Early Look

Thursday, April 30, 2020

Futures	Up/Down	%	Last
DJ Industrials	41.00	0.17%	24,607
S&P 500	-1.50	0.05%	2,939
Nasdaq	31.50	0.35%	9,067

 

 

Stocks futures are looking to add to yesterday’s gains, getting a boost once again from large cap tech after Microsoft, Tesla and Facebook all posted earnings results overnight that topped expectations handily, once again boosting market sentiment. Energy stocks are also helping lift futures as oil prices sky rocket with WTI crude up over 20% topping $17.50 per barrel. However, futures have been falling back since last night, paring recent gains ahead of another jam-packed day of earnings, including tech bellwethers Apple and Amazon after the close. In Asian markets, The Nikkei Index jumped 422 points to 20,193, the Shanghai Index climbed 37 points to 2,860 and the Hang Seng Index was closed. In Europe, the German DAX is flat at around 11,100, while the FTSE 100 is down -30 points to move back below 6,100. Investors closely watching the European Central Bank decision later this morning and the Lagarde press conference following. It is undetermined if the ECB will be aggressive with its QE program, forward guidance and flexibility or does nothing and disappointments.

 

U.S. stocks surged on Wednesday before slipping off their highs in the final minutes of trading, boosted by positive trial results for a potential treatment for COVID-19 from Gilead and by comments from the U.S. Federal Reserve who said that there’s more the Fed can do both in terms of the size and scope of its tools to aid the economy and markets. Gains were broad based but mainly focused in large-cap tech with better results from GOOGL lifting the Nasdaq Composite while the SmallCap Russell 2000 rose at least more than 1% for a 6th straight day (up nearly 5% yesterday alone) and is now 40% off the March lows. But markets again turn their attention to economic data this morning as weekly jobless claims are expected to rise another 3.5M (which would bring us to around 30M in 6-weeks) and continuing claims est. 19.475M. That data follows a Q1 GDP reading of a negative (-4.8%) yesterday, worse than expected.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 76.12 points, or 2.66%, to 2,939.51

·     The Dow Jones Industrial Average rose 532.31 points, or 2.21%, to 24,633.86

·     The Nasdaq Composite spiked 306.98 points, or 3.57%, to 8,914.71

·     The Russell 2000 Index advanced 62.68 points, or 4.83% to 1,360.76

 

Economic Calendar for Today

·     8:30 AM EST      Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

·     8:30 AM EST      Personal Income for March

·     8:30 AM EST      Personal Spending for March

·     8:30 AM EST      PCE Deflator MoM for March

·     8:30 AM EST      PCE Deflator YoY for March

·     8:30 AM EST      PCE Core Deflator MoM for March

·     8:30 AM EST      PCE Core Deflator YoY for March

·     9:45 AM EST      Chicago PMI for April

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

 

Earnings Calendar:

·     Earnings Before the Open: ABMD, AGIO, AMZN, BAX, BC, BEN, CFR, CG, CI, CMCSA, COP, DAN, DNKN, DOW, EIGI, ETN, FNMA, GEO, GNRC, GRA, ICE, IDXX, ILMN, IP, IRMD, K, KHC, LAZ, LNG, MCD, MCO, MMC, MTOR, NLSN, ONDK, PH, SAH, SIX, SO, SWK, TAP, TPR, TWTR, TXT, VC, WCC

·     Earnings After the Close: AAPL, AJG, AMZN, ATUS, BAND, BL, BRKS, BY, BZH, CASA, CDNA, COG, CXO, CXP, DCO, EMN, FBHS, FND, GILD, HUBG, LOCO, MGM, MOH, NCR, PRAH, PTCT, RMD, ROG, RRC, SGEN, SWI, SWN, SYK, TNDM, TWOU, V, WDC, WHR, X, ZEN

 

 

Macro	Up/Down	Last
WTI Crude	2.61	17.67
Brent	2.80	25.34
Gold	16.30	1,729.70
EUR/USD	0.0001	1.0874
JPY/USD	-0.04	106.64
10-Year Note	-0.019	0.607%

 

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) shares rise 7%; Q1 EPS $1.24 on revs $5.99B vs. est. $5.81B; 1Q cash and cash equivalents $8.08 billion vs. $2.20 billion YoY and Q1 capital ex: $455M, +63% YoY ; says Fremont model y production also exceeded first quarter of production of model 3 in shanghai; achieved positive gross margin for model y in its first production quarter; believe model 3 will achieve production rate of about 4,000/week (or about 200k/year extrapolated run rate) by mid-2020 in Shanghai

·     eBay (EBAY) 1Q adj EPS $0.77 vs est $0.73 on revs $2.37B vs est $2.34B, 1Q active buyers +2% to 174Mm; guides 2Q net revs $2.38-2.48B vs est $2.35B, sees 2Q adj EPS $0.73-0.80 vs est $0.73; says marketplace platforms have seen strength since mid-March and continued into April, says has seen pressure on classifieds continuing into April; guides FY net revs $9.56-9.76B vs est $9.51B, sees FY adj EPS $3.00-3.10 vs est $2.97; sees not change to capital allocation strategy or key targets

·     Churchill Downs (CHDN) Q1 EPS 5c/$252.9M vs. est. 16c/$264.97M; temporarily reduced its planned maintenance and project capital expenditures for 2020 as a result of the temporary property, and operations closures; Q2 results to be significantly impacted by rescheduling of the Kentucky Oaks and Derby

·     Wynn Resorts (WYNN) CEO Matthew Maddox stated during a White House meeting today that casinos could reopen by Memorial Day if all goes well. Earlier this week, the casino operator started to take reservations for Memorial Day weekend (watch LVS, MGM, PENN, CZR)

 

Energy

·     Western Europe’s biggest oil producer, Norway, is voluntarily joining international efforts to cut supply for the first time in almost two decades. “We will cut production by 250K barrels per day in June and by 134K bps in the second half of 2020

·     Antero Resources (AR) lowers 2020 CapEx to $750M from $1.15B saying reduced 2020 drilling and completion capital budget highlights the continued momentum in our capital cost savings initiative that was launched in early 2019; $750M budget is 41% lower than our 2019 capital spend, with no change to our growth target of 9% for 2020

·     Matador (MTDR) Q1 adjusted EPS 20c/$371.6M vs. est. 3c/$237M; Q1 average daily oil equivalent production decreased 4% sequentially to 71,200 barrels of oil equivalent per day, as compared to 73,700 BOE per day in Q4, and increased 19% YoY, as compared to 59,900 BOE per day in Q1 of 2019; sees 2020 total oil production up 9% vs. prior outlook up 16% and sees 2020 total natural gas production up 5% vs. prior up 12%.

·     Transocean (RIG) Q1 EPS loss (30c)/$759M vs. est. loss (29c)/$802.99M; Q1 revenue efficiency was 94.4%, compared with 96.2% in the prior quarter

 

Financials

·     Aflac (AFL) Q1 EPS $1.21 vs. est. $1.10; 1Q revenue $5.16B, -8.8% y/y, and below estimate $5.53B; withdraws adjusted Earnings Guidance for 2020

·     Annaly Capital (NLY) Q1 core EPS 21c vs. est. 22c; reports book value per common share of $7.50 vs. $9.66 as of December 31, 2019

·     Fair Isaac (FICO) 2Q adj EPS $2.14 vs est $1.71 on revs $308Mm vs est $295.8Mm; withdraws FY20 guidance

·     Hartford Financial (HIG) Q1 core EPS $1.34/$4.96B vs. est. $1.35/$5.21B; qtrly consolidated earned premiums $4,391 mln vs $3,940 mln reported last year; March 31, 2020 book value per diluted share of $41.42 declined 6% from $43.85 at December 31, 2019

·     Crown Castle (CCI) Adjusted FFO rose 1% to $593M, with site rental revenues up 5% to $1.31B; net income fell 4%, to $185M. EBITDA rose 1% to $814M; reaffirmed full-year expectations for AFFO of $2.572B-$2.617B, EBITDA of $3.479B-$3.524B, and site rental revenues of $5.337B-$5.382B

·     Primerica (PRI) 1Q adj op EPS $2.05 vs est $1.95 on revs $541.3Mm vs est $519.5Mm

 

Healthcare

·     Align Technology (ALGN) Q1 EPS 73c/$550.96M down 15% YoY vs. est. $1.26/$527.03M; withdraws FY guidance

·     BioMarin (BMRN) cuts FY20 revenue view to $1.85B-$1.95B from $1.95B-$2.05B (est. $1.97B) after Q1 revs $502M topped $468M est.; also reducing guidance for net product revs for Vimizim, Naglazyme and Palynziq for 2020

·     Cigna Corp. (CI) Q1 adj EPS $4.69/$38.46B vs. est. $4.36/$37.09B; total pharmacy customers rose to 78.8 million in the quarter from 74.9 million a year ago; total medical customers rose to 17.2 million from 16.9 million

·     Hologic (HOLX) Q2 adjusted EPS 57c/$756.1M vs. est. 57c/$745.9M; said excluding material acquisitions and divestitures, organic revenue growth was 4.7% through the end of fiscal February, or 5.2% in constant currency; withdraws year guidance

·     Jazz Pharmaceuticals (JAZZ) announced that enrollment in the Phase 3 clinical study of defibrotide for the prevention of hepatic veno-occlusive disease post-hematopoietic stem-cell transplantation in high-risk or very high-risk patients is being discontinued

·     Teladoc (TDOC) Q1 EPS loss (40c)/$180.8M vs. est. loss (36c)/$178.24M; guides Q2 revs $215M-$225M vs. est. $185.6M; boosts year revs view to $800M-$825M from prior $695M-$710M

·     Vertex (VRTX) Q1 adjusted EPS $2.56/$1.52B vs. est. $1.84/$1.29B; said global covid-19 outbreak has not had any impact on the continuity of Vertex’s supply chain for its approved medicines

 

Industrials & Materials

·     Kraton (KRA) Q1 EPS 27c/$427.3M vs. est. 4c/$409.9M; reports Q1 adj. EBITDA $77.9M, down 12.9% from last year

·     Tenaris (TS) said sees Q2 sales 35% lower than Q1 & ebitda margin, excluding restructuring charges, could fall to high single digit; follows Q1 sales $1.76B and operating loss of $510M

·     United Rentals (URI) Q1 EPS $3.35/$2.13B vs. est. $2.69/$2.09B; said expect our free cash flow to remain substantially positive in 2020, even in our worst-case scenarios; withdraws FY20 guidance

 

Technology, Media & Telecom

·     Facebook (FB) shares rise 9%; Q1 EPS $1.71/$17.44B vs. est. $1.74/$17.1B; Q1 daily active users were 1.73B on average for March, an increase of 11% year-over-year; Q1 monthly active users 2.60b vs. est. 2.34b; sees 2020 capex down to $14B-$16B from prior range of $17B-$19B; said significant cut in demand for ads in last 3 weeks of qtr; says ad rev about flat in 1st three weeks of April y/y; sees 2020 expenses $52-56b, down from prior $54-59b

·     Microsoft (MSFT) Q3 EPS $1.40/$35B vs. est. $1.26/$33.66B.; 3Q Productivity and Business Processes revenue $11.74 billion, +15% y/y; Q3 Intelligent Cloud revenue $12.28 billion, +27% y/y, and 3Q More Personal Computing revenue $11.00 billion, +3% y/y

·     Cree (CREE) Q3 adjusted EPS loss (14c)/$215.5M vs. est. loss (15c)/$216.06M; sees Q4 adjusted EPS (23c)-(15c) on revs $185M-$215M vs. est. loss (17c)/$213.64M

·     Inovalon (INOV) Q1 adj EPS $0.11, matches est on revs $154.2Mm vs est $159Mm; sees FY adj EPS $0.53-0.57 vs prior $0.59-0.63 on revs $672-698Mm (was $698-718Mm)

·     Macom (MTSI) Q2 EPS 17c/$126.4M vs. est. 10c/$122.67M; guides Q3 EPS 19c-23c on revs $129M-$133M above consensus 11c/$123.2M

·     Service-Now (NOW) shares rise 7%; 1Q adj EPS $1.05 vs est $0.95 on revs $1.05B vs est $1.02B; subscription revs $995Mm +34% yr/yr, 933 total customers with over $1Mm annual contract value +30% yr/yr; company remains confident in path to $10B revs and beyond; guidance includes expected covid impact (highest 2Q, 3Q), sees 2Q revs $995-1.0B with op mgn 23%, sees FY revs $4.13-4.15B with op mgn 23%

·     PTC (PTC) Q2 EPS 59c/$360M vs. est. 44c/$340.14M; reports Q2 ARR up 10% at $1.18B; narrows FY20 EPS view to $2.20-$2.35 from $2.15-$2.65 (est. $2.21) while cuts FY20 revenue view to $1.40B-$1.43B from $1.45B-$1.53B (est. $1.43B)

·     Qualcomm (QCOM) 2Q adj EPS $0.88 vs est $0.78 on adj revs $5.21B vs est $5.03B; sees 3Q adj EPS $0.60-0.80 vs est $0.72, sees 3Q revs $4.4-5.2B vs est $4.91B, says China 5G phone mix stronger than anticipated