US EARLY MORNING: Index futures regain poise; labour market data is the highlight today ahead of tomorrow's jobs report

US equity futures have regained poise following Wednesday's downside (NQ +0.7%, ES +0.5%, RTY +0.5%, YM +0.3%), which was a function of more hawkish Fed rhetoric, a Manufacturing ISM beat, all on the day that the Fed officially began QT, serving to remind us of the direction that policy is travelling in, and the risks this policy poses to stocks and bonds. There has been a lot of attention on the apparently diverging views of JPM’s superstar strategist Marko Kolanovic and the bank’s boss Jamie Dimon. Kolanovic thinks that US stocks are set for a gradual recovery this year, and will end 2022 around the unchanged mark. He argues that a lot of the bad news is now priced in, and he repeated recent arguments that near record-low positioning, bearish sentiment, combined with his view that there will be no recession, a supportive dynamic from US consumers, the post-COVID reopening globally, as well as Chinese stimulus and recovery leave the team with a positive view on risk assets. “Bears are saying, ‘only the Fed making a U-turn can change the course of markets here,’” Kolanovic wrote, “we think this is not true as what is needed is incremental change relative to the significant amount of tightening already priced into the market.” That view is far more sanguine than his boss Jamie Dimon, who Wednesday warned investors to brace themselves for the hurricane ahead, as the bank itself was; “that hurricane is right out there down the road coming our way,” Dimon said, adding that “we don’t know if it’s a minor one or Superstorm Sandy.” Dimon said the bank itself would be conservative with its balance sheet in the face of challenges from Fed tightening and the war in Ukraine. “Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this,” but “we’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years,” warning that there was too much liquidity in the system, and that the Fed has to remove some of that liquidity to stop the speculation, reduce home prices among other things. More immediately, today’s economic docket contains weekly claims data, ADP Payrolls ahead of tomorrow’s NFP (our NFP preview is here, and while there may be some jitters after the release of the ADP data, it is unlikely to have any significant impact on near-term pricing for the Fed), Challenger lay-offs, as well as remarks from the Fed’s Mester and NY Fed’s market wizard Logan (who will become the Dallas Fed chief in August). On the supply side, the Treasury announces sizes for next week’s 3s, 10s, 30s auctions. Full Day Ahead here.

CONSUMER CYCLICAL:

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  Amazon (AMZN) - Amazon must face lawsuit over COVID work-from-home expenses, according to Bloomberg.


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  Blue Apron Holdings (APRN), Walmart (WMT) - Blue Apron surged by over 11% after hours following the announcement that it had launched a new offering at Walmart, where consumers can purchase meal kits without a subscription.


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  Chewy Inc (CHWY) - Q1 EPS 0.04 (exp. -0.14), Q1 revenue USD 2.43bln (exp. 2.42bln), Q1 Adj. EBITDA USD 60.5mln (exp. 1.03mln). Q1 Active Customers +4.2% Y/Y at 20.6mln, Q1 Net Sales per Customer +14.9% Y/Y at USD 446.


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  PVH Corp (PVH) - Q1 2022 EPS 1.94 (exp. 1.61), Q1 revenue USD 2.12bln (exp. 2.09bln). FY Adj. EPS view seen at around 9.00 (exp. 9.01), FY Revenue growth seen between +1-2%.


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  GameStop Corp (GME) - Q1 EPS -2.08 (exp. -1.45), Q1 revenue USD 1.38bln (exp. 1.32bln).


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  Boyd Gaming (BYD) - Boosts buyback authorisation by USD 500mln.

CONSUMER STAPLES:

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  Remy Cointreau (REMYY) - FY21 revenue EUR 1.31bln (prev. 1.01bln Y/Y). Operating profit EUR 334.4mln (prev. 236.1mln). Affirmed its operating profit and gross margin guidance.

TECH:

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  Meta Platforms (FB) - Pared back initial losses after news that chief operating officer Sheryl Sandberg is leaving Meta to focus on her foundation and philanthropic work.


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  Hewlett Packard Enterprise Co (HPE) - Q2 adj. EPS 0.44 (exp. 0.45), Q2 revenue USD 6.70bln (exp. 6.78bln), Q2 total charges of USD 126mln related to Russia conflict’s impact on business. Sees Q3 adjusted EPS 0.44-0.54 (exp. 0.52), raised FY EPS forecast to 1.96-2.10 (exp. 2.10, prev. 2.03-2.17), maintains FY free cash flow forecast at USD 1.8bln-2.0bln (exp. 1.95bln).


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  NetApp Inc (NTAP) - Q4 2022 adj. EPS 1.42 (exp. 1.28), Q4 revenue USD 1.68bln (exp. 1.68bln), Q4 billings +16% at USD 2.02bln. Sees Q1 EPS 1.05-1.15 (exp. 1.10), sees Q1 rev. 1.48bln-1.63bln (exp. 1.56bln). Sees FY23 EPS 5.40-5.60 (exp. 5.42),  sees FY2023 net revenues growth of +6-8%.


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  Oracle’s (ORCL), Cerner (CERN) - Oracle announced that all required antitrust approvals have been obtained for its proposed acquisition of Cerner.


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  Riot Blockchain (RIOT) - Announced CFO Jeff McGonegal was to retire, will be succeeded as CFO by Colin Yee, head of Corporate & Financial Operations.


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  MongoDB (MDB) - Q1 adj. EPS 0.20 (exp. -0.09), Q1 revenue USD 285.4mln (exp. 266.5mln). Sees Q2 EPS between -31c and -28c (exp. -0.14). Sees FY22 adj. EPS between -31c and -16c (exp. -0.37).


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  Pure Storage (PSTG) - Q1 adj. EPS 0.25 (exp. 0.04), Q1 revenue USD 620.4mln (exp. 522mln). Sees Q2 revenue USD 635mln (exp. 606mln). Sees FY23 revenue USD 2.66bln (exp. 2.6bln, prev. 2.6bln).


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  nCino (NCNO) - Q1 EPS -0.06 (exp. -0.08), Q1 revenue USD 94.2mln (exp. 91.4mln). Sees Q2 EPS between -0.09 to -0.08 (exp. -0.08), sees Q2 revenue USD 97-98mln (exp. 96mln), sees Q2 subscription revenues USD 81.5-82.5mln. FY22 revenue seen between USD 401-403mln (exp. 398.8mln), and sees FY22 subscription revenues between USD 341-343mln.


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  C3.ai (AI) - Tumbled over 20% after hours on weak guidance. Q4 EPS -0.21 (exp. -0.29), Q4 revenue USD 72.3mln (exp. 71.3mln). Sees Q1 revenue USD 65-67mln (exp. 74.4mln), sees FY23 revenue USD 308-316mln (exp. 333.9mln).


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  Semtech (SMTC) - Q1 EPS 0.80 (exp. 0.76), Q1 revenue USD 202.1mln (exp. 203mln). Sees Q2 EPS between 0.80-0.90 (exp. 0.83), and sees Q2 revenue between USD 203-213mln (exp. 210.2mln).


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  SentinelOne (S) - Q1 EPS -0.33 (exp. -0.24), Q1 revenue USD 78.3mln (exp. 74.7mln). Sees Q2 revenue between USD 95-96mln (exp. 84.9mln), and sees FY23 revenue between USD 403-407mln (exp. 374.2mln). Exec said it was taking market share from incumbents with antiquated technology stacks. Company has ample cash, and is focused on grabbing market share long term investments.


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  ASGN (ASGN) - Will acquire GlideFast Consulting for USD 350mln in cash; added that it continues to see Q2 revenues within its previously announced range of USD 1.11-1.13bln.


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  Credo Technology (CRDO) - Q4 EPS 0.02 (exp. 0.00), Q4 revenue USD 37.5mln (exp. 36.4mln). Sees Q1 revenue between USD 43.5-47.5mln (exp. 42.8mln).


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  Descartes Systems (DSGX) - Q1 EPS 0.27 (exp. 0.27), Q1 revenue USD 116.4mln (exp. 108.5mln).


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  Elastic (ESTC) - Q4 EPS -0.16 (exp. -0.22), Q4 revenue USD 239.4mln (exp. 230.2mln). Sees Q4 EPS -0.20 to -0.16 (exp. -0.20). Sees FY23 EPS between -0.36 to -0.28 (exp. -0.28).


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  UiPath (PATH) - Q1 EPS -0.03 (exp. -0.05), Q1 revenue USD 245.1mln (exp. 223.3mln). Sees Q1 revenue between USD 229-231mln (exp. 227mln). Sees FY23 revenue between USD 1.085-1.09bln (exp. 1.07bln), and sees FY23 ARR between USD 1.22-1.225bln.


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  Vacasa (VCSA) - To sell 336.07mln Class A common shares.

FINANCIALS:

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  Barclays (BCS), Blackstone (BX) - The bank is reportedly nearing a deal for part of Blackstone’s Kensington, a lending platform, according to Bloomberg.


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  BPER (BPXXY), Carige (CRGI) - Italian anti-trust gives green light for a merger.


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  NatWest (NWG) - The bank announced sale of its performing tracker mortgage portfolio. Indicative pricing of sale is in line with expectations, and prior guidance, of EUR 300mln disposal losses.


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  FTSE Reshuffle - Centrica (CPYYY) and Unite Group (UTG) will be joining the FTSE 100 Index, exit FTSE 250 index.

INDUSTRIALS:

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  Tesla (TSLA) - The automaker is to delay US deliveries of certain long-range models by up to a month, due to supply-chain issues and disruptions in China operations, Reuters said.


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  Volkswagen (VWAGY) - JV partner Rimac has raised USD 500mln in a new funding round.


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  Renault (RNLSY) - Signed a deal with Managem for the supply of low carbon cobalt sulphate for EV batteries.


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  Rolls-Royce (RYCEY) - To deliver 70 MTU engines to provide support to the semi-industry within China; will be installed at multiple semiconductor facilities, to ensure chip production is unaffected by power outages.

ENERGY:

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  Inventories - API weekly energy inventories reportedly said that crude stocks -1.2mln bbls (exp. -1.4mln) in the week, Cushing +0.2mln, gasoline -0.3mln (exp. +0.5mln), distillates +0.9mln (exp. +1.0mln).


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  Glencore (GLNCY) - Will reportedly reject Yankuag Energy’s buyout bid for its minority stake in Yancoal Australia, according to Reuters.


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  Shell (SHEL) - Has received the green light for the Jackdaw North Sea oil project and aims to begin production by H2 2025.


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  Valaris (VAL), Equinor (EQNR) - Equinor terminated a long-term charter for Valaris’ drillship Valaris DS-11, according to Upstream Online.

HEALTH CARE:

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  Novartis (NVS) - Is restart business in Ukraine.


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  Repare Therapeutics (RPTX), Roche (RHHBY) - Repare Therapeutics enters global license agreement with Roche on RP-3500.


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  Veeva Systems (VEEV) - Q1 adj. EPS 0.99 (exp. 0.92), Q1 revenue USD 505.1mln (exp. 496mln). Sees Q2 adj. EPS between 1.00-1.01 (exp. 0.99). Sees FY23 adj. EPS at 4.16 (exp. 4.02), and sees FY23 revenue between USD 2.165-2.175bln (exp. 2.2bln).

02 Jun 2022 - 09:24- Research Sheet- Source: Newsquawk