Wake Up Call
- Hello ! US equity futures added to early losses Tuesday after a broad gauge of wages and benefits rose more than expected in the first quarter, renewing concerns that the Federal Reserve may have to keep interest rates higher for longer to fight stubborn inflation. The employment cost index increased 1.2% in the January-to-March period — above consensus estimates for 1%. S&P 500 futures pointed to a flat open on Wall Street. McDonald’s fell in premarket trading after results missed estimates, while Eli Lilly & Co. jumped more than 6% on an improved revenue outlook.
- Equities are on the cusp of closing out the first monthly retreat of 2024, with the S&P 500 down 2.6% in April. Amazon.com Inc. is due to report later today. Fed Chair Jerome Powell is likely to bolster expectations interest rates will stay higher for longer after Wednesday’s rates announcement, according to Bloomberg Economics.
- “Sentiment is positive but reserved,” said Peter Rosenstreich, head of investment products at Swissquote. “There has been plenty of hype around rates, earnings and the macro environment — now markets want to see the results.”
Wall Street Movers
- 3M +7.6% recorded good Q1 results (Adj EPS $2.39, est $2.03; Net sales $8.00bn, est $7.65bn). Plans to slash its dividend, ending more than six decades of boosting the payout each year as it enters a new era following the spinoff of its health-care products division. Starting in May, the manufacturing giant plans to pay a dividend at roughly 40% of its adj FCF (vs a payout that translated to more than 60% of its FCF last year)
- COCA COLA flat reported Q1 comparable EPS 72c above est 70c and raises its FY adj organic rev +8% to +9%, est +6.86% w/ comparable EPS +4% to +5% due to strong global demand.
- ELI LILLY +6.7% boosted its FY rev outlook $42.4bn to $43.6bn, est $41.38bn citing strong performance of its GLP-1 drugs Mounjaro and Zepbound. However, Q1 increased 26% but still missed est ($8.77bn vs est $8.93bn) while EPS $2.58, est $2.43.
- F5 -9% cut Q3 adj EPS 4cst $2.89 to $3.01, est $3.07 as well as rev view following mixed results for the current quarter.
- GE HEALTHCARE recorded a Q1 rev $4.65bn, below est $4.8bn as well as adj EPS 90c, est 91c. Reaffirms its FY guidance (adj EPS $4.20 to $4.35, est $4.30).
- MCDONALDS -0.6% Q1 Comparable sales misses est +2.33 as the segment continued to be impacted by the war in the Middle East as well as adj EPS $2.70, est $2.72; Q1 rev $6.17bn above est $6.15bn.
- NXP SEMICONDUCTORS +3.20% raises its Q2 adj EPS 4cst $3.00 to $3.41 (midpoint at $3.20) est $3.12 as well as rev $3.03bn to $3.23bn, est $3.11bn. Reported a Q1 adj EPS $3.24 above est $3.18 w/ rev $3.13bn matching est.
- PARAMOUNT GLOBAL -0.5% replaced CEO Bob Bakish as the board negotiates a possible change in control of the company. Later that night, company also reported mixed Q1 results w/ adj EPS from cont ops 62c above est 36 overshadowing a rev $7.69bn slightly below est $7.74bn due to less than est TV rev. Analysts note that investors are more focused on the Skydance deal rather than results this quarter
- PAYPAL +7.70% reported FY total payment volume $403.9bn, beating est $392.9bn. Expects earnings to fall this year as the financial-technology company continues to work on cutting costs and streamlining its businesses.
- TESLA -1.90% Elon Musk said in a staff email that two senior Tesla execs will leave, along with hundreds of employees, the Information reported.
- US SEMI stocks could be active this morning after SAMSUNG, the world’s largest maker of memory chips and smartphones, revealed its semiconductor division returned to profitability in the latest quarter thanks to a surge in spending on artificial intelligence services.
- WALMART flat is abandoning its plan to build out a network of low-cost health clinics due to escalating costs and reimbursement challenges and wants to expand its food empire.
At A Glance
- ADM recorded mixed results in Q1 w/ adj EPS $1.46 above est $1.37 and rev $21.85bn, est $22bn due to less Carbohydrate solutions sales. Maintains it FY adj EPS 4cst $5.25 to $6.25, est $5.55.
- AIR PRODUCT & CHEMICALS recorded mixed Q2 results (adj EPS from cont ops $2.85, est $2.72; Sales $2.93bn, est $3.07bn). Cut Q3 adj EPS 4cst $3.00-$3.05, est $3.30. Maintains FY guidance.
- AMERICAN ELECTRIC POWER maintains its FY op EPS 4cst $5.53 to $5.73, est $5.59 w/ good results in Q1 (op EPS $1.27, est $1.25; Rev $5.0bn, est $4.99bn). On track to reach 80% reduction in CO2 by 2030.
- CORNING raises Q2 core sales 4cst about $3.4bn, est $3.33bn after good results in Q1 (Core EPS 38c, est 35c; Core sales $3.26bn, est $3.12bn).
- EATON CORP boosts its FY adj EPS $10.20 to $10.60, est $10.20 w/ organic rev +7% to +9%, est +7.83%a after good results in Q1 ( adj EPS $2.40, est $2.29; net sales $5.94bn, est $5.9bn).
- ECOLAB raises its Q2 adj EPS 4cst $1.62 to $1.72, est $1.54, it expects FY24 adj diluted EPS in the $6.40 - $6.70 range. Recorded a Q1 adj EPS $1.34 slightly higher than est $1.33 w§ rev $3.75bn matching est.
- ENTERPRISE PRODUCTS PARTNERS Q1 adj EBITDA $2.47bn beats est $2.43bn as well as rev $14.76bn, est $13.69bn driven by contributions from new assets placed into service.
- EQUITRANS recorded weak results in Q1 (adj EPS 23c, est 25c; op rev $364.3mn, est $365mn). Company didn’t provide FY guidance due to pending transaction with EQT.
- GARTNER recorded a Q1 adj EPS $2.93 above est $2.53 while rev $1.47bn, est $1.49bn. Company increased guidance for 2024 on an FX neutral basis.
- ILLINOIS TOOL WORKS raises FY24 EPS to $10.30-$10.70, consensus $10.14
- INCYTE recorded Q1 adj EPS 64c well below est 82c, same for rev $880.9mn, est $916.4mn.
- KBR recorded Q1 adj EPS 77c above est 71c as well as rev $1.82bn, est $1.79bn.
- MARATHON PETROLEUM Q1 total rev & other income $33.21bn slightly above est $32.2bn, Capex too $636mn, est $586.6mn.
- MARTIN MARIETTA boosts its FY adj EBITDA 4cst $2.30bn to $2.44bn, est $2.32bn; Q1 adj EPS about
- META social media platforms Facebook and Instagram are under investigation from the European Union amid concerns they’re failing to cull targeted disinformation peddled by Russia that aims to sow discord on the continent.
- MICROSTRATEGY -2.6% reported a Q1 rev $115.2mn below est $123.7mn due an impairment change against the value of its roughly $13bn in Bitcoin holdings even though the cryptocurrency surged during the period.
- MOLSON COORS Q1 net sales $2.60bn beats est $2.5bn as well as Underlying EPS 95c vs. 54c y/y, est 75c.
- SIRIUS XM recorded Q1 rev $2.16bn better than est $2.13bn as well as adj EPS 7.0c, est 6.5c. Maintains its FY adj EBITDA $2.70bn, est $2.68bn.
- TENET HEALTHCARE boosts its adj EPS from cont ops 4cst $8.37 to $9.41, est $6.23, same for rev $20.00bn to $20.40bn, est $20.16bn after strong results in Q1.
- TESLA Elon Musk said in a staff email that two senior Tesla execs will leave, along with hundreds of employees, the Information reported.
- ZEBRA TECHNOLOGIES raises its Q2 adj EPS 4cst $2.60 to $2.90, est $2.57 despite seeing -1% to -5% in net sales; recorded good results in Q1
Key Events (UK Time)
Tuesday
13:30 US Employment Cost Index
14:00 FHFA House Price Index MoM
15:00 FOMC Begins Two-Day Meeting; Conf. Board Consumer Confidence
Wednesday
12:00 US MBA Mortgage Applications
13:15 ADP Employment Change
14:45 S&P Global US Manufacturing PMI
15:00 JOLTS Job Openings, ISM Manufacturing
19:00 FOMC Rate Decision (Upper & Lower Bound); FOMC Ends Two-Day Meeting; Interest on Reserve Balances Rate
19:30 Fed Chair Powell Holds Post-Meeting Press Conference
Thursday
13:30 US Initial Jobless Claims
15:00 US Factory Orders; Durable Goods Orders; Cap Goods Orders & Ship Nondef Ex Air
Friday
13:30 US Change in Nonfarm Payrolls; Change in Manufact. Payrolls; Unemployment Rate
14:45 S&P Global US Services & Composite PMI
15:00 ISM Services Index
Game Of Corporate Actions
DIV EX DATE
- Today : AES ($0.1725); Aon ($0.675); Citizens Financial ($0.42); Hasbro ($0.7); NRG ($0.4075); ONEOK ($0.99); Pinnacle West Capital ($0.88); Realty ome ($0.257)
- Tomorrow : Entergy ($1.13); DR Horton ($0.3)
TODAY EARNINGS
- Results aft mkt : AMD ; Amazon; Amcor; Boston Properties ; Caesars ; Clorox ; Diamondback Energy ; Edison International; Essex Property Trust ; Extra Space Storage ; Invitation Homes ; Mondelez ; ONEOK ; Prudential Financial ; Public Storage; Republic Services ; Skyworks Solutions ; Starbucks ; Stryker ; Super Micro Computer ; UDR
TOMORROW
- Results bef mkt : Aflac ; Automatic Data Processing ; Bio-Techne ; CDW ; Cencora ; CVS Health; Dayforce ; DuPont de Nemours ; Estee Lauder; Garmin ; Generac ; Global Payments ; IDEXX Laboratories ; Johnson Controls ; Kraft Heinz; Marriott International; Mastercard ; Norwegian Cruise Line; Pfizer ; PPL; Verisk Analytics ; WEC Energy ; Yum Brands
- Results aft mkt : Albemarle ; Allstate ; American International I; American Water Works ; ANSYS ; APA ; CF Industries ; CH Robinson ; Cognizant Technology Solutions; Corteva ; Devon Energy ; DoorDash ; eBay ; Etsy ; Eversource Energy; First Solar ; Host Hotels & Resorts ; Marathon Oil ; MetLife ; MGM Resorts; Mid-America Apartment Communit; Monolithic Power Systems ; Mosaic ; Paycom Software ; PTC ; Qorvo ; QUALCOMM ; Ventas ; VICI Properties