Early Look

Thursday, November 10, 2022

Futures	Up/Down	%	Last
Dow	71.00	0.22%	32,598
S&P 500	14.25	0.37%	3,769
Nasdaq	64.50	0.60%	10,895

 

 

S&P futures are higher, trading +0.35% to 3,7669 holding in a narrow 18-point range overnight (3,771.25 hi and 3,753.25 low), ahead of the Oct CPI data, while Bitcoin found a bottom overnight around $15,600, currently up +2.8% at $16,300. Stocks were lower on Wednesday, following recent market gains, as results of the midterm elections provided no clear answers about who would control the Senate yet and concerns about the volatile moves in cryptocurrency prices and the fall-out contagion if any of those levered to FTX platform which faces liquidity shortfall of up to $8 billion the WSJ reported yesterday. BTC has fallen 20.4% so far this week as investors fretted about the fallout from the implosion of crypto exchange FTX and the future of the industry. Markets still await conclusions to the Arizona and Nevada midterm elections, while Georgia heads to a run-off in early December. Republicans take back control of the Senate with just one of those wins, while they do appear to have claimed the House. In Asian markets, The Nikkei Index fell -270 points to 27,446, the Shanghai Index fell -12 points to 3,036, and the Hang Seng Index declined -277 points to 16,081. In Europe, the German DAX is up about 20 points t0 13,687, while the FTSE 100 is down a few points to 7,290. All eyes on the inflation report at 8:30 (ests below) and then the barrage of several Fed speakers spread throughout the day.

Economic Calendar for Today

·     8:30 AM ET           Consumer Price Index (CPI) M/M for October…est. +0.6%

·     8:30 AM ET           Consumer Price Index (CPI) Y/Y for October…est. +8.0%

·     8:30 AM ET           CPI core, Ex: Food &Energy M/M for Oct…est. +0.5%

·     8:30 AM ET           CPI core, Ex: Food &Energy Y/Y for Oct…est. +6.5%

·     8:30 AM ET           Weekly Jobless Claims…est. 220K

·     8:30 AM ET           Continuing Claims…est. 1.475M

·     9:35 AM ET           Fed’s Logan Speaks at Energy and the Economy Conference

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

·     12:30 PM ET         Fed’s Mester Discusses the Economic Outlook

·     1:00 PM ET           US Treasury to sell $18B in 30-year notes

·     1:30 PM ET           Fed’s George Speaks at Energy and the Economy Conference

·     2:00 PM ET           Federal Budget for October…est. (-$90.0B)

 

Earnings Calendar:

·     Earnings Before the Open: AWH BDX BKKT BTTR CRMD DGII DTC EMAN EPC EYE IAA KELYA KLXE ML OB PCT PGTI PX RBC RL SANW SBH SIX SSYS STXS SWIM TPR USFD UTZ WE WRBY WRK YETI ZVIA

·     Earnings After the Close: ACDC AGTI AIRG BEAT BZH COMP DAVE DOCS DUOL EDR ETON EVCM FIGS FLO GOCO HYPR ICAD INDI ISR KRUS LAW LFG LPTH LZ MCW MSGM MTTR OCX PET RYAN SMRT TACT TOST VERO XOS XPOF

 

Other Key Events:

·     Baird Annual Industrial Conference, 11/8-11/10 in Chicago, IL

·     Credit Suisse 31st Annual Healthcare Conference, 11/7-11/10, in CA

·     Goldman Sachs 11th Global Natural Resources Conference, 11/9-11/10, in London

·     Truist MedTech West Coast Bus Tour, 11/9-11/10

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -79.54 points, or 2.08%, to 3,748.57

·     The Dow Jones Industrial Average fell -646.89 points, or 1.95%, to 32,513.94

·     The Nasdaq Composite tumbled -263.02 points, or 2.48%, to 10,353.17

·     The Russell 2000 Index declined -48.53 points, or 2.68% to 1,760.40

 

 

Macro	Up/Down	Last
Nymex	-0.71	85.12
Brent	-0.49	92.16
Gold	-2.30	1,711.40
EUR/USD	-0.0064	0.9946
JPY/USD	-0.06	146.38
10-Year Note	-0.042	4.100%

 

 

World News

·     FTX’s native token, FTT is down 90% this week and was attempting to steady around $2, not far above its record low around $1.50. Bitcoin fell below $16,000 for the first time since late 2020 overnight and was last at $16,200.

·     China exports fell unexpectedly in October for the first time since May 2020, as outbound shipments in October shrank 0.3% from a year earlier 9vs. est. +4.3%), a sharp turnaround from a 5.7% gain in September, while imports contracted as well

·     Russia orders retreat from Kherson city, surrendering key regional capital ‘; Russian Defense Minister Sergei Shoigu ordered the retreat citing the difficulty of sustaining supply routes to troops in the Kherson city area but Ukraine wary

·     Chicago Fed’s Evans says it’s time to slow pace of rate hikes ‘; sees benefits to adjusting pace of Fed moves soon; hopeful inflation will start slowing soon; worries that much higher rates risk Fed’s jobs mandate; recession risk will rise as Fed takes rates higher – Bloomberg

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -21.9 vs -2.3 last week. Bulls fall to 25.1% from 30.6%, Neutrals fall to 27.9% from 36.5%, and Bears rise to 47% from 32.9%

 

Sector News Breakdown

Consumer

·     Beyond Meat (BYND) Q3 EPS loss (-$1.60) vs. est. loss (-$1.14); Q3 revs fell -22.5% y/y to $82.2M, vs. est. $98.1M; Q3 adj EBITDA loss $73.8M vs. est. loss $58.1M; lowers FY revs to $400M-$425M from $470M-$520M; expects reduction-in-force to be substantially complete by end of 2022

·     Celsius Holdings (CELH) 3Q revs $188.2Mm vs est. $162Mm; adj EBITDA $24.8Mm vs est. $17.04Mm

·     Dutch Bros (BROS) 3Q adj EPS $0.09 vs est. $0.08 on revs $198.6Mm vs est. $194.8Mm, adj EBITDA $27.8Mm vs est. $29.9Mm; guides FY revs at least $725Mm vs est. $724.5Mm, comps approx flat, adj EBITDA at least $90Mm vs est. $90.2Mm, CAPEX $175-200Mm

·     Nautilus (NLS) Q2 net sales $65.5M vs. est. $69.4M; Q2 loss/shr cont ops 48c vs. est. loss 52c

·     Purple Innovations (PRPL) 3Q adj EPS $0.03 vs est. ($0.05) on revs $143.3Mm vs est. $139.2Mm; guides FY revs $570-590Mm vs est. $578.7Mm

·     Rivian Automotive (RIVN) Q3 adj EPS ($1.57) vs. est. loss ($1.82); Q3 revs $536M vs. est. $551.57M; said produced 7,363 vehicles and delivered 6,584 vehicles in Q3; reaffirming 2022 production guidance of 25,000 total units produced; lowering capex guidance

·     Wynn Resorts (WYNN) Q3 EPS loss (-$1.20) vs est. loss (-$1.00); Q3 revs $889.7M vs. est. $871.21M; Q3 operating revenues from Las Vegas operations were $544.4M, an increase of $68.4M y/y; Q3 operating revenues from Wynn Macau were $40.4M, a decrease of $90.3M y/y

·     General Motors (GM) downgraded to Peer Perform from Outperform at Wolfe Research

 

Energy, Industrials and Materials

·     Rocket Lab (RKLB) Q3 EPS loss (-$0.07), in-line with estimates and Q3 revs $63.06M vs. est. $60.11M; sees Q4 revenue $51M-$54M below consensus $67.86M and guides Q4 adjusted EBITDA ($16M)-($12M)

·     Tetra Tech (TTEK) 4Q adj EPS $1.26 vs est. $1.15 on revs $736Mm vs est. $712.9Mm; sees 1Q net revs $675-725Mm vs est. $696.1Mm and EPS $1.15-1.20 vs est. $1.13; guides FY net revs $2.9-3.1B vs est. $2.96B and EPS $4.70-4.90 vs est. $4.74

 

Financials

·     AllianceBernstein L.P. (AB) said preliminary assets under management increased to $627 billion during October 2022 from $613 billion at the end of September. The 2% AUM increase was driven by market appreciation, partially offset by net outflows in each channel.

·     Artisan Partners Asset Management Inc. (APAM) preliminary assets under management as of October 31, 2022, totaled $125.3 billion. Artisan Funds and Artisan Global Funds accounted for $60.1 billion of total firm AUM

·     Fair Isaac (FICO) 4Q adj EPS $4.40 vs est. $4.12 on revs $349Mm vs est. $344Mm; guides FY23 revs $1.475B vs est. $1.454B and adj EPS $19.42 vs est. $18.36

·     Invesco (IVZ) reports preliminary AUM $1.36T as of October 31, +2.8% MoM; net long-term outflows of $1.1B in the month

·     Marqueta (MQ) Q3 EPS loss (-$0.10) vs. est. loss (-$0.09); Q3 revs rose 46% y/y to $192M vs. est. $180.9M; guides Q4 rev growth to 29%-31% vs. est. $190.9M; said posted 54% growth in third quarter total processing volume.

·     Payoneer Global (PAYO) Q3 EPS loss (-$0.08) vs. est. loss (-$0.02); Q3 revs $158.9M vs. est. $149.3M; sees FY22 revenue $605M-$615M vs. est. $598.11M and sees FY22 adjusted EBITDA $40M-$43M; B2B AP/AR volumes represented 12% of total volume in the third quarter, compared to 9% a year ago, and grew 39% year-over-year

·     Redfin (RDFN) Q3 EPS loss (-$0.83) vs. est. loss (-$0.80); Q3 revs rose 11% y/y to $600.5M vs. est. $602.8M; guides Q4 revs $430M-$459M vs. est. $560.1M; Q3 Adjusted EBITDA loss was $51M, compared to adjusted EBITDA income of $11.8M y/y

·     Virtus Investment Partners, Inc. (VRTS) preliminary assets under management of $149.5 billion as of October 31, 2022. In addition, the company provided services to $2.5 billion of other fee-earning assets, which are not included in assets under management.

 

Healthcare

·     A panel of advisers to the U.S. FDA recommended against authorizing Veru Inc’s (VERU) oral COVID-19 pill for treating moderate-to-severe hospitalized patients at high risk for developing acute respiratory distress syndrome

·     AstraZeneca (AZN) boosted its guidance for the full year after reporting a swing to net profit and higher sales for the third quarter of the year, which both beat consensus expectations.

·     Cano Health (CANO) Q3 EPS loss (-$0.23) vs. est. loss (-$0.05); Q3 revs $665.03 vs. est. $717.93M; lowers FY22 revenue view to $2.70B-$2.75B from $2.85B-$2.90B (est. $2.85B) citing lower-than-expected capitated revenue PMPM from new members

·     Catalyst Pharmaceuticals (CPRX) 3Q adj EPS $0.26 vs est. $0.19 on revs $57.2Mm vs est. $53.6Mm; sees FY revs $205-210Mm vs est. $205Mm and adj net Inc $100-105Mm vs est. $74.8Mm

·     Jazz Pharma (JAZZ) Q3 adj EPS $5.17 vs. est. $4.66; Q3 revs rose 13% y/y to $940.65M vs. est. $939.06M; raises FY22 EPS view to $17.20-$17.85 from $16.70-$17.70 (est. $17.41) and raises, narrows FY22 revenue view to $3.6B-$3.7B from $3.5B-$3.7B (est. $3.65B)

·     NuVasive (NUVA) Q3 EPS $0.54 vs. est. $0.54; Q3 revs $295.3M vs. est. $298.7M; GAAP operating margin of 7.4%; non-GAAP operating margin of 13.6%; lowers FY22 non-GAAP EPS to $2.00-$2.10 from $2.15-$2.45 (est. $2.24)

·     Phibro Animal Health (PAHC) 1Q adj EPS $0.21 vs est. $0.27 on revs $232.5Mm vs est. $227.6Mm, adj EBITDA $22.1Mm vs est. $27.2Mm; guides FY net sales $960Mm-1.0B vs est. $978.7Mm, adj EBITDA $113-118Mm vs est. $115.5Mm and adj EPS $1.21-1.31 vs prior $1.28-1.38 and est. $1.27

·     Teva (TEVA) has been awarded $176.5m in its patent infringement lawsuit against Eli Lilly (LLY) related to its Emgality migraine drug.

 

Technology, Media & Telecom

·     AppLovin Corp (APP) Q3 EPS $0.06 vs. est. $0.07; Q3 revs $713M vs. est. $728M; cuts FY22 revenue view from $2.84B-$3.14B to $2.80B-$2.81B and lowers FY22 adjusted EBITDA view to $1.05B-$1.07B from $1.20B

·     Bumble (BMBL) Q3 EPS $0.14 vs. est. $0.01; Q3 revs rose 17% y/y to $233M vs. est. $237.5M; qtrly bumble app revenue increased 28% to $181M, Q3 total paying users increased to 3.3M from 2.9M, and ARPU rose to $22.96 from $22.81; guides Q4 revs $232-$237M vs. est. $254.5M

·     Desktop Metal (DM) Q3 EPS loss (-$0.19) vs. est. loss (-$0.08); Q3 revs miss at $47.1M vs. est. $60.3M; cuts FY22 revenue view to $200M-$210M from $260M and lowers FY22 adjusted EBITDA view to ($123M)-($117M) from roughly ($90M)

·     Magnite Inc. (MGNI) 3Q adj EPS $0.18 vs est. $0.15 on re3vs $145.8Mm vs est. $124.2Mm, adj EBITDA $44.4Mm vs est. $38.2Mm; guides 4Q revs ex-TAC $151-157Mm

·     RingCentral (RNG) 3Q adj EPS $0.55 vs est. $0.51 on revs $509Mm vs est. $502.7Mm; guides 4Q adj EPS $0.59-0.60 vs est. $0.59 and revs $523-529Mm vs est. $545Mm; announces restructuring plan to cut full-time employees by about 10%, plan cost about $10-15Mm

·     Unity Software (U) Q3 EPS loss (-$0.14) vs. est. loss (-$0.15) and revs rose 13% y/y to $322.9M vs. est. $322M; sees FY revs $1.365B-$1.385B vs. est. $1.35B; Create Solutions revenue was $128.6 million, an increase of 54%; Operate Solutions revenue was $171.7 million, a decrease of 7%; Strategic Partnerships and Other revenue was $22.6 million, an increase of 28% y/y

·     Palo Alto (PANW) upgraded from Hold to Buy with a $200 PT at Loop Capital saying most recent industry checks indicate that PANW’s enterprise business is showing signs of accelerating momentum driven by an increase in large deal activity