Morning Preview: May 27, 2021

Auto PostDaily Market Report

Early Look

Thursday, May 27, 2021

Futures

Up/Down

%

Last

Dow

-9.00

0.03%

34,271

S&P 500

-8.25

0.20%

4,184

Nasdaq

-54.50

0.40%

13,646

 

 

Stock futures are edging slightly lower ahead of a busy morning of economic data, as investors await monthly GDP (2nd estimate for Q1 with estimate about 6.4% – in-line with prior reading), jobless claims data, durable goods and pending home sales. The narrative remains the same day after day as the U.S. economy continues to show improvement/rebound from pandemic lows, which has raised concerns over rising inflation and fears the Fed could pull back on its asset purchases/monetary policy – but most official have said over the last week they don’t feel it will be necessary to change course since rising price pressures likely will just be transitory. Market fears remain non-existent again as the CBOE Volatility Index (VIX) comes into the day below the 18 level (was above 27 just over a week ago). In Asian markets, The Nikkei Index fell -93 points to 28,549, the Shanghai Index rose 15 points to 3,608 and the Hang Seng Index fell -52 points to 29,113. In Europe, the German DAX is down over 40 points to 15,400, while the FTSE 100 is down a few points to 7,015. Stocks edged higher on Wednesday, with the SmallCap Russell 2000 index leading (up nearly 2%), and the tech heavy Nasdaq Composite, as markets were once again spurred by further reassuring talk from Federal Reserve officials that spiking inflation will be “transitory” with Treasury yields remaining lower. Fed Vice Chair Randal Quarles was the latest Fed official to ease worries about inflation. Outside of SmallCap and tech, momentum related sectors fueled the rally with social media “meme” stocks surging (GME, AMC, EXPR, KOSS), along with electric vehicle names and Bitcoin leveraged stocks.

Events Calendar for Today

·     8:30 AM EST      Gross Domestic Product (GDP) Q1 (2nd est.) …est. 6.5%

·     8:30 AM EST      GDP Price Deflator Q1 (2nd est.) …est. 4.1%

·     8:30 AM EST      GDP Consumer Spending for Q1 (2nd est.)

·     8:30 AM EST      Core PCE Prices for Q1…est. 2.3%

·     8:30 AM EST      PCE Prices Prelim for Q1

·     8:30 AM EST      Weekly Jobless Claims…est. 425K

·     8:30 AM EST      Continuing Claims…est. 3.68M

·     8:30 AM EST      Durable Goods for April…est. 0.7%

·     8:30 AM EST      Durable Goods Ex Transports for April…est. 0.8%

·     10:00 AM EST    Pending Home Sales MoM for April…est. 0.8%

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

·     11:00 AM EST    Kansas City Fed Manufacturing for May

 

Earnings Calendar:

·     Earnings Before the Open: AMWD, BBY, BURL, DG, DLTR, DXLG, GCO, HLNE, MOV, PLAN, SAFM, TITN

·     Earnings After the Close: ADSK, BOX, COST, CRM, DELL, DOMO, GPQ, HPQ, KRT, LGF.A, OLLI, ULTA, VEEV, VMX, YEXT

 

Other Key Events:

·     Goldman Sachs TechNet Conference Asia Pacific 2021 (virtual), 5/24-5/28

·     Microsoft Build Conference (virtual), 5/25-5/27

·     New Relic Future Stack Conference (virtual), 5/25-5/27

·     UBS Global Oil & Gas Conference (virtual), 5/25-5/27

·     Wolfe Research Transport & Industrials Conference (virtual), 5/25-5/27

·     Cowen Digital Dining Summit (virtual), 5/27

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 7.86 points, or 0.19%, to 4,195.99

·     The Dow Jones Industrial Average rose 10.59 points, or 0.03%, to 34,323.05

·     The Nasdaq Composite jumped 80.82 points, or 0.59%, to 13,738.00

·     The Russell 2000 Index surged 43.52 points, or 1.97% to 2,249.27

 

 

Macro

Up/Down

Last

Nymex

-0.48

65.73

Brent

-0.50

68.37

Gold

-1.00

1,895.70

EUR/USD

0.0012

1.2204

JPY/USD

0.02

109.17

10-Year Note

+0.012

1.586%

 

 

Sector News Breakdown

Consumer

·     American Eagle (AEO) 1Q adj EPS $0.48 vs. est. $0.46 on revs $1.03B vs. est. $1.02B, says digital momentum continued with revs +57% (Aerie +158%, AE +20%); total inventory +2% vs 2019

·     Cavaco Industries (CVCO) Q4 EPS $2.71 vs. est. $1.92; Q4 revs $306.5M vs. est. $293.79M; home sales order rates improved 50% over last year’s quarter; backlogs increased $131M during the quarter;

·     Designer Brands (DBI) 1Q adj EPS $0.12 vs. est. ($0.18) on sales $703.2Mm vs. est. $651Mm, comps +52.2%

·     Elf Beauty (ELF) Q4 adj EPS $0.71 vs. est. $0.10; Q4 sales $92.7M vs .est. $82.4M; sees 2022 adj EPS 64c-67c vs. est. 71c and sees year revs $343M-$350M vs. est. $334.3M; Q4 Selling, general and administrative expenses rose 23% to $57.9M

·     Modine Manufacturing (MOD) Q4 adj EPS $1.14 vs. est. $0.27; Q4 sales $514.9M vs. est. $493M; sees full-year 2022 YoY sales up 12%-18%

·     William-Sonoma (WSM) Q1 adj EPS $2.93 vs. est. $1.83; Q1 revs $1.75B vs. est. $1.52B; Q1 comp brand revenue growth accelerated to 40.4%, with all brands accelerating sequentially including West Elm at 50.9%, Pottery Barn at 41.3%, Williams Sonoma at 35.3% and Pottery Barn Kids and Teen at 27.6%; raising fiscal year 2021 outlook to low double-digit to mid-teen net revenue growth; for long-term, planning for net rev growth of mid-to-high single digits & non-Gaap operating margin expansion

·     Azek (AZEK) 15M share Secondary priced at $43.50

·     Crocs Inc. (CROX) will replace Cantel Medical Corp. (CMD) in the S&P MidCap 400, and Organogenesis Holdings Inc. (ORGO) will take Crocs’ spot in the S&P SmallCap 600 before trading opens on June 2, according to S&P Dow Jones Indices.

 

Energy, Industrials and Materials

·     Vertex Energy (VTNR) surged after hours after agreeing to acquire the Mobile refinery in Alabama from Royal Dutch Shell (RDS.A) for $75M

·     Ranpak Holdings (PACK) 5M share Spot Secondary priced at $21.00

·     The Department of Homeland Security issued a new security directive for pipeline owners and operators on Thursday after a hack of the Colonial Pipeline disrupted fuel supplies in the southeastern United States for days this month

 

Healthcare

·     Change Healthcare (CHNG) 4Q adj EPS $0.42 vs. est. $0.36 on revs $855.2Mm vs. est. $840.2Mm; says due to recently announced transaction with Optuminsight, will no longer by providing guidance

·     Ironwood Pharmaceuticals (IRWD) announces agreement with Teva (TEVA) involving Linzess® (linaclotide) 72 mcg dosage strength

·     Myovant Sciences (MYOV) and Pfizer (PFE) receive FDA approval for Myfembree®, the first once-daily treatment for heavy menstrual bleeding associated with uterine fibroids

·     Nextgen Healthcare (NXGN) Q4 adj EPS 21c vs. est. 19c; Q4 revs $144.2M vs. est. $140.1M; sees FY22 adj EPS 89c-95c vs. est. 99c; sees FY22 revs $574M-$584M vs. est. $577.2M; Subscription services revenue in Q4 generated $38.2M, or 16% growth over the prior year period, driven by demand for patient experience-related solutions.

·     Day One (DAWN) 10M share IPO priced at $16.00

·     Oak Street Health (OSH) 12.05M share secondary priced at $62.00

·     Ocugen (OCGN) says it is on track to submit emergency use authorization application (EUA) to U.S. FDA for its COVID-19 vaccine, Covaxin, in June; awaiting feedback from FDA after master file regarding vaccine was submitted in March

·     R1 RCM (RCM) 15M share secondary priced at $22.50

·     Singular Genomics Systems (OMIC) 10.2M share IPO priced at $22.00

·     VIR Biotech (VIR) received FDA emergency use approval for its antibody treatment co-developed with Glaxo (GSK) to treat mild-to-moderate COVID-19 in people aged 12 years and older 

 

Technology, Media & Telecom

·     NVIDIA (NVDA) Q1 non-Gaap EPS $3.66 vs. est. $3.28; Q1 revs $5.66B vs. est. $5.41B; qtrly data center revenue of $2.05B, up 79% from a year earlier; Q1gaming revenue of $2.76B, up 106% from a year earlier; sees Q2 revs expected to be $6.30B, plus or minus 2% vs. est. $5.5B; Q2 Gaap and non-Gaap gross margins are expected to be 64.6% and 66.5%, respectively, plus or minus 50 bps after Q1 margins 64.1% vs 65.1% YoY and Q1 non-Gaap gross margin 66.2% vs 65.8% YoY

·     Disneyland (DIS) to allow non-California guests starting on June 15; Disneyland extends reservation window to 120 days

·     DXC Technology (DXC) Q4 adj EPS 74c vs. est. 70c; Q4 revs $4.385B vs. est. $4.28B; Q4 bookings were $4.7B; sees FY22 adj EPS $3.45-$3.65 vs. est. $3.44; sees FY22 revenue $16.6B-$16.8B vs. est. $16.91B

·     Nutanix (NTNX) Q3 adj EPS loss (41c) vs. est. loss (49c); Q3 revs $344.5M vs. est. $334.45M; Q3 billings down 3.2% YoY to $371.1M; guides Q4 ACV billings $170M-$175M and Q4 adjusted gross margin roughly 81.5%-82%

·     Okta Inc. (OKTA) 1Q adj EPS ($0.10) vs. est. ($0.20) on revs $251Mm vs. est. $238.3Mm; guides 2Q adj EPS loss $0.35-0.36 vs. est. loss $0.11, sees 2Q revs $295-297Mm vs. est. $258.2Mm; guides FY adj EPS loss $1.13-1.16 vs. est. loss $0.44, sees FY revs $1.215-1.225B vs. est. $1.09B; says CFO stepping down June 1st, Brett Tighe (Treasurer) will be interim CFO

·     Ooma Inc. (OOMA) Q1 EPS $0.11c vs. est. $0.08; Q1 revs $45.6M vs. est. $44.31M; sees Q2 EPS 8c-10c vs. est. 6c; guides Q2 revs $46.0M-$46.8M vs. est. $45.12M; sees FY22 EPS 30c-38c vs. est. 29c; sees year revs $185M-$187M vs. est. $183.64M

·     Pure Storage (PSTG) Q1 adj EPS 0c vs. est. loss (6c); Q1 revs $412.7M vs. est. $403.91M; sees Q2 revs $470M vs. est. $455.85M; sees Q2 non-GAAP operating income $15M; Q1 Subscription services revenue $162.8 million, up 35% YoY; Q1 GAAP gross margin 68.3%; non-GAAP gross margin 70.5%

·     QAD Inc. (QADA) 1Q EPS $0.09 vs. est. $0.12 on revs $83Mm vs. est. $78.9Mm, subscription revs $36.7Mm; guides 2Q subscription revs $38.5Mm, maintenance revs $26zmm, sees 2Q op income $1Mm incl stock comp exp $5Mm; guides FY subscription revs $160Mm, maintenance revs $102Mm, op inc $12Mm incl stock comp exp $17Mm

·     Snowflake (SNOW) 1Q EPS ($0.70) vs. est. ($0.16) on revs $228.9Mm vs. est. $212.9Mm, qtr-end total customers were 4,532; guides 2Q product revs $235-240Mm vs. est. $251Mm; guides FY product revs $1.02-1.04B vs. est. $1.09B

·     Workday (WDAY) 1Q adj EPS $0.87 vs. est. $0.73 on revs $1.18B vs. est. $1.16B, qtrly subscription revs $1.03B +17%; guides 2Q subscription revs $1.095-1.097B; raises FY subscription revs guide to $4.425-$4.44B, raises FY adj op mgn guide to 18-19%;

·     Zuora (ZUO) 1Q adj EPS ($0.02) vs. est. ($0.04) on revs $80.3Mm vs. est. $79Mm; guides 2Q adj EPS loss $0.04-0.03 vs. est. loss $0.02, sees 2Q revs $82.5-84.5Mm vs. est. $81.8Mm; guides FY adj EPS loss $0.10-0.06 vs. est. loss $0.08, sees FY revs $337-339Mm vs. est. $336.3Mm

·     FIGS (FIGS) 26.4M share IPO priced at $22.00

·     Thryv Holdings (THRY) 4.24M share Secondary priced at $23.50

_________________________________________________________________

Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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