The S&P 500 futures are up 24 points and are trading 0.6% above fair value; the Nasdaq 100 futures are up 30 points and are trading 0.2% above fair value; and the Dow Jones Industrial Average futures are up 197 points and are trading 0.7% above fair value.
The tone had been cautious in the wake of disappointing fiscal Q2 revenue guidance from NVIDIA (NVDA), but a spate of better-than-expected/better-than-feared earnings results and outlooks from the retail space, along with an increased Q2 revenue growth outlook from Southwest Airlines (LUV) and JetBlue (JBLU), have put some spring in the futures market's step.
Additionally, guidance from Shanghai that its lockdown should end June 1, and a burgeoning belief that the market is due for a notable rebound, with some help from month-end rebalancing activity, has also contributed to the positive bias.
Today's economic releases include the second estimate for Q1 GDP, Weekly Initial Claims, and Pending Home Sales for April.
The 10-yr note yield is up one tick to 2.76% after flirting with 2.70% overnight. The U.S. Dollar Index is down 0.1% to 101.94. WTI crude futures are up 0.8% to $111.17/bbl.
In U.S. Corporate news:
NVIDIA (NVDA 162.98, -6.77, -4.0%): beats by $0.07, beats on revs; guides JulQ revs below consensus due to Russia and COVID lockdowns in China; increased and extended share repurchase program to $15.0 bln
VMWare (VMW 121.88, +1.34, +1.1%): Broadcom (AVGO 523.00, -8.63, -1.6%) to acquire VMware for ~$61 billion, or $142.50, in cash and stock
Macy's (M 21.90, +2.69, +14.0%): beats by $0.25, reports revs in-line; raises FY23 EPS above consensus, reaffirms FY23 revs guidance; Q1 comps +12.8%
Williams-Sonoma (WSM 124.89, +9.91, +8.6%): beats by $0.61, beats on revs, comps of +9.5%; reiterated FY23 revenue growth of mid-to-high single-digit percentage
Dollar General (DG 218.00, +22.66, +11.6%): beats by $0.10, reports revs in-line; reaffirms FY23 EPS guidance, guides FY23 revs above consensus; raises comp guidance
Southwest Airlines (LUV 43.36, +0.91, +2.1%): sees Q2 (Jun) revs growth of +12-15% yr/yr, up from prior guidance of +8-12% yr/yr
Dollar Tree Stores (DLTR 153.36, +19.77, +14.8%): beats by $0.39, beats on revs; guides Q2 revs in-line; guides FY23 EPS in-line, revs in-line
Snowflake (SNOW 117.11, -15.66, -11.8%): Reports Q1 (Apr) GAAP loss of $(0.53) per share; revenues rose 84.5% year/year to $422.37 mln; For Q2 (Jul), company expects product revs of $435-440 mln
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei -0.3%; Hong Kong's Hang Seng -0.3%; China's Shanghai +0.5%; India's Sensex +0.9%; South Korea's Kospi -0.2%; Australia's All Ordinaries -0.7%.
In economic data:
Japan's March Corporate Services Price Index 1.7% yr/yr (expected 1.5%; last 1.3%)
Australia's Q1 Private New Capital Expenditure -0.3% qtr/qtr (expected 1.5%; last 1.1%), Q1 Building Capital Expenditure -1.7% m/m (last 2.2%), and Q1 Plant/Machinery Capital Expenditure 1.2% qtr/qtr (last -0.1%)
Singapore's April Industrial Production 2.2% m/m (expected 8.1%; last -11.2%); 6.2% yr/yr (expected 5.1%; last 5.1%)
Hong Kong's April trade deficit HKD36.6 bln (last deficit of HKD37.3 bln). April Imports 2.1% m/m (last -6.0%) and Exports 1.1% m/m (last -8.9%)
In news:
Reports from China indicate that Shanghai's port has resumed most of its cargo handling capacity.
Japan will reopen its borders to foreign tourists on June 10.
The Bank of Korea raised its base rate by 25 bps to 1.75%, as expected. The central bank raised its CPI forecast for the year to 4.5% from 3.1%. Yonhap reported that South Korea will present measures to stabilize prices in the coming days.
U.S. Secretary of State Blinken will speak on the Biden administration's China policy this morning.
Major European indices trade in the green, though overall activity has been reduced due to the Ascension Day holiday. STOXX Europe 600 +0.3%; Germany's DAX +0.8%; UK's FTSE unch; France's CAC 40 =0.8%; Italy's FTSE MIB +0.4%; Spain's IBEX 35 +0.9%.
In economic data:
Italy's March Industrial Sales 2.4% m/m (last 2.9%); 21.4% yr/yr (last 20.8%). May Business Confidence 109.3 (expected 109.0; last 109.9) and Consumer Confidence 102.7 (expected 100.5; last 100.0)
In news:
British Chancellor of the Exchequer is expected to announce measures to support households struggling with high energy bills.
The U.K. will implement a "temporary, targeted" 25% tax on excess oil and gas profits.
The Central Bank of Russia lowered its bank rate by 300 bps to 11.0%.
U.S. equity futures:
S&P 500 Futures: +29 @ 4,008
DJIA Futures: +233 @ 32,354
Nasdaq 100 Futures: +52 @ 11,996
Overseas:
Europe: DAX +0.8%, FTSE UNCH, CAC +0.8%
Asia: Nikkei -0.3%, Hang Seng -0.3%, Shanghai Composite +0.5%
Commodities:
Crude Oil +0.89 @ 111.22
Nat Gas +0.121 @ 9.114
Gold -2.77 @ 1843.53
Silver +0.030 @ 21.900
Copper -0.0100 @ 4.2145
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Alibaba (BABA) beats by $0.78, beats on revs; annual active customers 1.31 bln, not providing financial guidance
American Woodmark (AMWD) beats by $0.04, beats on revs
Baidu (BIDU) beats by RMB5.64, beats on revs
Baozun (BZUN) misses by RMB0.64, beats on revs
Box (BOX) misses by $0.02, beats on revs; guides Q2 EPS in-line, revs above consensus; guides FY23 EPS in-line, revs in-line
Brady (BRC) beats by $0.10, beats on revs; guides FY22 EPS above consensus
Broadcom (BRCM) beats by $0.35, beats on revs; guides Q3 revs above consensus
Buckle (BKE) beats by $0.22, reports revs in-line; Q1 comps +3.7%
Burlington Stores (BURL) misses by $0.09, misses on revs; guides Q2 EPS below consensus; guides FY23 EPS below consensus
Change Healthcare (CHNG) misses by $0.02, beats on revs
CIBC (CM) beats by CAD 0.05, beats on revs
Dollar General (DG) beats by $0.10, reports revs in-line; reaffirms FY23 EPS guidance, guides FY23 revs above consensus; raises comp guidance
Dollar Tree (DLTR) beats by $0.39, beats on revs; guides Q2 revs in-line; guides FY23 EPS in-line, revs in-line
DXC Technology (DXC) misses by $0.15, misses on revs; guides JunQ EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus
e.l.f. Beauty (ELF) beats by $0.07, beats on revs; guides FY23 EPS below consensus, revs in-line
Enersys (ENS) beats by $0.05, beats on revs; guides Q1 EPS in-line
Genesco (GCO) beats by $0.53, reports revs in-line; reaffirms FY23 EPS guidance, revs guidance
Guess? (GES) misses by $0.05, beats on revs; guides Q2 revs below consensus; guides FY23 revs in-line
Hamilton Lane (HLNE) beats by $0.11, beats on revs
JetBlue Airways (JBLU) sees Q2 revs at or above high end of prior guidance range
Macy's (M) beats by $0.25, reports revs in-line; raises FY23EPS above consensus, reaffirms FY23revs guidance; Q1 comps +12.8%
Manchester United (MANU) misses by $0.01, beats on revs
Medtronic (MDT) misses by $0.04, misses on revs; guides FY23EPS below consensus
Modine Manufacturing (MOD) beats by $0.07, beats on revs; guides FY23revs above two analyst estimate
Nutanix (NTNX) beats by $0.16, beats on revs; guides Q4 revs below consensus; guides FY22revs below consensus
NVIDIA (NVDA) beats by $0.07, beats on revs; guides JulQ revs below consensus due to Russia and COVID lockdowns in China; increased and extended share repurchase program to $15.0 bln
Royal Bank of Canada (RY) beats by CAD 0.28
Safe Bulkers (SB) reports Q1 EPS of $0.24 vs. $0.28 consensus estimate, revenue increased 24% yr/yr to $77.7 mln vs. the $74.1 mln consensus estimate
Snowflake (SNOW) reports Q1 (Apr) results, beats on revs; reaffirms FY23product revs of $1.885-1.90 bln
Southwest Air (LUV) raises Q2 revenue guidance
Splunk (SPLK) beats by $0.43, beats on revs; guides Q2 revs above consensus; guides FY23revs above consensus
Titan Machinery (TITN) beats by $0.26, beats on revs; raises FY23EPS above consensus
Toronto-Dominion Bank (TD) beats by $0.09, beats on revs
Viasat (VSAT) misses by $0.30, misses on revs
VMware (VMW) misses by $0.28, misses on revs; Subscription and SaaS revenue +21%; company to be acquired by Broadcom
WeWork (WE) names Andre J. Fernandez As Chief Financial Officer effective June 10, 2022; reaffirmed its second quarter and full-year guidance
Williams-Sonoma (WSM) beats by $0.61, beats on revs, comps of +9.5%; reiterated FY23revenue growth of mid-to-high single-digit percentage
ZTO Express (ZTO) reports Q1 adjusted EPS of US$0.21, revenue rose 22.1% yr/yr to US$1.25 bln
Zuora (ZUO) misses by $0.14, beats on revs; guides JulQ EPS below consensus, revs below consensus; guides FY23EPS below consensus, reaffirms FY23revs guidance
General News:
Secretary of State Antony Blinken will give speech on China today at 10:00 ET, according to Bloomberg
Shanghai officials provided more details on plans to exit from lockdown on June 1, according to Reuters
Senators from both parties are discussing gun red flag laws rather than other gun control options, but that proposal still has many hurdles to passage, according to the Washington Post
UK imposes new taxes on oil and gas companies, according to CNBC
Biden Administration announces launch of first federally-supported test to treat site
Russian central bank lowers interest rates 300 basis points to 11%
Air Products (APD), OQ, and ACWA Power signed a joint development agreement toward a multibillion-dollar investment in a world-scale green hydrogen-based ammonia production facility powered by renewable energy in Oman
Apple (AAPL) increasing pay for workers, according to the Wall Street Journal
Apple (AAPL) aiming to keep its iPhone production flat this year, according to Bloomberg
Ashland (ASH) raises dividend by 12%; approves evergreen $500 mln common stock repurchase program
Avadel Pharmaceuticals (AVDL) received a proposed, final label and medication guide for FT218from the FDA
Burlington Stores (BURL) announced that Kristin Wolfe has been appointed Chief Financial Officer effective on or about August 1, 2022
Callaway Golf's (ELY) Board authorizes share repurchase of up to $100 mln in common stock
Celanese (CE) to increase selling prices on select acetyl intermediate products
Cinemark (CNK) appoints Carlos Sepulveda to succeed Lee Roy Mitchell as Executive Chairman
City Holding Co (CHCO) authorized the repurchase of up to 1.0 mln of its shares, approximately 7% of its current shares outstanding
Clover Health (CLOV) appoints Scott J. Leffler as CFO, effective in August
Disney (DIS) might get involved in Anaheim corruption investigation, according to the Wall Street Journal
Enochian Biosciences (ENOB) issues statement regarding arrest of co-founder
Google (GOOG) probed by UK CMA over potential abuse of dominance in ad tech
Horace Mann (HMN) authorizes new $50 mln share repurchase program
Hyliion (HYLN) receives Hypertruck ERX order from Holcim
Joby Aviation (JOBY) has received a Part 135 Air Carrier Certificate from the Federal Aviation Administration, allowing Joby to begin on-demand commercial air taxi operations
Legend Biotech (LEGN) receives conditional approval for CARVYKTI by the EC
McDonald's (MCD): Major McDonald's shareholders have sided with company regarding proxy battle with Carl Icahn, according to Reuters
Medtronic (MDT) and DaVita (DVA) announce new kidney health technology company
Membership Collective Group (MCG) appoints Thomas Allen as CFO, effective June 23
MeridianLink (MLNK) announces departure of CFO Chad Martin, effective May 31
Meritage (MTH) adds $200 mln to existing share repurchase program
Meta Platforms (FB): Metaverse expected to lose money in near term, according to Bloomberg
Nurix Therapeutics (NRIX) announces positive dose finding data in chronic lymphocytic leukemia and advances NX-2127to next phase of clinical development
Orion Engineered Carbons (OEC) to increase gas black production capacity
Petrobras (PBR) receives request for an Extraordinary General Meeting
Petrobras (PBR) signs contract for the sale of the LUBNOR refinery
Pfizer (PFE) granted Fast Track designation to investigational combination therapy for the treatment of non-alcoholic steatohepatitis (NASH) with liver fibrosis
Radware (RDWR) expanded its relationship with a leading, multinational e-commerce company in a million dollar deal
Reata Pharmaceuticals (RETA) announces FDA filing acceptance and Priority Review Designation for the NDA for omaveloxolone for the treatment of patients with Friedreich's ataxia; PDUFA date November 30, 2022
TechnipFMC (FTI) awarded significant contract by Equinor (EQNR) for Halten East development
Twitter (TWTR) reaches settlement with DOJ and FTC, to pay $150 mln in civil penalties for alleged data privacy violations
Univar Solutions (UNVR) expands distribution agreement with ANGUS Chemical Company
Vivid Seats (SEAT) authorizes the repurchase of up to $40 mln of outstanding shares of its Class A Common Stock following the completion of the Offer and Consent Solicitation and until the end of March 2023
Vontier (VNT) approved a replenishment of the share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases back up to $500 mln
Vroom (VRM) in slide presentation sees Q2-Q4 adjusted EBTIDA loss of $201-241 mln; sees $500 mln of liquidity by year end
Wallbox (WBX) announced continued expansion in the North American market through strategic partnerships and the opening of new facilities across the region
Wal Mart (WMT) and CVS (CVS) will stop conducting controlled substance prescriptions for Cerebral and Done Health, according to the Wall Street Journal
M&A:
B2Gold (BTG) acquires Oklo Resources
Emerson Electric (EMR) mulling sale of waste disposal unit for $3 bln, according to Bloomberg
EnLink Midstream (ENLC) agrees to acquire North Texas gathering and processing assets from Crestwood Equity Partners LP (CEQP) for $275 mln
Legato Merger Corp. II (LGTO) announces merger agreement with Southland
PayPal (PYPL) announces investment in Jetty, a financial service platform for renters
Shell (RDS.A) in discussions to sell LNG plant stake in Russia, according to Reuters
TG Therapeutics (TGTX) Announces Data Presentations from the ULTIMATE I & II Phase 3 Trials of Ublituximab in Multiple Sclerosis to be Presented at the 2022 Consortium of Multiple Sclerosis Centers Annual Meeting
Valvoline (VVV): Saudi Armaco aiming to make M&A deal with Valvoline, according to the Wall Street Journal
Vinco Ventures (BBIG) delays distribution date for Cryptyde spin-off
VMware (VMW): Broadcom (AVGO) to acquire VMware for ~$61 billion in cash and stock
Syndicate:
ACADIA Pharmaceuticals (ACAD) files for 42,393,855 share common stock offering by selling shareholders
Agree Realty (ADC) prices offering of 5.0 mln shares of common stock at $68.65 per share
Genpact (G) files mixed securities shelf offering
HireQuest (HQI) files for $100 mln mixed securities shelf offering
Mirum Pharmaceuticals (MIRM) files for 841,792 share common stock offering by selling shareholders
IPOs:
Priced to Trade:
No IPOs expected.
Gapping Up/Down
Gapping up:
WSM +8.7%, TWTR +5.7%, HYLN +5.2%, BIDU +4.7%, SPLK +4.5%, ELF +3.8%, MOD +3.7%, RH +3.1%, ENS+3.1%, CHNG +2.4%, LEGN +2.1%, ACAD +1.9%, GES+1.6%, W +1.4%, BBBY +1.3%, HMN +1.2%, BZUN+1%, ENLC +0.7%, TSLA +0.5%, INTC +0.5%, LZB+0.5%
Gapping down:
NTNX -35.1%, SNOW -14.4%, BBIG -8.9%, VSAT-6.3%, DDOG -5.6%, NVDA -5.4%, MIRM -4.7%, ZUO-4.6%, HQI -3.8%, ADC -3.7%, BOX -2.2%, AMD-1.9%, SB -1.5%, CM -1.3%, MRVL -1.2%, DXC-1.2%, CNK -1.1%, MU -1%, HPQ -0.5%, ENOB -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Alignment Healthcare (ALHC) upgraded to Buy from Neutral at BofA Securities; tgt lowered to $14
AmerisourceBergen (ABC) upgraded to Overweight from Equal Weight at Barclays
Canadian Nat'l Rail (CNI) upgraded to Outperform from In-line at Evercore ISI; tgt $128
Cigna (CI) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $300
Dick's Sporting Goods (DKS) upgraded to Hold from Reduce at Gordon Haskett; tgt $78
Frontier Communications Parent (FYBR) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $25
Kratos Defense and Security (KTOS) upgraded to Buy from Hold at Truist; tgt $20
lululemon athletica (LULU) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt lowered to $303
Patterson-UTI (PTEN) upgraded to Neutral from Underweight at JP Morgan; tgt $20
POINT Biopharma (PNT) upgraded to Buy from Hold at Jefferies; tgt raised to $20
Sysco (SYY) upgraded to Overweight from Neutral at JP Morgan; tgt $98
TuSimple Holdings (TSP) upgraded to Buy from Hold at China Renaissance; tgt lowered to $15.50
Downgrades:
ASGN Incorporated (ASGN) downgraded to Market Perform from Outperform at BMO Capital Markets
Cardinal Health (CAH) downgraded to Equal Weight from Overweight at Barclays
Centene (CNC) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $90
Columbus McKinnon (CMCO) downgraded to Neutral from Overweight at JP Morgan; tgt $37
Dow (DOW) downgraded to In-line from Outperform at Evercore ISI; tgt $68
Huntington Banc (HBAN) downgraded to Underperform from Peer Perform at Wolfe Research; tgt lowered to $11
Kraft Heinz (KHC) downgraded to Sell from Neutral at UBS; tgt lowered to $34
Manpower (MAN) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $84
Molina Healthcare (MOH) downgraded to Underperform from Buy at BofA Securities; tgt lowered to $335
Oscar Health (OSCR) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $6
ProPetro (PUMP) downgraded to Underweight from Overweight at JP Morgan; tgt lowered to $14
Robert Half (RHI) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $80
TrueBlue (TBI) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $20
Union Pacific (UNP) downgraded to In-line from Outperform at Evercore ISI; tgt $245
Others:
Coinbase Global (COIN) initiated with an Outperform at Cowen; tgt $85
CrowdStrike (CRWD) initiated with an Overweight at Stephens; tgt $232
CyberArk (CYBR) initiated with an Overweight at Stephens; tgt $170
KnowBe4 (KNBE) initiated with an Overweight at Stephens; tgt $25
Liquidia Technologies (LQDA) initiated with a Buy at BofA Securities; tgt $12
Okta (OKTA) initiated with an Overweight at Stephens; tgt $145
Zscaler (ZS) initiated with an Overweight at Stephens; tgt $200
Upcoming Events:
Econ Data:
08:30 ET: GDP - Second Estimate for Q1 (Briefing.comConsensus -1.3%; Prior -1.4%)
08:30 ET: GDP Deflator - Second Estimate for Q1 (Briefing.comConsensus 8.0%; Prior 8.0%)
08:30 ET: Initial Claims for May 21 (Briefing.comConsensus 210K; Prior 218K)
08:30 ET: Continuing Claims for May 14 (Briefing.comConsensus NA; Prior 1317K)
10:00 ET: Pending Home Sales for Apr (Briefing.comConsensus -1.9%; Prior -1.2%)
10:30 ET: EIA Natural Gas Inventories for May 21 (Briefing.comConsensus NA; Prior +89 bcf)
Earnings:
Monday (May 23)
Afternoon: AAP HEI NDSN SKY WKME ZM
Tuesday (May 24)
Morning: ANF ATHM AZO BBY CSIQ DOLE FRO NTES WOOF RL
Afternoon: A CAL INTU RAMP JWM TOL URBN
Wednesday (May 25)
Morning: BMO BNS CMCO DKS DY PLAB
Afternoon: BOX CHNG DXC ELF ENS GES NTNX NVDA SNOW SPLK VSAT WSM ZUO
Thursday (May 26)
Morning: BABA AMWD BIDU BZUN BRC BURL CM DG DLTR GCO HLNE JACK M MANU MDT ROLL RY SAFM TITN TD
Afternoon: ME AEO ADSK COST DELL DOMO FTCH GPS LGF.A MRVL RRGB STEP SUMO ULTA VMW WDAY ZS
Friday (May 27)
Morning: BIG CGC HIBB
Asia & Europe detail:
Asia: Nikkei -0.3%, Hang Seng -0.3%, Shanghai Composite +0.5%
Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Reports from China indicate that Shanghai's port has resumed most of its cargo handling capacity. Japan will reopen its borders to foreign tourists on June 10.Yonhap reported that South Korea will present measures to stabilize prices in the coming days. The Bank of Korea raised its base rate by 25 bps to 1.75%, as expected. The central bank raised its CPI forecast for the year to 4.5% from 3.1%. U.S. Secretary of State Blinken will speak on the Biden administration's China policy this morning.
In economic data:
Japan's March Corporate Services Price Index 1.7% yr/yr (expected 1.5%; last 1.3%)
Australia's Q1 Private New Capital Expenditure -0.3% qtr/qtr (expected 1.5%; last 1.1%), Q1 Building Capital Expenditure -1.7% m/m (last 2.2%), and Q1 Plant/Machinery Capital Expenditure 1.2% qtr/qtr (last -0.1%)
Singapore's April Industrial Production 2.2% m/m (expected 8.1%; last -11.2%); 6.2% yr/yr (expected 5.1%; last 5.1%)
Hong Kong's April trade deficit HKD36.6 bln (last deficit of HKD37.3 bln). April Imports 2.1% m/m (last -6.0%) and Exports 1.1% m/m (last -8.9%)
---Equity Markets---
Japan's Nikkei: -0.3%
Hong Kong's Hang Seng: -0.3%
China's Shanghai Composite: +0.5%
India's Sensex: +0.9%
South Korea's Kospi: -0.2%
Australia's ASX All Ordinaries: -0.7%
---FX---
USD/JPY: -0.5% to 126.65
USD/CNH: +0.6% to 6.7471
USD/INR: UNCH at 77.54
Europe: DAX +0.8%, FTSE UNCH, CAC +0.8%
Major European indices trade in the green, though overall activity has been reduced due to the Ascension Day holiday. British Chancellor of the Exchequer is expected to announce measures to support households struggling with high energy bills. The U.K. will implement a "temporary, targeted" 25% tax on excess oil and gas profits. The Central Bank of Russia lowered its bank rate by 300 bps to 11.0%.
In economic data:
Italy's March Industrial Sales 2.4% m/m (last 2.9%); 21.4% yr/yr (last 20.8%). May Business Confidence 109.3 (expected 109.0; last 109.9) and Consumer Confidence 102.7 (expected 100.5; last 100.0)
---Equity Markets---
STOXX Europe 600: +0.3%
Germany's DAX: +0.8%
U.K.'s FTSE 100: UNCH
France's CAC 40: +0.8%
Italy's FTSE MIB: +0.4%
Spain's IBEX 35: +0.9%
---FX---
EUR/USD: +0.3% to 1.0710
GBP/USD: +0.3% to 1.2614
USD/CHF: -0.3% to 0.9595