Morning Preview: February 10, 2023

Early Look

Friday, February 10, 2023

Futures

Up/Down

%

Last

Dow

-146.00

0.43%

33,588

S&P 500

-27.25

0.66%

4,064

Nasdaq

-146.75

1.18%

12,278

 

 

U.S. futures picking up where they left off late yesterday, with prices pointing to a lower open as S&P futures slip 0.65% or 25 points to 4,065 (overnight high 4,098.25 and low 4,063.25), currently down for the 5th time in last 6-days. Oil prices are jumping with WTI crude oil +2.4% around $80 per barrel and Brent +2.35% to $86.50 after Russia will cut oil production by 500,000 barrels per day, or around 5% of output in March, says Deputy Prime Minister Alexander Novak – watch oil related stock on headlines as well. Treasury yields currently at morning highs, with the 10-yr up 3-bp to 3.715% (also weekly highs) and the 2-yr above 4.5%. Treasury yields have risen all week following generally weak bond auctions for 3’s and 30’s, with huge tails showing weaker demand. Stocks fell Thursday, giving up early advances as concerns as the Federal Reserve future moves on monetary policy offset excitement offset recent upward momentum. The Dow fell 248 points, the S&P 500 lost -0.88% and the Nasdaq shed 1% in another volatile day. Speaking of, volatile times indeed: six times in the last three days the S&P has reversed by 1% and twice in the last three days it has reversed by more than 2%. That will likely carry over to early next week with the January consumer price index (CPI) report next Tuesday, which is expected to see a small uptick. In Asian markets, The Nikkei Index rose 86 points to 27,670, the Shanghai Index dipped -9 points to 3,260, and the Hang Seng Index tumbled -433 points or 2% to 21,190. In Europe, the German DAX is down -220 points or 1.45% to 15,300, while the FTSE 100 is down -50 points to 7,861.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -36.36 points, or 0.88%, to 4,081.50.

·     The Dow Jones Industrial Average fell -249.13 points, or 0.73%, to 33,699.88.

·     The Nasdaq Composite slumped -120.94 points, or 1.02%, to 11,789.58.

·     The Russell 2000 Index declined -27.26 points, or 1.40% to 1,915.34.

 

Economic Calendar for Today

·     10:00 AM ET           University of Michigan Sentiment, Feb-P…est. 65.0

·     10:00 AM ET           University of Michigan Sentiment 1 and 5-yr inflation expectations, Feb-P

·     12:30 PM ET           Fed’s Waller speaks

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

·     2:00 PM ET              Federal Budget for January…est. (-$63.0B)

·     4:00 PM ET              Fed’s Waller and Harker speak at Crypto Conference

 

Earnings Calendar:

·     Earnings Before the Open: COOP ESNT IQV NWL PRLB SPX SXT WPC

 

 

Macro

Up/Down

Last

Nymex

1.80

79.86

Brent

2.13

86.63

Gold

-4.40

1,874.10

EUR/USD

-0.0040

1.0696

JPY/USD

-0.64

130.92

10-Year Note

+0.032

3.715%

 

 

World News

·     Russia will cut oil production by 500,000 barrels per day, or around 5% of output in March, says Deputy Prime Minister Alexander Novak

·     China January CPI rose +0.8% m/m vs 0.7% consensus and +2.1% y/y vs 2.2% consensus; China January PPI fell (-0.8%) y/y vs. (-0.5%) consensus.

·     RBA revised Economic data: Revised up core CPI, wage growth and GDP, little change for unemployment outlook; based on technical assumptions, cash rate will peak at 3.75% before easing to 3% by June 2025.

·     Japan’s government is likely to appoint academic Kazuo Ueda as the Bank of Japan’s next governor, two government officials told Reuters, a surprise choice that could see the country finally aligning with other major economies in raising interest rates. Ueda is considered an expert on monetary policy and played a key role in battling the initial phase of Japan’s deflation with the introduction of huge amounts of asset purchases and forward guidance for financial markets.

·     The yen rallied after local media reported the Japanese government would appoint former board member Kazuo Ueda as the next BOJ governor. USD/JPY fell 1.4% at the lows but has trimmed losses to around 0.5% after Ueda said it is important to keep easing for now .

 

Sector News Breakdown

Consumer

·     Expedia Inc. (EXPE) 4Q adj EPS $1.26 vs est. $1.67 on revs $2.62B vs est. $2.7B, gr bookings $20.511Mm.

·     Flowers Foods (FLO) Q4 adj EPS $0.23, in-line with consensus and revs $1.08B vs. est. $1.1B; sees 2023 adjusted EPS $1.2-$1.30 vs. est. $1.33; sees 2023 revs $5.18B-$5.24B vs. est. $4.99B; sees 2023 Capital expenditures of $140M-$150M.

·     Lyft Inc. (LYFT) shares fall -23%; Q4 revs $1.2B vs. est. $1.16B but guides Q1 revs roughly $975M vs. est. $1.09B; Q4 adjusted EBITDA ($248.3M) vs ($47.6M) last year and sees Q1 adjusted EBITDA $5M-$15M; reported Q4 active riders up 8.7% y/y.

·     Mohawk Industries (MHK) 4Q adj EPS $1.32 vs est. $1.32 on revs $2.7B vs est. $2.7B; sees 1Q adj EPS $1.24-1.34 vs est. $1.70.

·     Nautilus (NLS) Q3 EPS loss (-$0.35) vs. est. loss (-$0.27); Q3 revs $98.1M vs. est. $103.5M; to reduce workforce by approximately 15%; lowers FY23 revenue view to $270M from $315M-$365M (est. $326.29M), primarily due to lower expectations in the Retail segment.

·     Topgolf Callaway (MODG) Q4 non-GAAP EPS loss (-$0.27) vs. est. loss (-$0.16); Q4 revs $851.3M, above consensus $840.42M; performance was driven by a combination of Topgolf new venue development and same venue sales growth; sees 2023 revs $4.42B-$4.47B vs. est. $4.38B.

·     Bark Inc. (BARK) 3Q adj EPS ($0.09) vs est. ($0.09) on revs $134.3Mm vs est. $134.2Mm, says reducing full-time workforce by about 12%; guides 4Q revs $121Mm vs est. $146.9Mm and adj EBITDA $(3.0)Mm vs est. $(3.1)Mm.

·     Coursera (COUR) 4Q adj EBITDA $(5.8)Mm vs est. $(14.4)Mm on revs $142.2Mm vs est. $138.1Mm; guides 1Q revs $136-140Mm vs est. $142.8Mm and adj EBITDA $(15.5)Mm-$(12.5)Mm vs est. $(8.1)Mm; sees FY revs $595-605Mm vs est. $618.5Mm and adj EBITDA $(34)Mm-$(26)Mm vs est. $(33.7)Mm.

·     Corsair Gaming (CRSR) 4Q adj EPS $0.20 vs est. $0.16 on revs $398.7Mm vs est. $379.3Mm; guides FY revs $1.35-1.55B vs est. $1.53B, adj EBITDA $90-110Mm vs est. $113.6Mm.

·     Mesa Airlines (MESA) 1Q adj EPS ($0.12) vs est. ($0.35) on revs $147.2Mm vs est. $125.2Mm; says 50% revs from United contracts, 45% from American contracts, 3% DHL, 2% leases of aircraft to 3rd party.

 

Energy, Industrials and Materials

·     Bloom Energy (BE) 4Q adj EPS $0.27 vs est. $0.12 on revs $462.6Mm vs est. $397.9Mm; sees FY23 revs $1.4-1.5B vs est. $1.49B, adj gr mgn 25%, adj op mgn positive.

·     Cabot Corp. (CBT) Q1 adj EPS $0.98 vs. est. $0.97; Q1 revs $965M vs. est. $955.2M; reaffirming our fiscal year 2023 outlook for adjusted eps in range of $6.25-$6.75 vs. est. $6.51; believe our outlook for discretionary free cash flow for full fiscal year remains on track.

·     Chemours (CC) 4Q adj EPS $0.00 vs est. $0.08 on revs $1.3B vs est. $1.27B, adj EBITDA $120Mm vs est. $138.1Mm; sees FY23 adj EBITDA $1.2-1.3B vs est. $1.22B and adj EPS $3.80-4.29 vs est. $4.09.

·     Genpact (G) raises quarterly dividend; Q4 adj EPS $0.70 vs. est. $0.68; Q4 revs $1.1B vs. est. $1.08B; sees 203 adj EPS $2.92-$2.99 vs. est. $3.00 and revs $4.64B-$4.71B vs. est. $4.36B; New bookings were approximately $3.9 billion, up 6% year-over-year.

·     Terex Corp. (TEX) Q4 EPS $1.34 vs. est. $1.13; Q4 revs rose 23% y/y to $1.2B vs. est. $1.1B; sees 2023 EPS $4.60-$5.00 vs. est. $4.78 and sales $4.6B-$4.8B vs. est. $4.52B; Q4 operating profit margin of 9.9% improved 290 bps year-over-year.

 

Financials

·     AllianceBernstein L.P. (AB) preliminary assets under management increased to $680 billion during January 2023 from $646 billion at the end of December.

·     Brighthouse Financial (BHF)

·     Franklin Resources, Inc. (BEN) preliminary month-end assets under management (AUM) of $1,451.9 billion at January 31, 2023, compared to $1,387.7 billion at December 31, 2022.

·     Invesco Ltd. (IVZ) preliminary month-end assets under management (AUM) of $1,482.7 billion, an increase of 5.2% versus previous month-end. The firm experienced net long-term outflows of $0.1 billion in the month.

·     PayPal (PYPL) President and CEO Dan Schulman announces intention to retire from PayPal at year-end; Q4 adjusted EPS $1.24 vs. est. $1.20; Q4 revs $7.4B vs. est. $7.39B; Q4 Total Payment Volume of $357.4B, growing 9% and below est. $360B; sees FY EPS about $4.87 adj vs. est. $4.75.

·     Regency Centers (REG) 4Q core EPS $0.98 vs est. $0.98; guides FY23 EPS $3.83-3.89 vs est. $4.05.

·     Ventas Inc. (VTR) 4Q FFO/shr $0.73 vs est. $0.72 on revs $1.05B vs est. $1.04B; sees FY FFO/shr $2.90-3.04 vs est. $3.06.

·     Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $161.4 billion as of January 31, 2023. The Company also reported average assets under management for the month of January of $157.1 billion.

·     Virtus Investment Partners, Inc. (VRTS) preliminary assets under management of $157.8 billion as of January 31, 2023. In addition, the company provided services to $2.6 billion of other fee-earning assets, which are not included in assets under management.

 

Healthcare

·     Dexcom (DXCM) Q4 EPS $0.22 vs. est. $0.27; Q4 revs $815.2M vs. est. $809.7M; sees FY23 revenue of $3.35B-$3.49B vs. est. $3.47B; sees FY23 gross margin of 62%-63% and EBITDA margin of about 26%

·     Doximity (DOCS) 3Q adj EPS $0.22 vs est. $0.18, adj EBITDA $55.5Mm vs est. $48.7Mm on revs $115.3Mm vs est. $111.5Mm; sees 4Q revs $109.6-110.6Mm vs est. $123.1Mm and adj EBITDA $45.2-46.2Mm vs est. $54.9Mm; sees FY24 revs over $500Mm and adj EBITDA mgn at least 43%

·     Mineralys Therapeutics (MYLS) 12M share IPO priced at $16.00.

 

Technology, Media & Telecom

·     Alteryx (AYX) 4Q adj EPS $0.84 vs est. $0.51 on revs $301.1Mm vs est. $279.3Mm; sees 1Q revs $198-202Mm vs est. $196Mm and adj EPS ($0.29)-($0.25) vs est. ($0.31).

·     Cloudflare (NET) 4Q adj EPS $0.06 vs est. $0.05 on revs $274.7Mm vs est. $274Mm; guides 1Q revs $290-291Mm vs est. $290.8Mm and adj EPS $0.03-0.04 vs est. $0.03; sees FY revs $1.33-1.34B vs est. $1.31B and adj EPS $0.15-0.16 vs est. $0.16.

·     Knowles (KN) Q4 adj EPS $0.33, in-line with consensus on revs $197.1M vs. est. $210M; sees Q1 adjusted EPS $0.01-$0.07 below est. $0.23 and revs $140M-$155M vs. est. $182.68M.

·     Motorola Solutions (MSI) Q4 adj EPS $3.60 vs. est. $3.43; Q4 revs $2.7B vs. est. $2.53B; sees Q1 adj EPS $2.02-$2.07 vs. est. $1.97 and sees Q1 revenue growth 12%-13% vs. est. $2.02B.

·     News Corp. (NWSA) Q2 adj EPS $0.14 vs. est. $0.19 and down from $0.44 last year; Q2 revs $2.521B vs est. $2.55B and $2.717B last year; 2Q Book Publishing Rev $531M, Digital Real-Estate Services Rev $386M, Dow Jones Revs $563M and Subscription Video Services Revs $462M.

·     Qualys Inc. (QLYS) 4Q adj EPS $1.01 vs est. $0.90 on revs $130.8Mm vs est. $130.1Mm; sees 1Q revs $130.2-131Mm vs est. $133Mm and adj EPS $0.95-0.97 vs est. $0.95; sees FY revs $553-557Mm vs est. $565.6Mm and adj EPS $4.10-4.18 vs est. $4.02.

·     Verisign (VRSN) 4Q EPS $1.70 vs est. $1.61 on revs $369.2Mm vs est. $366.1Mm.

·     Yelp Inc. (YELP) 4Q EPS $0.28 vs est. $0.28 on revs $309.1Mm vs est. $293.3Mm; sees FY23 revs $1.29-1.31B vs es.t $1.29B and adj EBITDA $290-310Mm vs est. $305.4Mm.

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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.