Good Morning US Marex Equities 3rd May 2024

US Yields Sink as Traders See Fed Cut in Sep. APPLE beats w/ record bback.

Wake Up Call

• Hello !  Dow Jones futures and other major stock indexes extended their rallies in premarket action Friday after the Labor Department's weaker-than-expected April jobs report. Among the winners was APPLE, which enjoyed a surge fueled by a share buyback ahead of the opening bell on the stock market today.
  
  DATAS
  * US Non-Farm Payrolls* (Apr) 175.0k vs. Exp. 243.0k (Prev. 303.0k, Rev. 315k) ; two month net revisions -22k (prev. +22k)
  * US Unemployment Rate* (Apr) 3.9% vs. Exp. 3.8% (Prev. 3.8%)
  * US Private Payrolls* (Apr) 167.0k vs. Exp. 190.0k (Prev. 232.0k, Rev. 243k)
  * US Average Earnings MM* (Apr) 0.202% vs. Exp. 0.3% (Prev. 0.3%)

Wall Street Movers

• APPLE +6% Q2 Rev $90.75bn ($90.33bn exp) / EPS $1.53 ($1.5 exp) / Company plans to buy back additional $110bn of shares. The company also raised its dividend as expected from $0.24 to $0.25/shr / Q2 Greater China rev fell but less than feared, at $16.37bn (-8.1% YoY) against estimations of $15.87bn / Q2 iPhone rev $45.96bn (est $45.76bn) / Q2 wearables rev also fell 9.6% YoY to $7.91bn while the market was expecting a rev of $8.29bn in that segment / At the time of writing we didn’t see much comments on AI but Tim Cook alluded to an "exciting" product announcement next week, which is widely expected to be updated iPads while he also acknowledged the launch of the Vision Pro. The appointment for AI will be in June when Cook is expected to lay out Apple’s AI strategy at its annual Worldwide Developers Conference / CITI open 90-day positive catalyst watch. 
  
  
• AMGEN +14% Q1 adj EPS $3.96 ($3.94 exp) / Rev $7.45bn ($7.43bn exp) / Product sales $7.12bn ($7.11bn exp) / Raises FY adj EPS 4cst $19.00 to $20.20, saw $18.90 to $20.30, ($19.48 exp). / Still sees capex ~$1.1bn / CEO said he was “very encouraged” by early results from a study of the company’s experimental obesity drug, MariTide. 
  
  
• BLOCK +7% boosts its FY adj EBITDA $2.76bn ($2.67bn exp) / Q1 adj EPS $0.85 ($0.71 exp) / Net rev $5.96bn ($5.89bn exp) driven primarily by inflows per active and monetization rate, with strong performance across Cash App Card, BNPL platform, Bitcoin products, and Cash App Borrow.
  
  
• BOOKING +2.8% Q1 rev $4.42bn ($4.25bn exp), travel demand remains strong and more travelers move into upper loyalty tiers / Adj EPS $20.39 ($13.94 exp) / Gross bookings $43.5bn ($42.2bn exp) / Sees Q2 room nights growth decelerate vs Q1 due to war and rev growth between +4% and 6%
  
  
• CLOUDFARE -13.8% after providing Q2 rev 4cst $393.5mn to $394.5mn below est $394.5mn. However, company recorded good results in Q1 (adj EPS 16c, est 13c; rev $378.6mn, est $373.7mn) and raised FY guidances.
  
  
• COINBASE -5% shrugging off a Q1 results beat, as Mizuho noted the crypto trading platform’s strong year-to-date rally, signs of a transaction rev drop in the coming months and potential regulatory risks. Good Q1 results w/ rev $1.64bn above est $1.32bn and adj EPS $4.40, est $1.07. 
  
  
• EXPEDIA -12% after Q1 gross bookings $30.16bn missed est $30.5bn and the company cut its sales forecast for the year. Analysts note weakness in Vrbo, its online marketplace for vacation rentals. 
  
  
• FORTINET -8% after recorded Q1 billings $1.41bn below est $1.43bn due to weakness in Europe despite, higher than est rev and adj EPS. Company raises its adj EPS 4cst $1.73 to $1.79, est $1.70 as well as rev $5.75bn to $5.85bn, est $5.79bn. 
  
  
• HERSHEY +1% recorded good results in Q1 w/ adj EPS $3.07, est $2.76 and net sales $3.25bn, est $3.1bn. However, company sees FY adj EPS $9.59 slighlty below est $9.6. Company declares qtrly div of $1.37/shr.
  
  
• INGERSOLL RAND -5% Cut FY rev 4cst after seeing a drop in orders in Q1. Mixed Q1 results, est $1.95bn and authorized a $1bn share repurchase program. 
  
  
• MERCADOLIBRE  +4.20% recorded a Q1 EPS $6.78 above est $6.14 as well as rev $4.3bn, est $3.84bn as firm’s strength in Mexico and Brazil offset weakness in Argentina. Gross merchandise value increased sharply by 36% in Brazil and 42% in Mexico yoy. 
  
  
• MONSTER BEVERAGE +2.8% after it reported results that analysts described as better than some investors had feared; Q1 EPS $0.42 misses est $0.44, net sales $1.9bn matching est. The company plans to raise prices later in the year.

At A Glance

• AES reaffirms Its FY24 Guidance for adj EPS and EBITDA. Mixed results in Q1 (adj EPS 50c, est 33c; rev $3.09bn, est $3.17bn). 
• ALBEMARLE is planning to do more lithium auctions including some outside China as it aims to shed more light on pricing in the opaque market.
• ALLIANT ENERGY recorded Q1 rev $1.03bn below est $1.04bn w/ adj EPS $0.62 est $0.629. Company still sees EPS $2.99 to $3.13, est $3.06 
• ARDELYX drove a strong Q1 rev beat (Q1 rev $46.0mn vs est $37.7mn), which Jefferies expects will boost confidence in the company’s management.
• CATALENT and NOVO NORDISK get FTC request for additional information
• CBOE Q1 adj EPS $2.15 beats est $2.05 while net rev $502.1mn, est $505mn. Anticipates FY higher end of organic total net rev growth of 5%/7% in 2024.
  
• CHENIERE ENERGY recorded Q1 rev $4.25bn higher than est $3.92bn (LNG rev $4.04bn, est $3.84bn). 
• CHEVRON is working to resume full production at the Gorgon Gas Facility in Australia after a mechanical fault. 
• CON EDISON recorded Q1 adj EPS $2.15, est $1.88 while rev $3.97bn, est $4.26bn.
• DIGITAL REALTY TRUST maintains FY Core FFO/shr $6.60 to $6.75 above est $6.64. Mixed Q1 results w/ op rev $1.3bn less than est $1.36bn and core FFO/shr $1.67, est $1.63. 
• EOG RESOURCES Q1 adj EPS $2.82 beats est $2.73 as well as rev $6.12, est $5.68bn. 
• FEDERAL REALTY TRUST narrows FY FFO/shr
• GREEN PLAINS recorded Q1 rev $7.94bn well above est $4.46bn as well as adj core EPS 78c, est 69c driven by office leasing growth.  
• HOLOGIC raises FY adj EPS 4cst $4.02 to $4.12, est $4.03 as well as rev rev $4.00bn to $4.05bn, est $4.03bn after recorded good Q2 results. 
• ILLUMINA Q1 rev $1.08bn beats est $1.05bn as well as adj EPS 9.0c, est 5.7c. Still sees core rev about flat.
• IMMUNITYBIO on a deal with the Serum Institute of India for Bacillus Calmette-Guerin supply.
• JOHNSON CONTROLS reportedly weighs sale of ADT alarms unit, acc.  to Reuters sources ; could fetch under $1bn
• MICROSOFT is adding security chiefs to its product groups in a bid to boost resilience to hacking after company has been criticized for failing to contain several serious cyberattacks.
• MORGAN STANLEY Mike Ashley’s Frasers Group has dropped its €50mn lawsuit against the company ahead of a judgment in the London case. 
• MOTOROLA Q1 net sales $2.39bn ($2.34bn exp) / Adj EPS $2.35 ($2.53 exp) / Boosts its FY adj EPS 4cst $12.98 to $13.08, ($12.74 exp). 
• NORTHROP GRUMMAN wins us air force contract with max value $7bn. Work expected to be completed by May 2029.
• PLAINS ALL AMERICAN maintains FY adj EBITDA 4cst $2.63bn to $2.73bn, est $2.7bn. Company recorded Q1 adj earnings per unit $0.41 above est $0.39 while rev $12.00 billion, est $12.96bn
• TRIMBLE cut its Q2 rev 4cst $845mn to $875mn, est $879.3mn w/ adj EPS 56c-60c, est 62c but it recorded higher than exp Q1 results (Adj EPS 64c, est 60c; rev $953.3mn, est $919.6mn). 
• US STEEL flat Q1 net sales $4.16bn ($4.22bn exp) / Adj EPS $0.82 ($0.8 exp) / Sees Q2 adj EBITDA $425mn to $475mn ($531.2mn exp) / Company w/ Nippon Stell received a request for additional information and documentary materials from DOJ in connection with antitrust review of the merger under the HSR Act / Currently expects that the merger will be completed in H2 of FY24.
• UNITI has agreed to buy Elliott Management backed Windstream Holdings in a deal that values Windstream at about $1bn.
• WIDEOPENWEST Shareholder Crestview says it and DigitalBridge submitted a joint, preliminary non-binding proposal to buy the cable service provider for $4.80 per Class A share.
• XPO Q1 rev $2.02bn above est $2.01bn.

Key Events (UK Time)

Friday
14:45 S&P Global US Services & Composite PMI
15:00 ISM Services Index

Game Of Corporate Actions 

DIV EX DATE 

• Today : Eaton ($0.94) ; Citigroup ($0.53) ; Brown & Brown ($0.13) ; Ameriprise Financial ($1.48) ; Synchrony Financial ($0.25)
• Tomorrow : Intel ($0.125) ; FirstEnergy ($0.425) ; Las Vegas Sands ($0.2) ; MetLife ($0.545)

TODAY EARNINGS

• Results aft mkt : --

TOMORROW : Berkshire Hathaway

MONDAY

• Results bef mkt : Loews ; Tyson Foods
• Results aft mkt : Axon ; FIS ; FMC ; International Flavors ; Microchip Technology ; Realty Income ; Simon Property ; Vertex Pharmaceuticals ; Williams Cos

Stay Tuned