Morning Preview: May 09, 2019

Auto PostDaily Market Report

Early Look

Thursday, May 9, 2019

Futures

Up/Down

%

Last

DJ Industrials

-188.00

0.72%

25,826

S&P 500

-20.50

0.72%

2,866

Nasdaq

-64.50

0.84%

7,583

 

 

Stocks are under pressure, with global markets retreating before today’s trade talks with China and the U.S. as additional trade tariffs are imminent. U.S. futures slumped as trade tensions ramped up after U.S. President Donald Trump threatened tariff retaliation on China, which he claims “broke the deal”. Safe haven assets such as the yen, gold and Treasuries are rallying as investors flee riskier assets. The dollar gained and oil slipped with markets less than 24-hours away from the U.S. hiking tariffs on additional China goods. A Chinese team led by Liu He is due in Washington today to try and sign a last-minute deal to avoid tariffs on $200 billion of Chinese goods tomorrow (while China has said they will hit back). In other geopolitical news, North Korea appears to have fired two short-range missiles at 4:29pm and at 4:49pm local time, South Korea’s Joint Chiefs of Staff said. Stocks fell toward the closing bell on Wednesday, erasing gains in the final minutes. The week so far has seen all three major indexes drop by at least 2%. Tuesday marked a particularly tough session for stocks, with the Dow suffering its biggest percentage drop since Jan. 3. In Asian markets, The Nikkei Index fell -200 points to 21,402, the Hang Seng Index dropped -692 points (2.39%) to settle at 28,311. In Europe, the German DAX is down about -100 points to 12,075, and the FTSE 100 is down around -30 points to 7,240.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -4.63 points, or 0.16%, to 2,879.42

·     The Dow Jones Industrial Average rose 2.24 points, or 0.01%, to 25,967.33

·     The Nasdaq Composite slipped -20.44 points, or 0.26%, to 7,943.32

·     The Russell 2000 Index declined -7.34 points, or 0.46% to 1,574.97

 

Events Calendar for Today

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

·     8:30 AM EST      Continuing Claims…est. 1.67M

·     8:30 AM EST      Producer Price Index (PPI) final demand for April…est. 0.3%

·     8:30 AM EST      PPI Ex: Food & Energy MoM (core) for April…est. 0.2%

·     8:30 AM EST      PPI Ex: Food & Energy YoY for April…est. 2.5%

·     8:30 AM EST      Trade Balance for March…est. (-$50.1B)

·     9:45 AM EST      Bloomberg Consumer Comfort Index…prior 60.4

·     9:45 AM EST      Fed’s Bostic discusses the Economic Outlook

·     10:00 AMEST     Wholesale Inventories MoM, Mar-F…est.0.6%

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

 

Earnings Calendar:

·     Earnings Before the Open: AMC, BDX, CAH, COMM, CNP, DUK, ELAN, GOGO, KDP, KHC, LNG, OSTK, PRTY, TEN, TPR, TTD, TW, UNVR, ZAYO 

·     Earnings After the Close: BKNG, CARG, CVET, DBX, IMMU, MAXR, NOG, NTRA, SYMC, UNIT, YELP, XON, ZG

 

Other Key Events:

·     China CPI/PPI for April

·     American Academy of Neurology (AANC) Annual Meeting, 5/4-5/10, in PA

 

 

Macro

Up/Down

Last

WTI Crude

-0.05

62.07

Brent

0.08

70.45

Gold

3.90

1,285.00

EUR/USD

-0.0003

1.1189

JPY/USD

-0.27

109.83

10-Year Note

-0.034

2.449%

 

 

Sector News Breakdown

Consumer

·     Costco (COST) April total comparable sales +5.4% vs. est. +3.3% and April U.S. comparable sales excluding fuel, currencies +5.6% vs. estimate +3.6%

·     e.l.f. Beauty (ELF) Q1 adjusted EPS 6c/$66.1M vs. est. 5c/$56.63M; sees FY20 adjusted EPS 35c-39c on revs $235M-$245M below est. 50c/$244.54M; outlook assumes a flat and highly competitive mass color cosmetics category and the expectation that it will take time to fully realize benefits from increased marketing and digital investments

·     Etsy (ETSY) Q1 EPS 24c/$169.3M vs. est. 14c/$170.06M; reports 2.23M active sellers in Q1, up 13% YoY and Q1 GMS $1.024B, up 18.9% YoY; raises full-year revenue growth of 30% to 32% vs. 29% to 32% prior and GMS growth of 18% to 21% vs. 17% to 20% prior

·     Fossil (FOSL) shares rose 11%; Q1 EPS loss (25c)/$465.3M vs. est. loss (60c)/$456.14M; reports comparable sales fell 9.5% in Q1 to top the consensus estimate of -13.5%; gross margin increased 280 bps to 53.3% of sales during the quarter; sees FY19 net sales declining (12%)-(7%) and sees FY19 gross margin in the range of 52.0%-53.5%

·     Hostess Brands (TWNK) Q1 EPS 21c/$222.7M vs. est. 13c/$211.23M; Q1 point of sale in tracked channels increased 1.6% and market share of 18.2% was unchanged from the first quarter of 2018; backed year EPS and rev view

·     Turtle Beach (HEAR) Q1 adjusted EPS 13c/$44.8M vs. est. 3c/$41.82M; still sees FY19 adjusted EPS 90c-$1.10 on revs $240M-$248M vs. est. 88c/$244.24M; though guides Q2 revs $40.2M-$43.2M vs. est. $44M

·     Camping World (CWH) Q1 EPS 8c/$1.06B vs. est. 14c/$1.07B

·     Yeti (YETI) 9.5M share Secondary priced at $28.50

 

Energy

·     Sunrun (RUN) Q1 EPS loss (12c)/$194.5M vs. est. 19c/$168M; sees 2q deployments to be in a range between 102 MW and 104 MW; sees year deployments to grow in a range between 16% and 18% year-over-year

·     Cimarex (XEC) Q1 adjusted EPS $1.20 vs. est. $1.35; sees 2Q production 263 to 275 mboe/d and sees FY production 260 to 275 mboe/d; 1Q avg production 258,882 boe/d vs. 206,050 y/y, and 2019 capital guidance unchanged

 

Financials

·     Envestnet (ENV) Q1 adjusted EPS 39c/$199.7M vs. est. 38c/$201.38M; sees Q2 adjusted EPS 44c on revs $223.5M-$226.5M vs. est. 50c/$219.55M; raises year EPS and revenue outlook

·     Green Dot (GDOT) shares fell -20%; Q1 adjusted EPS $1.51/$341M vs. est. $1.43/$327.7M; cuts FY19 adj. EPS view to $2.82-$2.91 from $3.59-$3.67 (est. $3.64) while backs FY19 revenue view $1.114B-$1.134B vs. est. $1.13B

·     Redfin (RDFN) Q1 EPS loss (74c)/$110.1M vs. est. loss (74c)/$103.55M; sees Q2 revenue $183.7M-$193.1M vs. est. $177.1M; sees Q2 net loss $14.7M-$11.3M, compared to net income of $3.2M in 2Q18

·     New York Mortgage (NYMT) 18M share Spot Secondary priced at $6.08

·     South Plains Financial (SPFI) 3.38M share IPO priced at $17.50

 

Healthcare

·     CareDx (CDNA) Q1 EPS 5c/$26.0M vs. est. loss (3c)/$24.3M; sees FY19 revenue $113M-$115M vs. est. $106.32M

·     Intercept (ICPT) files to sell $200M in common stock, $200M convertible senior notes

·     Perrigo (PRGO) reached a definitive agreement to sell its Animal Health business to PetIQ (PETQ) in a transaction valued at $185M in cash

·     Perrigo (PRGO) Q1 EPS $1.07/$1.18B vs. est. 94c/$1.15B; said will provide 2019 guidance tomorrow morning, before the U.S. market opens, as well as its plans to deliver long-term financial results in-line with our consumer peers

·     Quidel (QDEL) Q1 EPS 91c/$148M vs. est. $1.03/$157.7M; 1Q gross margin 61% vs. 63% y/y; targets 2019 revenue on constant currency basis seems $535M (vs. est. $533.6M)

·     Sarepta (SRPT) Q1 EPS loss (75c)/$87M vs. est. loss ($1.68)/$86.55M; had approximately $1.4B in cash, cash equivalents and investments as of March 31; says the revenue increase from last year primarily reflects the continuing increase in demand for EXONDYS 51 in the U.S

·     ShockWave Medical (SWAV) recent IPO reports Q1 EPS loss ($1.37)/$7.3M vs. est. loss (52c)/$5.69; sees FY19 revenue $33M-$36M vs. est. $29.58M

·     Tivity Health (TVTY) Q1 EPS 51c/$214.1M vs. est. 53c$/153.92M; sees FY19 adjusted EPS $2.24-$2.52 vs. est. $2.39 and raises FY19 revenue view to $1.15B-$1.18B from $612M-$627M – est. $1.02B (includes recent deal of NutriSystem)

·     Axcella (AXLA) 3.57M share IPO priced at $20.00

·     Cortexyme (CRTX) 4.41M share IPO priced at $17.00

·     NextCure (NXTC) 5M share IPO priced at $15.00

·     Twist Bioscience (TWST) 3.75M share Secondary priced at $21.00

 

Industrials & Materials

·     Albemarle (ALB) Q1 EPS $1.23/$832.1M vs. est. $1.22/$817.04M; backs year EPS, revenue and Ebitda outlooks

·     Kratos Defense (KTOS) Q1 EPS 3c/$160.4M vs. est. 2c/$153.56M; Q1 bookings of $139.2M and a book-to-bill ratio of 0.9 to 1.0; sees Q2 revenue $175M-$185M vs. est. $175.74M

·     Kronos (KRO) Q1 EPS 26c/$436.5M vs. est. 23c/$398.5M; 1Q TiO2 Product pricing change -8%

·     Matson (MATX) Q1 EPS 29c/$532.4M vs. est. 26c/$500.8M; raising outlook for consolidated operating income in 2019 after Q1 and expects full year 2019 Ocean Transportation operating income to approximate the $131.1M achieved in 2018

·     Mayville Engineering (MEC) 6.25M share IPO priced at $17.00

·     Rexnord (RXN) Q4 adjusted EPS 51c/$538M vs. est. 47c/$542.5M; sees 2020 adjusted Ebitda $460M-$475M

·     Tutor Perini (TPC) Q1 EPS loss (1c)/$958.5M vs. est. 7c/$1.01B; reports Q1 “record” backlog of $11.6B, up 37% from last year; backs FY19 EPS view of $2.00-$2.30 vs. est. $2.16

 

Media & Telecom

·     Disney (DIS) Q2 EPS $1.61/$14.92B vs. est. $1.59/$14.39B; Parks, Experiences and Products revenues for the quarter increased 5% to $6.2B and segment operating income increased 15% to $1.5B; Media Networks revenues for the quarter were comparable to the prior-year quarter at $5.5B and segment operating income decreased 3% to $2.2B; Studio Entertainment revenues for the quarter decreased 15% to $2.1B and segment operating income decreased 39% to $534M

·     CenturyLink (CTL) said that is exploring strategic alternatives for its Consumer business in its first quarter earnings release; reports Q1 adjusted EPS 34c on revs $5.65B vs. est. 27c/$5.71B; reaffirms FY19 adjusted EBITDA view $9B-$9.2B

·     Fox Corp. (FOXA) Q3 adjusted EPS 76c/$2.75B vs. est. 67c/$2.61B

·     IAC (IAC) Q1 GAAP EPS 91c/$1.11B vs. est. 41c/$1.09B; reports adjusted EBITDA of $190.6M vs. $188.4M a year ago (shares had traded up to record highs yesterday after better MTCH earnings beat which it owns 23% of)

 

Technology

·     Roku (ROKU) shares rose 7%; Q1 EPS loss (9c)/$206.7M vs. est. loss (24c)/$191.97M; sees Q2 revenue for 42% year-over-year revenue growth to nearly $223M at the midpoint vs. est. $220.1M; raises FY19 gross profit view to $470M from $453M prior forecast; 1Q average rev. per user $19.06 and 1Q active customer accounts 29.1 million

·     Applied Optoelectronics (AAOI) shares fell -8%; Q1 EPS loss (27c)/$52.72M vs. est. loss (22c)/$52.86M; sees 2Q EPS loss (35c-43c) on revs $40M-$45M vs. est. loss (23c)/$52.4M (watch other optic names: CIEN, ACIA, FN, LITE)

·     Carvana (CVNA) Q1 EPS adjusted EPS loss (53c)/$755.2M vs. est. loss (47c)/$702.05M; reports retail units sold 6,766, an increase of 99%; sees FY revenue $3.5B-$3.6B vs. est. $3.55B; sees year Retail unit sales of 165,000-170,000, an increase of 75%-81%

·     Conduent (CNDT) shares fell -13%; Q1 adjusted EPS 14c/$1.16B vs. est. 16c/$1.17B; sees FY revenue -3% to -4%; Q1 adjusted Ebitda $123M vs. est. $127.8M; board conducting search for company’s Next CEO as Vemuri intends to step down

·     Infinera (INFN) shares fell -12%; Q1 EPS loss (23c)/$295.6M vs. est. loss (27c)/$310.97M; sees Q2 EPS (28c) +/- 2c on revs $300M +/- $10M vs. est. loss (17c)/$336.81M

·     SailPoint (SAIL) shares fell -27%; Q1 adjusted EPS 0c/$60.6M vs. est. 0c/$60.36M; sees Q2 adjusted EPS loss (5c)/$59.7M-$61.2M vs. est. 2c/$65.25M; cuts FY19 adj. EPS view to 14c-16c from 25c-29c (est. 28c) and cuts FY19 revenue view to $277M-$281.5M from $293M-$299M (est. $296.7M)

·     Stamps.com (STMP) shares fell -40%; Q1 adjusted EPS $1.23/$136M vs. est. $1.07/$126.06M; sharply cuts FY19 adj. EPS view to $3.35-$4.85 from $5.15-$6.15 (est. $5.43) and guides FY19 revenue $510M-$560M vs. consensus $554.76M

·     SurveyMonkey (SVMK) Q1 EPS loss (2c)/$68.6M vs. est. loss (3c)/$68.15M; sees 2Q revs $72M-$73M vs. est. $70.6M and year revs $298M-$304M vs. est. $293.5M; paying users totaled 670,862 compared to 610,457 Y/y

·     Upland Software (UPLD) 3.3M share Secondary priced at $42.00

_________________________________________________________________

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.

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