Hammerstone Markets Early Look

By admin | 04/14/2022

Early Look

Thursday, April 14, 2022

U.S. futures are looking mixed to little changed ahead of a slew of earnings results in the banking sector (C, WFC, MS, GS, USB), the European Central Bank (ECB) policy meeting and a surplus of economic data ahead of the long 3-day weekend. In corporate news, Tesla (TSLA) CEO Elon Musk offered to buy 100% of Twitter (TWTR) for $54.20 per share in cash in what he calls his “best and final offer” as the drama from last week continues into the weekend. In Asian markets, The Nikkei Index surged 328 points or 1.22% to 27,172, the Shanghai Index rose 1.22% to 3,225 and the Hang Seng Index climbed 143 points to 21,518. In Europe, the German DAX is up +0.15% to 14,100, while the FTSE 100 is up a few points to 6,580. Also in Europe, Russia threatens new nuclear deployments if Sweden, Finland join NATO. Treasury yields edging lower with 10-yr around 2.7% and oil slips after massive 2-day gain.

Market Closing Prices Yesterday

• The S&P 500 Index jumped 49.14 points, or 1.12%, to 4,446.59
• The Dow Jones Industrial Average rose 344.23 points, or 1.01%, to 34,564.59
• The Nasdaq Composite surged 272.01 points, or 2.03%, to 13,643.59
• The Russell 2000 Index advanced 38.17 points, or 1.92% to 2,025.10

Economic Calendar for Today

• 8:30 AM ET          Weekly Jobless Claims…est. 171K
• 8:30 AM EST        Continuing Claims…est. 1.5M
• 8:30 AM ET          Advance Retail Sales m/m for March…est. +0.6%
• 8:30 AM ET          Retail Sales – Less Autos m/m for March…est. +1.0%
• 8:30 AM ET          Import Prices m/m for March…est. +2.3%
• 8:30 AM ET          Export Prices m/m for March…est. +2.2%
• 10:00 AM ET        University of Michigan Confidence, April-P…est. 59.0
• 10:00 AM ET        Business Inventories m/m for February…est. +1.3%
• 10:30 AM ET        Weekly EIA Natural Gas Inventory Data

Earnings Calendar:

• Earnings Before the Open: ALLY, C, GS, MS, PGR, PNC, RAD, STT, UNH, USB, WFC

World News

• Russia threatens new nuclear deployments if Sweden, Finland join NATO https://cnb.cx/3jFXM8a
• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -32.6 vs -16.7 last week as Bulls fall to 15.8% from 24.7%, Neutrals rise to 35.7% from 33.9%, and Bears rise to 48.4% from 41.4%

Sector News Breakdown

Consumer

• Costco (COST) raises quarterly dividend to $0.90 from $0.79
• Copa Holdings (CPA) posted an 8.4% fall in consolidated capacity (available seat miles) to 1.95B for March 2022 when compared with March 2019 numbers; Passenger traffic (revenue passenger miles) declined 6.8% from March 2019 to 1.65B for March 2022.
• Rent The Runway (RENT) Q4 EPS loss (-$0.62) vs. est. loss (-$0.70); Q4 revs $64.1M vs. est. $63.22M; sees FY22 revenue $295M-$305M vs. est. $305.02M and sees FY 22 Adjusted EBITDA margin of (6%) to (5%)
• Simply Good Foods (SMPL) announces $50M addition to share repurchase program

Energy, Industrials and Materials

• Grainger (GWW) downgraded to underweight from equal weight at Morgan Stanley as pace of price rises dips, PMI data points to slowing volumes and smaller competitors enter the market
• Libya’s national unity government said in a statement that it has adopted a plan to develop the country’s oil sector with the aim of increasing its output to 1.4 mln barrels per day.
• Kazakhstan said it expects its main oil-export route via Russia to restore full operations in late April.
• Airgain (AIRG) said a major U.S. water utility firm selected AirgainConnect AC-HPUE to improve connectivity of its fleet

Financials

• Big morning for earnings coming up with Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), US Bank (USB), PNC Bank (PNC) and Wells Fargo (WFC) all expected
• US Bank (USB) Q1 EPS $0.99 vs. est. $0.94; Q1 revs $5.6B vs. est. $5.55B; Q1 net interest margin 2.44% vs. 2.50% a year ago; Return on average assets of 1.09% and return on average common equity of 12.7%
• Wells Fargo (WFC) Q1 revenue $17.59B vs. est. $17.77b; Total avg. deposits $1.46 trillion; common equity Tier 1 ratio 10.5%, vs. estimate 11.1%; non-interest expenses $13.87B and recovery of credit losses $787M, estimate provision $149.6M; net interest income $9.22B vs. est. $9.29B; total loans $898B vs. est. $891B; 1q provision includes $1.1b decrease in allowance for credit losses due largely to reduced pandemic-linked uncertainty on loan portfolios

Healthcare

• United Healthcare (UNH) Q1 adj EPS $5.49 vs. est. $5.38; Q1 revs $80.15B vs. est. $78.79B; Q1 Optum revenues grew 18.9% to $43.3B and operating earnings grew 19.8% to $3.2B; Q1 medical care ratio was 82% compared to 80.9% last year; Q1 cash flows from operations $5.3B; raises FY22 adjusted EPS view to $21.20-$21.70 from $21.10-$21.60
• OncoCyte (OCX)27M share Spot Secondary priced at $1.33
• Sanofi (SNY) said data from a phase 1/2 of rilzabrutinib to treat adults with heavily pre-treated immune thrombocytopenia (ITP) were published in The New England Journal of Medicine.
• Protagonist Therapeutics (PTGX) shares fell over -30% after announced FDA intent to rescind the Breakthrough Designation, or BTD, for Rusfertide
• Pfizer (PFE) and BioNTech (BNTX) announce data showing high immune response following booster dose of COVID-19 vaccine in children 5 through 11 years of age; booster dose of vaccine increased neutralizing antibodies by 6-fold against SARS-CoV-2 wild-type strain in 140 participants
• Supernus (SUPN) reiterates full year 2022 financial guidance provided on February 28, 2022 and reiterated on April 4, 2022; still sees FY total rev. $640M-$680M (est. $685.5M) and still sees FY operating income $130M to $165M

Technology, Media & Telecom

• Twitter (TWTR) shares rise 11%; Elon Musk says on April 13, 2022, delivered a letter to Twitter which contained a non-binding proposal to acquire 100% of Twitter stock not owned by the reporting person for all cash consideration valuing stock at $54.20 per share. Msck says in filing “my offer is my best and final offer”; says if offer is not accepted, “I would need to reconsider my position as a shareholder”
• Taiwan Semi (TSM) said 2022 sales may exceed upper end of the previous guidance of mid-to-high 20% in USD and doesn’t expect change to CAPEX for 2022; expects no impact from material supply Co. has multiple suppliers of gases; plans 2-nm chips production in 2025
• IBM (IBM) upgraded to Overweight from Equal Weight at Morgan Stanley with $150 tgt
• Alibaba (BABA) shares slip -2% after the Chinese Communist Party’s anti-corruption watchdog was among the agencies involved in a recent inquiry into links between billionaire Jack Ma’s Ant Group and state-owned Chinese companies, Bloomberg reported
• Ericsson (ERIC) net profit attributable to shareholders of 2.94 billion Swedish kronor ($310.2 million) compared with SEK3.17 billion a year earlier, missing the SEKSEK4.07 billion expected; Q1 revs rose 11% to SEK55.06 billion, compared with SEK54.14 billion expected
• Cambium Networks (CMBM) announced the departure of Stephen Cumming as CFO, effective immediately. The board has appointed Andrew Bronstein as CFO. Andrew previously served as CFO for Cheetah Digital; guides Q1 revs $61M-$63M, down from prior view of $77.5M-$81.5M and below est. $79.5M; shares fell -12% on guidance
• LivePerson (LPSN): Starboard value – intends to file proxy statement, white proxy card with SEC to solicit votes for its 4 nominees at LivePerson Inc 2022 annual meeting – Reuters
• Western Digital (WDC) and Seagate (STX) both downgraded to Neutral from Positive at Susquehanna

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