Early Look

Wednesday, May 1, 2024

U.S. futures are adding to yesterday’s declines, down another -0.5% at 5,041 for S&P futures (Spuz) after sliding into the close Tuesday to finish at the lows. Stocks tumbled on Tuesday, ending the month with a -4.2% decline for the S&P 500, the Nasdaq Composite fell -4.4%, and the Dow Jones Industrial Average gave up -5% as all three indexes snapped five-month win streaks. Treasury yields jumped as stock markets weighed economic data showing rising labor costs and deteriorating consumer confidence ahead of the FOMC meeting later today. The FOMC will conclude its two-day policy meeting today at 2:00 followed by Chair Jerome Powell’s press conference. All S&P 500 sectors ended lower with energy (XLE), the weakest group, and Healthcare (XLV), with a -0.1% loss, fell the least. U.S. Treasury yields climbed on the higher ECI inflation reading as the benchmark 10-year yield rose 7.8 basis points (bps) to 4.69%. For the month, the 10-year yield was up 49.6 bps, its largest monthly gain since September 2022. Bitcoin adds to yesterday’s plunge, down another 4.25% at $57,300 (off lows around $56,500). For April, 10 of 11 S&P sectors finished in negative territory with REITs (XLRE) -8.4% for April, the worst sector in month followed by -5.7% for Technology (XLK), Healthcare (XLV) -5%, Materials (XLB) -4.59% MTD Communications (XLC) -4.65% and only sector higher was Utilities (XLU) +1.66% MTD. In Asian markets, The Nikkei Index fell -131 points to 38,274, the Shanghai Index fell -8 points to 3,104, and the Hang Seng Index rose 16 points to 17,763. In Europe, the German DAX is down -186 points to 17,932, while the FTSE 100 is up a few points to 8,150. Another monster day of earnings with shares of AMD, CVS, LEG, SBUX, SMCI, SWKS tumbling on results/guidance while DD, PINS, LMND, TMDX rise.

• The Dow Jones Industrial Average fell -570.17 points, or 1.49%, to 37,815.92.
• The Nasdaq Composite tumbled -325.26 points, or 2.04%, to 15,657.82.
• The Russell 2000 Index declined -42.12 points, or 2.09% to 1,973.91.

• 8:15 AM ET                  ADP Private Payrolls for April…est. 175K (prior 184K)
• 9:45 AM ET                  S&P Global Manufacturing PMI, April-Final…prior 49.9
• 10:00 AM ET                Construction Spending M/M for March…est. +0.3%
• 10:00 AM ET                ISM Manufacturing PMI for April…est. 50.0
• 10:00 AM ET                JOLTs Job Openings for March…est. 8.68M (prior 8.756M)
• 10:30 AM ET                Weekly DOE Inventory Data
• 2:00 PM ET                   Federal Open Market Committee (FOMC) meeting, no changes expected to rate.
• 2:30 PM ET                   Fed Chair Powell Holds Post-Meeting Press Conference

• Earnings After the Close: ACHC ACLS AEIS AFG AIG ALB ALKT ALL AMWL ANSS APA ARAY ASPN ATUS AWK BALY BV BZH CAR CCRN CDE CF CHRW CNXN CODI CORT CRK CSGS CTSH CTVA CVNA CW CWAN CWH DASH DVN EBAY EBS ENVX EPR ERII ES ETSY FORM FRSH FSLR FSLY GKOS GLAD GNW HCC HDSN HLF HRTG HST HTLF INFA INN JAZZ KAR KN LUNG MAA MCW MET MGM MOS MPWR MRO MUSA NGVT NOVA NSA NTGR NVST NYMT PAYC PCOR PPC PTC PTEN QCOM QRVO RDN RHP RLJ RM RYN SCI SFM SRPT SUM TENB TROX TWI UPWK VICI VMI VTR WHD ZG

• Caesar Entertainment (CZR) Q1 EPS loss (-$0.73) vs. est. loss (-$0.07); Q1 revs $2.7B vs. est. $2.84B; Q1 same store adj. EBITDA $853M, vs. est. $917.7M; excluding joint venture capex, estimate 2024 cash capex spend of $800M; says moving past Q1 headwinds, remain optimistic toward improved operating results throughout balance of year; Caesars Digital delivered strong revenue growth despite lower-than-expected hold in online sports due to unfavorable Super Bowl and March Madness.
• Clorox (CLX) Q3 adj EPS $1.71 vs. est. $1.37; Q3 revs $1.81B vs. est. $1.87B; recorded a one-time pretax charge of $240Mm during Q3 from sale of Argentina business; said expects to fully restore lost distribution, due to cyberattack in aug 2023, by the end of Q4; sees FY24 net sales to be down low single digits, but also at low end of the range and guides FY24 organic sales up low single digits, but also at low end of the range; raises FY24 adjusted EPS view to $5.80-$5.95 from $5.30-$5.50.
• Mondelez (MDLZ) Q1 adj EPS $0.95 vs. est. $0.89; Q1 revs $9.29B vs. est. $9.16B; Q1 adj gross margin 39.2%, above ests 36.6% and adj operating margin 18.5% better; sees FY24 adj EPS growth high single digits; sees FY24 Organic Net Revenue growth of 3%-5%, high single-digit and expects for 2024 Free Cash Flow of $3.5+ billion.
• Starbucks (SBUX) shares fell overnight as Q2 adj EPS $0.68 vs. est. $0.79; Q2 revs fell to $8.56B vs. est. $9.13B; Q2 global comparable store sales declined (-4%) vs. est. +1.45%, driven by a (-6%) decline in comparable transactions, partially offset by a 2% increase in average ticket; Q2 North America comp sales (-3%) vs. est. +2%; and US comp sales (-3%) vs. est. +2.3%; Q2 active U.S. rewards membership totals 32.8M, up 6% y/y.
• Fortune Brands (FBIN) Q1 adj EPS $0.83 vs. est. $0.74; Q1 revs $1.1B vs. est. $1.08B; sees FY24 EPS $4.20-$4.40 vs. consensus $4.29 and sees FY24 revenue growth 3.5%-5.5%; delivers first quarter sales and margin results reflecting strong execution; reaffirms full year guidance.
• Viking Holdings (VIK) 64M share IPO priced at $24.00 as the deal size was increased to 64M shares of common stock from 53M shares of common stock and priced within the $21.00-$25.00 range.
• Elon Musk disbands Tesla (TSLA) EV charging team, leaving customers in the dark; Musk’s decision, as reported by The Information, to dismiss the head of the business, Rebecca Tinucci, and most or all the staff that operated and maintained the system left officials at automakers and Tesla suppliers uncertain about the future – Reuters.
• Nio Inc (NIO) said it delivered 15,620 vehicles in April 2024, increasing by 134.6% year-over-year and delivered 45,673 vehicles year-to-date in 2024, increasing by 21.2% year-over-year.
• Li Auto (LI) announced that the company delivered 25,787 vehicles in April 2024, up 0.4% year over year; said cumulative deliveries of li auto vehicles reached 739,551 as of end of April 2024.
• Xpeng (XPEV) said 9,393 vehicles were delivered in April 2024, a 33% increase year-on-year and X9 MPV cumulative deliveries nearing 10,000 units since its launch in January.

• Edison International (EIX) Q1 adj EPS $1.13 vs. est. $1.14; Q1 revs $4.08B vs. est. $4.16B; backs FY24 core EPS view $4.75-$5.05 (est. $4.94) while reiterate long-term core EPS growth rate targets of 5%-7% for 2021-2025 and 5%-7% for 2025-2028.
• ONEOK (OKE) Q1 EPS $1.09 vs. est. $1.18; boosts 2024 net income guidance by $70M to a midpoint of $2.88B and adjusted EBITDA increased $75M to a midpoint of $6.175B.
• PG&E (PCG) is nearing a deal to sell a multibillion-dollar stake in its fleet of power plants to investment giant KKR as the company seeks funding for work intended to prevent its power lines from sparking wildfires – WSJ reported. PG&E has said the assets are nearly $3.5B, and analysts estimate the potential sale could be between $2B and $3B.

• Lemonade (LMND) Q1 EPS loss (-$0.67) vs. est. loss (-$0.79); Q1 revs rose 25% y/y to $119.1M v. est. $114.3M; raises FY24 revenue view to $511M-$515M from $505M-$510M (est. $510.6M), btu guided Q2 revs $118M-$120M vs. $123M; guides adj EBITDA loss $151M-$155M, saw loss $155M-$160M.
• Prudential (PRU) Q1 adj EPS $3.12 vs. est. $3.13; Q1 assets under management of $1.496 trillion versus $1.417 trillion for the year-ago quarter; Q1 Book value per Common share of $75.00 versus $85.33 per share for the year-ago quarter; adjusted book value per Common share of $97.03 versus $97.29 per share for the year-ago quarter.
• Voya Financial Inc (VOYA) board of directors authorizes the repurchase of an additional $500M of common stock.

• Stryker (SYK) Q1 adj EPS $2.50 vs. est. $2.35; Q1 revs $5.2B vs. est. $5.1B; said in Q1 delivered 10% organic sales growth; sees FY24 adjusted EPS $11.85-$12.05 vs. est. $11.85; said now expect full year 2024 organic net sales growth to be in the range of 8.5% to 9.5% with the pricing impact to be roughly flat.
• TransMedics Group (TMDX) Q1 EPS $0.35 vs. est. loss (-$0.05); Q1 revs $96.9M vs. est. $83.78M; boosts FY24 revenue view to $390M-$400M from $360M-$370M (est. $366.99M).

• DuPont (DD) Q1 adj EPS $0.79 vs. est. $0.65; Q1 revs $2.93B vs. est. $2.81B; guides Q2 EPS and revs above views ($0.84/$3.03B vs. est. $0.65/$2.81B) and raises FY24 adjusted EPS view to $3.45-$3.75 from $3.25-$3.65 and boosts FY24 revenue view to $12.1B-$12.4B from $11.9B-$12.3B.
• Hillenbrand (HI) Q2 adj EPS $0.76 vs. est. $0.75; Q2 revs $785.3M vs. est. $810.69M; cuts FY24 adj EPS view to $3.30-$3.50 from $3.60-$3.95 (est. $3.70) and lowers FY24 revenue view to $3.23B-$3.3B from $3.28B-$3.44B (est. $3.33B) citing reduced volumes stemming from lower than expected orders, unfavorable product mix in MTS, and pricing pressure in MTS.
• Powell Industries (POWL) Q2 EPS $2.75 tops consensus $1.77 and revs $255.1M beat est. $201.45M; Q1 backlog as of March 31 remained at $1.3B; Cash and short-term investments as of March 31, totaled $365M.
• Republic Service Group (RSG) Q1 adj EPS $1.45 vs. est. $1.35; Q1 revs $3.86B vs. est. $3.89B; expanded Q1 net income margin 110 basis points and adjusted ebitda margin 120 basis points; generated cash flow from operations of $812 million and adjusted free cash flow of $535 million.

• Pinterest (PINS) shares rose overnight as Q1 adj EPS $0.20 vs. est. $0.13; Q1 revs rose 23% y/y to $740M vs. est. $699.87M; Q1 global Monthly Active Users (MAUs) increased 12% y/y to 518M vs. est. 503.2M users; sees Q2 revenue $835M-$850M above consensus $826.48M while guides Q2 adjusted operating expenses $490M-$505M.
• Skyworks Solutions (SWKS) Q2 EPS $1.55 vs. est. $1.52; Q2 revs $1.05B vs. est. $1.05B; sees Q3 EPS $1.21 at mid-point vs. est. $1.47 and sees Q3 revenue $900M plus/minus 2% vs. est. $1.02B; for Q2 sees mobile business to be down sequentially.
• Super Micro Computer (SMCI) Q3 EPS $6.65 vs est. $5.78; Q3 revs $3.85B vs. est. $3.95B (and vs. $1.28B y/y); raises FY24 revenue view to $14.7B-$15.1BB, from prior $14.3B-$14.7B view and vs. est. $14.6B; sees FY24 EPS $23.29-$24.09 vs. consensus $21.99; guided Q2 EPS and revenues above consensus.
• Fubo (FUBO) has attempted to renew with Warner Brothers Discovery (WBD) our Discovery content agreement for its networks including Discovery, HGTV, Food Network and TLC, among others, and to obtain license rights for its Turner sports networks TNT, TBS, and truTV.