Hammerstone’s Early Look
July 31, 2020|
Friday, July 31, 2020
Stock futures are trading higher following blowout quarterly results from some of the biggest companies in the world, as Facebook, Apple, Amazon and Alphabet (GOOGL) posted results well above consensus views, lifting the Nasdaq futures by over -0.8%, though S&P futures have pulled back from overnight highs. Gold is surging again, back at fresh record highs around the $2,000 an ounce level as the dollar plunge continues daily. In Asian markets, The Nikkei Index dropped -629 points to 21,710, the Shanghai Index rose 23 points to 3,310 and the Hang Seng Index fell -155 points to 24,595. In Europe, the German DAX is up 50 points to 12,430, while the FTSE 100 is little changed moving back below the 6,000 level. Fresh data from China revealed encouraging factory data on the PMI manufacturing front, helping give a boost to commodity related prices. The news in Washington is bleak as the White House offered a short-term extension Thursday of a $600 weekly unemployment benefit, but Democrats rejected it, saying President Donald Trump’s team failed to grasp the severity of the crisis. With no new deal at this point, those benefits are set to expire today. During the two-hour meeting, Trump’s team offered a weeklong extension, but Democrats have so far rejected a piecemeal approach.
Economic Calendar for Today
- 8:30 AM EST Personal Income for June
- 8:30 AM EST Personal Spending for June
- 8:30 AM EST PCE Deflator MoM for June
- 8:30 AM EST PCE Deflator YoY for June
- 8:30 AM EST PCE Core Deflator MoM for June
- 8:30 AM EST PCE Core Deflator YoY for June
- 8:30 AM EST Employment Cost Index for Q2
- 9:45 AM EST Chicago PMI, for July
- 10:00 AM EST University of Michigan Confidence, July-F
- 1:00 PM EST Baker Hughes Weekly Rig Count
- Earnings Before the Open: ABBV, AON, AXL, BAH, BERY, CAT, CBOE, CHD, CHTR, CL, CTS, CVX, D, ES, GT, IDXX, IMGN, ITT, ITW, JCI, LAZ, LHX, LYB, MGI, MRK, NWL, PBF, PINS, PIPR, PNM, POR, PSX, PSXP, SNA, SPB, UAA, VFC, WPC, WY, XOM
Market Closing Prices Yesterday
- The S&P 500 Index dropped -12.22 points, or 0.38%, to 3,246.22
- The Dow Jones Industrial Average fell -225.92 points, or 0.85%, to 26,313.65
- The Nasdaq Composite gained 44.587 points, or 0.43%, to 10,587.81
- The Russell 2000 Index declined -5.53 points, or 0.37% to 1,495.10
- China’s official nonmanufacturing purchasing managers index slipped to 54.2 in July, compared with 54.4 in June, the National Bureau of Statistics said Friday. July’s reading was the fifth consecutive expansion
- China’s sub-index measuring business activity in the service sector fell to 53.1 from 53.4, while the sub-index measuring construction activity rose to 60.5 from June’s 59.8. The new-orders sub-index for the entire nonmanufacturing sector fell to 51.5 in July from 52.7 in June.
- French gross domestic product posted a record 13.8% drop in the second quarter and Spanish GDP slumped 18.5% after the impact of the pandemic.
- Fears of a second wave of the virus were rising in the U.K. after the government imposed fresh lockdown restrictions in northern swaths of the country late Thursday
Sector News Breakdown
- Amazon (AMZN) shares rose over 5%; Q2 EP $10.30 on sales $88.9B vs. est. $1.51 and $81.24B; Q2 AWS net sales $10.81B vs. est. $11.01B; sees Q3 net sales $87B-$93B vs. est. $86.51B; created over 175K new jobs since March; says invested over $9B in capital projects; said online grocery sales tripled in Q2 YoY
- Columbia Sportswear (COLM) Q3 EPS loss (77c) on sales $316.6M vs. est. loss (79c) and $304.17M; said highlight was our outstanding e-commerce growth, which increased 72% YoY while financial position remains strong with $476 million in cash and short-term investments
- Decker’s Brands (DECK) Q1 EPS loss (28c) on revs $283.2M vs. est. loss ($1.11) and $257.84M; not providing full year guidance for fiscal year 2021; Q1 UGG net sales down -10%, HOKA sales +37%, Teva sales down -7.9%
- Expedia (EXPE) Q2 EPS loss ($4.09) on revs $566M vs. est. loss ($3.34) and $680.3M; 2Q Trivago revenue $251 million, -10% YoY, 2Q gross bookings $2.71 billion, -90% YoY and 2Q adjusted Ebitda loss $436 million vs. profit $568 million YoY
- Ford (F) Q2 adjusted EPS loss (35c) on auto revs $16.6B vs. est. loss ($1.15) and $16.24B; sees 3Q adjusted EBIT of $0.5 billion to $1.5 billion; says initial outlook for 4Q, which features three significant product launches delayed by the coronavirus shutdown earlier this year, is an adjusted EBIT loss; 2Q Europe Ebit loss $664 million and 2Q North America Ebit loss $974 million
- MGM Resorts (MGM) Q2 adj EPS loss ($1.52) on revs $290M vs. est. $405.3M; Q2 MGM China revs $33.2M
- Shakeshack (SHAK) 2Q ($0.43) vs est ($0.37) on revs $91.8Mm vs est $93.01Mm, withdraws FY guidance, says 95% of domestic company-operated stores are open
- Cabot Oil (COG) 2Q adjusted EPS 5c vs. est. 2c; 2Q cash flow from operations $136.4 million, -58% YoY, capital expenditure $182.5 million, -19% YoY and 2Q discretionary cash flow $119.2 million, -61% YoY; 2Q production 2,229 mmcfe/d, -5.1% YoY
- Petrobras (PBR) reports a Q2 loss of 2.7B reais ($524M), compared with net income of 18.9B reais in the year-earlier period; Q2 adjusted EBITDA dropped 23.5% Y/Y to 25B reais; Q2 revenue fell 29.9% to 50.9B reais; Q2 production fell 3.7% Q/Q but rose 6.4% Y/Y
- SM Energy (SM) said Q2 capital expenditures of $170.9M were 26% below guidance primarily reflecting lower costs as well as timing of certain activity; reported net loss of $89.3M, compared with net income of $50.4M, a year ago; generated free cash flow of $27.9M vs. negative cash flow of $36.2M, a year ago.
- Allscripts (MDRX) Q2 adj EPS 18c on revs $406.2M vs. est. 12c and $399M; said it will sell its EPSi unit to a Roper Technologies unit for $365M; 2Q bookings $188 million, -32% YoY
- BioTelemetry (BEAT) 2Q adj EPS $0.35 vs est $0.16 on revs $99.1Mm vs est $89.5Mm
- Exact Sciences (EXAS) Q2 EPS loss (58c) on revs $268.9M vs. est. loss (63c)/$228.42M
- Gilead (GILD) Q2 adjusted EPS $1.11 on revs $5.1B, vs. est. $1.45/$5.31; raises FY20 EPS view to $6.25-$7.65 from $6.05-$6.45 (est. $6.71) and raises FY20 product sales view to $23B-$25B from $21.8B-$22.2B
- Pfizer (PFE) and BioNTech (BNTX) say they will supply Japan with 120M doses of their mRNA-based vaccine candidate against the coronavirus in H1 2021; financial details are not disclosed.
- Stryker (SYK) Q2 adj. EPS 64c on revs $2.76B vs. est. 55c/$2.59B; 2Q gross profit margin 56.0% vs. 65.2% YoY
- Tandem Diabetes (TNDM) Q2 EPS loss (45c) on revs $109.2M vs. est. loss (24c)/$87.15M; reinstating the sales guidance we set at the beginning of 2020 based on the continued strong worldwide demand for our t:slim X2 insulin pump ($450M-$465M vs. est. $417.2M)
Industrials & Materials
- Caterpillar (CAT) reported lower Q2 earnings and revenues from a year earlier as a result of the impact from COVID-19 while beating analyst estimates; Q2 net income fell to $458M from $1.62B in the prior-year period, and Q2 revenues fell across Caterpillar’s businesses but by less than expected
- Chemours (CC) Q2 adjusted EPS 18c/$1.1B vs. est. 10c/$1.09B
- MasTec (MTZ) Q2 adj EPS 95c on revs $1.57B vs. est. 78c and $1.54B; guides Q3 adj EPS $1.67 vs. est. $1.61; guides Q3 revs $1.9B vs. est. $2.24B
- Terex (TEX) Q2 EPS loss (5c) on revs $690.5M vs. loss of (60c)/$631.48M
- S. Steel (X) Q2 adjusted EPS loss ($2.67) vs. est. loss ($2.49); 2Q net sales $2.09B (down -41% YoY) vs. est. $1.84B; Q2 adjusted Ebitda loss $264M vs. profit $278M YoY; 2Q steel shipments 2,532 tons, flat-rolled steel average realized price per ton $721, estimate $681.04 and 2Q tubular steel average realized price per ton $1,288
- XPO Logistics (XPO) posted a smaller than expected Q2 loss, but the $0.63/share adjusted loss swung from a $1.28/share a year ago and revenues fell 17% to $3.5B from $4.24B in the same period last year; Q2 adjusted EBITDA sank 62% Y/Y to $172M from $455M, and XPO generated $214M in cash flow from operations.
Media & Telecom
- Altice USA (ATUS) 2Q EPS $0.19 vs est $0.15 on revs $2.47B vs est $2.44B; sees 2020 CAPEX less than $1.3B; reinstates FY20 guidance to say sees revs (ex-mobile) growth, adj EBITDA growth, share repurchase of $1.7B and year end leverage tgt ex Lightpath of 4.5-5.0x net debt/adj EBITDA (L2QA basis)
- com Inc. (AMZN) has won approval from the Federal Communications Commission to build a $10 billion satellite-internet network that would rival SpaceX’s Starlink network.
- WWE Corp. (WWE) 2Q adj EPS $0.45 vs est $0.14 on revs $223.4Mm vs est $228.4Mm, continues to believe growth prospects are strong, not reinstating guidance at this time
- Apple (AAPL) announces a 4 for 1 stock split; Q3 EPS $2.58 on revs $59.69B up 11% YoY vs. est. $2.07 and $52.30B; Q2 iPhone revenue $26.42 billion, +1.7%YoY, Q3 service revenue $13.16 billion, +15% YoY, wearables, home and accessories $6.45 billion and products revenue $46.53 billion, +9.9% YoY; said June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments (int’l sales accounted for 60% of the quarter’s revenue)
- Alphabet (GOOGL) Q2 revs ex TAC $31.06B vs. est. $20.45B; 2q google advertising revenue $29.87B, cloud revenue $3.01B, properties revenue $25.13B, Google search & other revenue $21.32B, YouTube ads revenue $3.81B; Q2 operating income $6.38B vs. est. $5.91B; to buyback up to added $28B in Class C shares
- Facebook (FB) 2Q EPS $1.80 vs est $1.39 on revs $18.687B vs est $16.795B, qtrly DAUs 1.79B on avg +12%, qtrly MAUs were 2.7B as of June 30, qtrly family daily active people was 2.47B on avg +15%; guides DAUs and MAUs to be flat or slightly down in most regions in 3Q vs 2Q, in first 3 wks of July yr/yr ad rev growth rate was approx. in-line with 2Q rt of +10%
- Nokia (NOK) +10% after strong EPS beat and upbeat cash performance; despite revenue being lower 10% Y/Y, they eked out a small gain; raised its FY20 Adj. EPS guidance to €0.25 from prior €0.23/share, Adj. operating margin to 9.5% from 9.0%, FCF to be clearly positive from positive.
- Atlassian (TEAM) 4Q EPS ($1.56) on revs $430.5Mm vs est $410.7Mm; guides 1Q21 revs $430-445Mm vs est $438.9Mm
- Electronic Arts (EA) 1Q EPS $1.25 vs est $0.79 on revs $1.46B vs est $1.05B; sees 2Q EPS about $0.21 vs est $0.90 on net revs about $1.125B vs est $1.289B; guides FY21 EPS about $2.97 v est $5.08 on revs about $5.625B vs est $5.608
- Flextronics (FLEX) 1Q adj EPS $0.23 vs est $0.17 on revs $5.2B vs est $4.94B; guides 2Q adj EPS $0.25-0.31 vs est $0.24, sees 2Q revs $5.4-5.7B vs est $5.36B; expects sequential recovery in all end markets in 2Q
- Xilinx (XLNX) 1Q adj EPS $0.65 vs est $0.56 on revs $727Mm vs est $725.6Mm; guides 2Q revs $730-780Mm vs est $730.3Mm, sees 2Q adj gr mgn 69.5-72.5% vs est 68.3%, sees 2Q op exp $326-340Mm;
- Zendesk (ZEN) 2Q adj EPS $0.14 vs est $0.09 on revs $246.7Mm vs est $240.6Mm; guides 3Q revs $250-255Mm vs est $253.9Mm
Want a free trial to The Hammerstone Report 4x Daily ? Sign-up for a trial today at https://www.hammerstonemarkets.com/
Please be sure to check out The Hammerstone Pro Feed; News and Analysis for the Informed Trader at https://www.hammerstonemarkets.com/pro-trader/#get-started
***DISCLAIMER/LIMITATION OF LIABILITY: Catena Media Financials US, Inc, (D.B.A. Hammerstone Markets) (the “Report”) provides information and data and does NOT provide any individual investment advice or money management assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity. This e-mail and any attachment(s) are believed to be free from virus. However it is the responsibility of the recipient to ensure that they are virus free. We do not accept any liability for any loss or damage arising in any way from the receipt, opening or use of this e-mail and any attachment(s). Nothing on the Hammerstone Platform is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy.