Early Look

Wednesday, May 17, 2023

Futures	Up/Down	%	Last
Dow	111.00	0.34%	33,171
S&P 500	10.25	0.27%	4,134
Nasdaq	14.00	0.10%	13,497

 

 

S&P 500 futures edge higher, trading in another narrow range overnight (high 4,136.75 and lows 4,122) as debt-ceiling talks between the White House and congressional aides are set to deepen so that a framework agreement can be presented to President Biden when he returns from his G7 trip this Sunday. Stocks slumped late Tuesday, finishing on their lows, but large cap technology (AMZN, AMD, GOOGL, MSFT, NVDA) again outpaced broader markets. Dow Jones Market Data noted the Nasdaq Composite is now leading the Dow Jones Industrial Average by 18.3%, its widest margin of outperformance since 1991 as of Tuesday’s close while the blue-chip gauge erases its year-to-date gain, closing below its 50-day moving average in the process. Still, on the year the S&P 500 is up more than 7%, and the Nasdaq up more than 18% but the Smallcap Russell 2000 is down 1% YTD, primarily due to weakness in the energy and SMID regional banks. In Asian markets, The Nikkei Index rose 250 points to 30,093, the Shanghai Index dipped -6 points to 3,284, and the Hang Seng Index tumbled -417 points or over 2% to 19,560. In Europe, the German DAX is higher by 45 points to 15,943, while the FTSE 100 is little changed at 7,750. The Nikkei topped the 30,000 level overnight for the first time since 2021 as economy grows at faster pace; Q1 GDP: 0.4% q/q vs 0.1% consensus.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -26.38 points, or 0.64%, to 4,109.90.

·     The Dow Jones Industrial Average fell -336.26 points, or 1.01%, to 33,012.34.

·     The Nasdaq Composite slipped -22.16 points, or 0.18%, to 12,343.05.

·     The Russell 2000 Index declined -25.36 points, or 1.44% to 1,736.18.

 

Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     8:30 AM ET            Housing Starts M/M for April…est. 1.437M

·     8:30 AM Et             Building Permits M/M for April…est. 1.40M

·     10:30 AM ET          Weekly DOE Inventory Data

·     1:00 PM ET             U.S. Treasury sells $12B in 20-year notes.

 

Earnings Calendar:

·     Earnings Before the Open: DT JACK TGI TGT TJX

·     Earnings After the Close: ATGN BOOT BOWL CSCO IBEX SNPS TTWO

 

Other Key Events:

·     Davidson 25th Annual Financial Institutions Conference, 5/15-5/17, in CO

·     JPMorgan Homebuilding & Building Products Conference (virtual), 5/16-5/17

·     Needham 18th Annual Technology & Media Conference, 5/16-5/18

·     RBC Capital Global Healthcare Conference, 5/16-5/17, in New York

·     RBC Capital Canadian Automotive, Industrials & Transportation Conference, 5/16-5/18

 

 

Macro	Up/Down	Last
Nymex	0.36	71.22
Brent	0.38	75.29
Gold	-1.00	1,992.00
EUR/USD	-0.0032	1.0829
JPY/USD	0.59	136.96
10-Year Note	-0.017	3.532%

 

 

Sector News Breakdown

Consumer

·     Target Corp. (TGT) shares slipped -2% on guidance; Q1 adj EPS $2.05 vs. est. $1.76; Q1 sales $24.95B vs. est. $25.29B; Comparable sales also grew by a better-than-expected 0.7%, but digital sales posted a surprise drop; forecast comparable sales to decline in the low-single digits, compared to estimates of a 0.25% rise; sees Q2 adj EPS $1.30-$1.70 below the $1.91 estimate; maintained its 2023 annual profit expectation after beating first-quarter results.

·     Tesla Inc. (TSLA) CEO Elon Musk said the electric-car maker will “try a little advertising and see how it goes”, a major shift for the company that’s largely avoided traditional marketing to sell its vehicles.

·     Azek (AZEK) files to sell 14M shares of Class A common stock for holders.

·     Container Store (TCS) 4Q adj EPS $0.18 vs est. $0.16 on revs $259.7Mm vs est. $265.7Mm, comps -13.1%; guides 1Q net sales $200-210Mm vs est. $257.71Mm, comps -23% to -19%, adj EPS ($0.16)-($0.10) vs est. $0.12; guides FY net sales $885-900Mm vs est. $1.07B, comps down mid-high-teens, adj EPS $0.21-0.31 vs est. $0.65.

·     Lyft (LYFT) said it named Erin Brewer as its CFO, effective July 10. Brewer will succeed Elaine Paul, who stepped into the role in January of last year and will continue working for the company as an adviser until Nov. 30.

·     Wynn Resorts (WYNN) upgraded to Overweight from Equal Weight at Barclays.

 

Energy, Industrials and Materials

·     Hess Midstream LP (HESM) 11.1M share Spot Secondary priced at $27.00.

·     Maxeon Solar (MAXN) offers to sell 6.8M shares of common stock.

·     PNM Resources (PNM) files for offering of up to $650 mln senior unsecured notes.

·     Old Dominion (ODFL) upgraded to Outperform from In Line at Evercore ISI.

·     Norfolk Southern (NSC) upgraded to Outperform from In Line at Evercore ISI.

 

Financials

·     Western Alliance (WAL) disclosed a Q2 investor update: stated “WAL’s deposit balances stabilized by March 20 and resumed growth trajectory. QTD deposit growth exceeded $2B as of May 12, up from $47.6B as of March 31. Insured Deposit Strength – greater than 79% as of May 12, up from 68% as of end of March.

·     WeWork Inc. (WE) named David Tolley as interim CEO to replace Sandeep Mathrani, who is stepping down as CEO and chairman on May 26. Tolley will work alongside WeWork President Anthony Yazbeck.

·     Everest Re (RE) 3.6M share Spot Secondary priced at $360.00.

·     New York Community Bancorp (NYCB) 39.03M share Spot Secondary priced at $10.08.

 

Healthcare

·     Akero Therapeutics (AKRO) 5.24M share Spot Secondary priced at $42.00.

·     Bioventus (BVS) 1Q adj EPS ($0.26) vs est. ($0.15) on revs $119.1Mm vs est. $116.58Mm, adj EBITDA $17Mm vs est. $10.06Mm; says confident in achieving adj EBITDA of at least $68Mm for FY vs est. $68.6Mm.

·     Doximity (DOCS) 4Q adj EBITDA $48.9Mm vs est. $45.7Mm on revs $110.966Mm vs est. $110.09Mm; guides 1Q revs $106.5-107.5Mm vs est. $112.09Mm and adj EBITDA $39-40Mm vs est. $45.38Mm; sees FY revs $500-506Mm vs est. $507.1Mm and adj EBITDA $216-222Mm vs est. $215.69Mm.

·     NextGen Healthcare (NXGN) 4Q adj EPS $0.31 vs est. $0.29 on revs $178.55Mm vs est. $171.2Mm, recurring revs $161.9Mm; guides FY revs $712-722Mm vs est. $709.32Mm, adj EBITDA $125-131Mm vs est. $129.79Mm and adj EPS $1.04-1.11 vs est. $1.10.

·     X4 Pharmaceuticals (XFOR) says it announces positive phase 3 results showing Mavorixafor reduced the rate, severity, and duration of infections vs. placebo in participants diagnosed with WHIM syndrome.

 

Technology, Media & Telecom

·     ServiceNow (NOW) announces $1.5b share buyback.

·     Dynatrace (DT) Q4 EPS $0.31 vs. est. $0.22; Q4 revs $314M vs. est. $304.9M; Q4 Total ARR of $1.247B, and adjusted ARR growth of 29% y/y; guides Q1 revs $325M-$328M vs. est. $319.2M.

·     Keysight Technologies (KEYS) Q2 adj EPS $2.12 vs. est. $1.95; Q2 revs rose 3.7% y/y to $1.42B vs. est. $1.38B; guides Q3 EPS $2.00-$2.06 vs. est. $1.96.

·     Agilysys (AGYS) 4Q adj EPS $0.26 vs est. $0.22 on revs $52.9Mm vs est. $52.01Mm, adj EBITDA $8.1Mm vs est. $8.09Mm; guides FY revs $230-235Mm vs est. $232.74Mm and adj EBITDA margin 13%.

·     Kyndryl Holdings (KD) Q4 EPS loss (-$3.24) vs. est. loss (-$1.03); Q4 revs $4.26B vs est. $4.16B; Ad adj Ebitda $476M; Fiscal year 2023 revenues total $17.0B, net loss is $1.4B, adjusted EBITDA is $2.0B, and adjusted pretax loss is $217M; continues to expect to return to positive revenue growth in calendar year 2025.

·     Vivid Seats (SEAT) files to sell 16M shares of common stock for shareholders.

·     ScanSource (SCSC) announced that it was subject to a ransomware attack on May 14^th that has impacted some of its systems.

·     Volkswagen AG (VWAGY) CFO Antlitz said the automaker is not currently in talks with Chinese technology company Huawei HWT.UL about licensing software for VW cars in China.