Early Look

Thursday, April 23, 2020

Futures	Up/Down	%	Last
DJ Industrials	-55.00	0.24%	23,301,
S&P 500	-3.50	0.12%	2,785
Nasdaq	-19.50	0.22%	8,618

 

 

Stock futures in the U.S. are looking at a slightly lower open, falling ahead of another busy day of earnings and economic data that is sure to paint another grim picture of the economy due to the impact of the coronavirus which continues to show rising cases. Today’s jobless claims report (8:30 AM EST) is expected to show another 4.5MM people announce first time unemployment claims, while continuing claims are expected to reach 17MM (22MM individuals have already filed first time unemployment claims the last 4-weeks). Commodity prices are higher after both gold and oil jumped yesterday. U.S. stocks rebounded Wednesday, ending higher for the first time in three days, as investors gained confidence from stabilizing crude oil markets, some better-than-expected corporate earnings reports, and expectations for Congress to roll out another fiscal stimulus package. On Tuesday night, U.S. Senators passed another coronavirus relief package worth nearly $500 billion to replenish funds for small businesses exhausted within days of applications opening, and the measure was expected to pass the House of Representatives Thursday. In Asian markets overnight, The Nikkei Index jumped 291 points to 19,429, the Shanghai Index dipped -5 points to settle at 2,838 and the Hang Seng Index rose 83 points to 23,977. In Europe, the German DAX is up slightly to 10,420, while the FTSE 100 is up a few points around 5,775. European markets are holding up despite another awful services reading which slid to an all-time low. On a bright note, several U.S. states are starting to reopen their economies in order to get business slowly ”back to normal” but the question remains, is it too soon?

Market Closing Prices Yesterday

·     The S&P 500 Index gained 62.75 points, or 2.29%, to 2,799.31

·     The Dow Jones Industrial Average rose 456.94 points, or 1.99%, to 23,475.82

·     The Nasdaq Composite jumped 232.15 points, or 2.81%, to 8,495.38

·     The Russell 2000 Index advanced 16.43 points, or 1.39% to 1,201.52

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims…est. 4.5MM

·     8:30 AM EST      Continuing Claims…est. 17.0MM

·     9:45 AM EST      Markit US Manufacturing PMI, Apr-P…est. 35.0

·     9:45 AM EST      Markit US Service PMI, Apr-P…est. 30.0

·     10:00 AM EST    New Home Sales MoM for March…est. down -16.3% to 640K

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

·     11:00 AM EST    Kansas City Fed Manufacturing Activity for April…est. (-37)

 

Earnings Calendar:

·     Earnings Before the Open: ADS, APD, ARCH, BX, CMS, CTS, CTXS, DPZ, ENTG, EWBC, FNB, GTLS, GWW, HBAN, HSY, IVZ, LLY, LUV, MRTN, NURO, ODFL, PHM, POOL, PTEN, RS, SAFE, TSCO, UNP, WSO, WWE

·     Earnings After the Close: ABCB, ASB, BOOM, CFB, COF, CSFL, CYBE, EHTH, ESRT, ETFC, EW, FE, FOR, GBCI, IEX, INTC, LLNW, MMSI, OZK, PBCT, SEIC, SIVB, SSB, TPH, UFPI, VCRA, VRSN

 

 

Macro	Up/Down	Last
WTI Crude	1.73	15.51
Brent	1.67	22.04
Gold	10.00	1,748.30
EUR/USD	-0.0047	1.0776
JPY/USD	-0.14	107.61
10-Year Note	+0.004	0.623%

 

 

World News

·     The IHS Markit flash eurozone services purchasing managers index fell in April to a record-low reading of 11.7, below expectations of 24

·     IHS Markit said the readings of both services and manufacturing PMI are indicative of the eurozone economy contracting at a quarterly rate of approximately 7.5%.

 

Sector News Breakdown

Consumer

·     Avis Budget (CAR) reports preliminary Q1 revenue of $1.7B to $1.8B; adjusted EBITDA is expected to land in a range of $85M to $95M; both were below consensus but the car rental company says current reservations for June are showing improvement.

·     Boston Beer (SAM) Q1 EPS $1.49/$330.6M vs. est. $1.77/$346M; prior to COVID impact, said company was on track to maintain its financial guidance for full-year fiscal 2020 but is now withdrawing guidance; said depletions through the 9-week period ended February 29, 2020 are estimated to have increased approximately 32% from the comparable period in 2019

·     Las Vegas Sands (LVS) Q1 net revenues drop 51% YoY to $1.78B vs. est. $2.1B and adjusted Ebitda -70% YoY to $437M; 1Q Macau adjusted property Ebitda $67M, -92% YoY and 1Q Sands China revenue $814M, -65% YoY

·     O’Reilly Automotive (ORLY) Q1 EPS $3.97 on sales $2.48B (+2.7% YoY) vs. est. $3.98/$2.43B; withdraws guidance; Q1 comp sales fell -1.9%

·     Ethan Allen (ETH) furloughed over 3,000 associates, hopes to reopen design centers in some states May 1; reports prelim 3Q net sales $150Mm, 3Q prelim adj EPS $0.01-0.02 vs. est. $146.75M and 6c

·     Sleep Number (SNBR) 1Q comps +7%, 1Q EPS $1.36 vs. est. 72c, expects to meet liquidity needs; Q1 revs $473M vs. est. $433M

·     Target (TGT) said same-store sales for April rose more than 5% as digital sales soar more than four times

·     Unilever (UN) slid as the household products giant reported flat underlying sales in the first quarter, including a 3.7% downturn from several geographic locations

 

Energy

·     Kinder Morgan (KMI) Q1 adjusted EPS 24c/$3.1B vs. est. 27c/$3.41B; sees FY20 adjusted EBITDA below plan by about 8%; raises quarterly dividend to 26.25c from 25c; sees 2020 DCF to be below plan by about 10%, sees 2020 adj EBITDA about 8% below plan

·     TechnipFMC (FTI) reported revenue for the first quarter of $3.13 billion, +7.5% YoY with backlog $21.96 billion; reports Q1 EPS loss (11c)

·     Bonanza Creek (BCEI) cuts 2020 capex forecast to $60M-$70M and lowered its recurring cash G&A by 13% to $27M-$29M; prelim 1Q capex of $41M, below original 2020 plan

·     Ring Energy (REI) halts drilling activity, says prelim 1Q production 991,772 BOE, says drilled four new horizontal San Andres well in 1Q, says no exception to oil price impacts

 

Financials

·     Ameritrade (AMTD) Q2 EPS adj 86c vs. est. 87c and revs $1.5B vs. est. $1.41B; backs FY20 guidance ranges for all metrics except OpEx

·     Eagle Bancorp (EGBN) Q1 EPS $1.11/$85.2M vs. est. 92c/$78.85M; tangible book value per share was $33.54 at March 31; reports Q1 net charge-offs .19%

·     Sallie Mae (SLM) Q1 EPS 79c vs. est. 83c; said private education loan originations up 8% in Q1; is withdrawing 2020 guidance

·     Signature Bank (SBNY) Q1 EPS $1.88 vs. est. $2.18; Q1 book value per share $88.94 and Q1 CET1 capital ratio 11.05% with Q1 net charge-offs 0.02%

·     Tradeweb Markets (TW) 11.16M share Secondary priced at $50.25

·     Umpqua (UMPQ) Q1 EPS loss (13c) vs. est. 26c; said Q1 net interest margin was 3.41%, down 10bps from 3.51% in Q4 primarily driven by the decrease in short and long term interest rates during the quarter (and down from 4.03% YoY); 1Q net interest income $218.5 million, -8.1% YoY and 1Q non-interest income $40.6 million, -11% YoY; 1Q total deposits $22.7 billion, +9.1% YoY

 

Healthcare

·     Eli Lilly (LLY) Q1 EPS $1.75 on revs $5.86B vs. est. $1.48/$5.51B; raises top end of year EPS view to $6.70-$6.90 from $6.70-$6.80; 1Q Trulicity revenue $1.23 billion, +40% YoY, 1Q Humalog revenue $695.8 million, -4.8% YoY and 1Q Altima revenue $560.1 million, +12% YoY

 

Industrials & Materials

·     Alcoa (AA) Q1 adj EPS loss (23c), in-line with ests on revs $2.4B vs. est. $2.35B and adj Ebitda $321M vs. est. $235.6M; reducing $100M of non-critical capital expenditures; suspends projections for supply and demand balances; continues to pursue sale of non-core assets; cuts its FY20 Aluminum segment shipment view to 2.9M-3.0M from 3.0M-3.1M metric tons

·     CSX Corp. (CSX) Q1 EPS $1.00/$2.86B vs. est. 94c/$2.86B; CSX’s operating ratio set a Class I railroad first quarter record of 58.7%, improved from 59.5% in the prior year; 1Q Intermodal volume 0% and 1Q volume -1%

·     Echo Global (ECHO) Q1 EPS 19c/$551.0M vs., est. 20c/$550.88M; sees Q1 revenue $530M-$570M vs. est. $509.03M while suspends guidance for the year

·     Fluor Corporation (FLR) announced the Air Force Installation Contracting Center awarded the company a position on the Air Force Contract Augmentation Program V (AFCAP V) for eight years beginning in May 2020. Fluor is now eligible to compete for specific task orders with a combined value not to exceed $6.4 billion during the contract period of performance

·     Landstar System (LSTR) says it will not provide EPS, revenue guidance for Q2 after Q1 EPS $1.04/$927.6M vs. est. $1.10/$928.5M

 

Technology, Media & Telecom

·     Lam Research (LRCX) Q3 EPS $3.98/$2.5B vs. est. $3.98/$2.58B; 3Q adjusted gross margin 46.3% vs. 45.1% YoY; Q3 adjusted operating margin 26.9% and sees 3Q capital expenditure $51.4M

·     Seagate (STX) shares fell -5% on guidance; Q1 EPS $1.38/$2.72B vs. est. $1.30/$2.61B; sees Q4 EPS $1.28, +/- 10% vs. est. $1.29 and guides Q4 revenue $2.6B, +/- 7%, vs. consensus $2.57B

·     Plexus (PLXS) 2Q adj EPS $0.61 on revs $767.4Mm vs. est. 56c/$741.1Mm; sees 3Q revs $790-830Mm (est. $767.3M), sees 3Q EPS $0.72-0.82 ex: Covid impact

·     Xilinx (XLNX) Q4 adjusted EPS 78c/$756M vs. est. 69c/$752.52M; sees Q1 revenue $660M-$720M vs. est. $738.84M and sees Q1 adjusted gross margin 68%-70%; 4Q North American revenue +27%, 4Q Asia Pacific revenue growth -28%, 4Q Europe sales -11%; raises quarterly dividend to 38c