US EARLY MORNING: Equity futures stabilise after geopolitical tumult; yields higher as Fed officials emphasise fight against inflation

US equity futures are mixed, but have settled in wake of Tuesday’s geopolitical tensions between US/China. RTY +0.3%, YM +0.2%, ES +0.1%, NQ -0.2%. Treasury yields are a touch higher and the shape of the curve is narrowing as Fed officials continue to push back on market expectations of a policy pivot, reiterating that the central bank still has work to do on inflation. Crude benchmarks are lower ahead of OPEC’s JMMC and OPEC+ meetings; API energy inventory data for the week reported a surprise crude stock build, while products drew down slightly. Meanwhile, OPEC and its partners are expected to keep output for September fairly steady, though reports suggest that there are risks of a small further easing in supply curbs. The Day Ahead features more Fedspeak, by way of 2023 voters Kashkari and Harker, while 2024 voter Barkin will also deliver remarks. The data docket will focus on the Services ISM to see if it matches the ‘Goldilocks’ manufacturing ISM report released earlier in the week. EMFX traders will note the BCB rate decision after the close. Full Day Ahead here. 

TECH:

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  Advanced Micro Devices Inc (AMD) - Q2 Adj. EPS 1.05 (exp. 1.03), Revenue USD 6.55bln (exp. 6.53bln). Exec said each of its segments grew significantly Y/Y, led by higher sales of data centre and embedded products, and it sees continued growth in the back half of the year. Q3 revenue guidance USD 6.5-6.9bln (exp. 6.81bln). Reiterates FY22 revenue outlook at USD 26.3bln +/- USD 300mln (exp. 26.2bln).


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  Infineon (IFNNY) - Q3 2022 Revenue EUR 3.68bln (exp. 3.4bln), EPS 0.40 (exp. 0.44). FY22 Guidance: Revenue EUR 14bln (exp. 13.5bln, prev. forecast 13.5bln), investments of circa. EUR 2.4bln planned, Segment Result Margin >23% (prev. forecast >22%). CEO says in some consumer-orientated end markets, demand has weakened recently.


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  Microchip Technology Inc (MCHP) - Q1 Adj. EPS USD 1.37 (exp. 1.34), Revenue USD 1.96bln (exp. 1.95bln). Raises quarterly dividend +37.8% Y/Y to USD 0.301/shr. Sees next quarter revenues between USD 2.023-2.101bln (exp. 1.97bln), and sees EPS between 1.42-1.46 (exp. 1.34). Said revenue growth was driven by robust demand across all product categories, which again outpaced the capacity improvements we implemented during the June quarter. Backlog for the September quarter is strong, it said, and it has more capacity improvements coming into effect. Said demand continued to outpace supply, and considerable backlog requested by customers in the September quarter currently cannot be fulfilled until later quarters, despite growing capacity from last quarter.


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  Robinhood (HOOD) - Q2 EPS USD -0.34 (exp. -0.36), Revenue USD 318mln (exp. 352mln). MAUs 14mln (-1.9mln Q/Q, exp. 15.5mln). Said it was reducing headcount by roughly 23%; Exec said earlier job cut announcement did not go far enough, has seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.


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  Paycom Software, Inc. (PAYC) - Q2 adj. EPS USD 1.26 (exp. 1.12), Q2 revenue USD 316.9mln (exp. 308.7mln). Sees Q3 revenue between USD 327-329mln (exp. 318.6mln). Lifts FY22 revenue view to USD 1.354-1.356bln (prev. guidance 1.33-1.34bln, exp. 1.33bln).


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  Microstrategy (MSTR) - Announced separation of Chairman and CEO roles.


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  Mandiant, Inc. (MNDT), Alphabet Inc. (GOOG) - Mandiant reported Q2 adj. EPS of -0.13 (ep. -0.10); will not providing guidance due to pending transaction with Alphabet's Google, and said that previously issued FY guidance should no longer be relied upon.


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  RingCentral, Inc. (RNG) - Q2 adj. EPS 0.45 (exp. 0.40), Q2 revenue USD 486.9mln (exp. 479.3mln). Sees Q3 adj. EPS between 0.50-0.51 (exp. 0.48), and sees Q3 revenue between USD 500-504 (exp. 509.5mln); raises FY22 adj. EPS outlook to between USD 1.91-1.95 (Exp. 1.86, prev. guidance 1.83-1.87), reiterates FY22 revenue outlook between USD 1.99-2.015bln (exp. 2.01bln).


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  Alteryx, Inc. (AYX) - Q2 adj. EPS -0.46 (exp. -0.60), Q2 revenue USD 180.6mln (exp. 161mln). Sees Q3 adj. EPS between -0.12 and -0.09 (exp. -0.18), sees Q3 revenue between USD 191-194mln (exp. 173.7mln). FY22 adj. EPS seen between -0.56 and -0.46 (exp. -0.55).


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  Cognex Corporation (CGNX) - Q2 adj. EPS 0.41 (exp. 0.41), Q2 revenue USD 274.6mln (exp. 276.6mln). Sees Q3 revenue between USD 160-180mln (exp. 290.25mln).


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  SolarEdge Technologies, Inc. (SEDG) - Q2 EPS 0.95 (exp. 1.39), Q2 revenue USD 727.8mln (exp. 725.2mln). Sees Q3 revenue between USD 810-840mln (exp. 813.3mln).

COMMUNICATIONS:

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  Match Group, Inc. (MTCH) - Q2 EPS -0.11 (exp. 0.53), Q2 revenue USD 794.5mln (exp. 804.2mln), Payers +10% to 16.4mln (vs 15mln in prev. qtr). Sees Q3 revenue between USD 790-800mln (exp. 885.2mln). Exec said it sees muted top-line growth in the H2, expects FX to have an 8-point impact on Y/Y revenue growth in Q3. Said it expects higher overall app store fees, reduced Y/Y sales and marketing spend, lower Y/Y growth in product and development spend as it begins to see the effects of a pullback in hiring.


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  Electronic Arts Inc (EA) - Q1 EPS USD 1.11 (exp. 0.28), Revenue USD 1.77bln (exp. 1.26bln). Net bookings (TTM) USD 7.478bln, +22% Y/Y; live services and other net bookings (TTM) +20% Y/Y. EA player network now nearly 600mln active accounts at quarter end. Sees FY23 revenue between USD 7.6-7.8bln (Exp. 7.99bln), and net bookings are seen around USD 7.9-8.1bln, EPS is seen around 2.79-2.87.


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  Twitter, Inc. (TWTR) - Twitter is attempting to find evidence that Elon Musk tried to torpedo the financing of his USD 44bln takeover deal for the social media company, while also looking into his motivation for backing out of the deal, Reuters reported.

CONSUMER CYCLICAL:

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  Starbucks Corp (SBUX) - Q3 Adj. EPS USD 0.84 (exp. 0.75), Revenue USD 8.15bln (exp. 8.11bln); Comp sales +3% (exp. +4.26%). North America comp sales +9% (exp. +9%). US comp sales +9% (exp. +8.85%). International comp sales -18% (exp. -16.1%). China comp sales -44% (exp. -39%). Executive said COVID lockdowns across China kept Shanghai stores largely closed for 2 months in Q3, and that continues episodically today; adds each one of their international regions grew revenue by double digits in Q3 aside from China. Exec said US customers were not trading down to cheaper items. SBUX said FY22 guidance remains suspended for the balance of the year.


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  Airbnb Inc (ABNB) - Q2 EPS USD 0.56 (exp. 0.44), Adj. EBITDA USD 711mln (exp. 591mln), Revenue USD 2.10bln (exp. 2.10bln), announces USD 2bln share repurchase. Gross booking value USD 16.98bln (exp. 16.92bln). Gross booking value per nights and experiences booked USD 163.74 (exp. 161.75). Free cash flow USD 795mln (exp. 469.7mln). Nights and experiences booked 103.7mln (exp. 106mln). Sees Q3 revenue between USD 2.78bln-2.88bln (exp. 2.78bln)


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  Caesars Entertainment Inc (CZR) - Q2 EPS USD 0.16 (exp. 0.17), Revenue USD 2.8bln (exp. 2.77bln). Exec said results reflected a consolidated EBITDA record for our brick and mortar properties led by an all-time quarterly EBITDA record in Las Vegas and continued strength in our regional markets when compared to 2019. Operating results in its digital segment improved dramatically versus the first quarter and it is optimistic regarding trends in this segment for the balance of the year.


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  O-I Glass (OI) - Q2 adj. EPS 0.73 (exp. 0.65), Q2 revenue USD 1.8bln (exp. 1.74bln). Exec noted glass shipments increased slightly compared to the prior year, and the benefit of higher selling prices continued to more than offset elevated cost inflation. Sees Q3 adj. EPS between 0.55-0.60 (exp. 0.58), and lifted its FY22 adj. EPS outlook to USD 2.05-2.20 (prev. guidance 1.85-2.10, exp. 2.10); updated range reflects favourable H1 results and solid momentum heading into H2.


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  Hugo Boss (BOSSY) - Q2 Revenue EUR 878mln (pre. 629mln Y/Y). EBIT 100mln (prev. 42mln). Co. has raised its top- and bottom-line outlook for the current fiscal year, now sees group sales increase between +20-25% (prev. +10-15%). Strong double-digit growth in South East Asia & Pacific compensated for a sales decline in mainland China.

INDUSTRIALS :

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  China's CATL has reportedly paused North American battery plant announcement due to US House Speaker Pelosi's Taiwan trip; plant was up to USD 5bln and was going to supply Ford (F) and Tesla (TSLA), according to Bloomberg.


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  AP Moller Maersk (AMKBY) - Final Q2 Revenue USD 21.7bln (prelim. 21.7bln). Net USD 8.59bln (exp. 7.1bln). Affirmed its FY underlying EBIT, FCF, and cumulative Capex guidance. Notes that demand for logistics services continued to moderate across the global supply chain in the quarter.


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  BMW (BMWYY) - Q2 2022 Q2 Revenue EUR 34.77bln (exp. 32.07bln). Automotive revenue EUR 30.02bln (exp. 28.52bln). Reiterates FY auto EBIT margin between 7-9% (exp. 8.41%). BEV sales more than double in 1st half-year (+110.3%). Sees slightly lower FY22 revenue Y/Y, but solid sales volume growth is expected in H2 Y/Y.


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  Nikola Corporation (NKLA) - Shareholders approved increasing authorised number of shares to 800mln from 600mln.


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  Rolls-Royce (RYCEY) - Spanish government has approved the sale of ITP Aero, completion at an enterprise value of EUR 1.8bln expected in coming weeks; proceeds used to rebuild balance sheet. Concluded the disposal programme.


• 
  Stellantis (STLA) - Production at its Melfi plant stopped due to strike action; strike to continue for an additional three eight-hours shifts.


• 
  Veolia (VEOEY) - H1 Revenue EUR 20.2bln, +46%; EBITDA EUR 2.95bln (exp. 2.99bln), Net Income EUR 528mn (exp. 499mln). Confirms FY22 guidance.


• 
  Waste Connections, Inc. (WCN) - Lifts FY22 revenue outlook to USD 7.125bln (exp. 4.8bln), said accelerating solid waste pricing and E&P waste activity drove a top-to-bottom beat in the period.

ENERGY:

• 
  Chesapeake Energy Corporation (CHK) - Q2 EPS USD 4.87 (exp. 3.81), Q2 revenue USD 3.52bln (exp. 1.94bln); boosts annual base dividend +10% to USD 2.20/shr; total quarterly dividend USD 2.32/shr, in line with its cash return framework.


• 
  Occidental Petroleum Corp (OXY) - Q2 Adj. EPS USD 3.16 (exp. 3.02), Revenue USD 10.74bln (exp. 10.26bln).

HEALTH CARE :

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  Gilead Sciences Inc (GILD) - Q2 Adj. EPS USD 1.58 (exp. 1.52), Revenue USD 6.30bln (exp. 5.85bln). Q2 product sales USD 6.1bln (flat Y/Y) billion, flat compared to the same period in 2021, total product sales ex-Veklury +7% to USD 5.7bln.Raises FY outlook, now sees EPS between 6.35-6.75 (prev. guidance 6.20-6.70).

Exact Sciences Corporation (EXAS) - Q2 EPS -0.94 (exp. -1.07), Q2 revenue USD 521.6mln (exp. 497.5mln). Lowers FY22 revenue outlook to USD 1.980-2.022bln (exp. 2.02bln, prev. gudiance 1.985-2.032bln).

FINANCIALS:

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  PayPal Holdings Inc (PYPL) - Q2 Adj. EPS 0.93 (exp. 0.86), Revenue USD 6.81bln (exp. 6.78bln); names Blake Jorgensen as CFO. Authorises new 15bln share buyback plan. Total payment volume USD 339.8bln. Q3 EPS view USD 0.94-0.96 (exp. 0.95). Q3 revenue view USD 6.80bln (exp. 7.02bln). Elliott Investment Management says it is one of PayPal's largest investors, with an about 2bln investment. PayPal (PYPL) says it expects to reduce headcount to lower costs.


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  HSBC (HSBC) - Chairman Tucker told a group of investors that the bank was mulling "alternative structures", but remained light on details, Telegraph reported.


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  Prudential Financial, Inc. (PRU) - Q2 adj. EPS USD 1.74 (exp. 2.36). Exec said results reflected macroeconomic trends, including rising interest rates, widening credit spreads, and equity market declines, as well as the strengthening of Individual Life reserves through its annual review of assumptions.


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  Societe Generale (SCGLY) - Q2 Net loss EUR 1.48bln (exp. loss 2.26bln). Revenue EUR 7.07bln (exp. 6.43bln). FIC trading revenue EUR 683mln (exp. 535mln). Global markets & investor net revenue EUR 1.74bln (exp. 1.49bln). Operating profit EUR 2.61bln (prev. 2.01bln). Targets higher revenue due to rising rates. Affirms FY CET1 ratio guidance and affirms FY25 targets.


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  SoFi Technologies, Inc. (SOFI) - Q2 EPS -0.12 (exp. -0.13), Q2 revenue USD 362.5mln (exp. 346.5mln). Raises FY22 adj. revenue outlook to between USD 1.508-1.513bln (exp. 1.48bln, prev. guidance 1.505-1.51bln).

03 Aug 2022 - 09:24- Research Sheet- Source: Newsquawk