 sales volume 510-560 BCFE; reaffirms FY sales volume 2,100-2,200 BCFE.
  • Matador Resources (MTDR) Q2 adj EPS $2.05 vs. consensus $1.76; Q2 revs $847.14M vs. consensus $825.29M; increased its full-year 2024 guidance range for total oil and natural gas equivalent production, oil production and natural gas production.
  • Nabors (NBR) Q2 EPS loss (-$4.29) vs. consensus loss (-$1.85); Q2 revs $735M vs. consensus $739.25M; sees 3Q lower 48 avg rig count of approximately 70 rigs; Q2 adjusted EBITDA of $114.0M, compared to $120.4M in Q1.
  • Range Resources (RRC) Q2 adj EPS $0.46 vs. est. $0.42; Q2 revs $530.04M vs. est. $594.28M; targeting a maintenance production program in 2024, resulting in approximately flat production at 2.12 – 2.16 bcfe per day; said 2024 all-in capital budget is $620M-$670M; expects annual production to be near high end of guidance.
  • Weatherford (WFRD) Q2 revs $1.405B vs. est. $1.419B; Q2 adj Ebitda $365M vs. est. $353.5M; authorized a three-year share repurchase program of $500M; introduced company’s first-ever shareholder return program with an annual dividend of $1 per share; said 2H is poised to deliver mid-single digits sequential revenue growth over 1H.

Financials

  • Visa Inc. (V) Q3 adj EPS $2.42 vs est. $2.42 on revs $8.9B vs est. $8.918B; transactions processed 59.3B, payments volume +7% y/y, cross border volume +14%.
  • Agree Realty (ADC) Q2 EPS $0.52 vs est. $0.44, AFFO/shr $1.04 vs est. $1.02: raising FY AFFO/shr to $4.11-4.14 vs est. $4.08.
  • Capital One Financial (COF) Q2 adj EPS $3.14 vs. consensus $3.29 and revs rose 5% y/y to $9.5B vs. consensus $9.57B; Net interest income rose 6%, while non-interest income rose 3%; reported $3.91 billion in provisions for credit losses, up nearly 60% from the $2.49 billion a year earlier.
  • Chubb Inc. (CB) Q2 core EPS $5.38 vs. consensus $5.15; Q2 pre-tax catastrophe losses were $580M vs $40M y/y; Q2 P&C combined ratio 86.8% vs. 85.4% last year; Q2 consolidated net premiums written of $13.4B, up 11.8%, or 12.3% in constant dollars, with P&C up 10.6% and life insurance up 27.6%.
  • CoStar Group (CSGP) Q2 EPS $0.15 vs. est. $0.09; Q2 revs $677.8M, in-line with consensus $677.26M; said overall revenue grew 12% year-over-year and net new bookings were $67M; reaches record 183M monthly average unique visitors; sees Q3 EPS $0.15-$0.16 vs. est. $0.18 and revs $692M-$697M vs. est. $704.07M.
  • Deutsche Bank (DB) shares fall after saying they set aside 1.3 billion euros ($1.41 billion) in provisions as it posted its first loss in four years; said the bank would not conduct a second share buy-back this year
  • Enova Int’l (ENVA) Q2 adj EPS $2.21 vs est. $2.07, adj EBITDA $163Mm vs est. $152Mm on revs $628.436Mm vs est. $622.9Mm.
  • PennyMac Financial Services (PFSI) raises quarterly dividend 50% to 30c per share; Q2 EPS $1.85, consensus $2.58; Q2 revenue $406.1M, consensus $466.57M; Total loan acquisitions and originations were $27.2 billion in unpaid principal balance, up 25% q/q.
  • Retail Opportunity (ROIC) Q2 FFO/shr $0.25; sees FY FFO/shr $1.04-1.07 vs est. $1.05.
  • Riot Platforms (RIOT) has acquired Block Mining, a Kentucky-based vertically integrated Bitcoin miner, for total consideration at closing of $92.5M.

Healthcare

  • Biogen (BIIB) and Sage Therapeutics (SAGE) announce topline results from phase 2 KINETIC 2 Study of SAGE-324 for the treatment of essential tremor. No statistically significant differences were demonstrated between any dose of SAGE-324 and placebo in the change from baseline for the primary endpoint.
  • Boston Scientific (BSX) Q2 adj EPS $0.62 vs. est. $0.58; Q2 revs $4.12B vs. consensus $4.02B; raises FY24 adjusted EPS view to $2.38-$2.42 from $2.29-$2.34 (est. $2.33) and estimates net sales growth for the full year 2024, versus the prior year period, to be in range of approximately 13.5%-14.5% and 13%-14% on an organic basis.
  • Pfizer (PFE) said Wednesday that its gene therapy for hemophilia A successfully reduced patients’ bleeds for at least 15 months in a large phase 3 trial – STAT news.
  • QuidelOrtho (QDEL) to replace Hibbett (HIBB) in S&P 600 at open on 7/26 which is being acquired by JD Fashion.
  • USANA Health (USNA) Q2 EPS $0.54 vs est. $0.65 on sales $212.869Mm vs est. $220.99Mm; active customers -4% y/y, -5% sequentially; guides FY sales $850-880Mm vs prior $850-920Mm and est. $883.52Mm, EPS $2.40-2.55 vs prior $2.40-3.00 and est. $2.78.
  • Verastem (VSTM) 13.333M share Spot Secondary priced at $3.00.

Industrials and Materials

  • Canadian National (CNI) Q2 adj EPS C$1.84 vs. est. C$1.94 and revs rose 6.7% y/y to C$4.33B vs. est. C$4.39B; lowers FY24 adjusted EPS view to up mid to high single-digits from prior view up 10%; said continues to expect to invest approximately C$3.5 billion in its capital program, net of amounts reimbursed by customers.
  • FTAI Aviation (FTAI) Q2 adj EBITDA $213.904Mm vs est. $177Mm, EPS ($2.26) vs est. $0.47 on revs $443.59Mm vs est. $362.9Mm.
  • Packaging Corp. (PKG) Q2 adj EPS $2.20 vs est. $2.14 on sales $2.0753B vs est. $2.205B; guides Q3 EPS $2.45 vs est. $2.43, sees prices and mix in both packaging and paper segments moving higher.
  • Schneider National (SNDR) to replace U.S. Silica (SLCA) in S&P 600 at open on 7/31.

Technology, Media & Telecom

  • Alphabet (GOOGL) Q2 EPS $1.89 vs est. $1.84 on revs $84.742B vs est. $84.176B, Cloud revs $10.35B, Ad revs $64.62B vs est. $64.5B; Q2 YouTube revs $8.66B vs. est. $8.93B; says still expects quarterly capital expenditures at or above $12B.
  • AT&T (T) Q2 adjusted EPS $0.57, in-line with consensus and Q2 revenue $29.8B vs. est. $29.92B; Q2 419,000 postpaid phone net adds vs. ests. 284K; backs FY24 adjusted EPS $2.15-$2.25, adjusted EBITDA view up 3% and FY24 capital investment view $21B-$22B; Q2 Free cash flow rose more than 9% to $4.6B vs. est. $4.2B.
  • CrowdStrike (CRWD) said a software update that crashed computers globally last week hitting services from aviation to banking and healthcare was caused by a bug in the U.S. cybersecurity firm’s quality control mechanism.
  • Manhattan Associates (MANH) Q2 adj EPS $1.18 vs est. $0.96 on revs $265.3Mm vs est. $255.88Mm, adj op Inc $92.9Mm vs est. $75.5Mm; guides FY revs $1.036-1.044B vs est. $1.031B, adj op mgn 32.0-32.2%, adj EPS $4.22-4.30 vs est. $3.91.
  • Seagate Technology (STX) Q4 EPS $1.05 vs. consensus $0.75; Q4 revs rose 18% y/y to $1.887B vs. est. $1.872B; Q4 non-GAAP gross margin expanded to nearly 31%, and non-GAAP EPS exceeded the high end of our guidance range; guides Q1 EPS $1.40 plus/minus $0.20 vs. est. $1.16 and revs $2.1B, plus/minus $150M (est. $2.07B).
  • Texas Instruments (TXN) Q2 EPS $1.22 vs est. $1.17 on revs $3.82B vs est. $3.823B; sees Q3 EPS $1.24-$1.48 vs est. $1.37 and revs $3.94-4.26B vs est. $4.121B
  • Spotify (SPOT) upgraded to Buy from Neutral at Goldman Sachs and raised tgt to $425 from $320.

_________________________________________________________________

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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