Early Look

Thursday, July 29, 2021

Futures	Up/Down	%	Last
Dow	133.00	0.38%	34,967
S&P 500	6.25	0.15%	4,400
Nasdaq	-26.50	0.18%	14,984

 

 

Stock futures are looking mixed as the Dow and S&P look to rebound after yesterday’s underperformance, while the tech heavy Nasdaq slips following a cautious outlook from Facebook weighed on shares. Solid earnings and the Fed saying yesterday during its monetary policy meeting that the economy was making progress but it still had a way to go before the central bank begins tapering stimulus helps boost sentiment. On the agenda today, Q2 Gross Domestic Product (GDP) data at 8:30 with growth expected around 8.5% and consumer spending to come in around 10% along with core PCE inflation data and weekly jobless claims. Inflation still not a market factor despite surging prices as the reminded us once again on Wednesday that prices appear transitory. In Asian markets, China and Hong Kong stocks open sharply higher after Beijing’s securities regulator convenes banks to ease crackdown fears and state media continues effort to restore market calm. The Nikkei Index climbed 200 points to 27,782, the Shanghai index rose 50 points (or 1.5%) to 3,411 and the Hang Seng Index surged over 800 points (3.3%) to settle at 26,315. In Europe, the German DAX is up about 70 points to 15,640, while the FTSE 100 is higher by roughly 65 points to 7,080. Earnings onslaught continues today as the busiest week of the season rolls on. In Washington, more than a dozen Republicans voted yes, breaking an initial filibuster on the bill. Final passage remains uncertain as Republicans will demand amendment votes and input on the bill and it will once again face a 60-vote hurdle to close debate.

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 380K

·     8:30 AM EST      Continuing Claims…est. 3.196M

·     8:30 AM ET         Gross Domestic Product (GDP) Advance Q2…est. 8.5%

·     8:30 AM ET         GDP Consumer Spending Q2-A…est. 10%

·     8:30 AM ET         GDP Price Deflator for Q2-A…est. 5.4%

·     8:30 AM ET         PCE Prices for Q2-A…

·     8:30 AM ET         Core PCE Prices for Q2…est. 5.9%

·     10:00 AM ET      Pending Home Sales MoM for June…est. 0.3%

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

 

Earnings Calendar:

·     Earnings Before the Open: AB, ACI, ADS, AGCO, AGIO, AMT, AMZN, AOS, ARES, BAX, BC, BSIG, BTU, CARR, CBRE, CBZ, CCO, CFR, CG, CFX, CMCO, CMCSA, CMS, CNSL, CNX, COHU, COLB, COOP, CRS, CTG, CTXS, DBD, EME, EXLS, FCN, FLEX, GPI, GVA, HBAN, HGV, HLT, HSY, IBCP, ICE, ICPT, IP, ITGR, KBR, KDP, KEX, KIM, LAWS, LH, MA, MAS, MDC, MLM, MMP, MO, MPW, MRK, MTD, MTSI, NLKSN, NOC, OMCL, OSK, OSTK, PATK, PBF, PCG, PTEN, QUMU, RLGY, SAH, SAIA, SAVE, SLCA, SNDR, SO, SXC, TAP, TPX, TREE, TROW, TW, TXT, VC, VLO, VSTO, WAB, WEX, WST, WWW, XEL, YUM

·     Earnings After the Close: AJG, ALEX, ASPN, ATR, AVTR, BIO, BJRI, BZH, CASA, CC, CDNA, CDR, COG, CPT, CRY, CTO, CUBE, CUZ, CXP, DECK, DLB, DLR, DRRX, DV, DXCM, EBS, ECOL, EHTH, EIX, ENVA, ESS, EW, EXPO, FISI, FSLR, FTNT, FTV, FWRD, GILD, GLPI, HAYN, HUBG, KLAC, KNSL, LGND, LLNW, LPLA, MATW, MATX, MHK, MMSI, MSTR, MTX, NATI, NXGN, OFC, OPK, PFPT, PINS, POWI, PTCT, ROG, RSG, SGEN, SILK, SKYW, SM, SWKS, SWN, TEX, TMUS, TWI, TWLO, TXRH, UPWK, USAK, VCRA, VRTX, WATT, WELL, WERN, WRAP, WRE, WWE, X, ZEN

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -0.82 points, or 0.02%, to 4,400.64

·     The Dow Jones Industrial Average fell -127.59 points, or 0.36%, to 34,930.93

·     The Nasdaq Composite jumped 102.01 points, or 0.70%, to 14,762.58

·     The Russell 2000 Index advanced 33.12 points, or 1.51% to 2,224.96

 

 

Macro	Up/Down	Last
Nymex	0.42	72.81
Brent	0.33	75.07
Gold	15.85	1,823.00
EUR/USD	0.0034	1.1879
JPY/USD	-0.09	109.82
10-Year Note	+0.005	1.268%

 

 

World News

·     Bipartisan infrastructure deal sails through first Senate vote ‘; More than a dozen Republicans voted yes, breaking an initial filibuster on the bill. Final passage remains uncertain as Republicans will demand amendment votes and input on the bill and it will once again face a 60-vote hurdle to close debate – Politico

·      

 

Sector News Breakdown

Consumer

·     Ford Motor (F) 2Q adj EPS $0.13 vs est. ($0.03) on revs $26.8B vs est. $24.25B; guides FY adj FCF $4-5B, sees volume rise by about 30% sequentially from 1H to 2H21, says strategic turnarounds of biz outside North Am remain on track

·     Didi Global Inc (DIDI) shares jumped after a report that the company is considering going private to ease investor concerns as Chinese crackdown widens; shares have plunged from their IPO price of $14 after Beijing launched an investigation days after its hotly anticipated U.S. market debut last month https://on.wsj.com/3i82o7g (DIDI shares pare gains after later commenting that the reports of going private are untrue)

·     Softbank is a selling a block of 45M Uber (UBER) shares, according to a CNBC report, citing two sources familiar. Goldman is said to be offering the share block, according to a Bloomberg report

·     Vista Outdoor (VSTO) Q1 adj EPS $1.74 vs. est. $0.90; Q1 revs $662.91M, consensus $615.6M; Q1 Gross profit rose 93% to $241M and gross profit margin improved by 1025 bps; sees Q2 EPS $1.70-$1.80 vs. est. $0.92; sees Q2 revenue $710M-$730M vs. est. $626.52M

·     Hilton Worldwide Holdings Inc. (HLT) Q2 adj EPS $0.56 vs. est. $0.38; Q2 revs $1.33B vs. est. $1.38B; Revenue per available room (RevPAR) more than tripled from a year ago to $73.03, above expectations of $67.80; Q2 system-wide comparable RevPAR increased 233.8%

·     ThredUP (TDUP) 6.42M share Secondary priced at $24.25

·     Century Communities (CCS) Q2 EPS $3.47 vs. est. $2.84; Q2 revs $1.04B vs. est. $977.3M; said home deliveries increased 12% to a second quarter record of 2,771 homes; Net new home contracts increased 17% to a second quarter record 3,120 homes; raises year rev outlook to $3.8B-$4.1B

·     Churchill Downs (CHDN) Q2 adj EPS $3.08 vs. est. $2.60; Q2 revs $515.1M vs. est. $483.8M; Record Adjusted EBITDA of $233.3 million compared to $30.1 million in the prior year quarter

·     Comfort Systems (FIX) 2Q EPS $0.90 vs est. $0.91 on revs $713.9Mm vs est. $719.6Mm

·     iRobot (IRBT) shares fall -16%; Q2 non-GAAP EPS $0.27 vs. est. $0.31; Q2 revs $365.6M vs. est. $352.8M; announces plans to execute a $100 mln accelerated share repurchase; Q2 revenue performance was highlighted by 40% growth in the U.S., 29% in EMEA and 7% in Japan over the prior year period; cuts year sales view to $1.55B-$1.62B

·     JAKKS Pacific (JAKK) Q2 adj EPS loss (38c) vs. est. loss ($1.49); Q2 revs $112.4M vs. est. $86.4M

·     Marriot Vacations (VAC) 2Q adj EPS $0.85 vs est. $0.91 on revs $979Mm vs est. $920.2Mm

·     O’Reilly Auto (ORLY) Q2 EPS $8.33 vs est. $7.56 on revs $3.47B vs est. $3.26B; Q2 comp sales +9.9%, sees FY comp sales +5-7%, revs $12.3B-12.6B (vs est. $12.29B), raised FY EPS view to $26.80-$27 (est. $26.64) from $24.75-$24.95

·     Red Rock Resorts (RRR) Q2 EPS $1.12 vs est. $0.38 on revs $428.2M vs est. $373.3M

·     VICI Properties (VICI) 2Q adj FFO $0.46 vs est. $0.47 on revs $376.4Mm vs est. $368.6Mm; guides FY adj FFO $1.82-1.87 vs est. $1.87

·     Wyndham Hotels (WH) 2Q adj EPS $0.95 vs est. $0.66 on revs $406Mm vs est. $413.6Mm, REVPAR +110%; guides FY adj EPS $2.60-2.70 vs est. $2.33, sees FY REVPAR +40%, sees FY fee-related and other revs $1.16-1.19B

·     Yum China (YUMC) 2Q adj EPS $0.42 vs est. $0.44 on revs $2.45B vs est. $2.45B, qtrly comps +5% (KFC +4%, PH +11% ex FX), total system sales +14% (KFC +14%, PH +16% ex fx), says rising commodity prices will become a headwind in 2H

 

Energy

·     Antero Midstream (AM) Q2 adj EPS $0.23 vs. est. $0.19; Q2 revs $233M vs. est. $220.78M; Q2 ow pressure gathering volumes averaged 2,897 MMcf/d, a 1% increase vs. the prior year quarter

·     Murphy USA (MUSA) 2Q EPS $4.79 vs est. $2.88 on revs $4.46B vs est. $4.24B

·     Ocean’s Engineering (OII) 2Q adj EPS $0.10 vs est. $0.04 on revs $498Mm vs est. $453.4Mm; says expect a sequential decline in 3Q results on a consolidated basis

·     Royal Dutch Shell (RDS/A) announces up to $2B share buyback program; said adjusted earnings rose to $5.53 billion in the three months to June from $3.23 billion in the first quarter better than ests on higher revs of over $60B

 

Financials

·     Robinhood (HOOD) 55M share IPO priced at $38.00, the low end of $38-$42 range

·     PayPal (PYPL) Q2 adj EPS $1.15 v est. $1.12 on revs $6.24B vs est. $6.29B; processed $311B in payments in the quarter, up 40% YoY, and added 11.4M net new active accounts; expects annual TPV to rise between 33-35%

·     Aflac (AFL) Q2 adj EPS $1.62 vs. est. $1.27; Q2 revs $5.6B vs. est. $5.35B; with respect to q2 sales results in U.S. and Japan, we continued to see improvement and expect a stronger second half of year in both countries; average yen/dollar exchange rate* in the second quarter of 2021 was 109.48, or 1.7% weaker than the average rate of 107.65 in the second quarter of 2020

·     AvalonBay (AVB) Q2 core FFO $1.98 vs. est. $1.93; core FFO per share for the three months ended June 30, 2021 decreased 11.2% to $1.98 from $2.23 for the prior year period;

·     Hartford Financial Group (HIG) Q2 core EPS $2.33 vs. est. $1.34; continue to expect full year pre-tax savings of approximately $540 mln in 2022 and $625 mln in 2023; Commercial Lines written premiums of $2.5 billion were 15% higher than second quarter 2020

·     Lending Club (LC) Q2 EPS $0.09 vs. est. loss (-$0.43); Q2 revs $204.4M vs. est. $134.5M; sees FY21 revenue $750M-$780M vs. est. $542.96M with net income guidance of $25-$35 mln for H2 2021

 

Healthcare

·     Merck (MRK) Q2 adj EPS $1.31 vs. est. $1.44; Q2 revs $11.4B vs. est. $11.54B; cuts FY21 adjusted EPS view to $5.47-$5.57 from $6.48-$6.68 and also cuts FY21 revenue view to $46.4B-$47.4B from $51.8B-$53.8B vs. est. $48.59B

·     Icosavax (ICVX) 12.13M share IPO priced at $15.00

·     Nuvalent (NUVL) 9.5M share IPO priced at $17.00

·     Rallybio (RLYB) 6.2M share IPO priced at $13.00

·     Regeneron (REGN) and Sanofi (SNY) announced a pivotal Phase 3 trial evaluating Dupixent in patients with moderate-to-severe chronic spontaneous urticaria, or CSU, met its primary and all key secondary endpoints at 24 weeks

·     Align Technology (ALGN) Q2 EPS $3.04 vs. est. $2.55; Q2 revs $1.01B vs. est. $937.88M; Sees FY21 net revs $3.85B-$3.95B above est. $3.81B, up approximately 56% to 60% over full-year 2020

·     BioMarin (BMRN) 2Q EPS $0.07 vs est. ($0.11) on revs $501.7Mm vs est. $448.5Mm; guides FY revs $1.79-1.88B vs est. $1.82B

·     Community Health (CYH) Q2 EPS $0.23 vs. est. loss (-$0.01); Q2 revs $3.00B vs. est. $2.94B; on same-store basis,2q admissions increased 17% and adjusted admissions increased 28.5% YoY

·     Exact Sciences (EXAS) Q2 EPS loss (-$1.03) vs. est. loss (-$0.76); Q2 revs$434.8M vs. est. $420.7M; Screening revenue was $263.9 million, an increase of 101%; COVID-19 testing revenue was $33.1M, a decrease of 4%; EBITDA was $(122.9) million and adjusted EBITDA was $(26.5) million; raises year rev outlook

·     Hologic (HOLX) Q3 adj EPS $1.33 vs. est. $1.12; Q3 revs $1.168B vs. est. $1.04B; sees Q4 adj EPS 92c-$1.00 vs. est. $1.13; sees Q4 revs $1B-$1.04B vs. est. $1.04B; Q3 Organic Revenue Increases 38.4%, 34.2% in Constant Currency

·     Molina Health (MOH) Q2 adj EPS $3.40 vs. est. $3.38; Q2 revs $6.8B vs. est. $6.38B; premium revenue was approximately $6.6B for q2 of 2021, an increase of 51% compared to q2 of 2020; increased its full year 2021 premium revenue guidance to more than $25.0B and EPS no less than $13.25 vs. est. $13.36 and $25.78B

·     NuVasive (NUVA) Q2 adj EPS 60c vs. est. 44c; Q2 revs $294.8M vs. est. $285.08M; sees FY21 adj EPS $2.25-$2.35 vs. est. $2.20; sees FY21 revenue $1.19B-$1.21B vs. est. $1.2B; Q2 GAAP operating margin of 3.6%; non-GAAP operating margin of 13.9%

·     Vanda Pharma (VNDA) 2Q EPS $0.17 vs est. $0.14 on revs $67.9Mm vs est. $69.8Mm; guides FY revs $270-300Mm vs est. $282.9Mm

 

Industrials & Materials

·     Ingersoll Rand (IR) Q2 adj EPS $0.46 vs. est. $0.42; Q2 revs $1.3B vs. est. $1.21B; Raising full-year 2021 revenue growth expectation (excluding the HPS and SVT businesses and pending acquisitions of Seepex and Maximus Solutions) to mid-teens, or up approximately 250 to 300 bps of organic growth from Q1 2021 guidance, and raising Adjusted EBITDA guidance to $1.15 bill

·     Kraton Corp. (KRA) Q2 adj EPS $0.32 vs. est. $0.50; on revs $493.6M; now expect adjusted ebitda for full year to fall in range of $280 – $300 mln; said expect further realization of price increases over course of q3 and q4

·     Tetra Tech (TTEK) 3Q adj EPS $0.95 vs est. $0.83 on revs $802Mm vs est. $625.8Mm; guides 4Q revs $650-700Mm vs est. $654.5Mm, sees 4Q EPS $0.95-1.00 vs est. $1.00

·     United Rental (URI) 2Q adj EPS $4.66 vs est. $4.88 on revs $2.287B vs est. $2.26B; guides FY total revs $9.45-9.75B vs est. $9.36B, sees FY adj EBITDA $4.225-4.375B vs est. $4.278B

·     XPO Logistics (XPO) 2Q adj EPS $1.86 vs est. $1.68 on revs $5.04B vs est. $4.86B, says Ravi Tulsyan will replace David Wyshner as CFO; guides GXO FY pro forma revs $7.5-7.7B; sees FY pro forma adj EPS $4.00-4.30

 

Semiconductors

·     Cirrus Logic (CRUS) 1Q adj EPS $0.54 vs est. $0.40 on revs $277.3Mm vs est. $262.4Mm

·     Formfactor (FORM) 2Q adj EPS $0.36 vs est. $0.32 on revs $188.1Mm vs est. $185.8Mm; guides 3Q adj EPS $0.31-0.39 vs est. $0.38, sees 3Q revs $182-194Mm vs est. $187.5Mm

·     Lam Research (LRCX) Q4 EPS $8.09 vs. est. $7.55; Q4 revs $4.15B vs. est. $4.01B; cash and cash equivalents, short-term investments, and restricted cash and investments balances remained flat at $6.0B at the end of the June quarter; sees Q1 EPS $8.02, plus/minus 50c, vs. consensus $7.77 and sees Q1 revs $4.3B, plus/minus $250M vs. est. $4.07B

·     MKS Instruments (MKSI) Q2 EPS $3.02 vs. est. $2.95; Q2 revs $750M vs. est. $742.24M; sees Q3 EPS about $2.74 vs. est. $2.73; sees Q3 revs about $720M vs. est. $732.5M

·     Qualcomm (QCOM) 3Q adj EPS $1.92 vs est. $1.68 on adj revs $8B vs est. $7.6B; guides 4Q revs $8.4-9.2B vs est. $8.5B, sees 4Q adj EPS $2.15-2.35 vs est. $2.04; sees CY 5G handset shipments upward bias to 450-550Mm units, sees CY 3G/4G/5G handset shipments of +HSD growth

 

Technology

·     Facebook (FB) 2Q EPS $3.61 vs est. $3.03 on revs $29.1B vs est. $27.9B, MAUS 2.9B +7%, DAUS 1.91B +7%, ad revs $28.58B vs est. $27.14B; says 3Q and 4Q expect yr/yr revs growth to decelerate significantly on a sequential basis, expect increased ad targeting headwinds

·     Cognizant Technology (CTSH) Q2 adj EPS $0.99 vs. est. $0.96; Q2 revs $4.6B vs. est. $4.44B; sees Q3 revs $4.69B-$4.74B vs. est. $4.56B; raises FY21 adj EPS view to $4.00-$4.06 from $3.90-$4.02 (est. $3.97) and boosts FY21 rev view to $18.4B-$18.5B from $17.8B-$18.1B

·     Impinj (PI) 2Q adj EPS $0.11 vs est. ($0.04) on revs $47.3Mm vs est. $42.7Mm; guides 3Q adj loss/shr $0.08-0.15 vs est. loss/shr $0.06, sees 3Q revs $43-45Mm vs est. $42.6Mm

·     Pegasystems (PEGA) 2Q adj EPS $0.23 vs est. $(0.18) on revs $325.7Mm vs est. $273.1Mm

·     Riskified (RSKD) 17.5M share IPO priced at $21.00

·     ServiceNow (NOW) Q2 adj EPS $1.42 vs. est. $1.21; Q2 revs $1.41B vs. est. $1.36B; sees FY21 subscription revenues $5.53B-$5.54B with FY21 total revenue consensus $5.73B; Q2 Subscription revenues of $1.33B representing 31% Yoy growth, 27% adjusted for constant currency; says current remaining performance obligations of $4.7 billion as of Q2 2021, representing 34% yoy growth, 31% adjusted for constant currency

·     Tyler technologies (TYL) 2Q adj EPS $1.83 vs est. $1.63 on revs $405.4Mm vs est. $373.5Mm; guides FY adj EPS $6.70-6.80 vs est. $6.71, sees FY revs $1.53-1.56B vs est. $1.53B