Early Look

Thursday, February 16, 2023

Futures	Up/Down	%	Last
Dow	-18.00	0.05%	34,156
S&P 500	-3.25	0.08%	4,155
Nasdaq	-4.50	0.03%	12,726

 

 

After surging late yesterday to close at the highs, S&P futures are flattish at 4,155, trading in narrow 15-point range overnight (4,168.50 high and 4,153.50 low) as markets await the deluge of economic data (PPI, Philly Fed, Jobless Claims, housing starts all at 8:30 AM) and then Fed President Bullard later this afternoon. U.S. stock markets have been incredibly resilient, bouncing seemingly every day off lows as investors look to risky assets with Bitcoin surging in recent days (+1.6% to $24,600) to its highest levels since late August and as stocks extend 2023 gains (SPX +8% YTD, Nasdaq +15% YTD and Russell +11%). Markets keep going up while everyone talking recession, Fed hiking more on signs of a strong economy, earnings growth slowing, and “meme”, high short interest stocks and crypto rally. The dollar weakens against all G-10 majors as China tech rally boosts risk sentiment across Asian markets. In Asian markets, The Nikkei Index gains 194 points to 27,696, the Shanghai Index falls -31 points to 3,249, and the Hang Seng Index rises 175 points to 20,987. In Europe, the German DAX is up 68 points to 15,575, while the FTSE 100 is up a few points topping the 8,000 level. The Stoxx 600 rises 0.6% to its highest level in a year with media, telecoms and banks the best-performing sectors.

 

Economic Calendar for Today

·     8:30 AM ET            Weekly Jobless Claims…est. 200K

·     8:30 AM ET            Continuing Claims…est. 1.695M

·     8:30 AM ET            Housing Starts M/M for January…est. 1.36M

·     8:30 AM ET            Building Permits M/M for January…est. 1.35M

·     8:30 AM ET            Philly Fed Survey for February…est. (-7.4)

·     8:30 AM ET            Producer Price Index (PPI) M/M for January…est. +0.4%

·     8:30 AM ET            Producer Price Index (PPI) Y/Y for January…est. +5.4%

·     8:30 AM ET            PPI core Ex: Food & Energy M/M for January…est. +0.3%

·     8:30 AM ET            PPI core Ex: Food & energy Y/Y for January…est. +4.9%

·     8:45 AM ET            Fed’s Mester Speaks at Global Interdependence Center Event

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

·     1:30 PM ET             Fed’s Bullard Discusses the Economy and Monetary Policy

·     6:15 PM ET             Fed’s Mester Discusses the Economic Outlook

 

Earnings Calendar:

·     Earnings Before the Open: ALE ARCH BBGI BLMN CBC CROX DOC DDOG DNB DNOW DOCN DTM EPAM ETR FUN GVA H HAS HSIC IRDM IRWD ITGR KBR KELYA LH LXP MTRN OGN PARA PBF POOL POR RCM RS SAGE SCL SHAK SO SYNH TOST USFD VC VMC WE WSO WST ZBRA ZD

·     Earnings After the Close: AEL AL AMAT AMN APPN ATR AXTI BFAM BIO BJRI CGNX CHUY CMBM COHU COLD CPS CWST DASH DBX DKNG DLR EIG HASI HTGC HUBS KNSL LOPE LTRPA MNTV NR NVRO NEW OEC OIS PACB PCOR PDFS RDFN RMAX STEM SWAV TSLA TXRH

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 11.47 points, or 0.28%, to 4,147.60.

·     The Dow Jones Industrial Average rose 47.48 points, or 0.11%, to 34,128.05.

·     The Nasdaq Composite gained 110.45 points, or 0.92%, to 12,070.59.

·     The Russell 2000 Index advanced 21.06 points, or 1.09% to 1,960.97.

 

 

Macro	Up/Down	Last
Nymex	0.18	78.77
Brent	0.11	85.49
Gold	1.60	1,846.90
EUR/USD	0.0011	1.0701
JPY/USD	-0.26	133.84
10-Year Note	-0.019	3.788%

 

 

World News

·     U.S. Dec Net Overall Capital Flow +$28.6B vs. +$213.4B in Nov; U.S. Dec net foreign holdings of U.S. Treasury bonds, notes +$20.0B vs. $54.2B in Nov; China’s U.S. Treasury securities holdings $867B vs. $870B in Nov.

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 5.3 vs 12.5 last week. Bulls fall to 34.1% from 37.5%. Neutrals fall to 37.1% from 37.5%, Bears rise to 28.8% from 25%.

·     JP Morgan strategist Kolanovic warned yesterday about potential of “Volmageddon part 2”; stems from potential of option dealers having to deal with negative gamma risk if the options go in the money and comes after a volume surge in short-dated options (zero days to expiry options)

 

Sector News Breakdown

Consumer

·     Boston Beer (SAM) 4Q GAAP EPS ($0.93) on revs $447.5Mm vs est. $393.7Mm; sees 1Q net loss on lower shipments and margin gains weighted to 2H; sees FY23 GAAP EPS $6.00-10.00 vs est. $11.02.

·     Host Hotels (HST) Q4 FFO $0.44 vs. est. $0.42; Q4 revs $1.26B vs. est. $1.25B; sees FY adj FFO $1.60-$1.82 vs. est. $1.87; full year forecast is bolstered by Q1 RevPAR growth which is anticipated to be between 24% and 27%.

·     Nu Skin Enterprises (NUS) 4Q adj EPS $0.89 vs est. $0.53 on revs $522.3Mm vs est. $542.3Mm; sees 1Q EPS $0.17-0.27 vs est. $0.70; guides FY EPS $2.27-2.67 vs est. $2.92.

·     Shopify (SHOP) Q4 adj EPS $0.07 vs. est. loss (-$0.02); Q4 revs rose 26% y/y to $1.73B vs. est. $1.65B; 4q gross merchandise vol $61.0B vs. est. $59.21B; sees 1q gross margin to be slightly higher than 4q ’22.

·     QuantumScape Corp. (QS) 4Q EPS ($0.25) vs est. ($0.21); guides FY23 CAPEX $100-150Mm and cash op exp $225-275Mm; believe cash runway now extends to 2H25.

·     Wyndham Hotels (WH) Q4 adj EPS $0.72 vs. est. $0.62; Q4 revs $334M v. est. $323.43M; Q4 global RevPAR grew 15% y/y in constant currency, a 300-bps improvement, representing 116% of 2019 levels; full-year global RevPAR grew 20% year-over-year in constant currency; Sees FY23 revenue $1.38B-$1.41B vs. est. $1.48B.

·     Zillow Group (ZG) Q4 revenue $435M vs. est. $413.48M; guides Q1 revs $404M-$437M vs. est. $429M; Rentals revenue increased 13% year over year to $68 million; Traffic to Zillow Group’s mobile apps and websites in Q4 was 198M average monthly unique users, flat y/y; average monthly unique users for 2022 were 220 million, up 1% year over year.

 

Energy

·     Ameren (AEE) 4Q EPS $0.63 vs est. $0.56; guides FY revs $7.957B vs est. $7.2B and EPS $4.25-4.45 vs est. $4.34.

·     Antero Resources (AR) Q4 EPS $2.31 vs. $0.91 est. and $2.65 a year ago; Q4 revs $2.085B; said Q4 net production averaged 3.2 Bcfe/d, including 182 MBbl/d of liquids; sees FY net production to average 3.25 to 3.3 bcfe/d, including 184 to 195 MBbl/d of liquids; 2023 capex $875-$925M.

·     EQT Corp. (EQT) Q4 adj EPS $0.42 vs. est. $0.52; Q4 revs $1.71B vs. est. $1.43B; sees Q1 total sales volume 425Bcfe-475Bcfe and sees FY23 total sales volume 1,900Bcfe-2,000Bcfe; sees 2023 capex spending $1.7B-$1.9B.

·     Marathon Oil (MRO) Q4 adj EPS $0.88 vs. est. $0.84; Q4 revs $1.733B vs. est. $1.72B; Q4 oil and oil-equivalent production of 166,000 net boepd and 333,000 net boed; plans to average approximately nine rigs and three to four frac crews; announced a $1.9B-$2.0B capex.

·     Marathon Oil (MRO) upgraded to Buy from Hold at Benchmark.

·     SunPower (SPWR) Q4 adj EPS $0.15 vs. est. $0.13; Q4 revs $497.3M vs. est. $488.3M; sees FY23 adjusted EBITDA $125M-$155M; Achieved record Q4: added nearly 24,000 customers; Added 83,000 customers and drove revenue of $1.7 billion in 2022, 53% growth y/y.

 

Financials

·     AIG Inc. (AIG) Q4 adj EPS $1.36 vs. est. $1.29; Property damage, floods and power outages from frigid conditions pushed up AIG’s catastrophe losses in the quarter to $235M from $189M y/y; underwriting income climbed 27% to $635 million from $499 million a year earlier, while net premiums written in its general insurance business fell 6%.

·     Invitation Homes (INVH) 4Q FFO/sh $0.43 vs est. $0.42 on revs $580Mm vs est. $570.1Mm; sees FY adj revs +5.25-6.25% vs est. +7.2% and AFFO/shr $1.73-1.81 vs est. $1.80.

 

Healthcare

·     10x genomics (TXG) Q4 EPS loss (-$0.15) vs. est. loss (-$0.31); Q4 revs $156.2M vs. est. $148.1M; sees FY23 revenue $580M-$600M or 12%-16% growth vs. est. $613.96M.

·     Community Health (CYH) Q4 EPS $1.50 vs. est. $0.37; Q4 revs $3.14B vs. est. $3.16B; Adjusted EBITDA was $404 million, including $2 million of pandemic relief funds; On a same-store basis, admissions increased 4.4% and adjusted admissions increased 8.2% y/y.

·     Seagen Inc. (SGEN) 4Q EPS ($0.80) vs est. ($1.04) on revs $528Mm vs est. $479.7Mm; guides FY total revs $2.14-2.24B vs est. $2.3B.

·     Trupanion (TRUP) 4Q EPS ($0.23) vs est. ($0.29) on revs $246Mm vs est. $242.2Mm, adj EBITDA $2.2Mm.

 

Industrials & Materials

·     On Thursday, the Chinese Commerce Ministry said it blacklisted Lockheed Martin Corp. (LMT) and an arm of Raytheon Technologies Corp. (RTX) over the companies’ arms sales to Taiwan. Putting the companies on its “unreliable entities list” prohibits them from export and import activities related to China.

·     Albemarle (ALB) 4Q adj EPS $8.62 vs est. $8.28 on revs $2.62B vs est. $2.63B; sees FY revs $11.3-12.9B vs est. $11.17B, adj EBITDA $4.2-5.1B vs est. $4.55B and adj EPS $26.00-33.00 vs est. $28.43.

·     Allison Transmission (ALSN) Q4 EPS $1.52 vs. est. $1.25; Q4 revs $718M vs. est. $676.2M; sees FY23 adj EBITDA $965M-$1.03B vs. $961M y/y and sees FY23 revs $2.83B-$2.93B vs. est. $2.83B.

·     CF Industries (CF) Q4 EPS $4.35 vs. est. $4.30; Q4 revs $2.61B vs. est. $2.84B; longer-term, management expects global nitrogen supply-demand balance will remain tight into at least 2025.

·     Republic Service Group (RSG) Q4 adj EPS $1.13 vs. est. $1.02; Q4 revs $3.53B vs. est. $3.47B; sees FY23 adjusted EPS $5.15-$5.23 vs. est. $5.04; sees FY23 revs $14.65B-$14.8B vs. est. $14.53B; sees adjusted free cash flow to be in the range of $1.86B-$1.9B.

·     Rush Enterprises (RUSHA) Q4 EPS $1.74 vs. est. $1.49; Q4 revs $1.9B vs. est. $1.82B; Leasing and Rental revenue in 2022 was $322.3 million, up 30.3% from 2021; sees ‘strong’ truck sales through at least 1H23.

·     Summit Materials (SUM) 4Q adj EPS $0.32 vs est. $0.29 on revs $552.3Mm vs est. $599.3Mm, adj EBITDA $119.3Mm vs est. $123.3Mm; guides FY adj EBITDA $480-520Mm vs est. $522.4Mm.

·     Tronox Holdings (TROX) 4Q adj EPS $0.17 vs est. $0.11 on revs $649Mm vs est. $660.8Mm; sees 1Q adj EBITDA $120-130Mm vs est. $152.4Mm.

·     Teck Resources (TECK) is said to plan coal spinoff to focus on metals; Canadian miner is planning to separate met coal business – Bloomberg.

 

Technology, Media & Telecom

·     Cisco Systems (CSCO) 2Q adj EPS $0.88 vs est. $0.86 on revs $13.6B vs est. $13.4B, adj op mgn 32.5%; guides 3Q revs +11-13% vs est. +5.8%, adj EPS $0.96-0.98 vs est. $0.89; sees FY revs +9-10.5% vs est. +5.8% and adj EPS $3.73-3.78 vs est. $3.55.

·     Amplitude (AMPL) 4Q adj EPS ($0.03) vs est. ($0.04) on revs $65.3Mm vs est. $65.6Mm; sees 1Q revs $64-66Mm vs est. $66.5Mm and adj EPS ($0.08)-($0.06) vs est. ($0.06); sees FY revs $283-291Mm vs est. $292.9Mm and adj EPS ($0.16)-($0.11) vs est. ($0.20).

·     Equinix Cor. (EQIX) raises quarterly dividend; Q4 AFFO $7.09 vs. est. $6.82; Q4 revs $1.87B vs. est. $1.87B; Delivered seventh consecutive quarter of record channel bookings, accounting for nearly 40% of total bookings and approximately 60% of new logos.

·     Fastly (FSLY) 4Q adj EPS ($0.08) vs est. ($0.13) on revs $119.3Mm vs est. $114.6Mm, adj gr mgn 57%; guides 1Q revs $114-117Mm vs est. $115.5Mm and adj EPS ($0.12)-($0.08) vs est. ($0.12); sees FY revs $495-505Mm vs est. $488.8Mm and adj EPS ($0.27)-($0.21) vs est. ($0.44).

·     Pegasystems (PEGA) 4Q adj EPS $0.82 vs est. $0.11 on revs $396.5Mm vs est. $333.7Mm; sees FY adj revs $1.4B vs est. $1.38B and adj EPS $1.50 vs est. $0.62.

·     Resideo Technologies (REZI) 4Q EPS $0.26 vs est. $0.40 on revs $1.56B vs est. $1.57B; guides 1Q revs $1.52-1.56B vs est. $1.51B, gr mgn $26.3-27.3%, EPS $0.29-0.39 vs est. $0.50; sees FY revs $6.2-6.55B vs est. $6.47B, gr mgn $26.8-27.8% and EPS $1.85-2.15 vs est. $2.27.

·     RingCentral (RNG) Q4 adj EPS $0.60 vs. est. $0.59; Q4 revs $525M vs. est. $527.4M; sees FY23 adjusted EPS $3.04-$3.10 above consensus $2.84 and revs $2.18B-$2.2B vs. est. $2.33B; Q4 Annualized Exit Monthly Recurring Subscriptions (ARR) increased 17% y/y to $2.10B.

·     Roku inc. (ROKU) Q4 EPS loss ($1.70) vs. est. ($1.73); Q4 revs $867.1M vs. est. $801.7M; sees Q1 revs about $700M vs. est. $687.1M; in Q4, the Roku channel reached U.S. households with an estimated 100 million people.

·     Synopsis (SNPS) 1Q adj EPS $2.62 vs est. $2.50 on revs $1.36B vs est. $1.36B; guides 2Q revs $1.36-1.39B vs est. $1.43B and adj EPS $2.45 vs est. $2.56; sees FY revs $5.775-5.825B vs est. $5.8B and adj EPS $10.53-10.60 vs est. $10.38.

·     Twilio Inc. (TWLO) 4Q adj EPS $0.22 vs est. ($0.09) on revs $1.02B vs est. $1.0B; sees 1Q revs $995Mm-1.005B vs est. $1.02B and adj EPS $0.18-0.22 vs est. $0.02; sees FY adj op profit $250-350Mm.

·     Tyler Technologies (TYL) Q4 adj EPS $1.66 vs. est. $1.75; Q4 revs $452.2M vs. est. $454.51M; sees FY23 adj EPS $7.50-$7.65 vs. est. $7.75 and revs $1.935B-$1.97B vs. est. $2B; Recurring revenues from maintenance and subscriptions were $374.0 million, up 7.7% y/y.