Early Look

Thursday, August 10, 2023

Futures	Up/Down	%	Last
Dow	156.00	0.44%	35,358
S&P 500	21.25	0.47%	4,507
Nasdaq	87.50	0.57%	15,265

 

 

After falling for the 6^th time in the last 7-trading days, S&P futures (Spuz) are looking higher by about +0.5%, back above the 4,500 level ahead of key inflation data in just a few hours. July Consumer Price Index (CPI) data is expected at 8:30 AM today; ests as follows: The Consumer Price Index (CPI) M/M headline for July is est. to rise +0.2% (prior 0.2%) and on a Y/Y basis est. to rise +3.3% (would be above prior month +3.0%). On a core basis, or Ex: Food & Energy M/M for July est. +0.2% (prior 0.2%) and on a Y/Y basis est. to rise +4.8% (prior 4.8%). Prices have been decelerating for several months, helping boost the prospect that the Fed could be done raising rates the remainder of 2023, but given the surge in oil prices (at 9-month highs) and natural gas prices hitting their highest levels since March, fears are figures could come in a little “hotter” than expected. Earnings season is finally starting to wind down, with the retailer group the last expected to report in the next two weeks. In retail, the WSJ reported overnight TPR is in talks to buy CPRI, sending shares higher ahead of expected earnings this morning. Treasury yields are steady into the CPI at 4% for the 10-year and the dollar (DXY) is down -0.3%. In Asian markets, The Nikkei Index gained 269 points to 32,473, the Shanghai Index rose 10 points to 3,254, and the Hang Seng Index was little changed at 19,248. In Europe, the German DAX is up 67 points to 15,920, while the FTSE 100 is little changed at 7,587.

 

Economic Calendar for Today

·     8:30 AM ET             Weekly Jobless Claims…est. 230K

·     8:30 AM ET             Continuing Claims…est. 1.71M

·     8:30 AM ET             Consumer Price Index (CPI) M/M headline for July…est. +0.2% (prior 0.2%)

·     8:30 AM ET             Consumer Price Index (CPI) Y/Y headline for July…est. +3.3% (prior 3.0%)

·     8:30 AM ET             CPI Ex: Food & Energy (core) M/M for July…est. +0.2% (prior 0.2%)

·     8:30 AM ET             CPI Ex: Food & Energy (core) Y/Y for July…est. +4.8% (prior 4.8%)

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

·     1:00 PM ET              US Treasury to sell $18B in 30-year notes.

·     2:00 PM ET              Federal Budget for July

·     3:00 PM ET              Fed’s Bostic Gives Remarks at Event About Employment

 

Earnings Calendar:

·     Earnings Before the Open: AIT ALIM BABA DNUT EYE GOCO HBI IPWR KELYA OPTN RL SIX STXS TAST TIO URGN USFD UTZ WWW XFOR YETI

·     Earnings After the Close: ACHR AEYE APYX ARLO ATGE BRCC CODX EARN ETON FLO GEOS JYNT KLXE LUNA NWSA OUST PX RGTI SENS SVV UIHC VIAV YMAB ZYME

 

Other Key Events:

·     UBS Private Software & Internet Conference, 8/9-8/10, in Menlo Park, CA

·     TD Cowen Hot Wheels Bus Tour, 8/8-8/10, in New Jersey

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -31.67 points, or 0.70%, to 4,467.71.

·     The Dow Jones Industrial Average fell -191.13 points, or 0.54%, to 35,123.36.

·     The Nasdaq Composite slumped -162.31 points, or 1.17%, to 13,722.02.

·     The Russell 2000 Index declined -16.65 points, or 0.86% to 1,930.77.

 

 

Macro	Up/Down	Last
Nymex	-0.26	84.14
Brent	-0.20	87.35
Gold	4.00	1,954.60
EUR/USD	0.0051	1.1024
JPY/USD	0.08	143.80
10-Year Note	-0.002	4.005%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 19.2 vs 27.7 last week. Bulls fall to 44.7% from 49%, Neutrals rise to 29.8% from 29.7%, Bears rise to 25.5% from 21.3%.

 

Sector News Breakdown

Consumer

·     Coach owner Tapestry (TPR) is in talks to buy Capri Holdings (CPRI), parent company of Michael Kors, Jimmy Choo, and Versace, the WSJ reported. The deal has been under discussion for months and could be announced as soon as Thursday, https://tinyurl.com/3c5u6dhh

·     Alibaba (BABA) Q1 adj EPS $2.40 vs. est. $2.02; Q1 revs $32.29B vs. est. $31.2B; 1Q Taobao, Tmall group revenue $15.85B, up 12%, Q1 international digital commerce group revenue $3.05B, up 41% and Q1 cloud intelligence group revenue $3.465B, up 4%.

·     Aramark (ARMK) 21.3M share Spot Secondary priced at $39.75.

·     CarGurus (CARG) Q2 EPS $0.29 vs. est. $0.23; Q2 revs $239.74M vs. est. $229.97M; said Q2 U.S. Marketplace segment revenue was up 4% y/y to $158.4M; guides Q3 EPS $0.24-$0.27 vs. est. $0.27 and revs $201M -$221M vs. est. $230.36M.

·     Purple Innovation (PRPL) Q2 adj EPS loss (-$0.20) vs. est. loss (-$0.11); Q2 revs fell -16.1% y/y to $120.9M, below consensus $131.83M; now expects net revenue to be in the range of $560M-$590M (vs. est. $588M) and adjusted EBITDA between ($10M) and breakeven; Q2 gross margin decreased 210 basis points to 31.8% compared to 33.9%.

·     Wynn Resorts (WYNN) 2Q adj EPS $0.91 vs. est. $0.62; Q2 revs $1.60B vs. est. $1.53B; said Q2 Las Vegas operating revs $578.1M vs. est. $587.2M and adj. property Ebitda $524.5M vs. est. $458.2M; Q2 Operating revenues from Wynn Macau were $301.6M for Q2.

·     Yeti (YETI) Q2 adj EPS $0.57 vs. est. $0.47; Q2 revs $402.6M vs. est. $411.64M; raises FY23 adjusted EPS view to $2.23-$2.32 from $2.12-$2.23 and sees FY23 adjusted sales to increase between 4% and 5% vs. prior outlook of between 3% and 5%.

 

Energy, Industrials and Materials

·     Algonquin Power & Utilities Corp. (AQN) announced that it will pursue a sale of the Renewable Energy Group.

·     EnerSys (ENS) Q1 adj EPS $1.89 vs. est. $1.80; Q1 revs $909M vs. est. $962.03M; raises quarterly dividend 29% to $0.225; sees Q2 adj EPS $1.77-$1.87 vs. est. $1.80 and gross margin 25%-27%; guides FY24 capex about $120M.

·     Genpact (G) Q2 adj EPS $0.72 vs. est. $0.69; Q2 revs rose 1.5% y/y to $1.11B vs. est. $1.12B; lowers 2023 adj EPS view to $2.91-$2.94 from $2.92-$2.99 and cuts 2023 revenue view to $4.59B-$4.64B from $4.64B-$4.71B (est. $4.65B).

·     Plug Power (PLUG) Q2 EPS loss (-$0.40) vs. est. loss (-$0.26); Q2 revs $260.18M vs. est. $242.2M; reaffirmsFY23 revenue view $1.2B-$1.4B (est. $1.28B).

 

Financials

·     Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of July 31, 2023, totaled $146.4 billion. Artisan Funds and Artisan Global Funds accounted for $70.9 billion of total firm AUM, while separate accounts and other AUM accounted for $75.5 billion.

·     Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1.45 trillion at July 31, 2023, compared to $1.43 trillion at June 30, 2023. This month’s increase in AUM reflected the impact of positive markets partially offset by long-term net outflows.

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,570.7 billion, an increase of 2.1% versus the previous month-end. The firm delivered net long-term inflows of $1.0 billion in the month. Non-management fee earning net inflows were $5.7 billion and money market net outflows were $9.1 billion.

·     Riot Platforms (RIOT) Q2 revs rose 5.2% y/y to $76.7M vs. est. $85M; Produced 1,775 Bitcoin during the quarter, as compared to 1,395 Bitcoin during the same three-month period in 2022; average cost to mine Bitcoin was $8,389 in the second quarter, as compared to $11,316 y/y.

·     Verra Mobility (VRRM) Q2 adj EPS $0.29 vs. est. $0.27; Q2 revs $204.5M (in-line w/consensus); raises year revenue outlook to $800M-$810M from prior $780M-$800M and sees FY adj Ebitda at upper end of prior $360M-$370M view.

·     Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $165.9 billion as of July 31, 2023, and average assets under management for July of $163.2 billion.

 

Healthcare

·     Novo Nordisk (NVO) agreed to buy Canadian obesity-drug developer Inversago Pharma for up to $1.08 billion. Privately held Inversago develops therapies designed to help people with obesity, diabetes and complications associated with metabolic disorders. The announcement came alongside earnings results for the Danish Pharma giant.

·     Catalyst Pharmaceuticals (CPRX) Q2 EPS $0.53 vs. est. $0.42; Q2 revs $99.6M vs. est. $91.71M; achieved FIRDAPSE Q2 revenues of $64.9M, up +22% y/y; submitted sNDA for FIRDAPSE seeking to increase the maximum indicated dose to 100 mg per day.

·     Galera Therapeutics Inc (GRTX) said it is reducing workforce by approximately 70% and announces restructuring plan that includes a wind-down of commercial readiness efforts and headcount reductions across several departments after receives Complete Response Letter (CRL) from U.S. FDA for avasopasem manganese.

·     Illumina (ILMN) Q2 adj EPS $0.32 tops $0.02 estimate and revs $1.18B vs. est. $1.16B; slashes FY23 adj EPS view to $0.75-$0.90 from $1.25-$1.50 prior (est. $1.31) and cuts FY23 revenue growth view to approximately 1% from prior 7%-10% (est. $4.91B); said 2H will be negatively impacted by customer caution, slower recovery in China and decline in consumable instruments.

·     Jazz Pharmaceuticals (JAZZ) Q2 adj EPS $4.51 vs. est. $4.42; Q2 revs $957.3M vs. est. $942.86M; sees FY23 adjusted EPS $18.15-$19.00 up from prior $16.90-$17.85 and boosts FY23 revenue to $3.725B-$3.875B from prior $3.675B-$3.875B.

·      

 

Technology, Media & Telecom

·     Disney Inc. (DIS) Q3 adj EPS $1.03 vs. est. $0.95; Q3 revs $22.33B vs. est. $22.5B; 3Q Disney Media & Entertainment Distribution revenue $14B, Q3 Parks revenue $8.33; Disney+ had 146.1M subscribers globally, 7.4% fewer than the 157.8M q/q; In the U.S. and Canada, Disney+ had 46M subscribers, down from 46.3M q/q; says on track to exceed the goal of cutting $5.5B from content and administrative budgets; raises prices for streaming services by as much as 27%.

·     AppLovin Corp. (APP) Q2 EPS $0.22 vs. est. $0.07; Q2 revs $750M vs. est. $724.27M; sees Q3 revenue $780M-$800M above consensus $741.41M; sees Q3 adjusted EBITDA $340M-$360M.

·     CACI International (CACI) Q4 adj EPS $5.30 vs. est. $4.90; Q4 revs $1.70B vs. est. $1.73B; sees FY24 adj EPS $19.13-$20.22 vs. est. $18.46; sees FY24 revenue $7B-$7.2B vs. est. $6.73B.

·     Innoviz Technologies (INVZ) 26M share Spot Secondary priced at $2.50.

·     Magnite Inc. (MGNI) Q2 adj EPS $0.09 vs. est. $0.03; Q2 revs $152.5M vs. est. $134.28M; Q2 adj Ebitda -9.7% y/y to $37.3M; sees FY23 adjusted EBITDA comparable to FY22.

·     Sonos (SONO) Q3 EPS loss (-$0.16) vs. est. loss (-$0.20); Q3 revs $373.4M vs. est. $334.2M; Q3 adj Ebitda $34.3M; narrows FY23 revenue to $1.64B-$1.66B from $1.625B-$1.675B; lowers FY margin view to 44%-44.2%, vs. prior 44.3%-44.8% and narrows year adj Ebitda.

·     Trade Desk (TTD) Q2 adj EPS $0.28 vs. est. $0.23; Q2 revs $464M vs. est. $454.9M; guides Q3 revs at least $485M vs. est. $480M; Q3 adj EBITDA $180M vs. $139M y/y.

·     ViaSat Inc. (VSAT) Q3 EPS $0.00 vs. est. loss (-$0.35); Q1 revs $780M vs. est. $650M; says overall expectations are to continue to grow revenue and adjusted ebitda again in fy2025, relative to our expectations for FY2024.