Early Look

Friday, May 5, 2023

Futures	Up/Down	%	Last
Dow	152.00	0.46%	33,348
S&P 500	25.25	0.61%	4,100
Nasdaq	83.50	0.64%	13,127

 

 

U.S. futures are looking higher, with the S&P rising +0.60% at 4,100, near the overnight higher, as Apple (AAPL) rises +2.3% after earnings and regional banks rebound early ahead of the Nonfarm payroll report at 8:30 AM. The Dow Jones Industrial Average and S&P 500 suffered their first 4-day losing streak since February on fears of banking contagion after the most recent Fed rate hike decision. Financials led the declines on Thursday as the sector remained under scrutiny by investors following the second-largest bank collapse in U.S. history last weekend by First Republic and marked the 3^rd major failure in 2-months. Due to the recent banking turmoil, traders have already priced in a pause in Federal Reserve’s monetary tightening at the June and July policy meetings, followed by multiple interest-rate cuts by year-end. Next up this morning the April Nonfarm payroll report due at 8:30 AM ET with estimates for +180K jobs, +160K private payrolls, manufacturing to fall -5K jobs, the unemployment rate to hold steady at 3.6% and hourly earnings to rise +0.3%. Overnight, Apple (AAPL) reported a top and bottom-line quarterly beat, raised its dividend, and announced a $90B share buyback, but revs fell for the 2^nd straight quarter and guidance for next quarter implies revs falling a 3^rd straight. In Asian markets, The Nikkei Index rose 34 points to 29,157, the Shanghai Index fell -15 points to 3,334, and the Hang Seng Index gained 100 points to settle at 20,049. In Europe, the German DAX is higher by 137 points or 0.87% to 15,871, while the FTSE 100 rises 40 points to 7,742.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -29.38 points, or 0.72%, to 4,061.37.

·     The Dow Jones Industrial Average slid -286.30 points, or 0.86%, to 33,127.94.

·     The Nasdaq Composite slipped -58.93 points, or 0.49%, to 11,966.40.

·     The Russell 2000 Index declined -20.48 points, or 1.18% to 1,718.81.

 

Economic Calendar for Today

·     8:30 AM ET            Nonfarm Payrolls for April…est. 180K

·     8:30 AM ET            Private Payrolls for April…est. 160K

·     8:30 AM ET            Unemployment rate for April…est. 3.6%

·     8:30 AM ET            Average Hourly Earnings M/M for April…est. +0.3%

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

·     3:00 PM ET            Consumer Credit for March

 

Earnings Calendar:

·     Earnings Before the Open: ACMR AES AMC AXL CBOE CI CNK D EPAM ESNT EVRG FLR FSK FUBO FWONA GLP GTN HUN JCI JOUT KOP LSXMA MMI OFS OMI PAA PAGP PBF PNM PRLB QRTEA ROAD RUTH SHO SMLP TILE TWST WBD

 

 

Macro	Up/Down	Last
Nymex	1.84	70.40
Brent	1.85	74.35
Gold	-10.60	2,045.10
EUR/USD	0.0013	1.1024
JPY/USD	-0.02	134.25
10-Year Note	+0.057	3.409%

 

 

World News

·     Investors dumped equities and moved into cash in the week to Wednesday, as equity funds saw $6.6 billion of outflows in the week, the largest weekly outflow in nine weeks, while there were $59 billion of inflows into cash – Bank America notes.

·     Federal Reserve data showed lending to banks shrunk a bit in the latest week, as money shifted out of a key lending tool. Borrowing by banks via three channels, the central bank’s discount window, the Bank Term Funding Program and what the Fed calls “other credit,” moved to $309.3 billion on Wednesday, from $325.6 billion on April 26. Fed lending surged in March driven by banking sector troubles and has remained at very high levels since that initial surge.

·     S&P Global Market Intelligence reported bankruptcy filings have pushed the year-to-date count to 236, more than double the comparable figure a year ago and higher than any of the prior 12 years. Larger bankruptcy cases are rising in 2023 alongside a broader increase in filings. Eight companies filed for bankruptcy protection in the first four months of 2023 that listed liabilities over $1 billion, it said.

 

Sector News Breakdown

Consumer

·     Booking.com (BKNG) Q1 EPS $11.60 tops consensus $9.54; Q1 revs rose 40% y/y to $3.78B vs. est. $3.39B; Q1 gross travel bookings rose 44% y/y to $39.4B, or approximately a 52% increase on a constant-currency basis; Q1 Marketing expense rose 32% y/y to $1.52B; Q1 Ebitda was $586M below consensus of $626M.

·     Carvana (CVNA) reports best first quarter in company history for adjusted ebitda and total gross profit per unit; said it expects to achieve positive adjusted EBITDA in 2q; Total gross profit per unit was $4,303, an increase of 52% y/y and total non-GAAP GPU was $4,796, up 61% y/y.

·     DoorDash (DASH) Q1 EPS loss ($0.41) vs est. loss (-$0.48); Q1 revs $2.04B vs est. $1.93B; Q1 adj. EBITDA $204M vs est. $152.9M; sees FY Gross Order Value $63B-$64.5B vs est. $61.37B and sees Q2 Marketplace Gov $15.9B-$16.2B vs est. $15.26B.

·     DraftKings (DKNG) Q1 EPS loss (-$0.87) vs. est. loss (-$0.89); Q1 adj. ebitda loss -$221.6M vs. est. loss $261.5m; Q1 revs $770M vs. est. $705.2M; Q1 monthly unique payers 2.80M; sees FY adj. ebitda loss $290M-$340M vs. est. loss $392.4M; raised year revs to $3.14B-$3.24B from $2.85B-$3.06B prior

·     Expedia Inc. (EXPE) Q1 adj EPS loss (-$0.20) vs. est. loss (-$0.04); Q1 revs $2.65B in line; 1Q gross bookings increase 20% with record lodging gross bookings; said saw strong travel demand driven by increasing int’l travel; 1q total gross bookings were $29.4B, an increase of 20% y/y.

·     Figs Inc. (FIGS) Q1 adjusted EPS $0.01 vs est. $0.00; Q1 revs $120.2M vs est. $112.66M; sees FY23 revenue growth 5.5%-7.5%, consensus $534.96M; sees FY23 adjusted EBITDA margin 12%-13%.

·     Floor & Décor (FND) Q1 EPS $0.66 vs. est. $0.67; Q1 revs $1.12B vs. est. $1.11B; sees FY23 EPS $2.55-$2.85, vs. consensus $2.70 and revs $4.61B-$4.75B vs. est. $4.66B.

·     Lyft Inc. (LYFT) Q1 EPS loss ($0.50) vs est. ($0.57); Q1 adj Net $27.7M vs est. Loss ($30.2M); Q1 adj. EBITDA $22.7M vs est. $12.6M; Q1 Active Riders 19.6M vs est. 19.8M; Q1 Revenue Per Active Rider $51.17 vs est. $49.77) and sees Q2 revs $1.0B-$1.02B vs. est. $1.08B.

·     Monster Inc. (MNST) Q1 EPS $0.38 vs. est. $0.34; Q1 revs $1.699B vs. est. $1.69B; net sales, adjusted for adverse changes in foreign currency of $52.0 million, rise 15.3%; Q1 gross margin percentages continue to increase on a quarterly sequential basis.

 

Energy, Industrials and Materials

·     Ameren (AEE) Q1 EPS $1.00 vs. est. $0.94; Q1 revs $2.06B vs. est. $1.95B; backs FY23 EPS.

·     Boise Cascade (BCC) announces special dividend of $3.00 per share to be paid on June 15, 2023 to stockholders of record on June 1, 2023; Q1 EPS $2.43/$1.54B vs. est. $1.67/$1.56B.

·     Coterra Energy (CTRA) Q1 EPS $0.87 vs. est. $0.70; Q1 revs $1.78B vs. est. $1.61B; estimate full-year 2023 discretionary cash flow of about $3.6B; estimate 2023 free cash flow of approximately $1.6B; sees 2023 oil production range increasing by 1.0 mboepd, to 87.0-93.0 mboepd; sees Q2 capex between $510M-$570M.

·     EOG Resources (EOG) Q1 adj EPS $2.69 vs. est. $2.48; Q1 revs $6.044B vs. est. $5.51B; saw its average crude oil prices fall about 20% during the reported quarter to $77.26 per barrel.

·     SolarEdge (SEDG) upgraded to Buy from Hold at Deutsche Bank, with $375 tgt.

 

Financials

·     AIG Inc. (AIG) Q1 EPS $1.63 vs. est. $1.42; combined ratio was 91.9% and the accident year combined ratio, ex-CAT, was 88.7%, a 100-basis point and 80-basis point improvement, respectively; raises its dividend; ​qtrly gross premiums written $ 12.03 bln, up 4%.

·     Block Inc. (SQ) Q1 adj EPS $0.40 vs. est. $0.32; Q1 revs rose 26% y/y to $4.99B vs. est. 44.51B; Q1 Transaction-based revenue up 15% y/y to $1.42B; Q1 Cash App revenue up 33% y/y to $3.27B above estimate $2.85B.

·     Coinbase (COIN) 1Q revs fell -34% y/y to $772.5M vs. est. $653.8M; sees Q2 subscription and services revenue around $300M, driven lower; maintain our goal to improve full-year 2023 adjusted ebitda in absolute dollar terms versus full-year 2022.

·     Icahn Enterprises (IEP) under pressure from short seller Hindenburg Research, said it would pay a dividend of $2 per unit to investors, sending shares higher after market.

·     Redfin (RDFN) Q1 EPS loss (-$0.55) vs. est. loss (-$1.00); Q1 revs $325.7M vs. est. $314.52M; sees Q2 revenue $268M-$281M vs. consensus $297.04M; mobile apps and website reached more than 50 million average monthly users, compared to 51 million in the first quarter of 2022.

 

Healthcare

·     Apellis Pharma (APLS) Q1 EPS loss ($1.56) vs. est. loss ($1.46); Q1 revs $44.85M vs. est. $26.10M; total revs consisted of $20.4M of U.S. net product revenue of EMPAVELI, $18.4M of U.S. net product revenue of SYFOVRE.

·     Insulet (PODD) Q1 EPS $0.34 vs. est. $0.11; Q1 revs $358.1M vs. est. $330.9M; raises FY23 revenue growth view to 18%-22% from 14%-19%; sees Q2 revenue growth of 27%-30%; announces new organizational structure to drive further growth.

·     Mettler-Toledo (MTD) Q1 adj EPS $8.69 vs. est. $8.60; Q1 revs $929M vs. est. $918.72M; guides Q2 EPS below views and arrows 2023 adj EPS view to $43.65-$43.95 from $43.55-$43.95.

·     Trupanion (TRUP) Q1 EPS loss (-$0.60) vs. est. loss (-$0.29); Q1 revs $256.33M vs. est. $251.67M; said Q1 subscription enrolled pets was 906,369, an increase of 23% y/y and subscription business revenue was $165.2M, an increase of 18% y/y.

·     ImmunoGen (IMGN) 26M share Secondary priced at $12.50.

·     4D Molecular (FDMT) 7.5M share Spot Secondary priced at $16.00.

·     SI-Bone (SIBN) 3.775M share Spot Secondary priced at $22.00.

 

Technology, Media & Telecom

·     Apple Inc. (AAPL) Q2 EPS $1.52 vs. est. $1.43; Q2 revs fell -2.5% y/y to $94.8B vs. est. $92.96B (down from $97.3B y/y); raises dividend to $0.24; announces $90B share buyback plan; Q2 iPhone sales rose 1.5% to $51.33 billion, compared with analyst expectations of a 3.3% decline to $48.9 billion, Mac sales fell more than 30% to $7.17 billion compared with analyst estimates of a 25% decline to $7.8 billion; Sales in Apple’s wearables business, which includes devices like AirPods and the Apple Watch, fell less than 1% to $8.76 billion; Q1 services business, which includes products like iCloud and Apple Pay, which grew 5.5% to $20.9 billion, in line with analyst expectations; sees Q3 revenue growth ‘similar’ to Q2 and sees Q3 gross margin 44%-44.5%.

·     Atlassian Corp. (TEAM) Q3 EPS $0.54 vs. est. $0.34; Q3 revs $915.5M vs. est. $901.59M; Quarterly subscription revenue of $761 million, up 37% y/y; sees Q4 revenue $900M-$920M vs. est. $919.51M; sees Q4 cloud revenue growth y/y to be in the range of 26% to 28% and gross margin is expected to be approximately 81.0% on a GAAP basis.

·     Bill Holdings (BILL) Q3 adj EPS $0.50 vs. est. $0.24; Q3 revs $272.6M vs. est. $248.8M; guides Q4 above views and sees FY23 adjusted EPS $1.46-$1.48 (est. $1.04) and sees FY23 revenue $1.039B-$1.042B (est. $1B).

·     Cirrus Logic (CRUS) Q4 adj EPS $0.92 vs. est. $0.84; Q4 revs $372.8M vs. est. $367.69M; sees Q1 revenue $260M-$320M below consensus $326.35M and guides Q1 gross margin 49%-51%.

·     Clearfield (CLFD) Q2 EPS and revs topped views but slashed Y23 EPS view to $1.80-$2.10 from $4.30-$4.50 and cuts FY23 revenue view to $260M-$275M from $380M-$393M citing customer order trends and an anticipated normalization of inventory.

·     DropBox (DBX) Q1 EPS $0.42 vs. est. $0.36; Q1 revs $611.1M vs. est. $601.07M; Q1 total ARR ended at $2.468 billion, up 7.8% y/y; total ARR grew $37.5M q/q and y/y growth would have been 11.6%; paying users ended at 17.90M up from 17.09M y/y.

·     Fortinet (FTNT) Q1 EPS $0.34 vs. est. $0.29; Q1 revs $1.26B vs. est. $1.2B; sees FY23 EPS $1.44 to $1.48 vs. consensus $1.41, sees FY23 revs $5.425B-$5.485B vs. est. $5.41B and sees FY23 billings in the range of $6.75B-$6.81B.

·     Live Nation (LYV) Q1 EPS loss (-$0.25) vs. est. loss (-$0.42); Q1 revs $3.13B vs. est. $2.28B; says ticket sales, attendance and onsite spend indicate ‘incredible demand for live events; concert ticket sales tracking more than 20% ahead of this point last year.