Early Look

Friday, July 30, 2021

Futures	Up/Down	%	Last
Dow	-87.00	0.25%	34,887
S&P 500	-27.25	0.62%	4,384
Nasdaq	-158.50	1.05%	14,879

 

 

A little different picture for global markets this morning as major U.S. averages are looking lower following a Q2 sales miss by online retail behemoth Amazon along with a softer Q3 sales outlook, dragging shares lower by over 6% and pushing Nasdaq futures down 1%. The outlook follows cautious forward-looking statements from both Facebook and Apple earlier this week for Q3. Treasury yields are slipping ahead of core PCE data later this morning as well as personal income and spending figures. The S&P 500 ended in positive territory on Thursday, but short of an earlier intraday record high, buoyed by robust quarterly results from the likes of Ford Motor and Qualcomm, while fresh data showed the U.S. economy reached pre-pandemic levels. Among the 11 S&P 500 sector indexes, financials and materials were among the strongest performers, each up over 1%. Oil prices are holding higher after WTI crude climbed past $73 a barrel with U.S. stockpiles declining. Virus worries continue to haunt growth prospects. In California, Sacramento County and Los Angeles County have enacted indoor mask mandates, and in Washington, D.C., masks will once again be required indoors beginning Saturday. In Asian markets, The Nikkei Index dropped -1.8% or nearly 500 points to settle the week at 27,283, the Shanghai Index dropped about -15 points to settle below 3,400 and the Hang Seng Index tumbled -1.35% or 350 points to 25,961 in a volatile week of trading. In Europe, the German DAX is lower by -135 points (-0.85%) to 15,500, while the FTSE 100 slips about -60 points to 7,020. Heading into the weekend, the U.S. Treasury looks to avoid the debt limit breach.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 18.51 points, or 0.42%, to 4,419.15

·     The Dow Jones Industrial Average rose 153.60 points, or 0.44%, to 35,084.53

·     The Nasdaq Composite edged higher 15.68 points, or 0.11%, to 14,778.26

·     The Russell 2000 Index advanced 15.07 points, or 0.68% to 2,240.03

 

Events Calendar for Today

·     8:30 AM ET         Personal Income MoM for June…est. (-0.3%)

·     8:30 AM ET         Personal Spending MoM for June

·     8:30 AM ET         PCE Price Index MoM for June

·     8:30 AM ET         PCE Prices Index YoY for June

·     8:30 AM ET         Core PCE Price Index MoM for June…est. 0.6%

·     8:30 AM ET         Core PCE Price Index YoY for June…est. 3.7%

·     8:30 AM ET         Employment Cost Index for Q2

·     9:45 AM ET         Chicago PMI for July…est.64.6

·     10:00 AM ET      University of Michigan Confidence for July-F…est. 80.8

·     1:00 PM EST       Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: ABBV, AON, AVNT, AXL, B, BAH, BCPC, BLMN, CAT, CBOE, CERN, CHD, CHTR, CVX, DAN, DCOM, HRC, HUN, IDXX, IMGN, IRDM, JCI, LAZ, LYB, NWL, PG, PNM, POR, VFC, WPC, WY, XOM

 

Other Key Events:

·     China NBS Manufacturing PMI for July

·     Alzheimer’s Association International Conference (AAIC) 2021 (virtual), 7/26-7/30

 

 

Macro	Up/Down	Last
Nymex	-0.32	73.30
Brent	-0.17	75.88
Gold	0.20	1,828.40
EUR/USD	0.0009	1.1896
JPY/USD	0.11	109.59
10-Year Note	-0.02	1.249%

 

 

World News

·     The C.D.C.’s new masking advice was based in part on data showing that the virus can thrive in the airways of vaccinated people. The findings are expected on Friday. People with so-called breakthrough infections — cases that occur despite full vaccination — of the Delta variant may be just as contagious as unvaccinated people, even if they have no symptoms – NYTimes https://nyti.ms/2VdGoid 

·     Japan Industrial Production (M/M) Jun P 6.2% (est. 5.0%; previous -6.5%); Japan Industrial Production (Y/Y) Jun P 22.6% (est. 20.7%; previous 21.1%); Japan Jobless Rate Jun 2.9% (est. 3.0%; previous 3.0%)

 

Sector News Breakdown

Consumer

·     Amazon (AMZN) shares fell 7% on sales miss; 2Q EPS $15.12 vs est. $12.30 on sales $113.1B vs est. $115.2B, AWS sales $14.8B, advertising & other sales $7.91B; guides 3Q sales $106-112B vs est. $118.9B, sees 3Q op income $2.5-6.0B well below the est. $8.1B

·     Beazer Homes (BZH) Q3 EPS $1.22 on revs $570.9M vs. $533.1M prior; Net new orders of 1,199, down 12.6% on a 18.6% increase in orders/community/month to 3.2 and a 26.3% decrease in average community count to 123; dollar value of backlog of $1,354.6B, up 53.1%; gross margin was 20.2%, up 320 basis points.

·     BJ’s Restaurants (BJRI) 2Q EPS $0.26 vs. est. $0.17; Q2 revs $290.3M vs. est. $284.34M; Q2 adjusted positive EBITDA of $27.7M, compared to negative $13.7M; says company is only operating 62 of their 212 California restaurants; Q2 Comp restaurant sales improved 121.9%

·     Dole (DOLE) 25M share IPO priced at $16 per share

·     Decker’s (DECK) Q1 EPS $1.71 vs est. (5c) loss on revs $504.7M vs est. $407.1M; DTC net sales $160.4M (+14.7% YoY); now sees FY22 adj EPS $14.45-$15.10 (est. $14.94) from $14.05-$14.65, and raised FY sales outlook to $3.01B-$3.06B (est. $3.02B) from $2.95B=$3B

·     Mohawk Industries (MHK) 2Q adj EPS $4.45 vs est. $3.68 on sales $3.0B vs est. $2.74B; guides 3Q adj EPS $3.71-3.81 vs est. $3.43; says longer term housing sales and remodeling expected to remain at a high level and apartment renovations should accelerate; says inflation in materials, energy and transportation expected to continue and will require further pricing actions to offset

·     Texas Roadhouse (TXRH) Q2 EPS $1.08 vs. est. $0.94; Q2 revs $898.79M vs. est. $855.56M; restaurant margin 17.7% vs. 2.50% y/y, estimate 18.7%; Q2 comparable restaurant sales at company restaurants increased 80.2% and 21.3% compared to 2020 and 2019, respectively; sees FY21 commodity cost inflation of approximately 7.0%

 

Energy

·     Chevron (CVX) Q2 adj EPS $1.71 vs. est. $1.50; Q2 revs $37.6B vs. est. $34.32B; for 2021, expect free cash flow excluding working capital to exceed $3B for Permian operations; in Q3, expect major turnarounds to reduce production by 150 MBoed, primarily at TCO; sees 2021 organic C&E expenditures about $13B; Q2 cash flow from operations $7B, free cash flow $5.2B

·     Edison int’l (EIX) Q2 core EPS $0.94 vs. est. $1.04; Q2 revs $3.315B vs. est. $3.29B; said SCE’s recently received proposed decision on its 2021 General Rate Case supports critical safety and reliability investments and provides the foundation for capital spending and rate base through 2023; spending $800 mln on vehicle electrification

·     First Solar (FSLR) Q2 EPS $0.77 vs est. $0.54 on revs $629M vs est. $617.2M; cut FY21 EPS view to $4-$4.60 from $4.05-$4.75 primarily due to freight costs, and raised FY21 sales view to $2.88B-$3.1B from $2.85B-$3.025B; announced intentions to invest $684M in a manufacturing facility in India that is expected to commence operations in 2H23

·     SM Energy (SM) Q2 non-GAAP EPS $0.01 vs. est. loss (-$0.27); Q2 revs $563.85M vs. est. $395.02M; Q2 production was 12.4 Mboe – 136.5 MBoed/d – and was 54% oil; full year 2021 production guidance range is narrowed to 47.5-49.5 Mboe, or 130.1-135.6 Mboe/d; except production, all other 2021 guidance metrics are unchanged

 

Financials

·     Bitcoin is on an eight-day winning streak, taking prices from $30,000 to above $40,000. If Bitcoin ends a ninth day in the green, it will be BTC’s longest streak since October 2015 as per CoinDesk

·     Camden Property (CPT) Q2 FFO $1.28 vs. est. $1.27; Q2 revs $276.5M vs. est. $278.2M; Q2 occupancy 96.9% vs. 96.0% last year and same-store NOI up 3.0% from last year; sees Q3 FFO $1.30-$1.36 vs. est. $1.31

·     Essex Property Trust (ESS) Q2 FFO $3.04 vs. est. $3.06; Q2 same-property revenues and net operating income declined by 3.0% and 4.2%, respectively yoy; raised midpoint of full-year same-property revenues to high-end of prior guidance range

 

Healthcare

·     CareDX (CDNA) 2Q adj EPS $0.11 vs est. $0.05 on revs $74.2Mm vs est. $67.8Mm; guides FY revs $280-290Mm vs est. $278.7Mm

·     Dexcom (DXCM) 2Q adj EPS $0.76 vs est. $0.44 on revs $595.1Mm vs est. $551.1Mm; sees FY21 revs $2.35B-$2.4B vs. est. $2.34B

·     Edward Lifesciences (EW) Q2 adj EPS $0.64 vs. est. $0.55; Q2 revs $1.4B vs. est. $1.28B; raises FY21 adj EPS to high end of $2.07-$2.27 range (est. $2.21) and raises FY21 revenue view to $5.2B-$5.4B from $4.9B-$5.3B (est. $5.17B); qtrly reported transcatheter aortic valve replacement sales of $902 mln, up 52% on a reported basis; sees FY underlying TAVR sales growth of around 20% vs previous sales growth expectation of 15% to 20%

·     eHealth (EHTH) Q2 non-GAAP EPS loss (-$0.45) vs. est. loss (-$0.61); Q2 revs $96.6M vs. est. $89.6M; backs 2021 non-GAAP EPS view $2.77-$3.26 (est. $2.89) and also backs 2021 revs $660.0M-$700.0M vs. est. $691.52M

·     Gilead Sciences (GILD) Q2 adj EPS $1.87 vs. est. $1.73; Q2 revs $6.2B vs. est. $6.07B; raises FY21 adj EPS view to $6.90-$7.25 from $6.75-$7.45 (est. $7.07) and narrows FY21 product sales view to $24.4B-$25B from $23.7B-$25.1B

·     Ligand (LGND) 2Q adj EPS $1.63 vs est. $1.36 on revs $84.7Mm vs est. $70.5Mm; guides FY adj EPS $5.80-6.05 vs est. $6.11, sees FY revs $265-275Mm vs est. $278Mm

·     MaxCyte Inc (MXCT) priced 13.5mm shares (upsized from 12.0mm) at $13.00 (upper half of the range)

·     Mettler-Toledo (MTD) Q2 adj EPS $8.10 vs. est. $7.59; Q2 revs $924.4M vs. est. $875.19M; sees FY21 adj EPS $32.60-$32.90 (up from prior $31.45-$31.90) vs. est. $31.93; anticipates local currency sales growth in 2021 will be approximately 15%; for q3 company anticipates that local currency sales growth will be in range of 11% to 13%

·     QIAGEN (QGEN) 2Q adj EPS $0.67 vs est. $0.65 on sales $567.3Mm vs est. $555.6Mm; anticipates ongoing strong demand in non-covid product groups in 2H, says has started new $100Mm share repurchase program; says FY outlook for at least 12% CER sales growth and at least $2.42 EPS

·     Vertex Pharma (VRTX) 2Q adj EPS $3.11 vs est. $2.51 on $1.79B vs est. $1.75B; guides FY revs $7.2-7.4B vs est. $6.99B

·     Zynex, Inc. (ZYXI) 2Q EPS $0.08 vs est. $0.07 on revs $31Mm vs est. $31.3Mm; guides 3Q revs $34.5-36Mm vs est. $38.1Mm; sees FY revs $130-137.5Mm vs est. $138.7Mm

·     Immuneering Corp. (IMRX) 7.5M share IPO (upsized from 7.0M) priced at $15.00

·     MaxCyte Inc (MXCT) 13.5M share IPO (upsized from 12.0mm) priced at $13.00

·     Omega Therapeutics (OMGA) 7.4M share IPO price $17.00

·     RxSIGHT (RXST) 7.35M share IPO priced at $16.00

·     Tenaya Therapeutics (TNYA) 10M share IPO priced at $15.00

 

Industrials & Materials

·     Caterpillar (CAT) Q2 adj EPS $2.60 vs. est. $2.40; Q2 sales $12.9B vs. est. $12.58B; The increase in sales was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories by $1.4 billion during the second quarter of 2020

·     Weyerhaeuser (WY) Q2 EPS $1.37 vs. est. $1.38; Q2 revs $3.14B vs. est. $3.07B

·     Chemours (CC) Q2 EPS $1.20 vs. est. $0.92; Q2 revs $1.7B vs. est. $1.52B; Q2 adjusted EBITDA of $366 million, up 120% yoy; free cash flow of $189 million, an increase of $139 million yoy; expect 2021 adjusted Ebitda and adjusted eps to be in top end of guidance ranges

·     Fortive (FTV) 2Q adj EPS $0.66 vs est. $0.60 on revs $1.3B vs est. $1.29B; guides 3Q adj EPS $0.62-0.66 vs est. $0.63; guides FY adj EPS $2.65-2.75 vs est. $2.62

·     Hub Group (HUBG) 2Q EPS $0.78 vs est. $0.70 on revs $981Mm vs est. $973.4Mm; guides FY EPS $3.50-3.70 vs est. $3.41, sees FY revs +high-teens vs est. +16.6%

·     Republic Service Group (RSG) Q2 adj EPS $1.09 vs. est. $0.94; Q2 revs $2.81B vs. est. $2.7B; raises quarterly dividend 8% to 46c; boosts FY21 adj EPS view to $4.00-$4.05 from $3.74-$3.79 (est. $3.84) and raises FY21 adj FCF view to $1.45b-$1.475B from $1.35B-$1.4B

·     Terex Corp. (TEX) Q2 EPS $1.02 vs. est. $0.60; Q2 sales $1.0B vs. est. $1.02B; sees FY EPS $2,85-$3.05 vs. est. $2.60; sees FY sales about $3.9B vs. est. $3.77B

·     U.S. Steel (X) Q2 adj EPS $3.37 vs. est. $3.05; Q2 revs $5.025B vs. est. $4.64B; announces up to $1B of additional debt reduction over the next 12 months – said this is in addition to the $2.2 billion of debt reduction they already committed to or delivered to date.

·     Werner Enterprises (WERN) 2Q adj EPS $0.86 vs est. $0.87 on revs $649.8Mm vs est. $647.8Mm

 

Media & Telecom

·     Liberty Global (LBTYA) Q2 adj EBITDA $1.25B vs. $1.19B last year; Q2 revs $3.01B vs. est. $3.49B; reaffirming all of our original, full-year guidance metrics, including $1.35 billion of Adjusted Free Cash Flow representing 26% YoY growth

·     T-Mobile (TMUS) Q2 EPS $0.78 vs. est. $0.53; Q2 revs $19.95B vs. est. $19.37B; Q2 net customer additions of 1.4 mln increased 107 thousand year-over-year; Q2 prepaid net customer additions were 76 thousand; Q2 postpaid net customer additions of 1.3 mln increased 164 thousand yoy; qtrly postpaid phone churn of 0.87%; boosts FY21 postpaid net customer adds view to 5M-5.3M

·     WWE Inc. (WWE) 2Q EPS $0.34 vs est. $0.25 on revs $265.6Mm vs est. $254.4Mm; not adjusting prior guidance at this time for FY given continued caution re: potential covid impact, does say anticipates spending on new HQ, sees FY total CAPEX $85-105Mm

 

Technology

·     Atlassian Corp. (TEAM) 4Q EPS $0.24vs est. $0.18 on revs $560Mm vs est. $524.1Mm; guides 1Q adj EPS $0.38-0.39 vs est. $0.31, sees 1Q revs $575-590Mm vs est. $540.9Mm

·     Fortinet (FTNT) Q2 EPS $0.95 vs. est. $0.88; Q2 revs $801.1M vs. est. $743.65M; said delivered our highest quarterly billings growth in over five years; Q2 Billings of $960.9 million, up 35% yoy; deferred revenue of $2.91B, up 27% yoy; GAAP operating margin of 18.4% and non-GAAP operating margin of 25.4%;

·     KLA-Tencor (KLAC) Q4 adj EPS $4.43 vs. est. $3.99; Q4 revs $1.93B vs. est. $1.87B; sees Q1 adj EPS $4.01-$4.89 vs. est. $4.13; sees Q1 revs $1.92B-$2.12B vs. est. $1.92B; announces $2B share repurchase and raises dividend 17%

·     Limelight Networks (LLNW) 2Q EPS ($0.11) vs est. ($0.03) on revs $48.3Mm vs est. $52.1Mm

·     MicroStrategy (MSTR) Q2 EPS $1.72 vs. est. $1.03; Q2 revs $125.4M vs. est. $120.45M; said had one of our best operational quarters in our software business in years, highlighted by 13% revenue growth; said latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins

·     Pinterest (PINS) shares fell -16%; Q2 adj EPS $0.25 vs est. $0.13 on revs $613M vs est. $562.1M; MAUs at qtr-end 454M missed est. 484M, as of July 27, U.S. MAUs have fallen ~7% YoY and global MAUs have risen ~5% YoY; not providing guidance on Q3 MAUs; avg rev per user $1.32 (+89% YoY); see Q3 sales growth in the low-40% range, expect operating expenses will modestly increase from Q2 as they ramp investments into long-term strategic priorities

·     Power Integrations (POWI) 2Q adj EPS $0.83 vs est. $0.75 on revs $180.1Mm vs est. $174.2Mm; guides 3Q revs -8% to +2% sequentially

·     Rogers Corp. (ROG) 2Q adj EPS $1.72 vs est. $1.89 on sales $234.9Mm vs est. $235.7Mm; guides 3Q adj EPS $1.70-1.85 vs est. $1.96, sees 3Q sales $235-245Mm vs est. $240.6Mm; guides FY CAPEX $70-80Mm

·     Skyworks Solutions (SWKS) 3Q adj EPS $2.15 vs est. $2.14 on revs $1.12B vs est. $1.1B; guides 4Q revs $1.27-1.33B vs est. $1.23B, sees 4Q adj EPS $2.53 vs est. $2.48

·     Twilio (TWLO) Q2 EPS loss (-$0.11) vs. est. loss (-$0.13); Q2 revs $668.9M vs. est. $598.37M; sees Q3 EPS loss (17c-14c) vs. est. loss (7c); sees Q3 revs $670M-$680M above est. $636.4M; more than 240,000 active customer accounts as of June 30, 2021, compared to 200,000 active customer accounts as of June 30, 2020

·     Upwork Inc. (UPWK) Q2 adj EPS 3c vs est. (9c) loss, revs $142.4M vs est. $120.2M; sees Q3 EPS 1c-3c vs est. (5c) loss on sales $125M-$127M vs est. $124.5M; for full-year, sees adj EPS 5c-7c on revs $490M-$494M vs prior $480M-$490M

·     Wrap Technologies (WRAP) 2Q EPS ($0.20) vs est. ($0.13) on revs $1.9Mm vs est. $1.8Mm; says expect continued near-term headwinds to growth thru 2H

·     Zendesk (ZEN) 2Q adj EPS $0.14 vs est. $0.16 on revs $318.2Mm vs est. $319.8Mm; guides 3Q revs $332-337Mm vs est. $335.5Mm, sees FY revs $1.31-1.318B vs est. $1.313B