Early Look

Wednesday, April 29, 2020

Futures	Up/Down	%	Last
DJ Industrials	126.00	0.52%	24,171
S&P 500	19.50	0.68%	2,886
Nasdaq	83.50	0.96%	8,803

 

 

Stock futures shoot higher ahead of another busy day of earnings results, and as oil prices spike ahead of weekly inventory data, a day after the Dow snapped its 4-day winning streak amid a late day market pullback. U.S. stocks closed lower Tuesday, giving up early gains, as tech stocks took a hit ahead of earnings reports. Wednesday is one of the busiest days of earnings seasons, with Facebook, Tesla and Boeing, among others, reporting. Investors are also looking forward to comments Wednesday by Fed Chairman Jerome Powell, who is scheduled to speak as the Fed wraps up two days of meetings. While no major moves by the Fed are expected, Powell is expected to give a message that the central bank has the current crisis under control. In Asian markets, The Nikkei Index was closed the Shanghai Index gained 12 points to settle at 2,822 and the Hang Seng Index rose 67 points to 24,643. In Europe, the German DAX is higher by about 30 points to 10,830, while the FTSE 100 is up about 50 points to move back above the 6,000 level. News of state by state reopening’s of their local economies has sparked the latest market rally that has seen major averages jump more than 25% off their March lows. Economic data today as GDP probably fell at a 4% annualized rate in the quarter.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.09 points, or 0.52%, to 2,863.39

·     The Dow Jones Industrial Average fell -32.23 points, or 0.13%, to 24,101.55

·     The Nasdaq Composite dropped -122.43 points, or 1.40%, to 8,607.73

·     The Russell 2000 Index advanced 16.20 points, or 1.26% to 1,298.08

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:30 AM EST      GDP Annualized QoQ for Q1-Actual…est. (-4.0%)

·     8:30 AM EST      Personal Consumption for Q1…est. (-3.6%)

·     8:30 AM EST      GDP Price Index for Q1…est. 1.0%

·     8:30 AM EST      Core PCE QoQ for Q1…est. 1.7%

·     10:00 AM EST    Pending Home Sales MoM for March…est. (-13.6%)

·     10:30 AM EST    Weekly DOE Inventory Data

·     2:00 PM EST       FOMC Rate Decision (no change expected)

 

Earnings Calendar:

·     Earnings Before the Open: ADP, AMT, ANTM, APRN, AVY, AZZ, BA, BDC, BSX, BTU, CME, DIN, EAT, EPD, GD, GE, HAS, HUM, LFUS, LH, MA, MAS, NOC, NSC, NYCB, OC, OSK, R, ROL, SHW, SLAB, SUM, SXT, TDOC, TUP, UTHR, VLO, YUM

·     Earnings After the Close: ADM, AFL, AGNC, ALGN, BMRN, CACI, CCI, CHDN, CMO, CONE, CREE, DRE, EBAY, FB, HCC, HIG, HOLX, KRA, MSFT, MXL, NLY, NOW, OLN, PPC, PRI, PS, PSB, PTC, QCOM, RIG, SCI, TSLA, UCTT, URI, VRTX, WHG

 

 

Macro	Up/Down	Last
WTI Crude	1.84	14.18
Brent	0.99	21.45
Gold	-3.20	1,719.00
EUR/USD	0.0027	1.0847
JPY/USD	-0.41	106.46
10-Year Note	-0.022	0.590%

 

 

Sector News Breakdown

Consumer

·     Ford (F) Q1 EPS loss (23c)/$31.3B vs. est. loss (12c)/$32.54B; drew over $15B in existing credit lines, suspended dividend during Q1; sees Q2 adj Ebit loss of over $5B; says sees significant drop in Q2 industry volumes for all regions; recorded volume-driven automotive Ebit loss of $177 million in qtr; says strong ford credit portfolio performance in qtr was offset by about $600 mln from increased credit-loss reserves, some higher depreciation

·     Starbucks (SBUX) 2Q comps -10% vs. up 5% QoQ, adj EPS $0.32 vs es.t $0.34, has closed about 50% US company-operated stores, 2Q China comps -50%; sees sig greater neg impact in 3Q, more moderate neg impact in 4Q; FY20 guidance remains suspended; see China comps -25% to -35% in 3Q, -10% to flat in 4Q, -15% to -25% FY

·     Hasbro (HAS) reports Q1 adjusted EPS 57c/$1.11B vs. est. 58c/$1.14B

·     Southwest (LUV) 70M share Spot Secondary priced at $28.50

·     iRobot (IRBT) 1Q non-Gaap EPS ($0.32) vs est ($0.47) on sales $192.5Mm vs est $186.8Mm, withdrew its financial expectations for 2020 as a result of the uncertainty surrounding COVID-19, including its duration and broader macroeconomic impact, as well as the evolving tariff exclusion process

·     Meritage Homes (MTH) Q1 EPS $1.83/$901M vs. est. $1.28/$800M; said expects weaker results for at least the next two quarters; halts share repurchases and withdraws guidance

·     Mondelez (MDLZ) 1Q adj EPS $0.69 vs est $0.665 on revs $6.71B vs est $6.61B, says organic revs +6.4% vs. est. 3.7%; temporarily suspends FY guidance; 1Q adjusted operating margin 16.5% vs. 16.7% YoY

·     WW (WW) Q1 EPS loss (9c)/$400.4M vs. est. loss (23c)/$399.96M; reports Q1 end-of-period subscribers up 9% year-over-year to 5M (said an all-time Q1-end high); implements $100M cost-savings initiative and withdraws guidance

·     Yum China (YUMC) Q1 adjusted EPS 16c/$1.75B vs. est. loss (18c)/$1.56B; Q1 same-store sales declined 15% year over year, with an 11% decline at KFC and 31% decline at Pizza Hut, excluding F/X; Q1 restaurant margin was 10.7% vs. 18.5% a year ago

 

Energy

·     The American Petroleum Institute (API) said weekly crude oil inventories rose 9.98M barrels last week; gasoline stocks were down 1.11M barrels, and distillates up 5.46M barrels

·     Avangrid (AGR) Q1 adjusted EPS 76c/$1.79B vs. est. 76c/$1.9B; backs FY20 adjusted EPS view $2.17-$2.37 (est. $2.20) as outlook reflects current assumptions including the recoverability of COVID-19 related impacts

·     Core Laboratories NV (CLB) decreased its regular quarterly cash dividend 96% to 1c from the previous dividend of 25c per share

·     Superior Energy (SPN) says it is unable to file its 10-K and 10-Q forms on a timely basis due to the coronavirus, citing disruptions to its operations; had planned to file an amended 10-K by April 30 and a 10-Q by May 11, but both will be pushed back no later than 45 days.

 

Financials

·     Artisan Partners (APAM) 1Q adj EPS $0.66 vs est $0.61 on revs $202.8Mm vs est $200.7Mm; cuts qtrly div to $0.61 from $0.68

 

Healthcare

·     Accuray (ARAY) shares jumped 30% after saying gross orders for the third quarter rose 27% YoY to $106M saying order momentum was evident in all but one of our regions; said the Americas delivered its third-consecutive quarter of double-digit or higher, year-over-year revenue growth; gross orders in Europe, the Middle East and Asia increased 15% on a year-over-year basis; withdrew 2020 guidance

·     Anthem (ANTM) Q1 adjusted EPS $6.48/$29.4B vs. est. $6.48/$28.6B; backs FY20 adjusted EPS view greater than $22.30; suspends stock buyback; Q1 benefit expense ratio 84.2% vs. 84.4% YoY

·     Boston Scientific (BSX) Q1 adj. EPS 28c/$2.54B vs. est. 31c/$2.52B;

·     Immunomedics (IMMU) 14.737M share Secondary priced at $28.50

·     Humana (HUM) Q1 adjusted EPS $5.40/$18.94B vs. est. $4.68/$18.46B; raises full year expected individual Medicare Advantage membership growth to 300,000 to 350,000 members from previous range of 270,000 to 330,000 members, while reaffirming group Medicare Advantage; backs year EPS view

·     Cerner (CERN) Q1 EPS 71c on revs $1.41B vs. est. 70c/$1.43B; sees Q2 adjusted EPS 60c-64c on revs $1.34B-$1.39B below est 74c/$1.44; lowers 2020 adjusted EPS outlook to $2.78-$2.90 from $3.09-$3.19 and cuts year revenue outlook to $5.55B-$5.70B from $5.725B-$5.975B

·     Chimerix (CMRX) received clearance from the FDA for a rolling submission of its New Drug Application for the approval of brincidofovir (BCV) as a medical countermeasure for smallpox; shares jumped 19% in post-market trading.

·     Community Health (CYH) Q1 adjusted EPS loss ($1.59) on revs $3.025B vs. est. loss (58c)/$3.17B; said on a same-store basis, admissions decreased 5.2% and adjusted admissions decreased 4.8%, compared with the same period in 2019; isn’t providing guidance

·     DexCom (DXCM) Q1 adjusted EPS 44c/$405.1M vs. est. 14c/$357.64M; suspends 2020 guidance

·     Masimo (MASI) Q1 adjusted EPS 97c/$269.6M vs. est. 91c/$259.9M; says given the uncertainties around the COVID-19 pandemic and its potential impact on our business, we are no longer offering guidance for 2020

·     Supernus Pharmaceuticals (SUPN) agrees to acquire the central nervous system portfolio of US WorldMeds, a privately held biopharmaceutical company, for $530M

 

Industrials & Materials

·     C.H. Robinson (CHRW) Q1 EPS 57c/$3.8B vs. est. 68c/$3.54B; said 1Q transportation revenue $3.54 billion, +1.1% YoY and the co remains committed to maintaining quarterly dividend

·     General Electric (GE) Q1 EPS 5c vs. est. 7c saying impact from virus felt most in aviation sector during the quarter; sees Q2 results to decline sequentially

·     O-I Glass (OI) Q1 EPS 41c/$1.56B vs. est. 40c/$1.63B; said is actively monitoring the impact of the COVID-19 outbreak, which will negatively impact its business and results of operations for Q2 and likely beyond; says extent to which the company’s operations will be impacted by the outbreak will depend largely on future developments, which are uncertain and cannot be accurately predicted

·     Werner (WERN) Q1 EPS 40c/$592.7M vs. est. 35c/$576.87M; said freight base is designed to more effectively manage through what we anticipate will be an extremely difficult economic environment in second quarter 2020, as a significant portion of our revenues come from delivering essential goods and products

 

Technology, Media & Telecom

·     Alphabet (GOOGL) Q1 EPS $9.87 on revs ex-TAC $33.71B vs. est. $10.33/$32.6B; 1Q operating income $7.98 billion, +21% YoY, Q1 Google Cloud revenue $2.78B vs. $1.83B a year ago; 1Q operating margin 19% vs. 18% YoY; Google advertising revenue $33.76B vs. $30.59B a year ago; Q1 YouTube ads revenue $4.04B vs. $3.03B in same quarter of prior year

·     Advanced Micro (AMD) Q1 EPS 18c/$1.79B vs. est. 18c/$1.78B; 1Q adjusted gross margin 46% vs. 41% YoY while 1Q computer and graphics revenue $1.44B falling -13% Qoq and 1Q enterprise, embedded and semi-custom revenue $348M, -25% QoQ; sees 2020 revs to grow about 25% YoY

·     Akamai (AKAM) Q1 adjusted EPS $1.20/$764M vs. est. $1.16/$749.76M

·     FireEye (FEYE) 1Q revs $224.7Mm vs. est. $221.1Mm, 1Q EPS ($0.02) vs. est. ($0.04); guides 2Q EPS ($0.03)-($0.01) vs. est. $0.02 on revs $213-217Mm vs. est. $221Mm, sees FY20 EPS $0.03-0.07 vs est $0.17; withdraws billings, cash flow guidance

·     Juniper Networks (JNPR) 1Q adj EPS $0.23 vs est $0.25 on revs $998Mm vs est $1.0B; guides 2Q adj EPS $0.29-0.39 vs est $0.34, sees 2Q revs $1.01-1.11B vs est $1.05B

·     Lattice Semi (LSCC) 1Q adj EPS $0.15 vs est $0.14 on revs $97.3Mm vs est $98.5Mm, sees 2Q revs $95-105Mm vs est $101.4Mm

·     Maxim Integrated (MXIM) Q3 adj EPS $0.61 vs est $0.57 on net revs $562Mm vs est $553Mm; guides 4Q adj EPS $0.43-0.57 vs est $0.47, sees 4Q adj gr margin 65.5-67.5%

·     MKS Instruments (MKSI) Q1 EPS $1.54/$536M vs. est. $1.24/$508.65M; sees Q2 EPS 90c-$1.38 vs. est. $1.24 and sees Q2 revenue $450M-$520M, vs. consensus $500.63M; Q1 semi sales rose 42% YoY to $313M, advanced mkt sales -8.2% YoY to $223M; Q1 GM’s 44.7%

·     Paycom Software (PAYC) 1Q adj EPS $1.33 vs est $1.26 on revs $242.4Mm vs est $238Mm, withdraws FY20 guide

·     Rapid7 (RPD) said it has entered into a definitive agreement to acquire Divvy Cloud, a leader in Cloud Security Posture Management