Early Look

Wednesday, June 8, 2022

Futures	Up/Down	%	Last
Dow	-164.00	0.49%	33,002
S&P 500	-19.25	0.47%	4,139
Nasdaq	-49.50	0.39%	12,662

 

 

U.S. futures are drifting lower, with the S&P looking down -0.45% at 4,138 (near overnight lows) heading into tomorrow’s ECB policy meeting and as inflation fears and rising interest rate concerns remain. Stocks rose Tuesday even after Target (TGT) issued a warning about its current quarter’s profits, which put pressure on the broader retail sector. Financial’s in Europe slide overnight after Credit Suisse Group AG (CS) warned it is likely to post a loss for Q2, as it continues to face challenging market conditions. Oil prices are looking at fresh 13-week highs, rising above $120 per barrel for WTI crude. In Asian markets, The Nikkei Index rose 290 points to 28,234, the Shanghai Index gained 22 points to 3,263, and the Hang Seng Index advanced 482 points to 2.24% to 22,014. In Europe, markets are lower after Credit Suisse issued a profit warning for the quarter, as the German DAX is down -0.5% to 14,482, while the FTSE 100 slips -0.25% to 7,578. Yen weakness extends in European trade, with JPY hitting the weakest level since 2002 at 133.77/USD after BOJ’s Kuroda reiterated easing stance. Bitcoin prices lower again after a late day surge pared Tuesday losses, down about 3% at $30,400. U.S. data is light today. Weekly MBA mortgage applications, which have been trending lower this year in response to higher U.S. mortgage rates.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 39.25 points, or 0.95%, to 4,160.68

·     The Dow Jones Industrial Average rose 246.36 points, or 0.80%, to 33,180.14

·     The Nasdaq Composite jumped 113.86 points, or 0.94%, to 12,175.23

·     The Russell 2000 Index advanced 29.68 points, or 1.57% to 1,919.56

 

Economic Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     10:00 AM ET        Wholesale Inventories M/M for April

·     10:30 AM ET        Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: A LOT, BF/B, CPB, DAKT, JILL, LOVE, OLLI, THO, VRA

·     Earnings After the Close: ABM, AMSWA, AVO, BASE, FIVE, GEF, MIND, OXM, QMCO, SKIL, STRM, YEXT

 

Other Key Events:

·     Baird Global Consumer, Technology & Services Conference, 6/6-6/8, in NY

·     Bank America Global Technology Conference, 6/7-6/9, in San Francisco

·     Citigroup Consumer Access Day, 6/8-6/9, in NY

·     Cowen Sustainability & Energy Transition Summit (virtual), 6/7-6/8

·     Deutsche Bank 13th Annual Global Materials Conference, 6/8-6/9, in NY

·     Oppenheimer FinTech Virtual Bus Tour (virtual), 6/6-6/9

·     RBC Capital Global Energy, Power & Infrastructure Conference, 6/7-6/8, in NY

·     REITweek 2022 Investor Conference, 6/7-6/9, in NY

·     RSA Conference 2022, 6/6-6/9, in San Francisco

·     UBS Global Industrials & Transportation Conference, 6/7-6/8, in NY

·     William Blair 42nd Annual Growth Stock Conference, 6/6-6/9, in Chicago

·     China Exports and Imports for May

 

 

Macro	Up/Down	Last
Nymex	1.54	120.96
Brent	1.42	121.99
Gold	-0.40	1,850.90
EUR/USD	0.001	1.0709
JPY/USD	1.28	133.86
10-Year Note	+0.037	3.007%

 

 

Sector News Breakdown

Consumer

·     Limoneira (LMNR) Q2 adj EPS $0.10 vs. est. $0.07; Q2 revs $46.75M vs. est. $48.32M; reaffirms guidance of fresh lemon volumes 4.5M-5M cartons for FY22 and expects avocado volumes to be in the range of 6.0M-7M pounds for fiscal year 2022

·     Thor Industries (THO) Q3 EPS $6.32 vs. est. $4.77; Q3 revs $4.66B vs. est. $4.18B; expect calendar year 2022 North American RV industry retail sales of between 460,000 and 480,000 units; Consolidated RV backlog as of April 30, 2022 was $13.88 billion

·     Torrid (CURV) Q1 EPS $0.23 vs. est. $0.20; Q1 revs $328.4M vs. est. $303.95M; sees Q2 revs $350M-$360M vs. rest. $359.4M; backs FY22 revenue view $1.3B-$1.365B and backs FY22 adjusted EBITDA view $195M-$220M

·     Casey’s General Stores (CASY) raises dividend to $0.38 from prior dividend of $0.35

·     DiDi Global (DIDI) is considering buying a stake in state-backed Sinomach Automobile’s electric-vehicle unit – Reuters

 

Energy

·     Efforts by OPEC+ oil producers to boost output are “not encouraging”, UAE energy minister Suhail al-Mazrouei said, noting the group was currently 2.6 million barrels per day short of its target – Reuters

·     The American Petroleum Institute (API) reported weekly crude inventories rose 1.9M barrels, inventories at Cushing fell -1.8M barrels, reported gasoline inventories rose 1.8M barrels and distillates rose 3.4M barrels

·     Northern Oil and Gas (NOG) agreed to acquire non-operated interests in North Dakota’s Williston Basin for $170M plus an additional $5M if WTI oil prices exceed $92.50/bbl at year-end 2022.

·     U.S. solar installations sank 52% Q/Q and 24% Y/Y in Q1 2022 to the lowest quarterly total in two years, according to a new report from the Solar Energy Industries Association and Wood Mackenzie. The U.S. solar market installed just 3.9 GW of solar capacity in Q1. But residential solar enjoyed its best-ever quarter, with 1.2 GWdc installed, up 5% Q/Q and 30% Y/Y.

 

Financials

·     Credit Suisse Group AG (CS) said it is likely to post a loss for Q2, as it continues to face challenging market conditions while it presses on with a restructuring; said its investment bank performance was depressed in April and May, and the unit will likely post a quarterly loss; said it plans to keep a common equity Tier 1 ratio of around 13.5% in the short term

·     Credit Suisse (CS) is considering a new round of job cuts after a Q2 profit warning on Wednesday, Bloomberg reports; the bank is mulling reducing the headcount across divisions, including investment banking and wealth management in different regions

·     Wall Street’s regulator is about to announce rule changes that would force trading firms to directly compete to execute trades from retail investors in a bid to boost competition for orders, according to four industry sources – Reuters reported https://reut.rs/3tnSqUh

·     Wintrust Financial (WFTC) 3M share Spot Secondary priced at $86.00

 

Healthcare

·     Novavax Inc. (NVAX) rises 17% after the FDA’s Vaccines and Related Biological Products Advisory Committee recommended that the FDA grant Emergency Use Authorization for the Novavax Covid-19 vaccine for individuals aged 18 years and older. In the phase III trial, the Novavax vaccine demonstrated 90.4% efficacy with a reassuring safety profile. Serious and severe adverse events were low in number and balanced between vaccine and placebo groups.

·     MediciNova (MNOV) announces positive top-line results from phase 2 trial of MN-166 (Ibudilast) in hospitalized #COVID19 patients at risk for ARDS

·     DBV Technologies (DBVT) said its phase 3 trial assessing its Viaskin Peanut for the treatment of peanut allergies in toddlers aged 1 to 3 years met its main goal.

 

Industrials & Materials

·     O-I Glass (OI) said it now expected its Q2 adjusted earnings to exceed its previous guidance range; now anticipates Q2 adj. EPS to exceed $0.65, compared to its previous expected range of $0.55–$0.60 (est. $0.58)

 

Technology, Media & Telecom

·     Intel Corp. (INTC): Citi lowers its estimates on Intel following the chipmaker’s comments at a conference where the management mentioned that circumstances are worse than expected during the quarter

·     Taiwan Semiconductor (TSM) maintained its strong revenue growth forecast for the current year saying demand remains solid for its chips; expects its revenue to increase by about 30% this year from last year’s 24.9% in U.S. dollar terms, in line with what the company projected in April.

·     Kingsoft Cloud Holdings Ltd (KC) said it expects our adjusted gross margin will be higher in q2 than in q1 and adjusted EBITDA margin will breakeven in q4 of 2022

·     Guidewire (GWRE) Q3 adj EPS loss (26c) vs. est. loss (27c); Q3 revs $197.4M vs. est. $187.69M; raises FY22 revenue view to $794M-$800M from $784M-$792M and ups FY22 adjusted operating income view to ($53M)-($47M) from ($50M)-($42M)

·     Paycom Software (PAYC) boosts, extends stock buyback plan to $550.0M

·     Smartsheet (SMAR) Q1 adj EPS loss (-$0.18) vs. est. loss (-$0.19); Q1 revs rose 44% y/y to $168.3M vs. est. $162.55M; raises FY23 adjusted EPS view to (67c)-(59c) from (70c)-(62c) and ups FY23 revenue view to $756M-$761M from $750M-$755M (est. $752.6M)

·     Verint (VRNT) Q1 adj EPS $0.52 vs. est. $0.47; Q1 revs $217.906M vs. est. $215.42M; reaffirms FY23 EPS view midpoint of $2.50 and reaffirms FY23 guidance of $940M plus/minus 2%vs. consensus $943.64M

·     Western Digital (WDC) announced that it is reviewing potential strategic alternatives aimed at further optimizing long-term value for its shareholders

·     Spotify Technology SA (SPOT) will host its first investor day since going public in 2018 on Wednesday