Early Look
Thursday, June 2, 2022
|
Futures |
Up/Down |
% |
Last |
|
Dow |
130.00 |
0.40% |
32,928 |
|
S&P 500 |
21.25 |
0.51% |
4,120 |
|
Nasdaq |
87.50 |
0.69% |
12,638 |
S&P futures rising above +0.5% to 4,121 around the overnight highs of 4,121.75 and well-off overnight lows of 4,083.50, heading into a busy morning of economic data. WTI crude futures slump as much as 3% on FT report that Saudi Arabia may boost production if Russian output declines (OPEC+ meeting taking place today). Stocks are looking to recover after a broad sell-off Wednesday after JPMorgan CEO Jamie Dimon was quoted as saying “brace yourself for an economic hurricane caused by the Fed and Ukraine war”; Jamie Dimon worried about quantitative tightening and the war in the Ukraine and its impact on commodities, oil could hit $150 or $175 a barrel. Stocks finished modestly lower as Wall Street remained subdued after last week’s massive rebound. The Dow Jones ended -0.5%, the S&P 500 finished -0.8% and the Nasdaq Composite closed -0.7%, dipping back below the 12,000 level. Ten of the 11 S&P sectors finished lower. Financial stocks led the retreat, hurt by Dimon’s comments about the economy. In the bond market, the 10-year Treasury yield climbed 9 bps to 2.93% while the 2-year advanced 12 basis points to 2.66%. In Asian markets, The Nikkei Index dipped -44 points to 27,413, the Shanghai Index rose 13 points to 3,195, and the Hang Seng Index fell -212 points to 1% to 21,082. In Europe, the German DAX is up +0.65% or 90 points to 14,433, while the FTSE 100 is down about 1% or -75 points to 7,530.
Economic Calendar for Today
· 7:30 AM ET Challenger Layoffs for May
· 8:15 AM ET ADP Private Payrolls for May…est. 300K
· 8:30 AM ET Weekly Jobless Claims…est. 210K
· 8:30 AM EST Continuing Claims…est. 1.325M
· 8:30 AM ET Non-farm Productivity for Q1…est. (-7.5%)
· 8:30 AM ET Unit Labor Costs for Q1…est. 11.6%
· 10:00 AM ET Factory Orders M/M for April…est. +0.7%
· 10:00 AM ET Durable Goods Orders for April
· 10:30 AM ET Weekly EIA Natural Gas Inventory Data
· 12:00 PM ET New York Fed’s Logan Makes Closing Remarks
· 1:00 PM ET Fed’s Mester Discusses Economic Outlook
Earnings Calendar:
· Earnings Before the Open: CIEN, DBI, DLTH, HRL, LE, SCWX, SPTN, TTC
· Earnings After the Close: ASAN, COO, CRWD, CVGW, HCP, IDT, IOT, JOAN, NAPA, NX, OKTA, PD, PHR, TLYS, ZUMZ
Other Key Events:
· OPEC+ meets and is expected to stick to an oil production deal agreed last year
· Bernstein 38th Annual Strategic Decisions Conference, 6/1-6/3, in NY
· Benchmark Healthcare Conference (virtual), 6/2
· Cowen 50th Annual Technology, Media & Telecom Conference, 6/1-6/2, in NY
· Jefferies Software Conference, 6/1-6/2, in San Francisco
· Loop Capital 2022 Investor Conference (virtual), 6/1-6/2
· RBC Capital Consumer & Retail Conference, 6/1-6/2, in Boston
· Wells Fargo Energy Conference, 6/1-6/2, in Texas
· Wells Fargo West Coast MedTech Tour, 5/31-6/3, in Menlo Park, CA
Market Closing Prices Yesterday
· The S&P 500 Index dropped -30.92 points, or 0.75%, to 4,101.23
· The Dow Jones Industrial Average fell -176.89 points, or 0.54%, to 32,813.23
· The Nasdaq Composite slumped -86.93 points, or 0.72%, to 11,994.46
· The Russell 2000 Index declined -9.22 points, or 0.49% to 1,854.82
|
Macro |
Up/Down |
Last |
|
Nymex |
-3.05 |
112.21 |
|
Brent |
-2.81 |
113.48 |
|
Gold |
9.90 |
1,858.60 |
|
EUR/USD |
0.004 |
1.0686 |
|
JPY/USD |
-0.33 |
129.77 |
|
10-Year Note |
-0.018 |
2.913% |
World News
· The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -5.1 vs -33.7 last week. Bulls rise to 32% from 19.8%, Neutrals rise to 30.9% from 26.7%, and Bears fall to 37.1% from 53.5%
· Fed’s Bullard said yesterday that the Fed must follow through on forward guidance with rate hikes, “we have a good plan for now” in terms of having penciled in a series of 50 bps increases expects growth to continue and job market to stay strong through rate hikes, still wants to get federal-funds rate at around 3.5% by year’s end.
· San Francisco Fed President Mary Daly said the FOMC needed to get rates to neutral as fast as possible and wants to see the fed funds rate at 2.5% by year end. The market currently has that priced in for November.
· Russian forces now have majority control of key Ukrainian city Severodonetsk, officials say as war enters 99th day – Axios
· China’s State Council orders state-owned banks to set up $120bln line of credit for infrastructure projects. The meeting was chaired by Premier Li Keqiang – Bloomberg
Sector News Breakdown
Consumer
· GameStop (GME) 1Q EPS ($2.08) vs est. ($1.48) on sales $1.378B vs est. $1.22B, inventory $917.6Mm vs year ago $570.9Mm, cash & equivalent at qtr end $1.035B
· Hormel Foods (HRL) Q2 EPS $0.48 vs. est. $0.47; Q2 revs rose 19% to $3.1B vs. est. $3.07B; Q2 organic sales rose 10%; reaffirming our sales expectations and narrowing our earnings guidance range; effective tax rate for fiscal 2022 is expected to be between 20.5% and 22.5%.
· PVH Corp. (PVH) 1Q EPS $1.94 vs est. $1.61 on revs $2.12B vs est. $2.09B; guides 2Q revs -3-4% vs est. -2.25% and adj EPS about $2.00 vs est. $2.29; sees FY revs +1-2% vs est. +2.75% and adj EPS about $9.00 vs est. $9.01
· Blue Apron (APRN) is launching a new offering on Walmart.com. Starting today, consumers can purchase a selection of meal kits without a subscription, from classic menu items to family favorite recipes.
· Cedar Fair (FUN) reported that preliminary year-to-date net revenues through Monday, May 30 increased 21%, or $60M, to a record $343M when compared with the five-month period ended Monday, June 3, 2019
Energy
· Oil prices fall -2.5% to $112.50 after media reports Saudi Arabia indicated to western allies that it was prepared to raise oil production should Russia’s output fall substantially due to sanctions. “Saudi Arabia is aware of the risks and that it is not in their interests to lose control of oil prices,” said one person briefed on the kingdom’s thinking – Financial Times
· Magnolia Oil & Gas (MGY) announces proposed 7.5M share block trade by EnerVest
· Valaris (VAL) said that Equinor (EQNR) delivered a termination notice for the drilling contract that had been awarded to its DS-11 drillship, effective at the end of June. Valaris said its $2.5B total contract backlog as of May 2 included $428M related to the DS-11 contract.
· The U.S. exported 7.29M metric tons of liquefied natural gas (LNG) in May, the second highest on record, Reuters reported; May’s exports rose 5% from 6.93M tons in April and 12% from a year earlier
Financials
· nCino (NCNO) Q1 EPS loss (-$0.06) vs. est. loss (-$0.08); Q1 revs $94.2M vs. est. $91.38M; guides Q2 revenue $97M-$98M vs. est. $95.5M; sees Q2 subscription revenues between $81.5M-$82.5M; Q1 Subscription Revenues of $79.2M, up 55% y/y and organic Subscription Revenues of $65.6M, up 29% y/y
· Blue Owl (OWL) announces offering of 10.7M shares of Class A common stock for holders
· Riot Blockchain Inc (RIOT) said Jeff McGonegal will retire from his position as CFO and move into a new role as Senior Advisor to Riot as of August 15th, 2022
Healthcare
· Immunic (IMUX) reported top-line data from its phase 2 CALDOSE-1 trial of lead asset, vidofludimus calcium, the company’s selective oral DHODH inhibitor, in patients with moderate-to-severe ulcerative colitis, or UC. The trial did not achieve the primary endpoint
· Repare Therapeutics (RPTX) rises 18% after announced a worldwide license and collaboration agreement with Roche (RHHBY) for its leading cancer candidate RP-3500
· Concert Pharmaceuticals (CNCE) 10M share Secondary priced at $4.75
· Centessa Pharmaceuticals (CNTA) to discontinue clinical development of Lixivaptan for Autosomal Dominant Polycystic Kidney Disease (ADPKD)
Industrials & Materials
· Albemarle (ALB) downgraded to Neutral from Buy at UBS
· Ecolab (ECL) upgraded to Buy from Neutral at UBS
· Chicago lumber futures for July delivery fell on Wednesday by the exchange maximum $49, or -7.5% to $604.50 per 1,000 board feet, extending this year’s slump to 46% and nearly two-thirds below the peak of $1,733 per $1,000 board feet from about a year ago https://bit.ly/3xmmRvB
Technology, Media & Telecom
· American Superconductor (AMSC) 4Q EPS ($0.18) vs est. ($0.17) on revs $28.3Mm vs est. $27.4Mm; sees 1Q revs $23-26Mm vs est. $27.6Mm and adj net loss not to exceed $0.25/shr vs est. loss $0.17/shr
· C3.ai Inc. (AI) shares fall -21%; Q4 EPS loss (-$0.21) vs. est. loss (-$0.29); Q4 revs rose 38% Y/Y to $72.3M vs. est. $71.3M; sees Q1 revs $65M-$67M vs. est. $74.4M; Q4 subscription revenue was $56.3 million, an increase of 31% compared to $43.1 million one year ago
· Elastic NV (ESTC) Q4 EPS loss (-$0.16) vs. est. loss (-$0.22); Q4 revs rose 35% Y/Y to $239.4M vs. est. $230.2M; Adjusted gross margin 74.9% vs. 77.6% Y/Y; sees FY23 EPS loss (36c) to (28c), vs. consensus (28c) and FY23 revenue $1.08B-$1.086B vs. est. $1.08B
· Hewlett Packard Enterprises (HPE) 2Q adj EPS $0.44 vs est. $0.45 on revs $6.7B vs est. $6.78B; sees 3Q adj EPS $0.44-0.54 vs est. $0.52; sees FY revs +3-4% adj for currency vs est. +2.9% and adj EPS $1.96-2.10 vs est. $2.09
· MongoDB Inc. (MDB) 1Q adj EPS $0.20 vs est. ($0.09) on revs $285.4M vs est. $266.5Mm; sees 2Q revs $279-282Mm vs est. $277.9Mm and adj EPS ($0.31) to ($0.28) vs est. ($0.14); guides FY revs $1.172-1.192B vs est. $1.181B and adj EPS $($0.31) to ($0.16) vs est. ($0.37)
· NetApp Inc. (NTAP) 4Q adj EPS $1.42 vs est. $1.28 on revs $1.68B vs est. $1.68B; sees 1Q net revs $1.475-1.625B vs est. $1.556B and adj EPS $1.05-1.15 vs est. $1.09; sees FY adj EPS $5.40-5.60 vs est. $5.42
· Pure Storage (PSTG) Q1 adj EPS $0.25 vs. est. $0.04; Q1 revs $620.4M vs. est. $522M; sees Q2 revenue $635M vs est. $606.28M; sees Q2 adjusted operating margin approximately 11.8%; raises FY adj. operating income to $320M from $300M prior on better op. margin
· Semtech (SMTC) 1Q adj EPS $0.80 vs est. $0.76 on sales $202.1Mm vs est. $202.9Mm; guides 2Q sales $203-213Mm vs est. $210.2Mm and adj EPS $0.80-0.90 vs est. $0.83
· SentinelOne (S) Q1 EPS loss ($0.33) vs est. loss ($0.24); Q1 revs rose 109% Y/Y to $78.3M vs est. $74.64M; sees Q2 2023 revenue $95-96M vs est. $84.95M and FY23 revs $403-407M vs est. $374.17M
· Veeva Systems (VEEV) Q1 adj EPS $0.99 vs. est. $0.92; Q1 revs $505.1M vs. est. $495.93M; sees Q2 adj EPS $1.00-$1.01 vs. est. $0.99 on revs $529M-$531M vs. est. $529.71M; Q1 Adjusted operating margin 39.5% vs. 41.8% Y/Y and adjusted gross margin 74.8%
· Credo Technology (CRDO) 4Q adj EPS $0.02 vs est. ($0.12) on revs $37.5Mm vs est. $36.4Mm; sees 1Q revs $43.5-47.5Mm vs est. $42.8Mm, adj gr mgn 59-61% and adj op exp $21.5-23.5Mm
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.