Morning Preview: July 19, 2023

Early Look

Wednesday, July 19, 2023

Futures

Up/Down

%

Last

Dow

43.00

0.12%

35,185

S&P 500

1.25

0.04%

4,589

Nasdaq

21.50

0.13%

15,996

 

 

Stocks futures in the U.S. edging higher, holding yesterday gains as the Dow Jones Industrial Average looks to make it an eighth straight day of gains, its longest streak this year as large caps extend YTD gains following a strong start to earnings season thus far. In Asian markets, The Nikkei Index surged 402 points to 32,896, the Shanghai Index was little changed at 3,198, and the Hang Seng Index fell -63 points to 18,952. In Europe, the German DAX is higher by 10 points to 16,134, while the FTSE 100 is up 115 points to 7,566. The pound weakened against the dollar and bonds rallied after UK inflation eased more than expected, and traders cut bets on further Bank of England rate-hikes. Total UK CPI inflation fell to 7.9% YoY in June from the prior 8.7%, which was 0.3% below expectations and a low rate since March last year. Core CPI fell to 6.9% YoY, a 0.2% under shoot. Major averages were strong in the US yesterday S&P sectors were mostly green, led by Energy, Financials and Healthcare, while Real Estate, Consumer Discretionary and Technology were laggards and the only sectors in the red. Path of least resistance remains to the upside for now, with major averages at new 2023 highs.

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 32.19 points, or 0.71%, to 4,554.98.

·     The Dow Jones Industrial Average rose 366.58 points, or 1.06%, to 34,951.93.

·     The Nasdaq Composite gained 108.69 points, or 0.76%, to 14,353.64.

·     The Russell 2000 Index advanced 24.80 points, or 1.27% to 1,976.07.

 

Economic Calendar for Today

·     7:00 AM ET            MBA Mortgage Applications Data

·     8:30 AM ET            Housing Starts M/M for June

·     8:30 AM ET            Building Permits M/M for June

·     10:30 AM ET          Weekly DOE Inventory Data

·     1:00 PM ET             US Treasury to sell $12B in 20-year notes.

 

Earnings Calendar:

·     Earnings Before the Open: ALLY BKR CBSH CFG ELV FHN GS HAL MTB NDAQ NTRS USB

·     Earnings After the Close: AA BANR CALX CCI CNS COLB DFS EFX FNB FR GSBC IBM KMI LBRT LVS MMLP NBHC NFLX PFBC RELL REXR SLG STLD TSLA UAL WTFC ZION

 

 

Macro

Up/Down

Last

Nymex

0.14

75.89

Brent

0.23

79.86

Gold

-2.60

1,978.20

EUR/USD

-0.0009

1.1217

JPY/USD

1.06

139.87

10-Year Note

-0.033

3.756%

 

 

Sector News Breakdown

Consumer

·     Brunswick (BC) sees Q2 EPS %2.30-$2.35 below est. $2.68 and guides Q2 sales $1.7B vs. est. $1.829B and guides year EPS $9.50 vs. est. $10.26 (watch shares of HZO, MBUU on guidance).

·     Carvana (CVNA) shares surge as Q2 revs $2.97B vs. est. $2.56B; said expects to achieve positive adjusted ebitda for Q3; Retail units sold of 76,530 and revenue of $2.968 billion, a decrease of 35% and 24%, respectively, compared to second quarter 2022, driven largely by internal prioritization of profitability initiatives; sees achieving positive adj. EBITDA in Q3.; said reaches deal to restructure debt and extend maturities.

·     Constellation Brands Inc. (STZ) said will appoint two new independent directors to its board and share more information with Elliott Investment Management as part of agreements struck between the alcoholic beverage company and the investment firm.

 

Financials

·     Citizens Financial (CFG) Q2 EPS $1.04 vs. est. $1.01; Q2 CET1 ratio improved to 10.3%; sees q3 net interest income excluding impact of private bank down about 4% vs q2 2023; sees Q3 underlying CET1 ratio excluding impact of private bank up modestly including share repurchases vs Q2.

·     First Horizon (FHN) Q2 adjusted EPS $0.39 vs. est. $0.40; Q2 tangible book value per share $11.50; Q2 CET1 capital ratio 11.1%.

·     Fulton Financial (FULT) 2Q operating EPS $0.47 vs est. $0.42; Q2 NII 212.852Mm vs est. $214.75Mm, credit loss provision $9.747Mm.

·     Hancock Whitney (HWC) 2Q EPS $1.35 vs est. $1.34 on NII $276.7Mm vs est. $280.35Mm; sees operating pre-provision net revs for FY23 to decrease 1-3% vs FY22, sees non-interest income for FY23 up 1-2% vs FY22.

·     Interactive Brokers (IBKR) 2Q adj EPS $1.32 vs est. $1.40 on revs $1.0B vs est. $1.06B.

·     M&T Bank (MTB) Q2 EPS $5.12 vs. est. $4.16 and $1.08 a year ago; net interest income came in at $1.81 billion, up from $1.42 billion in the year-ago quarter; noninterest income rose 41% from a year ago to $803 million; total deposits at the end of the quarter were $162.1 billion, up from $159.1 billion as of March 31, but down from $170.4 billion a year ago.

·     Visa (V) and MasterCard (MA) are facing a new antitrust lawsuit brought by Block (SQ), the parent company of Square, that alleges the credit card companies conspired to vastly overcharge the Square payment platform, causing higher retail prices paid by consumers – Bloomberg.

·     Western Alliance (WAL) 2Q EPS $1.96 vs est. $1.98 on NII $550.3Mm vs est. $565.4Mm, qtrly provision for credit losses $21.8Mm.

 

Healthcare

·     Amarin (AMRN) implements organizational restructuring to strengthen the company while driving patients access to VASCEPA®/VAZKEPA® globally.

·     Elevance Health (ELV) Q2 adj EPS $9.04 vs. est. $8.80; Q2 revs $43.4B vs. est. $41.5B; raises FY23 adjusted EPS view to greater than $32.85 per share from prior view $32.70 and est. $32.78.

·     Harrow Health (HROW) sees 2Q revs more than $31Mm vs est. $29.2Mm and adj EBITDA more than $9.3Mm vs est. $8.376Mm.

 

Industrials & Materials

·     AAR Corp. (AIR) 4Q adj EPS $0.83 vs est. $0.78 on sales $553.3Mm vs est. $531.4Mm, adj gr mgn 19.5% vs 18.6%, adj op mgn 7.0% vs 7.8%.

·     JB Hunt (JBHT) 2Q EPS $1.81 vs est. $1.92 on revs $3.13B vs est. $3.307B; decline in revenue was primarily driven by a decrease in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, and 21% in Truckload.

·     Joby Aviation (JOBY) downgraded to underweight from neutral at JPMorgan saying a surge in its shares, as well as in peer Archer Aviation, has decoupled from fundamentals.

 

Technology, Media & Telecom

·     The U.K.’s Competition and Markets Authority on Wednesday said it has provisionally cleared Broadcom’s (AVGO) deal to buy VMware (VMW) as it concluded the merger wouldn’t weaken competition in the supply of critical computer server products in the U.K.

·     Omnicom (OMC) 2Q adj EPS $1.81 vs est. $1.80 on revs $3.609B vs est. $3.674B; says while balance of year will continue to see economic uncertainty, are entering a dynamic and exciting new era for the company; has secured leading positions in generative AI tech and partnerships.

·     AT&T (T) said it does not intend to immediately remove lead cables from Lake Tahoe pending further analysis. The Wall Street Journal reported that AT&T and other telecom companies have left toxic lead cables on poles, underwater and buried under ground. In Tuesday’s court filing, AT&T argued that lead-clad cables “represent less than 10% of its copper footprint of roughly two million sheath miles of cable.” T hit 30-year lows this week and Verizon (VZ) 13-yr lows.

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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.