Morning Preview: May 26, 2023

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Early Look

Friday, May 26, 2023









S&P 500










U.S. futures looking higher as investors await news out of Washington on the debt ceiling talks, with the US Treasury funds dropping under $48B heading into today. Republican and White House negotiators are moving closer to an agreement to raise the debt limit and cap federal spending for two years, according to several news wires as the two sides have narrowed differences in talks over recent days. Big round of economic data, including the Fed’s preferred measure of inflation, PCE. At 8:30 AM ET, mkts get April Personal Spending which is to rise +0.4% and spending +0.5%. Both April PCE and Core PCE M/M ests to rise +0.3%. On a y/y basis PCE est. +4.3% and core PCE y/y to rise +4.6%. Treasuries are higher with US two-year yields falling 4bps after rising for 10 straight sessions. The dollar (DXY) also taking a breather after outperformance. In Asian markets, The Nikkei Index rose 115 points to 30,916, the Shanghai Index gained 11 points to 3,212, and the Hang Seng Index dropped -369 points to 18,746. In Europe, the German DAX is down about -15 points to 15,779, while the FTSE 100 is up a few points to 7,574.


Market Closing Prices Yesterday

·     The S&P 500 Index jumped 36.04 points, or 0.88%, to 4,151.28.

·     The Dow Jones Industrial Average slid -35.27 points, or 0.11%, to 32,764.65.

·     The Nasdaq Composite surged 213.93 points, or 1.71%, to 12,698.09.

·     The Russell 2000 Index declined -12.40 points, or 0.70% to 1,754.60.


Economic Calendar for Today

·     8:30 AM ET          Personal Income M/M for April…est. +0.4%

·     8:30 AM ET          Personal Spending for April…est. +0.5%

·     8:30 AM ET          PCE Price Index M/M for April…est. +0.3%

·     8:30 AM ET          PCE Price Index Y/Y for April…est.+4.3%

·     8:30 AM ET          Core PCE Price Index M/M for April…est. +0.3%

·     8:30 AM ET          Core PCE Price Index Y/Y for April…est. +4.6%

·     8:30 AM ET          Durable Goods Orders M/M for April…est. (-1.0%)

·     8:30 AM ET          Advance Goods Trade Balance for April…est. (-$85.7B)

·     10:00 AM ET        University of Michigan Sentiment, May-Final…est. 57.7  

·     1:00 PM ET         Baker Hughes Weekly rig count data


Earnings Calendar:

·     Earnings Before the Open: BAH BIG BKE





















10-Year Note





Sector News Breakdown


·     Costco (COST) 3Q EPS $2.93 vs est. $3.29 on revs $53.65B vs est. $54.66B, US comp sales ex gas, FX +1.8% vs est. +3.48%, total adj comps +3.5%; Q3q total Co. Comp sales incl gas, FX +4%, vs. est. +2.91%

·     Decker’s (DECK) Q4 EPS $3.46 vs. est. $2.67; Q4 revs rose 7.5% y/y to $791.6M vs. est. $720.73M; sees FY24 EPS $21.10-$21.60 vs. est. $21.77 and sees FY24 revenue $3.95B vs. est. $3.97B; Q1 Direct-to-Consumer (DTC) net sales increased 19.5% to $343.1M; Gross margin was 50.0% compared to 48.7%; HOKA brand net sales increased 40.3% to $397.7M, UGG brand net sales decreased -16.1% to $314.3M and Teva brand net sales increased 14.6% to $62.8M.

·     Gap Stores (GPS) Q1 adj EPS $0.01 vs. est. loss (-$0.16); Q1 revs $3.28B, consensus $3.29B. Comparable sales were down (-3%), in line with estimates; sees Q2 revenue down mid to high-single digit range; expect 2Q and FY23 gross margin expansion compared to the prior year.

·     Hibbett Sports (HIBB) cuts FY24 EPS view to $7.00-$7.75 from $9.50-$10.0 (est. $9.14) and cuts FY24 revenue growth view to flat to up ~2% from up mid-single digits; Q1 EPS $2.74 vs. est. $3.04 and revs $455.5M vs. est. $460.4M.

·     RH Corp. (RH) 1Q adj EPS $2.21 vs est. $2.09 on revs $739Mm vs est. $726.57Mm; sees 2Q revs $765-775Mm vs est. $784.27Mm; guides FY revs $3.0-3.1B vs est. $3.04B.

·     Ulta Beauty (ULTA) 1Q EPS $6.88 vs est. $6.87 on revs $2.634B vs est. $2.62B, comps +9.3%; guides FY net sales $11.0-11.1B vs prior $10.95-11.05B and est. $11.118B, comps +4-5%, op mgn 14.5-14.8% vs prior 14.7-15.0%, EPS $24.70-25.40 vs est. $25.56.


Energy, Industrials and Materials

·     Booz Allen (BAH) Q4 adj EPS $1.01 vs. est. $0.95; Q4 revs $2.43B vs. est. $2.39B; sees FY24 adjusted EPS $4.80-$4.95 vs. est. $4.88; sees FY24 revenue growth 7%-11%.

·     Pinnacle West (PNW) upgraded to Neutral at Bank America on improving regulatory backdrop.

·     Rio Tinto (RIO) upgraded to Overweight from Equal Weight at Morgan Stanley.



·     Fed lending to banks was essentially unchanged for the week ending Wednesday, with Bank Term Funding Program balances edging higher and discount window borrowing edging lower.



·     CVS Health (CVS) files debt securities shelf.

·     Guardant Health (GH) upgraded to Buy from Neutral at Citigroup.

·     Tilray (TLRY) announces $150M convertible senior notes offering.

·     Gilead Sciences (GILD) said CHMP adopts positive opinion to extend the use of Remdesivir to treat COVID-19 in people with severe renal impairment, including those on dialysis.


Technology, Media & Telecom

·     Autodesk (ADSK) 1Q adj EPS $1.55 vs est. $1.55 on revs $1.3B vs est. $1.268B, adj op mgn 32%; guides 2Q revs $1.315-1.325B vs est. $1.334B, adj EPS $1.70-1.74 vs est. $1.77; sees FY revs $5.025-5.175B vs est. $5.413B, adj op mgn approx flat yr/yr, adj EPS $7.07-7.41 vs est. $7.23.

·     Domo Inc. (DOMO) 1Q adj EPS ($0.17) vs est. ($0.17) on revs $79.5Mm vs est. $78.87Mm, adj subscription gr mgn 85%; guides 2Q revs $78.5-79.5Mm vs est. $79.73Mm, adj EPS ($0.11)-($0.07) vs est. ($0.11); sees FY revs $323-330Mm vs est. $325.97Mm and adj EPS ($0.39)-($0.27) vs est. ($0.35).

·     Lions Gate (LGF/B) 4Q EPS ($0.42) vs est. ($0.41) on revs $1.1B vs est. $994.39Mm, adj OIBDA $138Mm vs est. $91.28.

·     Marvell Technologies (MRVL) Q1 adj EPS $0.31 vs. est. $0.29; Q1 revs fell -8.7% y/y to $1.322B vs. est. $1.3B; sees Q2 adjusted EPS $0.32 plus/minus 5c vs. est. $0.31 and sees Q2 revenue $1.33B plus/minus 5% vs. consensus $1.31B; Q1 Gross Margin 42.2% GAAP gross margin.

·     Workday (WDAY) 1Q adj EPS $1.31 vs est. $1.12 on revs $1.68B vs est. $1.667B; sees 2Q subscription revs $1.611-1.613B; raises low end of subscription revs FY guide to $6.55-6.575B.

·     Paramount Global’s (PARA) controlling shareholder Shari Redstone’s National Amusements secured a $125M investment from BDT & MSD Partners – WSJ


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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