Morning Preview: May 10, 2022

Auto PostDaily Market Report

Early Look

Tuesday, May 10, 2022

Futures

Up/Down

%

Last

Dow

282.00

0.88%

32,443

S&P 500

39.25

1.00%

4,027

Nasdaq

180.50

1.48%

12,374

 

 

U.S. futures are pointing to a higher open as investors look for a tradeable bounce to stick following the recent carnage in stock markets. The brutal run for U.S. stock markets continued Monday as the “sell in May, go away” saying has held true thru the first week of the month, headlined by a broad sector sell-off. The Nasdaq has posted a 25.4% Year-to-Date drop to start the year, easily the worst start to a year on record for the Nasdaq according to Bespoke as through 88 trading days: 2022: -25.4%, followed by 1973: -17.2%, 2002: -13.0% and 2001: -11.0%. The Nasdaq also posted its 3rd 4%+ decline in the last 7 trading days (and 2 of the last 3 trading days), as the Federal Reserve’s aggressive tightening path and China’s Covid lockdowns worsen the outlook for economic growth, and surging Treasury yields and inflation impact high growth stocks. All eyes on inflation data this week with consumer prices (CPI) for April expected on Wednesday 8:30 AM. Investors hoping to see that CPI has peaked or see a possible dip (est. core CPI +0.4% M/M and core prices Y/Y +6% – while headline CPI M/M est. +0.2% and Y/Y +8.1% for April). Producer Prices (PPI) are expected the day after on 5/12.

 

In Asian markets, The Nikkei Index dropped -152 points or 0.58% to 26,167, the Shanghai Index gains over 1% to 3,035, and the Hang Seng Index falls -1.84% or 368 points to 19,633. In Europe, the German DAX gains 190 points to 1.43% to 13,575, while the FTSE 100 is higher by 0.65% to 7,265. The U.S. dollar bounces to morning highs after brief overnight weakness, as the dollar index (DXY) rises +0.2% to 103.85 (off yesterday 20-yr highs above 104), while Treasury yields steady, as the 10-year stands at 3%, off yesterday highs above 3.2%. Bitcoin trying to recover after a 14% drop on Monday, rising 1.3% to $31,350 after hitting overnight lows below $30K. Oil prices are down around $101.50, but off overnight lows of $100.44

Market Closing Prices Yesterday

·     The S&P 500 Index tumbled -132.10 points, or 3.20%, to 3,991.24

·     The Dow Jones Industrial Average fell -653.67 points, or 1.99%, to 32,245.70

·     The Nasdaq Composite plunged -521.41 points, or 4.29%, to 11,623.25

·     The Russell 2000 Index declined -77.48 points, or 4.21% to 1,762.08

 

Economic Calendar for Today

·     6:00 AM ET        NFIB Small Business Optimism for April

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     1:00 PM ET         U.S. Treasury to sell $45B in 3-year notes

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AGEN, AHCO, AMRS, ARMK, AVXL, AVYA, AZEK, BCO, BLDE, BLDR, CCO, CEVA, CHH, CRNC, DBD, DM, DXPE, EPC, EPZM, EVRI, EYE, FSTX, FWRG, H, HAE, HL, IGT, IIVI, KNBE, KPLT, LCII, LFG, MBUU, MIDD, MPLN, NCLH, NXST, PLNT, PTON, QTRX, REYN, RGS, RMBL, SEAT, SYY, TDG, TDW, TLS, TPG, TTGT, URGN, UWMC, VERX, VTNR, WHF, WKHS, WMG

·     Earnings After the Close: AIRG, AMBC, APEI, A RLO, ARRY, ARWR, AVGR, AXON, BIRD, BOOT, CALA, CLSK, CNVY, COIN, CPRX, CUTR DAR, DERM, DNAY, DOMA, DV, EA, EGHT, ELY, EPM, EXEL, FLYW, FOXA, GBDC, GMED, GO, GOCO, GRWG, HALO, HCAT, HRB, ID, INO, IPAR, JAMF, LMB, MODN, MTTR, NSTG, OMER, OPNT, OSUR, OXY, PANL, PAR, PLBY, PRCH, PROG, PRPL, RBLX, REAL, RPAY, RVNC, RXT, SALM, SCSC, SFT, SOFI, SWCH, TTD, U, VEC, WELL, WES, WYNN, XL, YELL, ZETA, ZVO

 

Other Key Events:

·     BTIG Annual Housing Ecosystem Conference, 5/10-5/11 in NY

·     Citigroup Global Energy, Utilities and Climate Technology Conference, 5/10-5/11, in Boston

·     Goldman Sachs Industrials & Materials Conference, 5/10-5/12, in NY

·     UBS Pan European Small & Mid-Cap Conference, 5/10-5/12, in London

·     China CPI, PPI for April

·     European Society for Radiotherapy and Oncology, 5/6-5/10, in Denmark

 

 

Macro

Up/Down

Last

Nymex

-1.72

101.37

Brent

-1.89

104.05

Gold

-1.80

1,856.80

EUR/USD

-0.0011

1.0545

JPY/USD

-0.10

130.15

10-Year Note

-0.069

3.011%

 

 

World News

·     U.S. NFIB business optimism index actual 93.2 vs. forecast 92.9, and vs. previous 93.20

·     German May ZEW Economist Expectations -34.3 vs -41.0 in April; German May ZEW Current Conditions -36.5 vs -30.8 in April

·     European Commission plans new EU debt issuance to cover Ukraine’s short-term €15bn financing needs

 

Sector News Breakdown

Consumer

·     AMC Entertainment (AMC) Q1 adj EPS loss (-$0.52) vs. est. loss (-$0.63); Q1 revs rose to $785.7M vs. est. $743.4M; Consolidated attendance 39.08 million vs. 6.80 million y/y and U.S. markets attendance 25.79 million; Q2 box office down 38% vs. 2019; YTD box office down 42% vs. 2019

·     Aramark (ARMK) Q2 adjusted EPS $0.22 in-line with ests and revs $3.9B vs. est. $3.78B; announced its plan to separate Aramark Uniform Services into an independent, publicly traded company.

·     CarGurus (CARG) 1Q adj EPS $0.36 vs est. $0.35 on revs $430.6Mm vs est. $403.1Mm; sees 2Q revs $480-510Mm vs est. $452.6Mm and adj EPS $0.26-0.29 vs est. $0.39

·     General Motors (GM) Cathie Wood’s fund on Monday marked its first purchase of shares in U.S. automaker General Motors Co., according to trading data from ARK compiled by Bloomberg. Wood’s firm ARK Investment Management LLC bought 158,187 shares

·     Planet Fitness (PLNT) Q1 adj EPS $0.32 vs. est. $0.27; Q1 revs $186.7M vs. est. $186.96M; Q1 system-wide same store sales increased 15.9%; sees 2022 adj EPS up mid 80% range; ends q1 with total membership of more than 16.2 mln

·     Tesla Inc (TSLA) has halted most of its production at its Shanghai plant due to problems securing parts for its electric vehicles; the plant plans to manufacture less than 200 vehicles on Tuesday, far less than the roughly 1,200 units it has been building each day – Reuters reported citing an internal memo

·     Tesla, Inc (TSLA) is recalling certain 2021-2022 Model S, Model X, and 2022 Model 3 and Model Y vehicles operating certain firmware releases; recalling 129,960 units due to infotainment CPU may overheat during the preparation of fast charging, causing the CPU to lag or restart

·     ThredUP (TDUP) Q1 EPS loss (21c) vs. est. loss (20c); Q1 revs $72.7M vs. est. $71.29M; guides Q2 revs below consensus and cuts FY22 revenue view to $315M-$325M from $330M-$340M and sees FY22 adjusted EBTIDA margin loss in range of 16%-14%

·     Trex Inc. (TREX) Q1 EPS $0.62 vs. est. $0.54; Q1 revs rose 38% to $339M vs. est. $$326.9M; guides Q2 revs $375M-$385M vs. est. $376.5M; reaffirm guidance for full year 2022 incremental ebitda margin of 30% to 35% and sees year revs double-digit growth

·     Vroom Inc. (VRM) 1Q adj EPS ($0.71) vs est. ($1.01) on revs $923.8Mm vs est. $878.1Mm; announces Tom Shortt as CEO; announces business realignment plan to prioritize unit economics, reduce operating expense and maximize liquidity

 

Energy

·     Magnolia Oil & Gas (MGY) Q1 EPS $0.90 vs. est. $0.88; Q1 revs $377.84M vs. est. $338.18M; currently expect D&C capital to be about $400M for 2022, compared to earlier guidance of $350M

·     Plug Power (PLUG) 1Q EPS ($0.27) vs est. ($0.16) on revs $140.8Mm vs est. $144.5Mm; sees 2Q margins remain under pressure; expects normal 30/70 seasonality in revs to continue in 2022; reaffirms FY targets

·     Gevo Inc. (GEVO) 1Q adj EPS ($0.08) vs est. ($0.07) on revs $0.23Mm vs est. $0.11Mm

 

Financials

·     Lemonade Inc. (LMND) 1Q EPS ($1.21) vs est. ($1.43) on revs $44.3Mm vs est. $43.2Mm; guides 2Q revs $46-48Mm vs est. $51.8Mm and FY revs $205-208Mm vs est. $216.5Mm

·     Simon Property Group (SPG) 1Q FFO/shr $2.78 vs est. $2.73, occupancy 93.3%, revs $1.3B vs est. $1.18B; guides FY adj FFO/shr $11.60-11.75 vs est. $11.71; says may repurchase up to $2B common stock over next 24 months as market conditions warrant

·     Upstart Holdings (UPST) shares -48%; Q1 adj EPS $0.61 vs. est. $0.53; Q1 revs $310.3M vs. est. $303.3M; but guides Q2 revs $295M-$305M below the $337M estimate; guides year revs about $1.25B, below prior estimate $1.4B

·     Brighthouse Financial (BHF) Q1 adj EPS $3.79 vs. est. $3.50; Q1 revs $2.74B vs. est. $2.25B; Estimated combined risk-based capital ratio between 450% and 470%; holding company liquid assets of $1.4 billion

·     TaskUs (TASK) Q1 adj EPS $0.34 vs. est. $0.32; Q1 revs $239.68M vs. est. $230.81M; said saw Q1 Y/Y organic revenue growth of over 56.8% and had approximately 5,700 net new TaskUs teammates join us last quarter; guides Q2 revs above views and reaffirms year revs

 

Healthcare

·     Novavax (NVAX) shares fell -11%; Q1 EPS $2.56 vs. est. $2.69; Q1 revs $704M vs. est. $845.2M; backs FY22 revenue view $4B-$5B vs. est. $4.49B; expect to initiate prevent-19 phase 3 trial in younger age groups (5-11 years) by q3; cash, cash equivalents and restricted cash were $1.6 bln as of March 31, 2022 vs $1.5 bln as of December 31, 2021

·     Amwell (AMWL) Q1 EPS loss (-$0.26) vs. est. loss (-$0.23); Q1 revs $64.2M in-line with ests; Q1 gross margin was 42.8%, compared to 38.0%; Q1 total active providers were ~102,000 compared to 91,000 last quarter; total visits were ~1.8 million, compared to ~1.5M Q/Q; reaffirms year

·     GoodRX (GDRX) 1Q adj EPS $0.10 vs est. $0.08 on revs $203.3Mm vs est. $200.4Mm; unlikely to achieve prior FY guidance; sees Q2 revs about $190M vs. est. $216.1M

·     Shockwave Medical (SWAV) Q1 EPS $0.39 vs. est. $0.18; Q1 sales $93.6M vs. est. $86.4M; raises FY22 revenue view to $435M-$455M from $405-$425M (est. $417.9M) or 83%-92% growth

·     ICU Medical (ICUI) Q1 EPS $1.82 vs. est. $1.78; Q1 revs $543.1M vs. est. $553.17M

·     Hims & Hers (HIMS) Q1 EPS loss (8c) vs. est. loss (7c); Q1 revs $101.31M vs. est. $91.17M; sees FY22 revenue $410M-$425M vs. est. $377.85M; sees FY22 adjusted EBITDA ($30M)-($20M)

·     SmileDirectClub (SDC) 1Q EPS ($0.19) vs est. ($0.16) on revs $152Mm vs est. $134.2Mm; reaffirmed FY guide

 

Industrials & Materials

·     Ball Corp. (BLL) announces $300M accelerated stock repurchase plan

·     Univar Solutions (UNVR) 1Q adj EPS $1.07 vs est. $0.77 on sales $2.9B vs est. $2.64B; guides 2Q adj EBITDA $270-290Mm vs est. $233.8Mm; sees FY adj EBITDA $1.0-1.05B vs est. $883.4Mm

·     XPO Logistics (XPO) 1Q adj EPS $1.25 vs est. $0.93 on revs $3.47B vs est. $3.22B; raises FY guide, sees FY adj EPS $5.20-5.60 vs est. $5.19

·     Hillenbrand (HI) 2Q adj EPS $1.01 vs est. $0.99 on revs $742Mm vs est. $726Mm; guides 3Q adj EPS $0.83-0.90 vs est. $0.97; reaffirms FY guide adj EPS $3.80-4.00 vs est. $3.96, sees FY total revs pro forma excluding divested Red Vale, Abel, Terrasource 2.895-2.975B

 

Internet, Media & Telecom

·     Groupon (GRPN) Q1 EPS loss (-$0.80) vs. est. loss (-$0.52); Q1 revs $153.3M vs. est. $165.81M; Q1 N.A. active customers were 14.0 million, down 8% compared with the balance as of March 31, 2021, and int’l customers were 8.2 million, down 23% compared with the balance Y/Y

·     IAC Inc. (IAC) Q1 revenue boosted by its Dotdash segment following the acquisition of Meredith Holdings Corp.; revs rose 68% to $1.33B from $786.6M and vs. est. $1.31B; Q1 adj EPS loss (-$0.07) vs. est. loss (-$0.75); ANGI revs rose 13% to $436M

·     Clear Channel Outdoor (CCO) Q1 revs rose 39.3% to $525.1M vs. est. $537.5M; expect consolidated capital expenditures for full year of 2022 between $195M-$215M, excluding movements in FX; guides Q2 revs $655M-$675M vs. est. $534.1M

 

Technology

·     3D Systems (DDD) narrows year revenue guidance to $580M-$625M from prior $570M-$630M; Q1 revs fell -9% Y/Y to $133M vs. est. $132M; adj Ebitda tumbles to $1.9M

·     Everbridge (EVBG) Q1 adj EPS loss (-$0.02) vs. est. loss (-$0.18); Q1 revs $100.4M vs. est. $98.83M; guides year EPS view to 23c-27c from 22c-26c (est. 24c) and raises FY22 revenue view to $428.2M-$432.8M from $426M-$432M (est. $428.5M)

·     Microchip Technologies (MCHP) 4Q adj EPS $1.35 vs est. $1.25 on revs $1.844B vs est. $1.82B, gross margin 66.2% vs est. 66.4%; guides 1Q revs $1.918-1.992B vs est. $1.86B and adj EPS $1.32-1.36 vs est. $1.28

·     PubMatic (PUBM) Q adj EPS $0.14 vs est. $0.05 on revs $54.6Mm vs est. $54.6Mm; sees 2Q revs $60-62Mm vs est. $61.7Mm

·     Ring Central (RNG) 1Q adj EPS $0.39 vs est. $0.34 on revs $468Mm vs est. $458.7Mm; sees 2Q adj EPS $0.40-0.41 vs est. $0.38; sees FY adj EPS $1.83-1.87 vs est. $1.71; raises year sub rev view

·     Sony Group’s (SONY) Q4 net profit rose 67% from a year earlier to 111.08 billion yen ($852.5 million) above estimate of Y94.24 billion; Q4 revenue increased 1.2% to Y2.264 trillion, which missed the estimate of Y2.322 trillion; sees revenue to increase 15% to Y11.400 trillion for the fiscal year started in April, while projecting that net profit will drop 5.9% to Y830.00 billion

·     Zynga (ZNGA) 1Q reported EPS ($0.02) vs est. $0.09 on revs $691Mm vs est. $742Mm; qtrly bookings $695Mm -3%, qtrly avg mobile DAUs 40Mm +3%, qtrly avg mobile MAUs 209Mm

_________________________________________________________________

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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