Early Look

Thursday, March 3, 2022

Futures	Up/Down	%	Last
Dow	-39.00	0.12%	33,810
S&P 500	-7.25	0.18%	4,374
Nasdaq	-44.50	0.31%	14,195

 

 

Following a stealth rally most of the day on Wednesday for U.S. averages, S&P futures are slipping, down below the 4,380 level (off yest highs around 4,400) – trading in one of the narrowest ranges of the year overnight with highs at 4,392.75 and lows 4,369.50 ahead of a busy day of economic data and day-2 of testimony for Fed Chairman Powell on Capitol Hill on the economy and monetary policy. All main U.S. indexes gained over 1.5% yesterday, paced by gains in the Russell 2000 as financials surged amid a spike in yields. The U.S. dollar, and crude (now up above $113 per barrel) were up while gold and Bitcoin slipped, and the U.S. 10-Year Treasury yield rises over 15 bps to around highs of 1.88%. Federal Reserve Chair Jerome Powell signaled the central bank would likely raise interest rates at the March meeting less than some investors had feared, as his comments helped calm investors amid anxiety over Russia’s invasion of Ukraine. Among yesterday’s top gainers, transports, banks, and semiconductor chips helped pace the gains along with materials and energy. After dipping below 1.70% on Tuesday, the 10-yr Treasury yield is back up to the 1.90% area. In Asian markets, The Nikkei Index rose 0.7% to 26,577, the Shanghai Index slipped a few points to 3,481, and the Hang Seng Index climbed 0.55% to 22,467. In Europe, the German DAX is down about -0.6% to 13,910, while the FTSE 100 falls -0.5% to drop below 7,400. The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -11 vs -30.3 last week as bullish sentiment rises to 30.4% from 23.4%, neutrals rise to 28.2% from 22.9% and bearish sentiment declines to 41.4% from 53.7%. No major developments in Ukraine/Russia overnight.

Economic Calendar for Today

·     7:30 AM ET         Challenger Layoffs for February

·     8:30 AM ET          Weekly Jobless Claims…est. 225K

·     8:30 AM EST        Continuing Claims…est. 1.475M

·     8:30 AM ET          Nonfarm productivity for Q4 (revised)…est. +0.3%

·     8:30 AM ET          Unit Labor Costs for Q4 (revised)…est. +6.7%

·     9:45 AM ET          Markit Composite PMI, Feb-F

·     9:45 AM ET          Markit Services PMI, Feb-F

·     10:00 AM ET        Factory orders MoM for January…est. +0.7%

·     10:00 AM ET        ISM Non-Manufacturing PMI, for February…est. 61.0

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

 

Earnings Calendar:

·     Earnings Before the Open: ABUS, ATRS, BBY, BIG, BJ, BURL, CNSL, CRAI, GMS, GOGO, KR, MCS, MEI, PBPB, SOHO, STXS, SUP, TTC, TWI, UTZ, WHF

·     Earnings After the Close: AVAV, AVGO, CEMI, COO, COST, CVT, DUOL, EGLE, EOLS, ESTC, EFVM, FNKO, GPS, MRVL, NCMI, NX, OOMA, PAYO, PBYI, SG, SWBI, VERI, VZIO, XPOF

 

Other Key Events:

·     KBW Fintech Payments Conference, 3/1-3/3, in New York

·     Susquehanna Technology Conference (virtual), 3/3-3/4

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 80.28 points, or 1.86%, to 4,386.54

·     The Dow Jones Industrial Average rose 596.40 points, or 1.79%, to 33,891.35

·     The Nasdaq Composite surged 219.56 points, or 1.62%, to 13,752.02

·     The Russell 2000 Index advanced 50.37 points, or 2.51% to 2,058.87

 

 

Macro	Up/Down	Last
Nymex	2.70	113.30
Brent	2.01	114.94
Gold	9.70	1,938.45
EUR/USD	-0.0037	1.1083
JPY/USD	0.24	115.74
10-Year Note	+0.027	1.856%

 

 

Sector News Breakdown

Consumer

·     American Eagle (AEO) 4Q adj EPS $0.35 vs est. $0.35 on revs $1.51B vs est. $1.51B and gross margin 32.4%, inventory units +14% qtr-end, reflecting earlier deliveries of spring shipments; guides FY op profit $550-600Mm vs est. $655Mm, says taking cautious view of 2022; sees continued freight pressures driving earnings decline in 1H

·     Big Lots (BIG) Q4 adj EPS $1.75 vs. est. $1.89; Q4 revs $1.73B vs. est. $1.72B; decline to last year was driven by a comp sales decrease of 2.3%, as the company lapped 7.9% comparable sales increase last year; sees Q1 adjusted EPS $1.10-$1.20 vs. est. $1.28; Q4 results negatively impacted by around $0.30/share due to adverse shrink results

·     ChargePoint (CHPT) 4Q EPS ($0.23) vs est. ($0.15) on revs $80.7Mm vs est. $76.7Mm; guides 1Q revs $72-77Mm vs est. $81.7Mm and RY revs $450-500Mm vs est. $378.7Mm; sees adj op exp $350-370Mm

·     Fortune Brands (FBHS) announces $750M share buyback authorization

·     MGM Resorts (MGM) announces $2B stock buyback plan

·     Planet Fitness (PLNT) files to sell 4.16M shares of common stock for holders

·     Rush Street Interactive (RSI) Q4 adjusted EPS loss (-$0.15) vs. est. loss (-$0.11); Q4 revs $131M vs. est. $136.57M; guides year revs $580M-$630M vs. est. $611M

·     Victoria’s Secret & Co (VSCO) Q4 EPS $2.70 vs est. $2.63 on sales $2.175B vs est. $2.14B; sees Q1 sales $1.425B-$1.495B vs est. $1.52B, FY sales flat to up low-single digits vs FY21 $6.785B (est. $6.95B); announced a new $250M share repurchase program after completing its accelerated $250M program announced in December

·     American Public Education (APEI) 4Q EPS $0.50 vs est. $0.35 on revs $154Mm vs est. $152.1Mm; guides 1Q revs $155-159Mm vs est. $153.4Mm and adj EBITDA $17.7-19.8Mm vs est. $23.1Mm

 

Energy, Industrials and Materials

·     PNM Resources (PNM) files mixed securities shelf

·     Greif (GEF) Q1 adj EPS $1.28 vs. est. $1.19; Q1 revs $1.56B vs. est. $1.46B; Q1 adj EBITDA of $196.8 million, an increase of $58.3M compared to Adjusted EBITDA of $138.5M; net cash provided by operating activities increased by $10.9M-$22.4M; year EPS $6.30-$6.90 vs. $6.15

·     Honeywell (HON) said it’s reaffirming its 1Q and FY 2022 guidance; upgrades long-term financial framework, including organic growth, margin expansion and long-term segment margin targets; increasing capital deployment commitments

·     Summit Materials (SUM) announces $250M share buyback

 

Financials

·     Barrett Business Service (BBSI) Q4 EPS $1.40 vs. est. $0.99; Q4 revs rose 10% to $256.57M vs. est. $248.69M; Q4 gross billings were up 13% to $1.81B; authorizes new $75M share buyback; sees 2022 gross billings growth of 7%-9%

·     Flywire Corporation (FLYW) Q4 EPS (11c) vs est. (5c) on revs $51.4M vs est. $41.9M, total payment volume +75% to $3.1B; sees FY revenue $266M-$276M vs est. $238.4M

·     Remitly Global Inc. (RELY) 4Q EPS ($0.10) vs est. ($0.23) on revs $135.3Mm vs est. $125.4Mm; guides FY revs $605-615Mm vs est. $602.4Mm

 

Healthcare

·     AstraZeneca PLC (AZN) said that its rare disease group Alexion has closed an exclusive global deal and license agreement with Neurimmune AG to commercialize NI006, an investigational antibody in Phase 1b aimed at treating a cardiomyopathy.

·     Cassava Sciences (SAVA) warned late Wednesday that it may face a clinical hold on its trials for simufilam after the U.S. FDA imposed them this year on two competitors that are also working on Alzheimer’s candidates

·     OrthoPediatrics Corp. (KIDS) 4Q adj EPS ($0.24) vs est. ($0.30) on revs $24.8Mm vs est. $24.7Mm; guides FY revs $118-121Mm vs est. $119.2Mm, expects positive adj EBITDA vs est. $4.79Mm

·     Roche (RHHBY) is planning a new phase 3 Alzheimer’s disease prevention trial (SKYLINE, NCT05256134) of its investigational anti-amyloid antibody gantenerumab.

 

Technology, Media & Telecom

·     Anaplan inc. (PLAN) Q4 adj EPS in-line ($0.11) on revenue $162.7M vs est. $154.7M; sees Q1 revenue $164.5M-$165.5M vs est. $163.6M, FY revenue $754M vs est. $729.7M, full year operating margin between -4.5% and -3.5%

·     Box Inc. (BOX) shares rise 11%; 4Q adj EPS $0.24 vs est. $0.23 on revs $233.4Mm vs est. $228.8Mm; sees 1Q adj EPS $0.24-0.25 vs est. $0.24 and revs $233-235Mm vs est. $230Mm; guides FY revs $990-996Mm vs est. $980.5Mm

·     C3.AI Inc. (AI) 3Q adj EPS ($0.07) vs est. ($0.27) on revs $69.8Mm vs est. $67.2Mm; guides FY revs $252Mm vs est. $249.5Mm and adj op loss $90-94Mm vs est. loss $105Mm

·     Digimarc Corp. (DMRC) Q4 EPS loss (-$0.50) vs. est. loss (-$0.51); Q4 revs rose 28% to $7.1M vs. est. $6.63M

·     Nutanix (NTNX) Q2 adj EPS loss (-$0.03) vs. est. loss (-$0.19); Q2 revs $413.1M vs. est. $406.9M; sees Q3 revs $395M-$400M vs. est. $400.92M and Q3 adjusted gross margin roughly 82%; guides year revs $1,625B-$1.63B vs. est. $1.63B

·     Okta Inc. (OKTA) 4Q adj EPS ($0.18) vs est. ($0.24) on revs $383Mm vs est. $359.4Mm; guides 1Q revs $388-390Mm vs est. $374.9Mm and adj EPS loss $0.34-0.35 vs est. loss $0.20; guides FY revs $1.78-1.79B vs est. $1.75B and adj EPS loss $1.24-1.27 vs est. loss $0.49

·     Pure Storage (PSTG) Q4 adj EPS $0.36 vs. est. $0.26; Q4 revs $708.6M vs. est. $629.2M; sees Q1 revenue $520M vs. est. $515.25M and year revs $2.6B vs. est. $2.48B; Sees FY23 adjusted operating income $300M

·     Snowflake (SNOW) shares fall over 20%; Q4 EPS ($0.43) vs est. $0.03 on revenue $383.8M vs est. $372.6M; sees Q1 revenue $383M-$388M vs est. $409.9M, FY23 revenue rising 65-67% YoY to $1.88B-$1.9B vs est. $2.01B; announced definitive agreement to acquire Streamlit

·     Splunk (SPLK) 4Q revs $901Mm vs est. $775.6Mm, qtrly cloud ARR $1.34B +65%, qtrly total ARR $3.12B +32%; guides 1Q revs $615-635Mm vs est. $609.8Mm; guides FY revs $3.25-3.3B vs est. $3B

·     Turtle Beach Corp. (HEAR) Q4 adj EPS $0.16 vs. est. $0.23; Q4 revs $109.4M vs. est. $108.2M; sees 2022 EPS $0.70-$1.20 vs. est. $1.14; sees 2022 revenue flat, plus or minus 5%, from 2021; Q4 was 32.5% compared to 35.8% in the fourth quarter of 2020.

·     Veeva Systems (VEEV) Q4 EPS $0.90 vs. est. $0.88; Q4 revs rose 22% to $485.5M vs. est. $476.2M; guides Q1 EPS $0.91-$0.92 vs. est. $0.94; Q1 revs $494M-$496M vs. est. $505.5M; Fiscal Year 2022 Subscription Services Revenues of $1,484.0M, up 26% y/y; Q4 Subscription Services Revenues of $395.7M, up 23% y/y

·     Western Digital (WDC) cuts Q3 adjusted EPS view to $1.30-$1.60 from prior view of $1.50-$1.80 and vs. consensus $1.50; cuts Q3 revenue view to $4.2B-$4.4B from $4.45B-$4.65B (est. $4.06B); updated its outlook due to the recent chemical contamination issue

·     Zuora (ZUO) Q4 adj EPS loss (-$0.01) vs. est. loss (-$0.02); Q4 revs $90.7M vs. est. $90.9M; guides Q1 EPS loss (1c-2c) vs. est. loss (-$0.01); announces $400 million strategic investment from Silver Lake to accelerate growth and extend leadership in the subscription economy; also agreed to issue Silver Lake warrants to purchase up to 7.5 mln shares of class a common stock

·     Samsara Inc. (IOT) Q4 adj EPS ($0.05) vs est. ($0.07) on revenue $125.8M vs est. $116.3M; sees Q1 revenue $130M-$132M vs est. $124.3M, FY23 revenue $568M-$578M vs est. $548.1M