Early Look

Friday, July 29, 2022

Futures	Up/Down	%	Last
Dow	123.00	0.38%	32,613
S&P 500	32.25	0.80%	4,106
Nasdaq	154.50	1.21%	12,892

 

U.S. stock futures are pointing to a higher open, with the S&P poised for a roughly 30-point pop, trading above the 4,100 level after earnings results from Apple (AAPL) and Amazon (AMZN) provide upside momentum. Amazon shares are looking higher by about 13% and Apple about 2%, while Intel slides -9% in the chip space after a wide Q2 miss and lower guide and ROKU tumbles over 20% on disappointing results. Energy giant Chevron (CVX) posts a big beat this morning. Markets are on track for healthy July gains with the Nasdaq up over 10% coming into the final trading day of the month, the S&P 500 up 7.5% MTD, the Dow up 5.7% and the Russell 2000 up 9.6% MTD. The tech rally has been paced by a rebound in semiconductors, with the SOX rising 15% MTD, helped after a chip bill was passed in Washington to help support the industry (remains down roughly -25% YTD). In Asian markets, The Nikkei Index dipped -13 points to 27,801, the Shanghai Index fell -29 points to 3,253, and the Hang Seng Index tumbled -466 points or 2.26% to 20,156. In Europe, the German DAX is up 1% or 135 points to 13,415, while the FTSE 100 rises 0.4% to 7,375. U.S. stocks have surged the last 2-days following FOMC meeting results where the Fed boosted rates by 75-bps, but markets anticipate that rate hikes will slow going forward given the stream of negative economic data. Bitcoin steady at $24,000 and Ethereum -2% to $1,725 but both on track for best months since 2021. Yen surges to 6-week high vs. the US dollar.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 48.82 points, or 1.21%, to 4,072.43

·     The Dow Jones Industrial Average rose 332.04 points, or 1.03%, to 32,529.63

·     The Nasdaq Composite jumped 130.17 points, or 1.08%, to 12,162.59

·     The Russell 2000 Index advanced 24.69 points, or 1.34% to 1,873.03

 

Economic Calendar for Today

·     8:30 AM ET           Personal Income M/M for June…est. +0.5%

·     8:30 AM ET           Personal Spending M/M for June…est. +0.9%

·     8:30 AM ET           PCE Price index M/M for June

·     8:30 AM ET           PCE Price Index Y/Y for June

·     8:30 AM ET           Core-PCE Price index M/M for June…est. +0.5%

·     8:30 AM ET           Core-PCE Price Index Y/Y for June…est. +4.7%

·     9:45 AM ET           Chicago PMI for July…est. 55.0

·     10:00 AM ET         University of Michigan Sentiment, July-F…est. 51.1

·     1:00 PM EST         Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: AB ABBV ACRE AON ARCB B BAH BLMN CBOE CHD CHTR CL CVEO CVX DCOM FHB GTLS IMGN LYB MOG/A MTD NWL PG PIPR PSX PSXP SLCA VRTS WETF WPC WY XOM

 

 

Macro	Up/Down	Last
Nymex	1.78	98.20
Brent	1.65	108.79
Gold	7.30	1,776.50
EUR/USD	0.0022	1.0219
JPY/USD	-1.00	133.28
10-Year Note	+0.029	2.71%

 

 

Sector News Breakdown

Consumer

·     Amazon Inc. (AMZN) rises 12%; GAAP EPS ($0.20) vs est. $0.13 on revs $121.2B vs est. $119.1B, AWS net sales $19.7B, says 2Q net loss includes pre-tax valuation loss of $3.9B included in non-operating expense from investment in Rivian (RIVN); sees 3Q net sales $125-130B vs est. $126.4B and op Inc. $0-3B vs est. $4.27B; Q2 AWS net sales $19.73B vs. $14.81B a year ago

·     Decker’s Outdoors (DECK) 1Q EPS $1.66 vs est. $1.19 on revs $614.5Mm vs est. $566.2Mm; guides net sales $3.45-3.5B vs est. $3.49B, gr margin approx 51.5%, SG&A exp approx 34%, op margin 17.5-18%, effective tax rt 22-23%, raises EPS guide to $17.50-18.35 to prior share repurchase (no additional repurchase included in guide)

·     VF Corp (VFC) Q1 EPS $0.09 vs. est. $0.13; Q1 revs $2.26B vs. est. $2.24B; maintaining its currency adjusted outlook as now expect FY adjusted eps of $3.05 to $3.15 vs. est. $3.34 while backs its FY23 rev growth view of up 7% and margins up slightly; Q2 Vans revenue down 7% y/y at $946.8M, North Face revenue was up 31% at $481M, Timberland up 8% at $269.5M

·     Yum China (YUMC) 2Q adj EPS $0.20 vs est. $0.00 on revs $2.13B vs est. $2.18B; comps -16%; says entering 3Q seeing gradual recovery, continue to rebase cost structure to be more flexible; FY targets unchanged

·     Mohawk Industries (MHK) Q2 EPS $4.41 vs. est. $4.31; Q2 revs $3.15B vs. est. $3.16B; sees Q3 EPS $3.33-$3.43

·     Gaming & Leisure Properties (GLPI) 2Q AFFO/shr $0.91 vs est. $0.92 on revs $326.5Mm vs est. $325.3Mm; sees FY AFFO/shr $3.50-3.54 vs est. $3.62

 

Energy

·     Chevron (CVX) Q2 adj EPS $5.82 vs. est. $5.10; Q2 revs $68.76B vs. est. $59.29B; raises top end of annual buyback guidance to $15B; qtrly worldwide net oil-equivalent production was 2.90 mln barrels per day; qtrly international production down 13% primarily due to end of concessions in Thailand, Indonesia; U.S. production up 3% mainly in Permian basin; US upstream operations earned $3.37 bln in qtr vs $1.45 bln

·     ExxonMobil (XOM) Q2 adj EPS $4.14 vs. est. $3.98; Q2 revs $115.6B vs. Est. $132.7B; qtrly oil-equivalent production in the second quarter was 3.7 million barrels per day; capital and exploration expenditures were $4.6 billion in the second quarter; capital investments totaled $9.5 billion for first half of 2022; on track with full-year guidance

·     Continental Resources (CLR) Q2 adj EPS $3.47 vs. est. $3.18; Q2 revs $2.65B vs. est. $2.57B; Q2 2022 total production averaged 400.2 mboepd; updating its 2022 production expense per boe to $3.75 to $4.25 from $3.50 to $4.00

·     First Solar (FSLR) Q2 EPS $0.52 vs. est. $0.23; Q2 revs $621M vs. est. $604.02M; said earnings guidance lowered due to legacy systems business asset impairment in Chile and Japanese yen devaluation but raises year sales view; sees year sales $2.55B-$2.8B vs. est. $2.46B; sees year EPS loss (25c) to up $0.25 vs. est. loss of (-$0.07)

·     Edison Int’l (EIX) Q2 core EPS $0.94 vs. est. $0.92; Q2 revs $4.01B vs. est. $3.55B; reaffirms 2022 EPS guidance of $4.40-$4.70 and reiterates long-term EPS growth rate target of 5-7%

·     Eversource Energy (ES) 2Q EPS $0.84 vs est. $0.84 on revs $2.57B vs est. $2.31B; guides FY EPS $4.04-4.14 vs est. $4.11 excluding transaction and transition charges; reaffirmed long-term EPS growth rate from existing core regulated businesses in upper half +5-7%

·     Chart Industries (GTLS) lowers FY22 adjusted EPS view to $5.20-$5.60 from $5.35-$6.50 and cuts FY22 revenue view to $1.725B-$1.80B from $1.725B-$1.85B (est. $5.24 and $1.75B)

 

Financials

·     AllianceBernstein (AB) Q2 EPS $0.71, in-line with consensus and revs $971.44M vs est. $814M and down from $1.076B last year; total assets under management as of June 30, 2022 were $646.8B; total net outflows were $2.7B in q2, compared to net inflows of $11.4B in Q1

·     Hartford Financial (HIG) Q2 adj EPS $2.15 vs. est. $1.52; authorized new $3.0B share repurchase program, effective Aug. 1, 2022, through end of 2024; Property & Casualty written premiums rose 10% in Q2; Commercial Lines Q2 combined ratio of 87.3 improved 1.6 points

·     Getty Images (GETY)

·     Digital Realty (DLR) Q2 core FFO $1.72 vs. est. $1.64; lowers core FFO view to $6.75-$6.85 from $6.80-$6.90 (est. $6.84) and reduces FY22 revenue view to $4.65B-$4.75B from $4.70B-$4.80B (est. $4.73B)

 

Healthcare

·     Edwards Lifesciences (EW) 2Q adj EPS $0.63 vs est. $0.64 on revs $1.37B vs est. $1.4B; sees 3Q sales $1.3-1.37B vs est. $1.44B, sees underlying sales growth about +10%; sees FY sales $5.35-5.55B down from prior $5.5B-$6.0B and vs est. $5.71B and adj EPS at bottom end of original guidance range of $2.50-2.65 vs est. $2.56

·     Dexcom (DXCM) falls -16%; Q2 EPS $0.17 misses est. $0.19; Q2 revs rose 17% to $696.2M vs. est. $698.6M; sees FY22 revenue $2.86B-$2.91B below consensus $2.92B; sees gross margin of 65%; Q2 U.S. revenue growth of 11% and international revenue growth of 39% on a reported basis

·     Seagen Inc. (SGEN) 2Q EPS ($0.47) vs est. ($0.86) on revs $498Mm vs est. $437.6Mm; guides FY revs $1.71-1.795B vs 1.665-1.745 prior and est. 1.783B

 

Industrials & Materials

·     Casella Waste (CWST) 2Q adj EPS $0.36 vs est. $0.28 on revs $283.7Mm vs est. $251.6Mm; guides FY revs $1.035-1.05B vs est. $1.02B and adj EBITDA $238-242Mm vs est. $234.6Mm

·     Celanese (CE) Q2 adj EPS $4.99 vs. est. $4.57; Q2 sales rise 13% y/y to $2.49B vs. est. $2.42B

·     Chemours (CC) Q2 adj EPS $1.89 vs. est. $1.43; Q2 revs up 16% y/y to $1.9B vs. est. $1.84B; price was a positive contributor to the improved results, up 23%, partially offset by volume headwinds of (1%) and currency headwinds of (2%), on a y/y basis

·     Eastman Chemical (EMN) Q2 adj EPS $2.83 vs. est. $2.69; Q2 sales $2.78B vs. est. $2.77B; reaffirms FY22 adj EPS guidance of $9.50-$10.00 vs. est. $9.80; expect to continue raising prices, particularly in our specialty product lines, in response to persistently high inflation

·     L3Harris Technologies (LHX) Q2 EPS $3.23 vs. est. $3.15; Q2 revs $4.1B vs. est. $4.18B; guides FY22 EPS at low end of $13.35-$13.65 range (est. $13.37); guides FY22 revenue at low end of $17.3B-$17.7B range (est. $17.24B) and sees organic revenue growth up 1.0%-3.0%

·     Olin Corp. (OLN) Q2 EPS $2.76 vs. est. $2.54; Q2 sales $2.61B vs. est. $2.63B; sees year adj Ebitda $2.5B-$2.7B view

·     US Steel (X) announces a new $500 mln stock buyback authorization; Q2 EPS $3.86 vs. est. 43.87; Q2 revs $6.29B vs. est. $5.76B; Q2 adjusted EBITDA rose 26% y/y to $1.62B above est. $1.44B and steel shipments 4.18 million tons vs. 4,214 y/y

·     PPG Industries (PPG) files $2B mixed securities shelf

 

Technology, Media & Telecom

·     Apple Inc. (AAPL) rises 3%; Q3 EPS $1.20 vs est. $1.16; Q3 revs $82.96B vs. est. $82.81B; Q2 Products revenue $63.36B, down -0.9% y/y, iPhone revenue +2.8% y/y to $40.67B, Mac revenue down -10% y/y to $7.38B and wearables, home, and accessories down -7.9% y/y to $8.08B; said Q2 service revenue up 12% y/y to $19.60B; did not provide revenue guidance

·     Intel Corp. (INTC) falls -9%; Q2 adj EPS $0.29 vs. est. $0.69; Q2 revs $15.3B vs. est. $17.92B; guidance lower as sees Q3 EPS $0.35 on revs $15B-$16B, well below estimates of $0.87 and $18.62B; cuts FY22 adj EPS view to $2.30 from $3.60 and below consensus $3.42

·     Roku (ROKU) shares fall -25%; 2Q EPS ($0.82) vs est. ($0.69) on net revs $764Mm vs es.t $805.2Mm; ARPU $44.10 TTM +21%, added 1.8Mm incremental active accounts to reach 63.1Mm, qtrly streaming hours 20.7B -0.2B hrs qtr/qtr; for 2Q sees advertising spend (particularly in scatter market) will continue to be negatively impacted; sees 3Q revs approx $700Mm vs est. $901.7Mm and adj EBITDA ($75Mm) vs est. $25.6Mm; withdraws FY revs growth guide

·     KLA-Tencor (KLAC) Q4 adj EPS $5.81 vs. est. $5.50; Q4 revs $2.49B vs. est. $2.43B; sees Q1 adj EPS $5.70-$6.80 vs. est. $5.81 and Q1 revenue $2.475B-$2.725B vs. est. $2.52B; Cash flow from operations for the quarter and fiscal year was $819.2M and $3.31B

·     Five9 Inc. (FIVN) 2Q adj EPS $0.34 vs est. $0.18 on revs $189.4Mm vs est. $180Mm; sees 3Q adj EPS $0.31-0.33 vs est. $0.30 with revs $192.5-193.5Mm vs est. $192.3Mm; sees FY revs $780.5-782.5Mm vs est. $772.1Mm and adj EPS $1.38-1.40 vs est. $1.22

·     National Instruments (NATI) 2Q adj EPS $0.36 vs est. $0.0.11 on revs $396Mm vs est. $390Mm; sees 3Q revs $410-440Mm vs est. $422.8Mm and EPS $0.34-0.48 vs est. $0.29

·     Cohu Inc. (COHU) 2Q adj EPS $0.81 vs est. $0.71 on revs $217.2Mm vs est. $217Mm; sees 3Q sales $198-212Mm vs est. $214.5Mm

·     Verisign (VRSN) 2Q EPS $1.54 vs est. $1.52 on revs $352Mm vs est. $348.8Mm

·     Zendesk (ZEN) 2Q adj EPS $0.15 vs est. $0.12 on revs $407.2Mm vs est. $404.5Mm