Early Look

Thursday, January 27, 2022

Futures	Up/Down	%	Last
Dow	-30.00	0.09%	34,025
S&P 500	-2.25	0.06%	4,339
Nasdaq	0.50	0.00%	14,158

 

 

A much better picture for U.S. futures than late last night, as the S&P is little changed around 4,340, a strong rebound off overnight lows of 4,263.25, falling as much as 1.6% and taking out the Tuesday night lows of 4,276.50. It looked like an ugly looking start to the day, with U.S. futures adding to a late day tumble Wednesday as a path of higher interest rates and an unclear message by the Fed weighed on investor’s mind, while earnings/guidance disappointments from a handful of companies amid constant warnings of worsening supply-chain constraints are taking a toll on sentiment. Treasury yields hit overnight highs above 1.86% but has since pulled back to 1.83% (still much higher than prior day lows). In geopolitical news, the United States said it had set out a diplomatic path with Russia as the country held security talks with Western countries. The dollar spiked to an 18-month high just shy of the 97 level (euro falls below 1.12), adding to the late day surge Wednesday after the Federal Reserve said it is likely to raise U.S. interest rates in March as expected and later launch a significant reduction in its asset holdings. Oil prices edge higher, gold slips, Bitcoin modestly higher. Data on U.S. fourth-quarter GDP, weekly jobless claims and December durable goods orders are due to be published today. In earnings, TSLA, INTC lower after results overnight with Apple (AAPL) tonight.

 

Fed Chair Jerome Powell said yesterday during his press conference that the U.S. central bank will be open-minded as it adjusts monetary policy to keep persistently high inflation from becoming entrenched. The overall commentary was not well received by Wall Street which hoped the Fed would be slightly less hawkish than in recent weeks – but was not the case. In Asian markets, The Nikkei Index tumbled over -800 points or 3.1% to 26,170, the Shanghai Index fell -1.78% to 3,394 and the Hang Seng Index declined -2% to 23,807. In Europe, the German DAX is down -0.45% at 15,390, while the FTSE 100 rises 30 points to move back above 7,500.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.67 points, or 0.15%, to 4,349.78

·     The Dow Jones Industrial Average fell -130.89 points, or 0.38%, to 34,166.84

·     The Nasdaq Composite edged higher 2.82 points, or 0.02%, to 13,542.12

·     The Russell 2000 Index declined -27.56 points, or 1.38% to 1,976.47

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 260K

·     8:30 AM EST       Continuing Claims…est. 1.65M

·     8:30 AM ET         Gross Domestic Product (GDP), Q4-A…est. 5.5%

·     8:30 AM ET         GDP Price Deflator, Q4-A…est. 6.0%

·     8:30 AM ET         Personal Spending for Q4-A…prior 2.0%

·     8:30 AM ET         PCE Prices for Q4-A

·     8:30 AM ET         Core PCE Prices for Q4-A…est. 4.9%

·     8:30 AM ET         Durable Goods orders for December…est. (-0.5%)

·     8:30 AM ET         Durable Goods Ex: Transportation for Dec…est. 0.4%

·     10:00 AM ET       Pending Home Sales MoM for December…est. (-0.2%)

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

·     11:00 AM ET       Kansas City Fed Manufacturing for January

·     1:00 PM ET          U.S. to sell $53B in 7-year notes

 

Earnings Calendar:

·     Earnings Before the Open: ADS, AIT, ALK, AOS, BC, BLL, BX, CFR, CMCSA, CNX, DHR, DOW, EWBC, EXP, EXTR, FLWS, FRME, HCA, HZO, IBCP, IP, JBLU, KEX, LUV, MCD, MKC, MMC, MO, MSCI, MTSI, MUR, NTCT, NOC, ORI, OSIS, ROK, SFNC, SHW, STBA, TROW, TSCO, TXT, VLO, VLY, WTBA, XEL

·     Earnings After the Close: AAPL, ABCB, AJG, AX, BY, BZH, CATY, CE, CLFD, CSTR, EMN, FFBC, FFIC, FHI, FIBK, FICO, FOR, GBCI, HAYN, HOOD, JNPR, KLAC, KRNY, MA, MATW, MDLZ, MSBI, NATI, NUE, OCFC, OLN, RMD, SBCF, SYK, TBBK, V, WAL, WDC, WRB, X

 

 

Macro	Up/Down	Last
Nymex	0.32	87.67
Brent	0.20	90.16
Gold	-9.60	1,810.00
EUR/USD	-0.0075	1.1161
JPY/USD	0.56	115.19
10-Year Note	-0.013	1.833%

 

 

Sector News Breakdown

Consumer

·     Tesla Inc. (TSLA) Q4 EPS $2.54 vs. est. $2.26; Q4 revs $17.72B vs. est. $16.64B; making progress on the industrialization of Cybertruck, which is currently planned for Austin production after Model Y; Q4 end cash and cash equivalents increased sequentially by $1.5B to $17.6 bln in Q4

·     Las Vegas Sands (LVS) 4Q adj EPS ($0.22) vs est. ($0.24) on revs $1.01B down 12% YoY vs est. $1.05B, total qtrly Macao revs $649Mm; Adjusted property EBITDA $251M, +78% y/y

·     Levi Strauss (LEVI) 4Q adj EPS $0.41 vs est. $0.40 on revs $1.7B vs est. $1.68B, qtrly DTC net revs +25%, qtr end total inventory +10%; guides FY22 net revs +11-13% vs est. +10.7% and adj EPS $1.50-1.56 vs est. $1.52

·     Meritage Homes (MTH) 4Q EPS $6.25 vs est. $6.03, qtrly sales orders 3,367 homes +6%, qtrly homes closed 3,526, qtrly closing revs $1.5B vs est. $1.51B

·     Stanley Black & Decker Inc. (SWK) said it plans to restate previous financial statements to correct an accounting error related to its recording of equity shares; said it would revise its financials for an annual filing for the year ended Jan. 2, 2021, and for three subsequent quarterly filings

·     Tractor Supply (TSCO) Q4 EPS $1.93 vs. est. $1.85; Q4 revenue $3.32B vs. est. $3.24B; Q4 comp sales rose 12.7%; announces $2B increase to share repurchase plan; raises quarterly dividend 77% to 92c per share; sees FY22 EPS $9.20-$9.50 vs. est. at $8.76

·     Whirlpool (WHR) Q4 adj EPS $6.14 vs. est. $5.84; Q4 revs $5.82B vs. est. $5.88B; sees FY22 adjusted EPS $27.00-$29.00 vs. est. $25.39; sees FY22 net sales growth of 5%-6%; sees FY22 cash from operating activities $2.2B, free cash flow $1.5B

 

Energy, Industrials and Materials

·     Murphy Oil (MUR) Q4 adj EPS $0.40 vs. est. $0.47; Q4 revs $738.95M vs. est. $618.75M; produced 150 thousand barrels of oil equivalent per day with 53 percent oil volumes in Q4; says 2022 capex to be in range of $840M-$890M; sees 2022 production to be in range of 164-172 mboepd

·     Hexcel (HXL) 4Q adj EPS $0.16 vs est. $0.12 on revs $360.3Mm vs est. $359Mm; guides FY22 sales $1.50-1.63B vs est. $1.62B and adj EPS $1.00-1.24 vs est. $1.25

·     Landstar (LSTR) Q4 EPS $2.99 vs. est. $2.81; Q4 revs $1.95B vs. est. $1.82B; Q1 revenue is expected to be lower than revenue of immediately preceding Q4 as sees $1.7B-$1.75B vs. est. $1.58B; expect rev per load on loads hauled via truck to increase 14 to 17% & loads hauled via truck to increase by 12 to 14 %, respectively, in Q1

·     Packaging Corp (PKG) announces new $1B share repurchase plan; Q4 adj EPS $2.76 vs. est. $2.07; Q4 revs $2b vs. est. $1.94B; sees Q1 EPS $2.50 vs. est. $2.13; said expected continued higher inflation and higher freight and logistics expenses to offset the benefits of strong demand and its most recent price increase

·     Unifi (UFI) Q2 EPS $0.05 vs. est. $0.27; Q2 revs rose 23.7% to $201.4M vs. est. $187.8M; lowers FY22 adjusted EBITDA view to $60M-$62M from $65M-$67M; sees sales volume and Repreve fiber sales growth driving net sales to $800 million or more in 2022

·     United Rentals (URI) Q4 adj EPS $7.39 vs est. $6.72 on revenue $2.776B vs est. $2.745B; sees FY22 revs $10.65B-$11.05B vs est. $10.71B, announced a new $1B share repurchase program

·     Marathon Oil (MRO) raises dividend by 17% to $0.07

·     Marathon Petroleum (MPC) is evaluating a conversion of Phillips 66’s (PSX) Alliance refinery in Louisiana into a renewable fuel plant – Reuters

 

Financials

·     Ameriprise Financial (AMP) Q4 adj EPS $6.15 vs. est. $5.70; Q4 revs $3.7B vs. est. $3.56B; announces $3B share repurchase plan; Assets under management and administration increased to a record high of $1.4 trillion.

·     Axis Capital (AXS) 4Q op EPS $2.13 vs est. $1.51, qtrly gross premiums written increased by $214 mln, or 16%, to $1.6B; qtrly net premiums written increased by $162M, or 21% to $947M

·     Duke Realty (DRE) 4Q core FFO $0.44 vs est. $0.45; guides FY22 core FFO $1.87-1.93 vs est. $1.90

·     Lending Club (LC) Q4 EPS $0.27 vs est. $0.22 on revenue $262.2M vs est. $245.7M; sees Q1 total revenue $255M-$265M vs est. $527M, FY22 revenue $1.1B-$1.2B vs est. $1.16B; shares now down over 13%

·     Raymond James Financial (RJF) raises quarterly dividend 31% to $0.34; Q1 EPS $2.12 on revs $2.78b vs. est. $1.76 and $2.64B; says well positioned entering Q2; qtr-end private client group assets under administration of $1.20 trillion, up 23% over December 2020

·     SL Green (SLG) 4Q FFO/share $1.52 vs est. $1.55 on revs $194.6Mm vs est. $152.4Mm

·     SLM Corp. (SLM) 4Q adj EPS $1.05 vs est. $0.96; guides FY22 adj EPS $2.80-3.00 vs est. $2.78; approves new $1.25B repurchase program

 

Healthcare

·     Centene (CNC) drew takeover interest from Cigna (CI) in recent months, Bloomberg news reported last night after the close; the talks were preliminary and didn’t result in serious deal discussions late last year and there are no ongoing talks

·     Atara Biotherapeutics (ATRA) enters strategic manufacturing partnership with Fujifilm which is acquiring Atara’s cell therapy manufacturing facility for total upfront financial consideration of $100M

·     CONMED Corp. (CNMD) Q4 adj EPS $1.07 vs est. $1.03 on sales $274M vs est. $275.8M; sees FY22 adj EPS $3.60-$3.85 vs est. $3.72 on revenue $1.075B-$1.125B vs est. $1.1B

·     Edwards Lifesciences (EW) Q1 adj EPS $0.51 vs est. $0.55 on revenue $1.33B vs est. $1.35B; reaffirms FY22 sales guidance for all product groups, sees Q1 adj EPS $0.54-$0.62 vs est. $0.60 on sales $1.27B-$1.35B vs est. $1.36B

·     Vertex Pharma (VRTX) 4Q adj EPS $3.37 vs est. $3.30 on revs $2.07B vs est. $1.98B; guides FY22 revs $8.4-8.6B vs est. $8.2B, adj R&D and SG&A exp $2.7-2.75B, adj effective tax rt 21-22%

·     Epizyme (EPZM) prices $85M offering – 56.66M shares at $1.50/share

 

Technology, Media & Telecom

·     Intel Corp. (INTC) 4Q EPS $1.13 vs est. $0.80 on adj revs $19.5B vs est. $18.1B, gr margin 53.6%; guides 1Q revs about $18.3B vs est. $17.6B and adj EPS $0.80 vs est. $0.86; raises quarterly dividend 5% to $1.46 per share on an annual basis

·     Xilinx (XLNX) shares rise as China’s State Administration for Market Regulation said it will conditionally approve Advanced Micro Devices (AMD) $35 billion all-stock deal for them on condition that AMD and Xilinx do not force tie-in sales of products or discriminate against customers that buy one set of products but not another.

·     Avnet (AVT) Q2 adj EPS $1.51 vs. est. $1.27; Q2 revs $5.865B vs. est. $5.59B; Q3 adj EPS $1.45-$1.55 vs. est. $1.26; sees Q3 revenue $5.4B-$5.8B vs. est. $5.54B

·     Aspen Technology, Inc. (AZPN) 2Q adj EPS $1.20 vs est. $1.29 on revs $171.4Mm vs est. $183.6Mm; guides FY22 revs $737-754Mm vs est. $726.7Mm and adj EPS $5.23-5.39 vs est. $5.02

·     CACI International Inc (CACI) 2Q adj EPS $4.39 vs est. $4.19 on revs $1.5B vs est. $1.53B; guides FY22 revs $6.3-6.4B vs est. $6.3B and adj EPS $18.14-18.57 vs est. $18.55

·     Calix (CALX) 4Q adj EPS $0.26 vs est. $0.24 on adj revs $176.4Mm vs est. $173.9Mm; guides 1Q adj revs $174-180Mm vs est. $164.2Mm and adj EPS $0.16-0.21 vs est. $0.15

·     Celestica (CLS) Q4 adj EPS $0.44 vs. est. $0.32; Q4 revs $1.5B vs. est. $1.49B; sees FY22 revenue at least $6.3B vs. est. $6.34B; sees FY22 operating margin in the range of 4.0%-5.0%

·     Crown Castle (CCI) 4Q FFO/share $1.77 vs est. $1.70; guides FY22 AFFO/share $7.31-7.41 vs est. $7.34; sees FY22 AFFO $7.31-$7.41 vs. est. $7.37; sees FY22 revs $6.23B vs. est. $6.31B; Q4 Site rental revenues $1.47B and service and other revenue $180M

·     Credo Technology (CRDO) 25M share IPO priced at $10.00

·     Flex Inc. (FLEX) Q3 adj EPS $0.50 vs est. $0.42 on sales $6.6B vs est. $6.33B; sees Q4 adj EPS $0.41-$0.46 vs est. $0.44 on revenue $6.2B-$6.6B vs est. $6.42B

·     Lam Research (LRCX) Q2 EPS $8.53 vs. est. $8.51; Q2 revs $4.23B vs. est. $4.41B; sees Q3 EPS $7.45 plus/minus $0.75 and revs $4.25B plus/minus $300M vs. est. $8.72 and $4.49B; sees Q3 gross margin 45% plus/minus 1%

·     MKS Instrument (MKSI) Q4 adj EPS $3.02 vs est. $2.86 on revenue $764M vs est. $759.1M; sees Q1 EPS about $2.57 vs est. $2.89 on revenue about $750M vs est. $789.1M

·     Netflix (NFLX) rises after Bill Ackman told investors that his hedge fund, Pershing Square Capital Management, started buying shares on Friday and now owns more than 3.1 million shares in Netflix, making Pershing Square a top 20 shareholder

·     Plexus (PLXS) 1Q EPS $0.82 vs est. $1.00 on revs $817Mm vs est. $831.3Mm; guides 2Q revs $825-865Mm vs est. $863Mm and EPS $0.76-0.92 vs est. $1.07

·     PTC Inc. (PTC) Q1 EPS $0.95 vs. est. $1.00; Q1 revs $457.7M vs. est. $467.6M; Cash flow from operations $137.7M and free cash flow $134.4M

·     Qualtrics International Inc. (XM) 4Q adj EPS ($0.07) vs est. ($0.02) on revs $316Mm vs est. $297.6Mm; guides 1Q revs $324-326Mm vs est. $314.7Mm; guides FY revs $1.402-1.406B vs est. $1.359B, sees FY adj EPS loss $0.00-0.02 vs est. loss $0.01

·     Seagate Technology (STX) Q2 EPS $2.41 vs. est. $2.36; Q2 revs $3.12B vs. est. $3.11B; sees Q3 EPS $1.80-$2.20 vs. est. $2.07; sees Q3 revs $2.75B-$3.05B vs. est. $2.92B; Cash flow from operations of $521 million and free cash flow of $426 million

·     ServiceNow (NOW) 4Q adj EPS $1.46 vs est. $1.43 on revs $1.61B vs est. $1.6B, subscription revs $1.523B +29%

·     Teradyne (TER) 4Q adj EPS $1.37 vs est. $1.29 on revs $$885Mm vs est. $868Mm; guides 1Q revs $700-770Mm vs est. $875.4Mm and adj EPS $0.76-0.98 vs est. $1.30; increases qtrly dividend by 10% to $0.11/share

·     Wolfspeed Inc. (WOLF) Q2 EPS loss (-$0.16) vs. est. loss (-$0.18); Q2 revs $173.1M vs. est. $169.3M; sees Q3 revs $185M-$195M vs. est. $182M

·     Xilinx (XLNX) 3Q adj EPS $1.29 vs est. $0.95 on revs $1.011B vs est. $956.8Mm