Early Look

Friday, March 3, 2023

Futures	Up/Down	%	Last
Dow	67.00	0.20%	33,085
S&P 500	13.25	0.33%	3,997
Nasdaq	47.50	0.39%	12,109

 

 

U.S. S&P futures are pointing to a higher open, rising +0.33% at 3,997.75, the high end of range overnight (high 3,998.75 and low 3,974), building on yesterday gains, and back at the 50-day MA level around 4,000 (the SPX 50-day 3,982). Treasury yields dip as the 10-yr falls 5bps back to the 4% level while the 2-yr dips 2.5bps to 4.85%. Bitcoin slides -4.5% back to 2-week lows of $22,300 after the Silvergate (SI) fallout hurts the crypto space. European shares rose along with global stocks this morning as investors took comfort in underlying economic strength. U.S. stocks bounced back on Thursday as Atlanta Fed President Bostic said that he favors the U.S. central bank sticking with quarter-point rate increases, though concerns over the impact of higher rates on growth linger. Speculation has risen that the Fed could reaccelerate the pace of its hikes as inflation shows signs of perking up again and as other economic releases indicate a still tight labor market. Only Financials and Consumer Discretionary lagged in yesterday’s broader market rally. In Asian markets, The Nikkei Index surged 428 points or 1.56% to settle at 27,927, the Shanghai Index rose 17 points to 3,328, and the Hang Seng Index gained 138 points to 20,567. In Europe, the German DAX is up 160 points to 15,488, while the FTSE 100 rises 17 points to 7,961. Oil is lower, gold is higher and the dollar is weaker.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 29.96 points, or 0.76%, to 3,981.35.

·     The Dow Jones Industrial Average rose 341.73 points, or 1.05%, to 33,003.57.

·     The Nasdaq Composite gained 83.50 points, or 0.73%, to 11,462.98.

·     The Russell 2000 Index advanced 4.23 points, or 0.22% to 1,902.66.

 

Economic Calendar for Today

·     9:45 AM ET          S&P Global Services PMI, Feb-F

·     9:45 AM ET          S&P Global Composite PMI, Feb-F

·     10:00 AM ET        ISM Non-Manufacturing PMI, for February

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

 

 

Macro	Up/Down	Last
Nymex	-0.37	77.79
Brent	-0.46	84.29
Gold	13.70	1,854.10
EUR/USD	0.0018	1.0614
JPY/USD	-0.74	136.03
10-Year Note	-0.07	4.003%

 

 

World News

·     Fed’s Waller indicated that it’s still possible that for the terminal rate to be close to 5% rather than 6%. Fed’s Waller said that he would support raising interest rates “a couple more times to a projected terminal rate between 5.1% and 5.4%” if the labor market and inflation cool down. However, he also added that “if those data reports continue to come in too hot, the policy target range will have to be raised this year even more.”

·     Eurozone economy expanded at the strongest pace since June 2022 with final composite PMI rising to 52 in Feb from 50.3 in Jan, S&P Global reported. Services PMI also rose to a 8-month high of 52.7 up from 50.8.

·     Eurozone PPI surprised on the downside decelerating to 15% YoY in Jan from 24.5% YoY in Dec. The MoM rate fell 2.8% after rising 1.1%.

 

Sector News Breakdown

Consumer

·     Costco Inc. (COST) Q4 EPS $3.30 vs. est. $3.20; Q2 total comp sales ex: fuel, in constant currency +6.8%, vs. estimate +6.16% and U.S. comps +5.8%, vs. est. +5.56%; int’l comps +9.5% vs. est. +7.1%; said membership fees rose 6.2% y/y to $1.03B; Q2 e-Commerce sales down -9.6%.

·     ChargePoint (CHPT) 4Q EPS ($0.23) vs est. ($0.17) on revs $152.8Mm vs est. $165.4Mm; guides 1Q revs $122-132Mm vs est. $152.5Mm.

·     Hibbett Corp. (HIBB) Q4 EPS $2.91 vs. est. $2.95; Q4 sales $458.3M vs. est. $477.5M; Gross margin 35.2% vs. 35.1% y/y, estimate 35%; E-commerce sales as share of total sales 17.4%.

·     Nordstrom (JWN) Q4 adj EPS in-line at $0.74 on revs $4.32B vs. est. $4.37B; Digital sales in the fourth quarter decreased 13.1% y/y; Ending inventory decreased 15.2% compared with the same period in fiscal 2021, versus a 4.1% decrease in sales; provides fiscal 2023 outlook, including plans to wind down Canadian operations to drive profitable growth and enhance shareholder value.

·     Potbelly (PBPB) 4Q adj EPS $0.09 vs est. $0.13 on revs $120.2Mm vs est. $119.4Mm; sees both revs and profitability to grow in 1Q and FY23.

·     Tesla Inc.’s (TSLA) shipments from its China factory climbed in February as price cuts attracted buyers and consumer spending kicked back into gear. The US electric vehicle pioneer delivered a total of 74,402 vehicles from its Shanghai facility last month.

·     Victoria Secret (VSCO) Q4 adj EPS $2.47 vs. est. $2.34; Q4 revs $2.02B, in-line with ests; sees FY23 revenue up mid-single digit range vs. est. $6.35B; sees Q1 net sales to decrease in mid-single digit range compared to last year’s q1 net sales of $1.484B; expect adjusted operating income rate for full year 2023 to be like 2022.

 

Energy, Industrials and Materials

·     Astronics Corp. (ATRO) 4Q EPS ($0.21) vs est. ($0.18) on revs $158.2Mm vs est. $155Mm; maintains FY revs guide $640-680Mm, sees 1Q lightest revs of year at $140-150Mm vs est. $152.8Mm.

 

Financials

·     Riot platforms (RIOT) after saying files non-timely 10K with the SEC.

·     SVB Financial Group (SIVB) files for mixed shelf; size not disclosed.

 

Healthcare

·     Cigna Group (CI) files for two-part senior notes offering of up to $1.5B.

·     Revolution Medicines (RVMD) 13.64M share Secondary priced at $22.00.

·     Veru Inc (VERU) shares slide after saying the FDA declined emergency use authorization for its experimental drug to treat adult patients hospitalized with moderate-to-severe COVID-19.

·     Viatris Inc (VTRS) warned that it will stop selling some essential medicines in the UK that are already in short supply unless the British government makes changes to its voluntary medicines pricing agreement.

·     Vistagen Therapeutics Inc (VTGN) files for offering of up to 12.4 mln shares of common stock.

 

Technology, Media & Telecom

·     Broadcom (AVGO) Q1 adj EPS $10.33 vs. est. $10.10; Q1 revs $8.92B vs. est. $8.9B; sees Q2 revenue approximately $8.7B vs. est. $8.59B and sees Q2 adjusted EBITDA approximately 64.5% of projected revenue; Q1 Infrastructure software revenue $1.81 billion below views.

·     Bumble (BMBL) 13.8M shares offering priced at $22.80 per share.

·     C3.ai, Inc. (AI) 3Q adj EPS ($0.06) vs est. ($0.22) on revs $66.7Mm vs est. $64.3Mm; guides 4Q revs $70-72Mm vs est. $69.9Mm and adj operating loss ($24)-($28)Mm; sees FY revs $264-266Mm vs est. $261.3Mm and adj operating loss ($69)-($73)Mm.

·     Dell Inc. (DELL) Q4 EPS $1.80 vs. est. $1.63; Q4 revs down -11% y/y to $25.04B vs. est. 23.3B; announces 12% increase in annual cash dividend to $1.48 per common share; Q4 infrastructure solutions group rev of $9.9 bln, up 7% and qtrly client solutions group rev of $13.4 bln, down 23%; says took $367 mln charge in q4 related to layoffs announced in February.

·     Elastic NV (ESTC) 3Q adj EPS $0.17 vs est. $0.05 on revs $274.6Mm vs est. $264.4Mm; guides 4Q revs $276-278Mm vs est. $283.8Mm and adj EPS $0.08-0.10 vs est. $0.07.

·     Hewlett Packard Enterprises (HPE) Q1 adj EPS $0.63 vs. est. $0.54; Q1 revs $7.8B vs. est. $7.43B; sees Q2 adj EPS $0.44-$0.52 vs. est. $0.47 and revs $7.1B-$7.5B vs. est. $7.04B; raises FY23 rev growth estimate to be in range of 5%-7% adjusted for currency.

·     Identiv (INVE) 4Q EPS $0.00 vs est. $0.00 on revs $29Mm vs est. $29.7Mm; sees FY23 revs $125-130Mm vs est. $137.5Mm.

·     Marvell Technologies (MRVL) 4Q adj EPS $0.46 vs est. $0.47 on revs $1.42B vs est. $1.4B, adj gr mgn 63.5%; sees 1Q revs $1.3B vs est. $1.38B, adj gr mgn 60%, adj EPS $0.24-0.34 vs est. $0.41.

·     Ooma Inc. (OOMA) 4Q adj EPS $0.16 vs est. $0.14 on revs $56.5Mm vs est. $56.4Mm; sees 1Q revs $56.4-56.9Mm vs est. $57Mm and adj EPS $0.13-0.14 vs est. $0.14; sees FY revs $235.5-238.5Mm vs est. $237.5Mm and adj EPS $0.55-0.63 vs est. $0.58.

·     Samsara (IOT) Q4 EPS loss (-$0.02) vs. est. loss (-$0.05); Q4 revs $186.6M vs. est. $171M; sees Q1 EPS loss (6c) to (5c) vs. est. Loss (-$0.05); sees Q1 revenue $190M-$192M vs. est. $182.4M.

·     Veritone (VERI) 4Q adj EPS $0.05 vs est. $0.07 on revs $43.9Mm vs est. $44.8Mm; guides 1Q revs $29.5-30.5Mm vs est. $33.9Mm and adj net loss $8.5-9.5Mm; sees FY revs $158-168Mm vs est. $161Mm.

·     VMWare (VMW) Q4 adj EPS $2.13 vs. est. $1.94; Q4 revs $3.71B vs. est. $3.63B; License revs down -18% y/y to $845M vs. est. $943.2M while Subscription and SaaS revenue rise 36% y/y to $1.18 billion, above ests.

·     Zscaler (ZS) shares fell on billings miss; 2Q adj EPS $0.37 vs est. $0.29 on revs $387.6Mm vs est. $364.9Mm; guides 3Q revs $396-398Mm vs est. $387.3Mm and adj EPS $0.39 vs est. $0.31; sees FY revs $1.558-1.563B vs est. $1.526B and adj EPS $1.52-1.53 vs est. $1.24; also announces restructuring plan and approx 3% headcount reduction.