Morning Preview: May 01, 2019

Auto PostDaily Market Report

***Please note: This will be the final Early Look for the rest of the week.

***Service will resume normally on Monday May 6th

 

 

 

 

 

 

 

Early Look

Wednesday, May 1, 2019

Futures

Up/Down

%

Last

DJ Industrials

77.00

0.29%

26,661

S&P 500

9.00

0.31%

2,957

Nasdaq

54.50

0.70%

7,854

 

 

U.S. stock futures are firmly higher, looking to set new all-time record highs for the S&P 500 and Nasdaq Composite, helped by shares of Apple (AAPL), rising over 5% after strong quarterly earnings and better guidance. The report is welcome news to technology stocks which slipped yesterday after GOOGL’s disappointing results. Today brings forth another heavy dose of quarterly earnings but attention also firmly set on the 2:00 PM EST FOMC policy meeting where markets are anticipating no rate changes from the Fed, but should be more attuned to what the central bank has to say, both in its post meeting statement and during Fed Chairman Jerome Powell’s news conference. With the ramp up in criticism from President Trump against the Fed being too aggressive on rate hikes late last year, Powell will likely be asked about the possibility of a rate cut down the road in reaction to below-target inflation (while the economy continues to grow and stocks trade at record levels). U.S. stocks were mixed on Tuesday as the S&P 500 Index retreated from earlier gains, while the Nasdaq-100 Index sank as Google’s parent had its worst day since 2012 after reporting a first-quarter revenue miss. Hopes of a potential trade deal between China and the U.S. also growing with trade representatives in Beijing this week to iron out final details. Oil prices slid on Wednesday as the likelihood of an escalation in Venezuela’s political crisis appeared to fade, and US oil inventories posted a surprise jump, easing supply concerns. In Asia markets were closed, as the Nikkei Index remained closed this week for its national holiday, the Shanghai Index and the Hang Seng Index were also closed. In Europe, the German DAX was closed, while the FTSE 100 is down a few points holding above the 7,400 level. The dollar retreated a day before Federal Reserve policy decision, as month-end portfolio re-balancing signaled dollar sales.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 2.80 points, or 0.10%, to 2,945.83

·     The Dow Jones Industrial Average rose 38.52 points, or 0.15%, to 26,592.91

·     The Nasdaq Composite dropped -66.47 points, or 0.81%, to 8,095.39

·     The Russell 2000 Index declined -7.15 points, or 0.45% to 1,591.21

 

Events Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Change for April…est. 180K

·     9:45 AM EST      Markit US Manufacturing PMI, Apr-F…est. 52.4

·     10:00 AM EST    ISM Manufacturing for April…est. 55.0

·     10:00 AM EST    Construction Spending MoM for March…est. 0.0%

·     10:30 AM EST    Weekly DOE Inventory Data

·     2:00 PM EST       FOMC Interest Rate Decision

 

Earnings Calendar:

·     Earnings Before the Open: ADP, AMCX, BKI, BTU, CALX, CDW, CG, CLH, CLX, CME, CMP, CSTE, CVS, EXTR, EL, GCI, GSK, GRMN, HLT, HRS, HUM, IIVI, JCI, KBR, LLL/HRS, PBI, RCL, RDN, SAIA, SEE, SMG, SPR, TAP, TKR, UFS, WLTW, WNC, YUM

·     Earnings After the Close: ALL, ACAD, ANSS, BNFT, CACI, CAKE, CAR, CDAY, CREE, CRUS, CSGS, CZR, DLB, DXCM, EQIX, EVTC, FIT, FIVN, FORM, H, HIG, HOLX, LNC, LSI, MANT, MET, MRO, MXL, OI, OTEX, PRU, PS, PSA, QCOM, QLYS, RUBI, SQ, STMP, TRMB, TTMI, VVV, WMB, XPO

 

Other Key Events:

·     FOMC Interest Rate Decision

·     Monthly auto sales released for April

·     The 2019 ARVO Annual Meeting (Vision & Ophthalmology), 4/28-5/2, in Vancouver

·     American Society of Gene & Cell Therapy, 4/29-5/2, in Washington D.C.

 

 

Macro

Up/Down

Last

WTI Crude

-0.25

63.67

Brent

0.11

72.17

Gold

-1.11

1,282.44

EUR/USD

0.0023

1.1238

JPY/USD

-0.09

111.33

10-Year Note

-0.011

2.498%

 

 

World News

·     Special counsel Robert Mueller expressed frustration to Attorney General William Barr last month about how the findings of his Russia investigation were being portrayed, saying he worried that a letter summarizing the main conclusions of the probe lacked the necessary context and was creating public confusion about his team’s work, a Justice Department official said

·     Investor Intelligence poll shows writers classified as bulls rebounded as equities rose to record highs as bulls stood at 56.4%, the highest since sentiment peaked October 3 at 61.8%, while bearish sentiment slips to 17.8, lowest since last June, vs 18.4 last week and those expecting a correction falls for 11 of last 13 weeks to 25.8%, a six-week low, versus 28.2% last week

 

Sector News Breakdown

Consumer

·     Clorox (CLX) Q3 EPS $1.44/$1.55B vs. est. $1.45/$1.57B; narrows FY19 EPS view to $6.25-$6.35 from $6.20-$6.40 (est. $6.32) and narrows FY19 revenue growth guidance to 2%-3% from 2%-4%

·     Mondelez (MDLZ) Q1 adjusted EPS 65c/$6.54B vs. est. 61c/$6.55B; sees FY adjusted EPS +3% to +5%; reported Q1 organic revenue +3.7%. adjusted operating margin 16.7%

·     Denny’s (DENN) Q1 adjusted EPS 13c/$151.4M vs. est. 13c/$148.83M; sees FY19 SSS growth at company, domestic franchised stores of 0%-2%; reported Q1 domestic system-wide same-store sales grew 1.3%, including increases of 1.5% at company restaurants

·     M.D.C. Holdings (MDC) Q1 EPS 64c/$647.28M vs. est. 61c/$603.9M; sees Q2 backlog conversation ratio 41%-43%

·     Nu Skin (NUS) Q1 EPS 77c/$623.6M vs. est. 71c/$615.84M; sees Q2 EPS 91c-98c on revs $660M-$680M vs. est. 96c/$705.08M

 

Energy

·     The American Petroleum Institute (API) reported U.S. crude supplies rose by 6.8M barrels for the week ended April 26, showed a stockpile fall of -1.1M barrels for gasoline, while distillate stockpiles fell by -2.1M barrels

·     Concho Resources (CXO) Q1 adjusted EPS 72c/$1.1B vs. est. 76c/$1.03B; Q1 production was 29.6 million barrels of oil equivalent (MMBoe), or an average of 328 thousand Boe per day (MMBoe), an increase of 44% YoY and 7% QoQ; raises FY19 oil production guidance to 27%-31%

·     Devon Energy (DVN) Q1 core EPS 36c vs. est. 28c; Q1 upstream revenue, excluding commodity derivatives, totaled $1.4B, a 24% increase QoQ; strong revenue growth was primarily attributable to higher oil price realizations; overall, net production for retained U.S. assets averaged 308,000 Boe per day during the first quarter, exceeding midpoint guidance by 27,000 Boe per day; raises the oil production outlook for its retained U.S. business in 2019

·     Edison (EIX) Q1 adjusted EPS 63c/$2.824B vs. est. 87c/$2.76B

·     Enphase Energy (ENPH) Q1 EPS 8c/$100.2M vs. est. 5c/$92.45M

·     Nabors Industries (NBR) Q1 EPS loss (36c)/$800M vs. est. loss (26c)/$774.36M; said Q2 should continue to deliver higher margins on higher rig count in the Lower 48 as we continue to deploy contracted rig upgrade

·     Viper Energy (VNOM) Q1 EPS 61c vs. est. 45c; Q1 average realized prices were $45.31 per barrel of oil, $2.05 per Mcf of natural gas and $18.09 per barrel of natural gas liquids, resulting in a total equivalent realized price of $35.26/boe; sees 2Q production 19.00 to 21.00 mboe/d and FY production 20.00 to 23.00 mboe/d

 

Financials

·     Chubb (CB) Q1 core EPS $2.54 vs. est. $2.56; said had a very good first quarter with core operating income per share of $2.54, up 8.5% from prior year. Our underwriting results were highlighted by a P&C combined ratio of 89.2%

·     Fiserv (FISV) Q1 EPS 84c/$1.50B vs. est. 82c/$1.52B; sees adjusted FY19 EPS $3.39-$3.52 vs. est. $3.46; continues to expect internal revenue growth in a range of 4.5% to 5% for the year

·     Unum Group (UNM) Q1 EPS $1.31/$2.99B vs. est. $1.31/$3.0B; sees FY operating EPS +4%-7%

 

Healthcare

·     Amgen (AMGN) Q1 EPS $3.56/$5.56B vs. est. $3.48/$5.52B; boosted the low end of year outlook for revenue and adj. EPS to $13.25-$14.30, from $13.10-$14.30 (est. $14.10) and revs $22.0B-$22.9B from $21.8B-$22.9B;

·     Acadia Healthcare (ACHC) Q1 adjusted EPS 39c/$760.6M vs. est. 35c/$759.9M; backs FY19 adjusted EPS view $2.15-$2.30 (est. $2.17) and backs FY19 revenue view $3.15B-$3.2B (est. $3.17B)

·     Community Health (CYH) Q1 EPS loss (53c)/$3.37B vs. est. loss (46c)/$3.3B

·     Exact Sciences (EXAS) Q1 EPS loss (66c)/$162.0M vs. est. loss (65c)/$153.04M; cash, cash equivalents and marketable securities were $1.3B at the end of the quarter; raises FY19 revenue view to $725M-$740M from $710M-$730M; 334k Cologuard tests were completed, up 79% y/y

·     Healthcare Services (HCSG) shares fell -20%; Q1 EPS 12c/$476M vs. est. 36c/$489.79M

·     Tandem Diabetes (TNDM) shares rose 7%; Q1 EPS loss (40c)/$66M vs. est. loss (30c)/$47.51M; said Q1 growth was driven by strong domestic demand for the t:slim X2 insulin pump; raises FY19 revenue view to $300M-$315M from $255M-$270M (est. $266.5M)

·     Teladoc (TDOC) Q1 EPS loss (43c)/$128.6M vs. est. loss (44c)/$128.08M; sees Q2 EPS (44c)-(42c) on revs $128M-$131M vs. est. loss (40c)/$130.02M; sees total U.S. paid membership to be in the range of 27 million to 28 million

·     Vertex (VRTX) Q1 EPS $1.03/$858.4M vs. est. 98c/$850.93M; affirms FY19 revenue outlook $3.45B-$3.55B (est. $3.56B); affirms Combined GAAP R&D and SG&A expenses $2.00B-$2.15B

 

Industrials & Materials

·     Ashland Global (ASH) Q2 EPS 83c/$142M in Ebitda vs. est. 84c/$151.0M; said intends to start a new $200 million share-repurchase program in early May

·     Century Aluminum (CENX) Q1 EPS loss (70c)/$490.0M vs. est. loss (75c)/$484.8M

·     C.H. Robinson (CHRW) Q1 EPS $1.16/$3.75B vs. est. $1.14/$3.98B; Q1 transportation revenue $3.50B; total revenue missed expectations and dropped y/y, due to lower pricing across most transportation service lines

·     Hub Group (HUBG) Q1 EPS 71c/$933.0M vs. est. 54c/$947.08M; sees FY19 EPS $3.25-$3.40 vs. est. $3.20

·     Olin (OLN) Q1 EPS 25c/$1.55B vs. est. 33c/$1.69B; 1Q adjusted Ebitda $270.1M

·     OSI Systems (OSIS) Q3 EPS $1.17/$304.3M vs. est. 94c/$289.15M; raises FY19 EPS view to $4.10-$4.30 from $3.93-$4.10 (est. $4.03) and raises FY19 revenue view to $1.165B-$1.190B from $1.15B-$1.185B

·     Terex (TEX) Q1 EPS 87c/$1.14B vs. est. 61c/$1.13B; said it now expects full year EPS in the upper half of its previous outlook.

 

Technology, Media & Telecom

·     Apple (AAPL) shares rose 4%; Q2 EPS $2.46/$58.01B vs. est. $2.36/$57.37B; sees Q3 revenue $52.5B-$54.5B above consensus $51.93B; sees Q3 gross margin between 37% and 38%; boosts quarterly dividend by 5% to 77c; to buy back up to added $75B in shares; Q2 service revs $11.45B, Greater China revs $10.22B; 2Q iPhone revenue $31.05B

·     Apple suppliers rose after the iPhone maker guided Q3 revs above views) – shares of SWKS, QRVO, CRUS, AVGO, TSM among suppliers

·     AMD (AMD) shares rose 3%; Q1 EPS 6c/$1.27B vs. est. 5c/$1.26B; sees Q2 revenue to be approximately $1.52B, plus or minus $50M, an increase of approximately 19% sequentially and a decrease of approximately 13% year-over-year

·     Akamai (AKAM) Q1 adjusted EPS $1.10/$707M vs. est. $1.02/$698.33M; raises FY19 EPS view to $4.05-$4.20 from $4.00-$4.15 (est. $4.10) and raises FY19 revenue view to $2.82B-$2.86B from $2.81B-$2.86B (est. $2.84B)

·     CalAmp (CAMP) Q4 adjusted EPS 28c/$84.4M vs. est. 26c/$88.58M; said expects FY20 Software and Subscription Services revenue to represent more than 30% of consolidated revenue

·     Coherent (COHR) Q2 EPS $1.61/$372.9M vs. est. $1.47/$369.21M; sees Q3 revenue $335M-$355M vs. est. $388.77M; sees Q3 adjusted gross margin 37%-40%

·     FireEye (FEYE) Q1 adjusted EPS loss (3c)/$211M vs. est. loss (3c)/$210.21M; sees Q2 adjusted EPS 1c-3c on revs $212M-$216M vs. est. 4c/$216.02M; backs year EPS and revenue outlook

·     Flex (FLEX) Q4 adjusted EPS 27c/$6.23B vs. est. 27c/$6.43B; sees Q1 EPS 25c-29c on revs $6.1B-$6.5B vs. est. 27c/$6.47B

·     Groupon (GRPN) Q1 EPS 3c/$578.4M vs. et. 0c/$552.9M; 1Q adjusted Ebitda $47.0M; 1Q global units sold -12%; still sees FY adjusted Ebitda about $270.0M

·     Frontier Communications (FTR) Q1 EPS loss (84c)/$2.1B vs. est. loss (38c)/$2.1B; Q1 net broadband losses of 38,000 and customer churn of 1.99%, up slightly from Q4, add average revenue per customer of $89.14, a sequential increase

·     Lattice Semiconductor (LSCC) Q1 EPS 11c/$98.1M vs. est. 9c/$96.01M; sees Q2 revenue $98M-$102M vs. est. $98.54M; sees Q2 gross margin 57.5%-59.5%

·     Maxim Integrated (MXIM) Q1 EPS 52c/$542M vs. est. 52c/$540.15M; said Q1 EPS excludes $7M in pre-tax special items which primarily consisted of charges related to acquisitions; sees Q2 GAAP EPS 54c-60c on revs $540M-$580M vs. est. 57c/$561.59M; sees Q2 gross margin 63%-66% GAAP, or 64%-67% excluding special items

·     Paycom Software (PAYC) Q1 adjusted EPS $1.19/$199.9M vs. est. $1.11/$195.49M; sees Q2 revenue $162.5M-$164.5M vs. est. $162.6M; sees Q2 adjusted EBITDA $62.5M-$64.5M; raises FY19 revenue view to $718M-$720M from $710M-$712M and ups year Ebitda view as well

·     SS&C (SSNC) shares fell -9%; Q1 adjusted EPS 91c/$1.15B vs. est. 87c/$1.15B; sees FY19 adjusted revenue $4.67B-$4.76B vs. est. $4.75B; sees FY19 adjusted net income $992.0M-$1.0420B;

·     Twilio (TWLO) Q1 adjusted EPS 5c/$233.1M vs. est. 1c/$222.79M; reports 154,797 Active Customer Accounts as of March 31, 2019, compared to 53,985 Active Customer Accounts as of March 31, 2018

·     Zendesk (ZEN) Q1 adjusted EPS 5c/$181.5M vs. est. 3c/$179.56M; sees Q2 revenue $191M-$193M vs. est. $191.32M; sees Q2 adjusted operating loss $0M-$2M

_________________________________________________________________

Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

Live Trading

Open an Account

Paper Trading

Register