Early Look

Thursday, May 2, 2024

After a late day sell-off on Wednesday late day, erasing most of the rally from the FOMC/Powell related commentary, U.S. futures are pointing to a solid rebound ahead of another plentiful day of economic data and big earnings, including Apple (AAPL) which reports after the close. U.S. stocks closed mixed on Wednesday after the Federal Reserve left its key interest rate unchanged at 5.25%-5.5%, as expected, and indicated that its next move will probably be to cut rates, though remains data dependent. Fed Chairman Powell also downplayed the prospect of further interest-rate hikes, which was got the rally going initially. The S&P 500 and the Nasdaq ended lower while the Dow Jones Industrial Average notched a modest gain. Fed Chair Jerome Powell suggested that while the central bank remains focused on bringing inflation back to its 2% target, he noted progress toward that goal and dismissed the notion of an imminent rate hike. Powell said the labor market was normalizing, citing data released on Wednesday showing job openings dropping to a three-year low. The odds of a Fed rate cut by the September meeting are now at 53.8% vs. 45.9% on Tuesday and 69.8% a week earlier. Markets only expect one rate cut by year-end, with a slim chance of no move. Overnight the dollar/yen saw volatility driven by another possible government intervention, the second time this week. Another slew of earnings overnight have shares of AIG, CAR, CHRW, CVNA, MGM, MPWR and QCOM rising after results while shares of EBAY, ETSY, FSLR, FSLY, QRVO, WOLF, ZG falling on their results/guidance. In Asian markets, The Nikkei Index dipped -37 points to 38,236, the Shanghai Index dipped -8 points to 3,104, and the Hang Seng Index jumped 444 points to 18,207. In Europe, the German DAX is up 7 points to 17,939, while the FTSE 100 rises 25 points to 8,146.

• The Dow Jones Industrial Average rose 87.37 points, or 0.23%, to 37,903.29.
• The Nasdaq Composite dropped -52.34 points, or 0.33%, to 15,605.48.
• The Russell 2000 Index advanced 6.32 points, or 0.32% to 1,980.23.

• 8:30 AM ET                  Weekly Jobless Claims…est. 212K
• 8:30 AM ET                  Continuing Claims…est. 1.797M
• 8:30 AM ET                  Non-farm Productivity for Q1…est. +3.3% (prior +0.4%)
• 8:30 AM ET                  Unit Labor Costs for Q1…est. +0.8% (prior +3.2%)
• 8:30 AM ET                  International Trade for March…est. (-$69.1B)
• 10:00 AM ET                Factory Orders M/M for March…est. +1.6%
• 10:00 AM ET                Durable Goods Orders M/M for March
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data

• Earnings After the Close: AAPL ACCO AEE AES ALTR AMGN AMH ATGE AXTI BECN BFAM BILL BJRI BKNG BOOM CABO CDXS CIVI CLAR COHU COIN CPT CTRA DKNG DLB DLR DMRC DRH DVA EB ED EOG EXPE FDP FIVN FND FOXF GDDY GSIT HOLX HUN ILMN IR IRTC LASR LNT LYV MATW MP MSI MTZ NET NR OLED OPEN OUT PBYI PCTY POST PXD REG RKT RYAN SEM SGHT SM SPT SPXC SQ STEM SWN TNDM TPIC TRUP TXRH UDMY UPLD VIAV VREX WLDN WSC WW X XPOF ZEUS

• British house prices fell unexpectedly for a second month running during April, figures from mortgage lender Nationwide showed on Wednesday. House prices fell 0.4% month-on-month, after a 0.2% drop in March.
• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 6 vs -1.8 last week. Bulls rise to 38.5% from 32.1%, Neutrals fall to 29% from 33.9%, Bears fall to 32.5% from 33.9%.

• Carvana (CVNA) Q1 net income $49M vs. ($286M) last year on revs $3.06B vs. est. $2.67B; retail vehicle unit sales 91,878, +16% y/y, above ests around 84k; Retail vehicle gross profit per unit $6,432, +49% y/y; sees sequential increase in adjusted EBITDA in Q2; expects to ‘comfortably deliver’ on 2024 adjusted EBITDA outlook.
• DoorDash (DASH) Q1 EPS loss (-$0.06) vs. est. loss (-$0.04); Q1 revs $2.51B vs. est. $2.45B; Q1 Total Orders increased 21% year-over-year to 620 million and Marketplace GOV increased 21% Y/Y to $19.2B; sees Q2 Marketplace GOV $19.0B-$19.4B and adjusted EBITDA $325M-$425M.
• eBay Inc. (EBAY) Q1 adj EPS $1.25 vs. est. $1.12; Q1 revs $2.6B vs. est. $2.36B; Q1 Gross Merchandise Volume of $18.6B, up 1% on an as-reported basis and roughly flat on an FX-Neutral basis; guides Q2 adj EPS $1.10-$1.15 vs. consensus $1.07 and sees Q2 revenue $2.49B-$2.54B vs. est. $2.39B.
• Etsy Inc. (ETSY) Q1 EPS $0.48 vs. est. $0.49; Q1 revs $645.954M vs. est. $646.33M; Q1 Consolidated GMS was $3.0 billion, down 3.7% y/y; said year-over-year decline in consolidated Q2 24 GMS is expected to be similar to actual Q1; current view suggests a modest acceleration in year-over-year consolidated GMS in 2H’24.
• MGM Resorts (MGM) Q1 adj EPS $0.74 vs. est. $0.62; Q1 revs $4.38B vs. est. $4.24B; Q1 Las Vegas Strip Resorts net revenue rose 3.6% y/y to $2.26B and Q1 MGM China net revenue +71% y/y to $1.06B; said achieved record consolidated revenues in the first quarter; Q1 Las Vegas Strip Resorts adj property EBITDAR $827.8M, -1% y/y.
• Zillow (ZG) Q1 revenue $529M vs. est. $508.52M; Q1 net loss was $23M, or 4% of total revenue, in Q1, compared with $22M, or 5% of total revenue, in Q1 2023; Q1 adjusted EBITDA was $125M, or 24% of total revenue, $25M above the midpoint of the company’s outlook range; sees Q2 revenue $525M-$540M vs. est. $558.85M.

• Comstock Resources (CRK) Q1 EPS loss (-$0.05) vs. est. loss (-$0.07); Q1 revs $335.77M vs. est. $351.26M; said Q1 natural gas and oil sales totaled $336.0M (including realized hedging gains of $48.0M); Q1 operating cash flow (excluding changes in working capital) generated in the first quarter of 2024 was $182.0M.
• Devon Energy (DVN) Q1 adj EPS $1.16 vs. est. $1.11; Q1 production averaged 664,000 oil-equivalent barrels per day, exceeding guidance by 4%; Delaware Basin production increased 5% y/y; Q1 operating cash flow totaled $1.7B, rising 4% y/y; is increasing its full-year 2024 production forecast by 2 percent to a range of 655,000 to 675,000 Boe per day.
• First Solar (FSLR) Q1 EPS $2.20 vs. est. $1.99; Q1 revs $794M vs. est. $702.17M; reaffirms FY24 revenue view $4.4B-$4.6B vs. consensus $4.5B and backs FY24 gross margin $2B-$2.1B; YTD net bookings of 2.7 GW with an average selling price of 31.3 cents per watt, excluding adjusters.
• Marathon Oil (MRO) Q1 adj EPS $0.55 vs. est. $0.54; Q1 revs fell -7.7% y/y to $1.55B vs. est. $1.57B; Q1 Net sales volume 369 mboe/d, -7.1% y/y and Oil Production 181 Mmbbls/d, -2.7% y/y; continues to expect its capital program to be heavily weighted to first half of year, production expected to increase from Q1 levels.

• AIG Inc. (AIG) to buy back up to $10B shares and boosts quarterly dividend to 40c/share; Q1 adjusted EPS $1.77, tops consensus $1.65; Q1 general insurance combined ratio of 89.8%, improved 2.1 points y/y; Q1 general insurance total catastrophe-related charges $106M vs $264M y/y; Q1 general insurance underwriting income up 19% to $596M.
• Allstate (ALL) Q1 adj EPS $5.13 vs. est. $3.94; Q1 revs $15.26B vs. est. $12.88B; Q1 Property-Liability earned premiums of $12.9 billion increased 10.9% y/y; Underwriting income of $898 million in the quarter increased by $1.9 billion y/y; Q1 Premiums written of $13.2 billion increased 11.9% compared to the prior year quarter.
• MetLife Inc. (MET) Q1 adj EPS $1.83 vs est. $1.82; Q1 revs $16.06B vs $15.39B last year; board approves new $3B share repurchase authorization; Q1 net investment income $5.4B and Q1 premiums, fees, other rev $12B.

• Emergent BioSolutions (EBS) said it would cut about 300 jobs across all areas of the company and shut down several manufacturing facilities as part of a restructuring plan; raises FY24 revenue view to $1B-$1.1B from $900M-$1.1B and boosts FY24 adjusted EBITDA view to $125M-$175M from $50M-$100M.
• Jazz Pharmaceuticals (JAZZ) Q1 EPS $2.68 vs. est. $4.18; Q1 revs rose 12% y/y to $901.98M vs. est. $953.9M; affirms 2024 financial guidance; 12% year-over-year revenue increase from combined key growth drivers: Xywav(R), Epidiolex(R) and Rylaze; Oncology revenues grew 13% y/y; submitted zanidatamab BLA for 2L BTC; expect to launch in 2025 or earlier.
• Moderna (MRNA) Q1 EPS loss (-$3.07) vs. est. loss (-$3.58); Q1 revs fell -91% y/y to $167M vs. est. $99.6M; said Q1 total operating expenses fell -36% y/y to $1.43B.
• Novo Nordisk (NVO) raised its full-year guidance as sales of its weight-loss drug Wegovy more than doubled in the first three months of 2024; said Q1 net sales jumped 22% to 65.3 billion Danish kroner ($9.1 billion), beating estimates while sales of its popular diabetes treatment Ozempic rose 42% to 27.8 billion kroner, while sales of anti-obesity drug Wegovy surged 106% to 9.4 billion kroner; guides FY24 sales to be between 19%-27% than the previous year vs. prior range of 18%-26%.

• Avis Budget (CAR) Q1 EPS loss (-$3.21) vs. est. loss (-$2.70); Q1 revs $2.55B vs. est. $2.41B; said ended the quarter with revenues of $2.6B, driven by strong travel demand; Q1 net loss was $113M and adj EBITDA was $12M; liquidity position at the end of the quarter was approximately $0.7 billion, with an additional $3.8 billion of fleet funding capacity.
• CF Industries (CF) Q1 EPS $1.03 vs. est. $1.52; Q1 revs $1.47B vs. est. $1.459B; Q1 adj Ebitda $459M vs. est. $602M; Q1 sales volume 4.52M tons vs. 4.54M last year.
• CH Robinson Worldwide (CHRW) Q1 EPS $0.86 vs. est. $0.62; Q1 revs fell -4.3% y/y to $4.4B vs. est. $4.27B; Q1 adjusted operating margin down 420bps to 19.3%; said the decline in revenue was primarily driven by lower pricing in its truckload services, though partially offset by higher pricing and increased volume.
• Enovix (ENVX) Q2 EPS loss (-$0.31) vs. est. loss (-$0.29); Q1 revs $5.27M vs. est. $3.78M; sees Q2 EPS loss (28c)-(22c), vs. consensus (22c) and expect revenue between $3M-$4M, an adjusted EBITDA loss of $26M-$32M; announced it has reached a development agreement with one of the top five smartphone OEMs in the world by unit volume.
• Mosaic (MOS) Q1 adj EPS $0.65 vs. est. $0.66; Q1 revs $2.7B vs. est. $2.9B; said selling price for potash fell to $241 per tonne in the quarter from $421 per tonne a year earlier, while phosphate prices fell 9.4% to $598 per tonne; sees potash sales volumes of 2.2M-2.4M tonnes in Q2 and phosphate sales volumes of 1.6M-1.8M tonnes.

• Qorvo (QRVO) Q4 adj EPS $1.39 vs. est. $1.21; Q4 revs $940.9M vs. est. $926.85M; Q1 adj operating margin 15.6% was in-line; but guides Q1 EPS $0.60-$0.80 vs. est. $1.27 and revs $850M plus/minus $25M vs. est. $917.67M; said for FY25, expect modest revenue growth and margin improvement compared to fiscal 2024.
• Cognizant Technology (CTSH) Q1 adj EPS $1.12 vs. est. $1.11; Q1 revs $4.8B vs. est. $4.72B; guides Q2 rev mid-point below consensus; backs FY24 adjusted EPS view $4.50-$4.68 (est. $4.62) but cuts FY24 revenue view to $18.9B-$19.7B from $19.0M-$19.8B (est. $19.42B).
• Fastly (FSLY) Q1 EPS loss (-$0.05) vs. est. loss (-$0.06) on in-line revs $133.5M; but shares tumble as guides FY24 EPS loss (12c)-(6c) vs. est. loss (-$0.03) and revs $555M-$565M below consensus $584.59M.
• Monolithic Power Systems (MPWR) Q1 EPS $2.81 vs est. $2.66; Q1 revs $457.9M vs. est. $447.72M; sees Q2 revenue $480M-$500M vs. est. $474.26M and sees GAAP gross margin between 55.1% and 55.7%.
• Paycom Software (PAYC) Q1 EPS $2.59 vs. est. $2.45; Q1 revs $499.9M vs. est. $495.84M; sees FY24 revenue $1.860B-$1.885B, vs. consensus $1.87B and sees FY24 adjusted EBITDA in the range of $720M-$730M; said expands automated payroll with Beti into Ireland.
• Wolfspeed (WOLF) Q3 EPS loss (-$1.18) vs. est. loss ($0.64); Q3 revs $200.7M vs. est. $201.1M; sees Q4 EPS loss (86c) to (72c), vs. consensus loss (-$0.61) and revenue $185M-$215M vs. est. $225.8M