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Stocks of earnings reporters would add nearly 80 points to the Dow"s price

Four of the five Dow Jones Industrial Average components are contributing to the index's gains, as they would roughly add a net 77 points the Dow's price. Meanwhile, Dow futures rose 36 points, or 0.1%, ahead of the open. The biggest gainer was Coca-Cola Co.'s stock , which rose 2.7%, with the implied price gain adding about 10 points to the Dow's price, after better-than-expected third-quarter results. Next was McDonald's Corp.'s stock , which gained 2.6% ahead of the open to add about 40 points to the Dow after upbeat 3Q results. Elsewhere, Microsoft Corp. shares rose 1.8% to add about 37 Dow points after record 1Q results, and Boeing Co.'s stock tacked on 2.1% to boost the Dow by 29 points despite a 3Q miss. Meanwhile, Visa Inc.'s stock was the biggest Dow loser in the premarket after 4Q results, as it fell 2.6% to shave about 39 points off the Dow's price.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchOct 27th, 2021

Futures Flat Ahead Of Historic Taper Announcement, China Warns Of "Downward Pressure" On Economy

Futures Flat Ahead Of Historic Taper Announcement, China Warns Of "Downward Pressure" On Economy US stock futures were flat ahead of today's Fed meeting, where the central bank is widely expected to announce the reduction of asset purchases with a majority of analysts expecting the Fed reducing its monthly purchases of Treasuries by $10 billion and mortgage- backed securities by $5 billion. Nasdaq 100 futures climbed 0.1% while S&P 500 and Dow Jones futures were little changed. Oil fell as the U.S. ramped up pressure on OPEC+ to boost supplies (which will bear zero results). The two-year Treasury yield was steady, while the 30-year rate shed two basis points. European stocks struggled for direction and the dollar fell less than 0.1%.   Despite turmoil in the bond market which sent the MOVE (or bond VIX) index to post-covid highs... ... stocks remain complacent and are likely not under stress “because we all think we know what will come out from today’s meeting: a gradual start of the tapering of the bond purchases program,” said Ipek Ozkardeskaya, senior analyst at Swissquote. A "taper announcement will likely be seamless, what may be less seamless is the rate discussion," she wrote in a note.  In recent weeks, policy makers have come under pressure to reassess their assessment of inflation being transitory, with bond and currency markets pricing in faster-than-expected rate hikes. “The big question will be whether they will signal anything about when the rate hikes will start,” Jeanette Garretty, chief economist at Robertson Stephens Wealth Management, said on Bloomberg Television. “I think they are going to try and avoid that.” Wall Street has also largely shrugged off concerns around rising price pressures and mixed economic growth, boosted by a stellar third-quarter earnings season and an upbeat commentary about growth going forward. In fact, there is absolutely nothing that can dent the ongoing market meltup which according to Morgan Stanley will continue until just around Thanksgiving. "Anything suggesting that the Fed is confident to keep withdrawing monetary policy support following a start today may allow equity investors to buy more," said Charalambos Pissouros, head of research at JFD group. "After all, they may have already digested the idea that interest rates will start rising at some point soon." Meanwhile, Chinese equities drifted lower after what Bloomberg called was a "dour warning" from Premier Li who cautioned about “downward pressure” for the economy. Hang Seng falls as much as 1.2% after tech shares resume slide. Here are some of the most notable premarket moves: Lyft rose after its third-quarter results showed a continued improvement in key metrics for the ride-sharing company. Zillow dropped as the decision to shut its home-flipping business raised questions about its ability to deliver growth. Shale oil producer Devon Energy rose 4.8% in premarket trading on topping earnings estimates as oil prices hit multi-year highs. Mondelez International added 1.9% after the Oreo maker raised its annual sales forecast, helped by price increases and strong demand from emerging markets. T-Mobile gained 3.4% after the U.S. wireless carrier beat third-quarter estimates for adding monthly bill paying phone subscribers. Activision Blizzard tumbled 12.0% after the videogame publisher delayed the launch of two much-awaited titles, as its co-leader Jen Oneal decided to step down from her role On the economic data front, October readings on ADP private payrolls, IHS Markit composite PMI and ISM non-manufacturing activity is due later in the day. Meanwhile, European stocks were flat as losses in energy stocks offset gains in basic resources shares.  Italy's FTSE MIB outperforms, rising as much as 0.3% while Spain's IBEX underperforms. Oil & gas, retail and utilities are the weakest Stoxx 600 sectors; miners and autos outperform. Asia’s equity benchmark was little changed as traders await the outcome of the U.S. Federal Reserve’s policy meeting, with an announcement expected on tapering amid concerns about elevated inflation. The MSCI Asia Pacific Index traded in a narrow range, with Alibaba Group, AIA Group and Samsung Electronics the biggest drags and Tencent among the winners. South Korea’s Kospi tumbled 1.3% on mounting selling by foreign funds. Hong Kong’s benchmark Hang Seng Index declined for a seventh day, extending its longest losing streak since July. The earnings season has failed to boost Asian shares, with the regional benchmark down more than 10% from a February peak as supply-chain and inflation worries persist. Traders will focus on the Fed’s policy move on Wednesday for cues at a time volatility in the bond market has heightened. “U.S. monetary policy has a very direct impact on the Asian market, especially with their plethora of dirty U.S. dollar pegs,” Jeffrey Halley, senior market analyst at Oanda, wrote in a note. Philippine stocks were among the top gainers, advancing for a second day after local Covid-19 cases fell to fewest since March. Stocks in Australia also rose after the country’s central bank scrapped a bond-yield target on Tuesday and said there’s still some time to go for rate hikes. Iron ore’s rebound on Wednesday also bolstered the mining sector. Japan’s equity market was closed for a holiday. Chinese stocks dripped after Premier Li Keqiang said China’s economy faces new downward pressures and has to cut taxes and fees to address the problems faced by small and medium-sized companies. Li did not specify the extent of the new “downward pressure” or its cause, but the phrase is generally used by Chinese officials to refer to a slowing economy. He has used the phrase before, including several times in 2019. The economy needs “cross-cyclical adjustments” to continue in a proper range, Li said during a visit to China’s top market regulator, state broadcaster CCTV reported. That phrase is associated with a more conservative fiscal and monetary approach that focuses more on the long-term outlook instead of immediate economic performance. “There are no obvious growth drivers now, so the government is looking for one,” said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong Ltd. “Small businesses’ investment can provide a source of healthier, longer-term growth, compared with government or property investment.” In rates, 10-year Treasury note futures are at the top of Tuesday’s range, gaining over Asia session while eurodollar futures are up 1-2 ticks in red and green packs as shares declined in China and Hong Kong ahead of today’s FOMC decision and after Premier Li’s warning of downward pressures to the economy. Treasury 10-year yields richer by 1.8bp on the day, flattening 2s10s spread with front-end yields unchanged -- bunds and gilts trade slightly cheaper vs. Treasuries. Cash Treasuries resumed trading in London after being closed in Tokyo for a Japanese holiday --curve has flattened with long-end yields richer by as much as 2bp. Focus on U.S. session includes ADP employment and durable goods data, refunding announcement before 2pm ET Fed rate decision. In Europe, Bunds bull flattened, helped in part by dovish comments from ECB’s Lagarde and Muller while peripheral spreads tightened with 10y Bund/BTP narrowing 3bps near 120bps. In FX, the Bloomberg Dollar Spot Index inched lower as the dollar fell versus most of its Group-of-10 peers and Treasury yields fell by up to 3 basis points, led by the long end of the curve. The euro gradually climbed toward the $1.16 handle while European government bonds yields fell and curves flattened. New Zealand’s dollar was among the top G-10 performers, and rose from a two- week low after the unemployment rate dropped more than economists predicted; the Kiwi and Aussie were also boosted by leveraged short covering. The pound inched up from a three-week low against the dollar before a speech by Bank of England Governor Andrew Bailey. Hedging the pound on an overnight basis is the costliest since March as traders focus on the upcoming meetings by the Federal Reserve and the BOE. In commodities, crude futures extend Asia’s softness; WTI drops over 2%, stalling near $82, Brent drops a similar magnitude to trade near $83. Spot gold drifts around Asia’s worst levels near $1,783/oz. Most base metals are up over 1% with LME aluminum and tin outperforming Looking at the day ahead the highlight will be the aforementioned Fed's policy decision along with Chair Powell’s subsequent press conference. Other central bank speakers include ECB President Lagarde, alongside the ECB’s Elderson, Centeno, de Cos and Villeroy. Data releases include the final October services and composite PMIs from the UK and the US, and other US data includes the ISM services index for October, the ADP’s report of private payrolls for October and factory orders for September. Finally, earnings today include Qualcomm, Booking Holdings, Fox Corp and Marriott International. Market Snapshot S&P 500 futures little changed at 4,622.00 STOXX Europe 600 little changed at 479.79 MXAP little changed at 197.87 MXAPJ little changed at 645.10 Nikkei down 0.4% to 29,520.90 Topix down 0.6% to 2,031.67 Hang Seng Index down 0.3% to 25,024.75 Shanghai Composite down 0.2% to 3,498.54 Sensex little changed at 59,993.78 Australia S&P/ASX 200 up 0.9% to 7,392.73 Kospi down 1.3% to 2,975.71 German 10Y yield little changed at -0.18% Euro little changed at $1.1587 Brent Futures down 1.8% to $83.23/bbl Gold spot down 0.3% to $1,782.83 U.S. Dollar Index little changed at 94.05 Top Overnight News from Bloomberg The Federal Reserve is widely expected to announce the reduction of asset purchases at the conclusion of its policy meeting Wednesday, which Chair Jerome Powell will likely say is not a step toward raising interest rates any time soon Traders have had a mixed view for most of this year about when emerging-Asia central banks will begin to normalize policy. Suddenly though, they are rushing to price in rate-hike bets across the region. The hawkish shift is most evident in South Korea and India, where markets are now anticipating at least a quarter-point increase in the next three months, while they are also building in Malaysia and Thailand over a two-year horizon China’s economy faces new downward pressures and has to cut taxes and fees to address the problems faced by small and medium-sized companies, according to the country’s Premier Li Keqiang More provinces in China are fighting Covid-19 than at any time since the deadly pathogen first emerged in Wuhan in 2019 The likelihood that elevated inflation will become entrenched is increasing, according to European Central Bank Governing Council member Bostjan Vasle A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed despite another encouraging handover from Wall Street where all major indices notched fresh record closing highs for the third consecutive day, and the DJIA breached the 36k level amid a slew of earnings and absence of any significant catalysts to derail the recent uptrend. Gains in APAC were also capped by holiday-thinned conditions with Japan away for Culture Day and as the FOMC announcement draws closer (full Newsquawk preview available in the Research Suite). The ASX 200 (+0.9%) outperformed amid a resurgence in the top-weighted financials sector as AMP shares were boosted after it announced to divest a 19.1% stake in Resolution Life Australasia for AUD 524mln and with CBA also higher as Australia’s largest bank is to offer customers the ability to conduct crypto transactions via its app. Conversely, the KOSPI (-1.3%) lagged after its automakers posted weak October sales stateside and following comments from South Korean PM Lee that they cannot afford additional cash handouts right now, while there was also attention on Kakao Pay which more than doubled from the IPO price on its debut. The Hang Seng (-0.3%) and Shanghai Comp. (-0.2%) were lacklustre and failed to benefit from the improvement in Chinese Caixin Services and Composite PMI data, amid ongoing concerns related to the energy crunch and with tech subdued after Yahoo pulled out of China due to a challenging business and legal environment. Furthermore, reports also noted that the Chinese version of Fortnite will close in mid-November, while a slightly firmer PBoC liquidity operation failed to spur Chinese markets as its efforts still resulted in a substantial net drain. Aussie yields continued to soften after the RBA affirmed its dovish tone at yesterday’s meeting and with the central bank also present in the market today for AUD 800mln in semi-government bonds which is in line with its regular weekly purchases, while a softer b/c at the 10yr Australian bond auction failed to unnerve domestic bonds and T-notes futures were steady overnight amid the looming FOMC. Top Asian News State Bank of India Profit Tops Estimates on Lower Provisions Chinese Copper Smelters Boost Exports to Ease Historic Squeeze China’s PBOC Says Digital Yuan Users Have Surged to 140 Million Malaysia Holds Rates on Recovery, ‘Benign’ Inflation Outlook European majors have adopted a similarly mixed performance (Euro Stoxx 50 -0.1%; Stoxx 600 Unch) as seen during the APAC session, as markets and participants count down to the FOMC policy decision, with the BoE and NFPs also on the docket for the rest of the week. US equity futures are also mixed but have been drifting mildly higher in European trade thus far, vs a flat overnight session. Back to Europe, there isn’t anything major to report in terms of under/outperformers among European majors, although Spain’s IBEX (-0.7%) lags in the periphery amidst losses in sector heavyweights. Sectors in Europe are mixed with no overarching theme. Basic Resources top the charts in a slight reversal of yesterday’s underperformance and amid a bounce in base metal prices. Travel & Leisure is propped up by Deutsche Lufthansa (+5.0%) post-earnings. Oil & Gas names are pressured by the decline across the crude complex in the run-up to tomorrow’s OPEC+ confab, whilst Banks are lacklustre as yields lose ground. In terms of individual movers, Vestas Wind System (-9.0%) is at the bottom of the Stoxx 600 after cutting guidance. BMW (+0.4%) is choppy after-earnings which saw EBIT top forecasts and targets confirmed, although the group noted that the rise in raw material prices have also had an impact on earnings, but they do not expect short-term magnesium shortage to affect production. Finally, Pandora (+0.8%) reported improvements on their metrics but warned that APAC performance, including China, remains weak and heavily impacted by COVID-19, with China expected to remain a drag on performance for the remainder of the year. Top European News BMW Muscles Through Chip Shortage With Profit Jump Nexans Drops as Morgan Stanley Says 3Q Results Were Weak Russia’s Biggest Alcohol Retailer Seeks $1.3 Billion in IPO LSE Boss Expects London Will Keep EU Clearing Role Post-Brexit In FX, far from all change, but the Kiwi has reclaimed 0.7100+ status against the Greenback and a firmer grasp of the handle in wake of significantly stronger than expected NZ labour market metrics via Q3’s HLFS update overnight, including jobs growth coming in five times higher than forecast and the unemployment rate falling sharply irrespective of a rise in participation. Nzd/Usd is hovering around 0.7135 and the Aud/Nzd cross is under 1.0450 even though the Aussie has regained some composure after its post-RBA relapse to retest 0.7450, albeit with assistance from the Buck’s broad pull-back rather than mixed PMIs and much weaker than anticipated building approvals. Indeed, the Franc has also rebounded from circa 0.9150 with no independent incentive and cognisant that the SNB will be monitoring moves as Eur/Chf meanders within its 1.0604-1.0548 w-t-d range. DXY/JPY/EUR/GBP/CAD - The Dollar index has drifted back down from a fractional new high compared to Tuesday’s best between 94.144-93.970 parameters vs a 94.136-93.818 range yesterday, and for little apparent reason aside from pre-FOMC tinkering and fine-tuning of positions it seems. Nevertheless, DXY components are mostly taking advantage of the situation, albeit in typically tight ranges seen on a Fed day, with the Yen holding above 114.00 on Japanese Culture Day, the Euro just under 1.1600 and amidst more decent option expiry interest (1.1 bn from 1.1585 to the round number), Sterling still trying to retain 1.3600+ status and also close to a fairly big option expiry (821 mn at the 1.3615 strike) and the Loonie striving to contain declines beneath 1.2400 against the backdrop of retreating oil prices. Note, some upside in the Pound via upgrades to UK services and composite PMIs, but limited and Eur/Gbp remains over 0.8500 in advance of the showdown between Britain and France on fishing tomorrow when the BoE also delivers its eagerly anticipated November policy verdict. SCANDI/EM - Not much adverse reaction to a slowdown in Sweden’s services PMI for the Sek, while the Nok is taking the latest downturn in Brent crude largely in stride on the eve of the Norges Bank meeting that is widely seen cementing rate hike guidance for next month. However, scant respite or solace for the Try from sub-consensus Turkish CPI as the near 20% y/y print means more divergence relative to the CBRT’s 1 week repo, and PPI accelerated again to heighten the build up of pipeline price pressures. Conversely, the Cnh and Cny are nudging back above 6.4000 after an encouraging Chinese Caixin services PMI and the Zar is on a firm footing awaiting results of SA local elections. RBNZ said the financial system is well placed to support economic recovery despite uncertainty and risks, while the more recent Delta outbreak is creating stress for some industries and regions, particularly in Auckland. RBNZ also noted that with the risk of global inflation heightened, already stretched asset prices are facing headwinds from rising global interest rates and that supply chain bottlenecks and inflation are adding to stresses in some sectors. Furthermore, they intend to increase the minimum CFR requirement to its previous level of 75% on 1st January 2022, subject to no significant worsening in economic condition, while capital requirements for banks are to progressively increase from 1st July 2022 and it is encouraging to see them increasing ahead of these requirements. (Newswires) In commodities, WTI and Brent front month futures are softer and in proximity to USD 82/bbl and USD 83/bbl respectively with losses today also potentially a function of the downbeat China COVID updates seen overnight. As a reminder, China's most recent COVID-19 outbreak is reportedly the most widespread since Wuhan with infection in 19 of 31 provinces, according to a major newswires article. It was also reported that around half the flights to and from Beijing city’s two airports were cancelled Tuesday, according to aviation industry data site VariFlight. Further, yesterday’s Private Inventory data was also bearish, printing a larger-than-expected build of 3.6mln bbl vs exp. +2.2mln, ahead of today’s DoEs which will take place 1hr earlier for those in Europe. Looking ahead to tomorrow’s OPEC+, markets expect a continuation of the current plan to ease output curbs by 400k BPD/m. Outside calls have been getting louder for the producers to open the taps more than planned amid inflationary feed-through to consumers and company margins, although ministers, including de-factor heads Saudi and Russia, have been putting weight behind current plans, with no pushback seen from members within OPEC+ thus far. Further, the COVID situation in China is deteriorating, hence ministers will likely express a cautious approach. Elsewhere, spot gold and silver are flat within overnight ranges, as is usually the case before FOMC. Base metals are staging a recovery with LME copper back above USD 9,500/t, whilst Chinese thermal coal futures rose some 10% following 10 days of declines US Event Calendar 8:15am: Oct. ADP Employment Change, est. 400,000, prior 568,000 9:45am: Oct. Markit US Services PMI, est. 58.2, prior 58.2 Oct. Markit US Composite PMI, prior 57.3 10am: Sept. Durable Goods Orders, est. -0.4%, prior -0.4% Sept. -Less Transportation, est. 0.4%, prior 0.4% Sept. Cap Goods Orders Nondef Ex Air, prior 0.8% Sept. Cap Goods Ship Nondef Ex Air, prior 1.4% 10am: Sept. Factory Orders, est. 0.1%, prior 1.2% Sept. Factory Orders Ex Trans, est. 0%, prior 0.5% 10am: Oct. ISM Services Index, est. 62.0, prior 61.9 2pm: FOMC Rate Decision DB's Jim Reid concludes the overnight wrap So after much anticipation we’ve finally arrived at the Fed’s decision day, where it’s widely anticipated (including by DB’s US economists) that they’ll announce a tapering in their asset purchases. Such a move has been increasingly anticipated over recent months, not least with the repeated upgrades to inflation forecasts over the course of 2021, and the FOMC themselves flagged this at their September meeting, where their statement said that “if progress continues broadly as expected … a moderation in the pace of asset purchases may soon be warranted.” In terms of what our economists are expecting, their view is that the Fed will announce monthly reductions of $10bn and $5bn in the pace of Treasury and MBS purchases respectively, with the first cut to purchases coming in mid-November. They see this bringing the latest round of QE to an end in June 2022, though this would also offer some flexibility to respond to any changes in the economic environment over the coming eight months should they arise. On the question of rate hikes, they think lift-off won’t take place until December 2022, but don’t see Chair Powell actively pushing back on current market pricing (a full hike nearly priced in by mid-year 22) given the elevated uncertainty about the outlook, particularly on inflation. You can see more details in their preview here. Of course since the Fed’s last meeting, many inflationary pressures have only grown, particularly given the fresh surge in energy prices that’s taken WTI oil up to $83/bbl, having been at just $72/bbl at the time of their September meeting. In turn, this has taken market expectations of future inflation up as well, with the 10yr breakeven now standing at 2.52%, up from 2.28% following Powell’s September press conference. And market pricing has also shifted significantly since the last meeting, with investors having gone from expecting less than one full hike by the December 2022 meeting to more than two. Ahead of all that, global risk assets continued to perform strongly and a number of major indices climbed to fresh all-time highs yesterday. The S&P 500 (+0.37%), the NASDAQ (+0.34%), the Dow Jones (+0.39%) and Europe’s STOXX 600 (+0.14%) all hit new records, whilst France’s CAC 40 (+049%) exceeded its previous closing peak made all the way back in 2000. Positive earnings news helped bolster those indices, with 27 of 29 S&P 500 reporters beating earnings estimates during trading, and 16 of 20 after-hours reporters beating earnings estimates. This included Pfizer during the day, which raised its full-year forecasts on the back of strong vaccine demand and noted it had the capacity to produce as much as 4 billion shots next year. However, the big winner yesterday (the biggest in the small-cap Russell 2000 yesterday) was Avis Budget Group (+108.31%) even if its performance actually marked a fall from its intraday high when the share price had more than tripled. Those moves occurred after Avis posted strong earnings driven by better-than-expected demand. Their CEO said they’d add more electric cars, whilst the stock also got attention on the WallStreetBets forum on Reddit, which readers may recall was behind some big moves at the start of the year in various "meme stocks” like GameStop. The banner day added $8.5bn to its market cap, which helped it leap frog fellow meme stock AMC to become the second biggest company in the Russell 2000 from third slot yesterday. In other such popular retail stocks, Tesla retreated -3.03% after Elon Musk cast some doubt the previous evening over the recently announced deal to sell 100,000 cars to rental car company Hertz. That said, the automaker has still added over $300 billion in market cap over the last month. Sovereign bonds were another asset class that put in a decent performance ahead of the Fed, with yields falling throughout the curve across a range of countries following the relatively dovish tone vs heightened expectations from the RBA yesterday morning. By the close, those on 10yr Treasuries were down -1.4bps to 1.54%, whilst their counterparts in Europe saw even steeper declines, including those on 10yr bunds (-6.3bps), OATs (-8.5bps) and BTPs (-14.1bps). BTPs were the biggest story and the move seemed to coincide with a reappraisal of ECB hike expectations, as pricing through December 2022 declined -6.5 bps, down from c.20 bps of expected tightening priced as of Monday. So a big decline. In Asia, the Shanghai Composite (-0.57%), the Hang Seng (-0.93%) and the KOSPI (-1.23%) are all trading lower. Japan’s markets are closed due to the Culture Day, meaning also that cash treasuries are not trading in the region. In data releases, the Caixin Services PMI for China rose to 53.8 versus 53.1 expected. However, Premier Li’s remarks about new “downward pressure” on China’s economy and latest COVID outbreak, which is now the most widespread since the first emergence of the virus, are weighing down on the sentiment. Meanwhile, China and Hong Kong are discussing reopening of the shared border. The S&P 500 futures (-0.01%) is pretty flat this morning. Aussie yields are again lower especially at the front end with the infamous April 24 bond around -7bps as we type. As we go to print the Associated Press have called the Virginia as a victory for the GOP Youngkin with New Jersey equivalent also looking likely to go to the GOP. So a big blow to the Democrats. Of those, Virginia was being more closely watched. As recently as the Obama years it was a fiercely contested battleground, but it’s trended Democratic over the last few cycles, with Biden’s 10 point margin of victory last year well exceeding his 4.4 point margin nationally. So this will not be good news for the Dems ahead of next year’s mid-terms. It will also increase the odds of legislative and fiscal gridlock after that - although the latter has been increasingly expected. Staying with US Politics, President Biden indicated in a news conference that he was getting closer to announcing whether or not he would re-nominate Fed Chair Powell for another term as head of the central bank, or if he would appoint a new Chair. He said an announcement will come “fairly quickly”. In terms of the latest on the pandemic, the US CDC’s advisory committee on immunization practices met and backed the Pfizer vaccine for 5-11 year olds, joining the FDA who gave the vaccine the green light for the same age group. There wasn’t much in the way of data releases yesterday, though we did get the final manufacturing PMIs from Europe, where the Euro Area PMI for October was revised down two-tenths from the flash estimate to 58.3. Germany also saw a downward revision to 57.8 (vs. flash 58.2), but Italy outperformed expectations with a 61.1 reading (vs. 59.6 expected). To the day ahead now, and the highlight will be the aforementioned policy decision from the Fed, along with Chair Powell’s subsequent press conference. Other central bank speakers include ECB President Lagarde, alongside the ECB’s Elderson, Centeno, de Cos and Villeroy. Data releases include the final October services and composite PMIs from the UK and the US, and other US data includes the ISM services index for October, the ADP’s report of private payrolls for October and factory orders for September. Finally, earnings today include Qualcomm, Booking Holdings, Fox Corp and Marriott International. Tyler Durden Wed, 11/03/2021 - 08:13.....»»

Category: blogSource: zerohedgeNov 3rd, 2021

Stocks of earnings reporters would add nearly 80 points to the Dow"s price

Four of the five Dow Jones Industrial Average components are contributing to the index's gains, as they would roughly add a net 77 points the Dow's price. Meanwhile, Dow futures rose 36 points, or 0.1%, ahead of the open. The biggest gainer was Coca-Cola Co.'s stock , which rose 2.7%, with the implied price gain adding about 10 points to the Dow's price, after better-than-expected third-quarter results. Next was McDonald's Corp.'s stock , which gained 2.6% ahead of the open to add about 40 points to the Dow after upbeat 3Q results. Elsewhere, Microsoft Corp. shares rose 1.8% to add about 37 Dow points after record 1Q results, and Boeing Co.'s stock tacked on 2.1% to boost the Dow by 29 points despite a 3Q miss. Meanwhile, Visa Inc.'s stock was the biggest Dow loser in the premarket after 4Q results, as it fell 2.6% to shave about 39 points off the Dow's price.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchOct 27th, 2021

Futures Flat As Bitcoin Nears All-Time High, Yen Tumbles To 4 Year Low

Futures Flat As Bitcoin Nears All-Time High, Yen Tumbles To 4 Year Low US index futures were little changed as investors weighed the start of the earnings season against growing stagflation, tightening, energy crisis, China property and supply risks. S&P 500 futures were flat after the cash index edged closer to a record on Tuesday, rising above 4,500. Contracts on the Nasdaq 100 were also unchanged after the main index rallied for the past five days. At 7:30 a.m. ET, Dow e-minis were down 8 points, or 0.02%, S&P 500 e-minis were down 1 point, or 0.03%, and Nasdaq 100 e-minis were up 5 points, or 0.03%. Oil was down and the dollar steadied. Bitcoin traded just shy of its all time high overnight, and was last seen around $64,000. The S&P closed higher on Tuesday with the biggest boosts from the technology and healthcare sectors amid optimism about solid third-quarter earnings season. The index is just 0.4% below its early September record close, while the Dow Jones Industrials average is 0.5% below its all-time high reached in mid-August. "Earlier this month, stagflation was the buzzword on Wall Street. But now excessive pessimism is receding, especially after strong U.S. retail sales data on Friday," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Tech shares and other high-growth shares that would have been sold on rising bond yields are rallying, which clearly shows that there is now strong optimism on upcoming earnings." The positive mood saw U.S. bond yields rising further, with the 10-year U.S. Treasuries yield climbing to 1.67% , a high last seen in May. Shorter yields dipped, however, with the two-year yield slipping to 0.404% from Monday's peak of 0.448% as traders took profits for now from bets that the U.S. Federal Reserve will turn hawkish at its upcoming policy meeting in early November. Investors expect the Fed to announce tapering of its bond buying and money markets futures are pricing in one rate hike later next year. "The Fed is likely to become more hawkish, probably tweaking its language on its assessment that inflation will be transient. While the Fed will maintain tapering is not linked to a future rate hike, the market will likely try to price in rate hikes and flatten the yield curve," said Naokazu Koshimizu, senior strategist at Nomura Securities. In premarket trading, Tesla edged 0.4% lower in the run up to its quarterly results after markets close, with investors awaiting details on its performance in China. Anthem rose 0.6% as the second largest health U.S. insurer raised its profit outlook for 2021 after beating third-quarter profit estimates. United Airlines Holdings gained 1.6% after the carrier reported a smaller quarterly loss than a year ago on travel rebound. Ford gained 1.9% after Credit Suisse upgraded the U.S. automaker’s stock to ‘outperform’ on EV transition. Oil majors Exxon Mobil and Chevron Corp slipped 0.7% and 0.6%, respectively, tracking crude prices. Meanwhile, Chinese technology ADRs climbed as jitters in the wake of President Xi Jinping’s regulatory crackdowns fade. Netflix’s global sensation “Squid Game” helped lure more customers than expected, the world’s largest streaming service said as it predicted a packed lineup would further boost signups through the end of the year. Its shares, however, fell 2.7% after hitting a record high earlier this month and gaining 18.2% year-to-date. Here are some of the other biggest U.S. movers today: Chinese tech stocks listed in the U.S. rally in premarket with Hong Kong peers as jitters in the wake of President Xi Jinping’s regulatory crackdowns fade; Pinduoduo (PDD US) +1.7%; Didi (DIDI US) +1.3% Alibaba (BABA US) jumped 6.7% in Hong Kong after reports that founder Jack Ma has traveled abroad for the first time in a year United Airlines (UAL US) gains 2% in U.S. premarket trading after the airline posted a narrower loss than expected despite the impact of the coronavirus delta variant. Cowen notes that 3Q was better than expected and also ahead of management’s last guidance from early September Novavax (NVAX US) shares fall as much as 25% in U.S. premarket trading after Politico reported a potential delay in registering its Covid-19 vaccine candidate with the U.S. Food and Drug Administration in connection with inadequate purity levels Vinco Ventures (BBIG US) shares slump 15% in premarket trading after the company reported the resignations of Chief Executive Officer Christopher Ferguson and Chief Financial Officer Brett Vroman Ford (F US) shares gain 1.7% premarket after Credit Suisse upgrades to outperform with joint Street-high target of $20 following a significant turnaround over the past year Stride (LRN US) gained 7.9% Tuesday postmarket after the education company forecast revenue for the full year that beat the highest analyst estimate WD-40 (WDFC US) sank 10% in postmarket trading after forecasting earnings per share for 2022 that missed the average analyst estimate Omnicom (OMC US) fell 3% in postmarket trading after third quarter revenue fell short of some analyst estimates Canadian National (CNI US) U.S.-listed shares rose 4.6% in postmarket trading after reporting adjusted earnings per share for the third quarter that beat the average analyst estimate Akero Therapeutics (AKRO US) shares rose as much as 12% in Tuesday extended trading after co. said the U.S Verizon Communication, Abbott Laboratories, Tesla Inc, Kinder Morgan and IBM are set to report their earnings later in the day.  Analysts expect S&P 500 earnings to rise 32.4% from a year earlier, according to Refinitiv data, while also keeping a close eye on growth outlook from companies that are faced with rising costs, labor shortages and supply chain disruptions. “Investor response to the latest set of earnings reports has been a touch hit and miss with supply chain issues dogging both Procter and Gamble and Philip Morris,” wrote Danni Hewson, financial analyst at AJ Bell in a client note. “After six quarters of beating earnings expectations, the focus may now shift to forward guidance for 2022 and away from the likely better than expected results for this quarter,” Clive Emery, a multi asset fund manager at Invesco said in a note. “If CEOs are more conservative, this could dent market pricing – especially after such strong moves in equity markets over the last 18 months.” In Europe, stocks were also little changed as gains in food and beverage stocks offset losses in miners which are some of the region’s steepest decliners as base metals slip after China launched a blitz of measures to tackle the energy crisis. The Stoxx Europe 600 basic resources index drops 2% as of 10:56am in London, worst performance among Stoxx 600 sectors. Here are some of the biggest European movers today: Falck Renewables shares rise as much as 15% after Infrastructure Investments Fund agreed to buy Falck SpA’s 60% stake in the company at EU8.81/share. IIF will launch a mandatory cash tender offer for Falck Renewables’ remaining share capital after the transaction. Husqvarna shares advance as much as 7.7%, the most intraday since May 2020, after reporting 3Q operating profit that Pareto Securities says is “substantially” stronger than expected. Getinge shares jump as much as 8.1% to a record high, leading the OMX Stockholm 30 index, after 3Q earnings which Handelsbanken (hold) says showed “impressive” order intake and operating leverage. Deliveroo shares jump as much as 4.9% to their highest level since Sept. 30, after the U.K. online food delivery firm hikes its growth forecast, which Jefferies says is an “aspiration” for players in the sector. Nestle shares advance as much as 3.9% after the world’s largest food company increased its sales outlook for the year. This along with the lack of a negative margin update “should be enough to reassure,” according to Citigroup. AutoStore Holdings shares jumped as much as 15% in its Oslo trading debut after pricing shares at the top end of the marketed range as an online shopping boom and labor shortages drive up demand for its automated warehouse robots. Kering SA shares tumbled as much as 5.8% after slowing growth at Gucci, its biggest brand, put more pressure on the label’s new collection to deliver a strong holiday season. Antofagasta shares slump as much as 6.3%, most intraday for two months, after the miner guides for lower copper production next year. Citi and Morgan Stanley analysts say 2022 outlook came in below expectations Kuehne + Nagel shares fall as much as 4.7% to their lowest level in five months after working- capital concerns outweighed a 3Q earnings beat for Swiss logistics operator. Earlier in the session, Asian stocks advanced with Hong Kong-listed tech shares extending their rally to a fourth day, buoyed by encouraging U.S. earnings and growing optimism that the strictest of China’s new regulations on tech firms may already be announced.  The MSCI Asia Pacific Index rose as much as 0.7%, powered by Alibaba Group Holding Ltd., which closed up 6.7%. The equity gauge also climbed after Johnson & Johnson raised its profit forecast and Netflix Inc. reported a jump in subscribers. Hong Kong and Australia were among the top-performing markets.  “Asian stocks appear to be taking their cue from the U.S. earnings season and are being bought on the back of the nascent technical confirmation,” said Justin Tang, the head of Asian research at United First Partners. The regional benchmark has gained 5% over the past two weeks as the earnings season progresses and inflation and supply chain worries ease. The measure is close to surpassing its 100-day moving average. Coal stocks listed in mainland China slumped after the nation’s top economic planner said it’s studying ways to intervene in the coal market as the government tries to rein in rising prices and curtail shortfalls. Meanwhile, expectations are falling that China’s central bank will ease monetary policy by cutting the amount of cash banks have to hold in reserve, according to a front-page story from the central bank’s own newspaper. Japanese equities eked out a second day of gains, driven by advances in telecommunications providers. Banks were also among the biggest boosts to the Topix, which rose less than 0.1%. SoftBank Group and Fast Retailing were the largest contributors to a 0.1% gain in the Nikkei 225. U.S. equities extended a rally on Tuesday as solid corporate results helped counter concerns stemming from elevated inflation. In Australia, the S&P/ASX 200 index rose 0.5% to 7,413.70, its highest close since Sept. 16. Banks boosted the index as a subgauge of financials hit a four-year peak. Kogan.com rallied after the company reported gross sales for the first quarter of A$330.5 million vs. A$273 million y/y. Whitehaven plunged after China’s top economic planner said it is studying ways to intervene in the coal market as the government tries to rein in rising prices and curtail shortfalls. In New Zealand, the S&P/NZX 50 index rose 0.4% to 13,114.24 In FX, the Bloomberg dollar index is little changed in London trade following yesterday’s slide and the greenback traded mixed against its Group-of-10 peers. The Treasury curve held on to yesterday’s steepening as the 2-year yield fell a second day, while the 10- year yield was steady after earlier rising to 1.67% for the first time since May. Norway’s krone was the worst G-10 performer as it fell from the European open, after yesterday reaching a four-month high versus the dollar. The pound slipped, reversing modest gains, after the U.K.’s September inflation reading came in lower than expectations; still, it’s well beyond the Bank of England’s target and it’s the last before the rate decision in November. Australia’s led G-10 gains and the sovereign bond curve bear steepened, tracking yesterday’s Treasury moves. The yen fell to weakest level in almost four years as traders added to bets on Fed rate hikes and rising oil prices boosted concern about the Japanese trade deficit. China’s offshore yuan extends its overnight softness after a weaker than expected fixing, with USD/CNH 0.25% higher. In rates, treasuries were narrowly mixed and off lows reached during Asia session after being led higher during European morning by gilts, where short maturities outperform. The 10-year TSY yield touched 1.67%, the highest level since May. The treasury futures rally stalled after a block sale in 10-year contracts, apparently fading strength. Treasury curve pivots around a little-changed 10-year sector, with front-end yields slightly richer on the day, long-end slightly cheaper; 5s30s, steeper by 2bp, extends rebound from Monday’s multimonth low; U.K. 10-year yield is lower by nearly 4bp. U.S. session includes 20-year bond auction.   Bunds and gilts ground higher in quiet trade, with curves having a small steepening bias. Long end USTs cheapen 1bp, gilts richen ~2.5bps at the short end. Peripheral spreads are marginally tighter to Germany. Italy’s green BTP syndication is well received with final books over EU48b. European equities fade a small opening dip to trade little changed. Price action is quiet, V2X drops toward 16 In commodities, crude futures drift lower. WTI drops 0.9% near $82.20, Brent is 1% lower holding above $84. Spot gold slowly extends Asia’s gains, rising $9 to trade near $1,780/oz. Most base metals are under pressure with LME copper and aluminum underperforming peers. In cryptocurrencies, bitcoin stood at $64,068, near its all-time peak of $64,895 as the first U.S. bitcoin futures-based exchange-traded fund began trading on Tuesday Looking at the day ahead now, and data releases include the UK and Canadian CPI readings for September, alongside the German PPI reading for the same month. From central banks, the Fed will be releasing their Beige Book, and we’ll hear from the Fed’s Bostic, Kashkari, Evans, Bullard and Quarles, as well as the ECB’s Villeroy, Elderson, Holzmann and Visco. Finally, today’s earnings releases include Tesla, Verizon Communications, Abbott Laboratories, NextEra Energy and IBM. Market Snapshot S&P 500 futures little changed at 4,509.50 MXAP up 0.4% to 200.82 MXAPJ up 0.5% to 661.79 Nikkei up 0.1% to 29,255.55 Topix little changed at 2,027.67 Hang Seng Index up 1.4% to 26,136.02 Shanghai Composite down 0.2% to 3,587.00 Sensex down 0.6% to 61,343.39 Australia S&P/ASX 200 up 0.5% to 7,413.67 Kospi down 0.5% to 3,013.13 STOXX Europe 600 little changed at 468.88 German 10Y yield rose 8.5 bps to -0.115% Euro little changed at $1.1628 Brent Futures down 0.9% to $84.32/bbl Gold spot up 0.5% to $1,777.33 U.S. Dollar Index little changed at 93.80 Top Overnight News from Bloomberg Business Secretary Kwasi Kwarteng said there won’t be a fresh lockdown of the U.K. economy even as Covid-19 cases tick upwards and Prime Minister Boris Johnson warns of a difficult winter ahead The recovery in France and in Europe “remains very strong,” Bank of France Governor Francois Villeroy de Galhau says on Wednesday during a National Assembly finance committee hearing The yen’s tough year is only going to get tougher as a rising tide of oil prices and global yields threatens to send Japan’s currency past 115 per dollar for the first time since 2017 PBOC Deputy Governor Pan Gongsheng says financial activities by China’s property sector and financial market prices are gradually becoming normal, China Business News reports, citing a speech at a forum in Beijing Sinic Holdings Group Co. became the latest Chinese real estate firm to default as investors wait to see whether China Evergrande Group Inc. will meet overdue interest payments on dollar bonds this week A more detailed look at global markets from Newsquawk Asian equity markets traded mostly positive as the region took its cue from the extended gains on Wall Street where sentiment was underpinned amid encouraging earnings results and with some hopes for a breakthrough on reconciliation as the White House and Democrats continued deliberations. ASX 200 (+0.5%) was led higher by outperformance in tech and with nearly all of its sectors in the green, while there were also gains seen in some of the blue-chip miners and across the big four banks. Nikkei 225 (+0.1%) was lifted by the weaker currency and following better than expected Exports and Imports data, although the index stalled just shy of the 29.5k level, while KOSPI (-0.5%) failed to hold on to opening gains with confirmation from North Korea that it fired a new submarine launched ballistic missile on Tuesday. Hang Seng (+1.4%) and Shanghai Comp. (-0.1%) were varied whereby Hong Kong was boosted by tech and health care with Alibaba leading the advances after it recently unveiled China’s most advanced chip and with its founder Jack Ma travelling abroad for the first time in over a year who is currently on a study tour in Spain. Conversely, the mainland was subdued alongside weakness in domestic commodity prices and despite a firmer liquidity effort by the PBoC, while the central bank provided no surprises in maintaining its benchmark Loan Prime Rates unchanged for the 18th consecutive month and a PBoC-backed paper also noted that expectations for a RRR cut during Q4 have eased. Finally, 10yr JGBs were lower amid spillover selling from global peers and recent curve steepening in US which desks attributed to positioning and upcoming supply, although the downside for JGBs was limited by the presence of the BoJ in the market for nearly JPY 1.4tln of JGBs heavily concentrated in 1yr-10yr maturities. Top Asian News Abu Dhabi’s Top Fund Backs Indonesia’s Largest Internet Firm Singapore Category E COE Price Rises to Highest Since Oct. 2013 China’s Liu He Says Property Market Risks Are Controllable: 21st Rio’s New CEO Starts Turnaround With $7.5 Billion Climate Pledge It’s been a choppy start to the session for European equities (Euro Stoxx 50 flat; Stoxx 600 flat) as opening losses were quickly trimmed after the cash open. Stocks in Europe were unable to benefit from the constructive APAC handover, which itself benefitted from a strong Wall St close as stocks in the US gained for a fifth consecutive session. As it stands, US equity index futures are relatively flat as indices succumb to the choppy price action with events on Capitol Hill not providing much guidance for price action as lawmakers strive to reach a deal on spending by the end of the week. Back to Europe and sectoral performance is somewhat mixed with clear outperformance in the Food & Beverage sector as earnings from Swiss heavyweight Nestle (+3.2%) provides support and prompts upside in the SMI (+0.7%). Nestle reported a beat on 9M revenues and raised FY guidance amid performance of coffee and pet food sales, whilst noting that it increased pricing in a “responsible manner” during Q3. Elsewhere in Switzerland, Roche (-1.0%) also beat on revenues and raised guidance but was unable to benefit from a lift in its share price. To the downside, Basic Resources lag amid softness in some base metals prices as well as a production update from Antofagasta (-4.2%) and a broker downgrade for Rio Tinto (-4.0%). Retail names are also trading on a softer footing after Q3 earnings from Kering (-4.0%) saw the Co. report a decline in consolidated revenues and note that performance for Gucci was hit by a resurgence of COVID-19 cases in Asia. H&M (-2.7%) is also weighing on the sector after a broker downgrade at Morgan Stanley. Elsewhere, Deliveroo (+3%) is seeing upside today after the Co. upgraded Gross Transaction Value (GTV) growth guidance. Additionally, in what has been a tough week for the Co., IAG (-3.6%) is seeing further losses after being downgraded at Peel Hunt. Finally, updates from the likes of materials name Akzo Nobel (supply chain woes) and semiconductor ASML (revenues fell short of expectations) have sent their shares lower by 1.5% and 1.7% respectively. Top European News Weidmann to to Step Down as Bundesbank Chief at End of Year Credit Suisse Dodges Bigger Fine With Debt-Forgiveness Vow Vinci Up After Reporting Higher 9m Sales; Guidance Confirmed Covid Tests Boost Roche Growth Once Again, Lifting Outlook In FX, the Index has recovered from yesterday's decline, which saw a base at 93.500 – matching the 32.8% Fib retracement of the September move, with the Index now eyeing the 21 DMA at 93.917 ahead of 94.000. The main stateside development has been on the fiscal front, where President Biden told Democrat lawmakers he believed they could secure an agreement for a tax and spending proposal valued at USD 1.75tln-1.90tln, whilst US progressive Democratic Rep. Jayapal said she feels even more optimistic after the White House meeting. As Republicans fully opposed Biden's plans, all Democrat votes are needed in the Senate, whilst only a few can be spared in the House. As a reminder, Congress set an Oct 31st deadline for the passage. Negotiations are expected to wrap up as soon as this week. Ahead, the stateside docket is quiet aside from several Fed regulars after the European close. NZD, AUD, CAD - The Kiwi stands as the current outperformer in a continuation of the strength seen as bets mount for a steeper RBNZ OCR hike at the upcoming meeting in light of the CPI metrics earlier this week. The NZD/USD pair also sees some technical tailwinds after failing to convincingly breach 0.7150 to the downside overnight. AUD/USD meanwhile eyes 0.7500 to the upside from a 0.7466 base with some potential support seen as China taps into Aussie coal amid surging demand. USD/CAD dips below 1.2350 but remains within yesterday's 1.2309-76 range ahead of Canadian CPI later – with headline Y/Y expected to tick higher to 4.3% from 4.1%. EUR, GBP - Both flat vs the Dollar and against each other. Sterling saw some mild weakness as UK CPI narrowly missed expectations at 3.1% vs exp. 3.2% for the headline Y/Y, in turn prompting market pricing to ease a touch as the dust settled – with the implied rate for the 4th Nov meeting modestly under 25bps vs 25.71bps heading into the release. That being said, the slight miss is likely not to provide enough ammunition for the BoE doves, whilst the hawks will likely continue to warn the dangers of persistently high inflation – ultimately not settling the debate on the MPC regarding how soon it should raise rates. GBP/USD fell back under its 100 DMA (1.3805) from a 1.3814 high. From a technical standpoint, aside from yesterday's 1.3833 peak, the pair sees the 200 DMA at 1.3846. EUR/USD meanwhile rebounded off its 21 DMA (1.1615) but remains under 1.1669 high, having seen little reaction to the unrevised Y/Y final EZ CPI metrics, although the M/M metrics were revised slightly higher as expected. Elsewhere, it is worth noting that ECB-hawk Weidmann has submitted his resignation to the Bundesbank and the ECB ahead of next week's Governing Council confab. JPY - The JPY is relatively flat intraday, but overnight price action was interesting as USD/JPY drifted to a high of 114.69, with participants recently flagging barriers just ahead of 115.00. Some have also cited Gatobi demand, where accounts In commodities, WTI and Brent Dec futures are marginally softer on the day in a continuation of the downward trajectory during US hours yesterday. WTI has dipped below USD 82/bbl (vs high USD 82.60/bbl) while its Brent counterpart hovers around USD 84.50/bbl (vs high USD 85.20/bbl). The subdued prices come amid a larger-than-expected build in Private inventories, although the internals were bullish, with the DoEs headline expected to print a build of some 1.8mln bbls. Elsewhere, the Iraqi energy minister has been vocal throughout the session, saying he expects oil prices to reach USD 100/bbl in Q1 and Q2 2022 – in contrast to comments he made last week which suggested that oil price is unlikely to increase further; whilst he also recently noted oil prices between USD 75-80/bbl is a fair price for producers and consumers. The Iraqi minister today said it is preferable for long-term oil prices between USD 75-85/bbl, and OPEC+ is now discussing ways to balance oil prices but no decision has yet been made to add more production above the agreed levels. Elsewhere, following India’s call on OPEC yesterday to lower prices, India’s HPCL executive says current oil prices are high for India; USD 60-70/bbl is comfortable and high oil prices may impact demand growth. Over to metals spot gold resides around its 50 DMA at USD 1,778/oz while spot silver eyes USD 24/bbl to the upside. Overnight, China’s coal intervention saw prices slump – with thermal coal futures hitting limit down and coke futures opening lower by 9%. LME copper prices are also softer, with the contract briefly dipping under USD 10k/t overnight. US Event Calendar 7am: Oct. MBA Mortgage Applications, prior 0.2% Oct. 20-Oct. 22: Sept. Monthly Budget Statement, est. -$59b, prior -$124.6b 2pm: U.S. Federal Reserve Releases Beige Book DB's Jim Reid concludes the overnight wrap Whilst inflation concerns are still very much bubbling under the surface of markets, risk appetite strengthened further yesterday thanks in no small part to decent earnings reports. There are no signs of widespread erosions of margins at the moment. Perhaps there is so much money sloshing about that for now prices are broadly being passed on. We’ll get a better picture of this as the earnings season develops. Indeed, the selloff from September feels like an increasingly distant memory now, with the S&P 500 (+0.74%) advancing for a 5th consecutive session to leave the index just 0.38% beneath all-time closing high from early September. Earlier Europe’s STOXX 600 (+0.33%) also moved higher. In the US, earnings supported sentiment yet again. 10 of the 11 companies reporting during New York trading beating estimates, whilst all 4 of the after-hours reporting beat as well. That brings the total number of reporters for the season thus far to 57, 50 of whom have beat earnings expectations. Most sectors were higher yesterday, with health care (+1.31%), utilities (+1.26%), and energy (+1.14%) leading the way; only consumer discretionary (-0.29%) lagged. We even saw the FANG+ index (+1.56%) of megacap tech stocks hit a new record ahead of Tesla’s earnings today, whilst the NASDAQ (+0.72%) was also up for a 5th consecutive session. Equities may be brushing off the inflation stories for now but they are hardly going away, as yesterday saw oil prices climb to fresh multi-year highs. Brent Crude was up +0.89% to close above $85/bbl for the first time since 2018, whilst WTI (+0.63%) similarly advanced to close just shy of $83/bbl, a mark not reached since 2014. And investor expectations of future inflation are still moving higher in many places, with the Euro Area 5y5y forward inflation swap up +4.0bps to 1.90%, also the highest level since 2014. Against this backdrop, sovereign bonds continued to selloff on both sides of the Atlantic, even though investors slightly pared back some of their Monday bets on near-term rate hikes by the Fed and the BoE. 10yr yields moved higher across the board, with those on Treasuries up +3.7bps to 1.64%, their highest closing level since early June, just as those on bunds (+4.3bps), OATs (+4.3bps) and BTPs (+4.8bps) similarly moved higher. It was a more divergent picture at the 2yr horizon however, with those on 2yr Treasuries down -3.0bps after five days of increases, whereas those on gilts were up +1.0bps. Watch out for UK inflation numbers shortly after this hits your inboxes although this may be the calm (due to base effects) before the inflationary storm in the coming months. From central banks, we had the latest global hike yesterday in Hungary, where the base rate was raised by 15bps to 1.80%, in line with consensus expectations, with Deputy Governor Virag saying afterwards that this monetary tightening was set to carry on into next year. However, we did get some pushback to recent market pricing from ECB chief economist Lane, who said that “If you look at market pricing of the forward interest rate curve, I think it’s challenging to reconcile some of the market views with our pretty clear rate forward guidance”. This didn’t really hit fixed income but it did see the euro pare back some of its gains against the US dollar yesterday, ending the session up just +0.08%, down from an intraday high of +0.51%. Asian equities have followed those moves higher overnight, with the Hang Seng (+1.71%), Nikkei (+0.27%), CSI (+0.08%) and Shanghai Composite (+0.03%) all trading higher, although the KOSPI (-0.11%) has lost ground. China’s property market continues to be in focus after home prices fell -0.08% in September, which is their first monthly decline since April 2015. Separately, Chinese coal futures (-8.00%) have snapped a run of 8 consecutive gains this morning after the country’s National Development and Reform Commission said that it wanted to ensure a rise in coal output to 12m tons per day, and that they would also be looking at other measures to intervene in the market. Outside of Asia, equity futures are pointing slightly lower, with those on the S&P 500 down -0.03%. The pandemic hasn’t been a major influence on markets in recent weeks but there may be some initial signs that the global decline in cases that we’ve seen since late August has stopped. Looking at data from John Hopkins University, the rolling weekly change in confirmed cases has ticked up on each of Saturday, Sunday and Monday. And although we shouldn’t over-interpret a few days’ numbers, we had already seen the rate of decline slow for 3 successive weeks now, which was probably to be expected given the time of year. We’re certainly coming up to a key period where a more indoor northern hemisphere life will combine with waning vaccine effectiveness to test the resolve of the authorities to maintain relatively restriction-free economies. Boosters may be key here. Once we get past this winter things may get easier particularly with new medicines in the pipeline like the viral pill from Merck that trials showed reduced hospitalisations and deaths by around half. On the data front, US housing starts fell to an annualised rate of 1.555m in September (vs. 1.615m expected), whilst building permits also fell to an annualised rate of 1.589m (vs. 1.680m expected). The previous month’s numbers were also revised down for both. Finally in the US, after an acrimonious weekend, Senators Sanders and Manchin expressed optimism they could agree on a framework for the next reconciliation bill by the end of the week in bilateral negotiations, which is set to contain a number of President Biden’s key legislative goals. To the day ahead now, and data releases include the UK and Canadian CPI readings for September, alongside the German PPI reading for the same month. From central banks, the Fed will be releasing their Beige Book, and we’ll hear from the Fed’s Bostic, Kashkari, Evans, Bullard and Quarles, as well as the ECB’s Villeroy, Elderson, Holzmann and Visco. Finally, today’s earnings releases include Tesla, Verizon Communications, Abbott Laboratories, NextEra Energy and IBM. Tyler Durden Wed, 10/20/2021 - 07:59.....»»

Category: smallbizSource: nytOct 20th, 2021

Airline Stock Roundup: DAL"s Environmentally-Friendly Deal, RYAAY"s Traffic & More

Delta (DAL) inks a deal worth more than $ 1 billion to reduce carbon emissions. Ryanair's (RYAAY) September traffic surges in excess of 100%. In the past week, Delta Air Lines DAL inked a deal with Aemetis (AMTX) for 250 million gallons of blended fuel containing sustainable aviation fuel, which is to be delivered over a period of 10 years. The estimated value of the agreement with the renewable fuels company is more than $1 billion. The deal is in line with the objective to reduce carbon emissions.Alaska Air Group’s ALK subsidiary Alaska Airlines dominated headlines by virtue of its codeshare agreement with the Spanish carrier Iberia Airlines, which expanded its network. European carrier Ryanair Holdings’ RYAAY September traffic surged more than 100% year over year to 1.6 million on the back of improving air-travel demand in Europe.Recap of the Past Week’s Most Important Stories1. Per a Reuters report, Delta’s management said that the airline’s ticket sales stabilized and began to improve. This induces a drop in the bookings due to a spike in coronavirus cases induced by the Delta variant. The carrier now expects third-quarter 2021 revenues to fall within its initial guidance of a decline of 30-35% from the comparable period’s reading in 2019, per the report. Due to rising coronavirus cases, Delta previously estimated total adjusted revenues at the lower end of the guided range. Per the report, chief executive officer ED Bastian told reporters on the sidelines of a meeting of the airlines group IATA that "For Delta, they bottomed out in the later part of August and the first part of September.” Bastian further added, "Business traffic is growing back in the U.S." Business-travel demand persists to be rather slower in recovery than leisure-travel demand.Delta carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.2. Per Alaska Airlines’ agreement with Iberia Airlines, passengers of the Spanish carrier can book travel and connect to several routes across Alaska Airlines’ network and vice versa, beginning Oct 7. Alaska Airlines customers will have easy access to international destinations in Europe, given Iberia’s existing nonstop service between Los Angeles and Madrid, and a seasonal service between San Francisco, CA and Barcelona. According to the deal, Alaska Airlines’ Mileage Plan members can earn miles on the Iberia flights. The agreement also offers reciprocal elite benefits, such as preferred seat selection; priority check-in, security clearance and boarding; lounge access and an extra baggage allowance. Iberia Airlines is a member of the oneworld alliance.3. On the back of the improving traffic scenario, Ryanair’s September load factor (percentage of seats filled with passengers) increased to 81% from 71% in September 2020. The airline operated more than 69,500 flights last month. Despite improving from the pandemic-triggered lows, Ryanair’s traffic continues to be significantly below the pre-pandemic levels. The airline’s September 2021 traffic declined 24.8% from the comparable period’s tally in 2019.Ryanair’s traffic in October is also expected to be high (exceeding 10.5 million) per CEO Michael O'Leary, which was mentioned in the previous week’s write up.4. Southwest Airlines LUV mandated COVID-19 vaccines for all its employees by Dec 8, 2021, in compliance with President Joe Biden’s vaccination directive for federal contractors. The Dallas-based carrier announced that its contracts with the U.S. government require the company to fully comply with the federal vaccination directive. The company informed that its employees need to be either fully vaccinated against COVID-19 or granted an exemption on religious, medical or disability grounds to continue their employment with the carrier.5. September traffic at Gol Linhas GOL moved up marginally on a month-over-month basis. In the same time frame, capacity measured in available seat kilometers rose 2.1%. Since traffic surge was less than capacity expansion, load factor dipped 1.1 percentage points (p.p) from August levels to 79.1%. On a year-over-year basis, traffic surged 36.8% in September. In the same time frame, capacity expanded 38.1%. Since traffic surge was less than capacity growth, load factor decreased 0.8 p.p to 79.1% from the year-ago period’s levels. Gol Linhas’ total monthly departures surged 51.7% and seats rose 51.1%. Gol Linhas transported 1.6 million passengers in September (up 47.8% on a year-over-year basis). The Latin America-based airline did not operate international flights during September.PerformanceThe following table shows the price movement of the major airline players over the past week and during the past six months.Image Source: Zacks Investment Research The table above shows that all airline stocks have traded in the green over the past week although the gains were muted in nature. The NYSE ARCA Airline Index has inched up 1.7% to $98.85 in the period. Over the course of the past six months, the NYSE ARCA Airline Index has depreciated 9%. What’s Next in the Airline Space?Investors will await the third-quarter 2021 earnings report of Delta Air Lines. The airline is scheduled to release September-quarter results on Oct 13. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Southwest Airlines Co. (LUV): Free Stock Analysis Report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 6th, 2021

Futures Rebound As Yields Drop

Futures Rebound As Yields Drop U.S. index futures rebounded on Tuesday from Monday's stagflation-fear driven rout as an increase in Treasury yields abated and the greenback dropped from a 10 month high while Brent crude dropped from a 3 year high of $80/barrel after API showed a surprise stockpile build across all products. One day after one of Wall Street’s worst selloff of this year which saw the S&P's biggest one-day drop since May, dip buyers made yet another another triumphal return to global markets, with Nasdaq 100 futures climbing 130 points or 0.9% after the tech-heavy index tumbled the most since March on Tuesday as U.S. Treasury yields rose on tapering and stagflationconcerns. S&P 500 futures rose 28 points or 0.6% after the underlying gauge also slumped amid mounting concern over the debt-ceiling impasse in Washington. A key catalyst for today's easing in financial conditions was the 10-year yield shedding four basis points and the five-year rate falling below 1%. In the past five sessions, the 10Y yield rose by a whopping 25 basis point, a fast enough move to trigger VaR shocks across risk parity investors. "We think (10-year treasury yields) are likely to around 1.5% to 1.75%, so they obviously still have room to go," said Daniel Lam, senior cross-asset strategist at Standard Chartered, who added that the rise in yields was driven by the fact that the United States was almost definitely going to start tapering its massive asset purchases by the end of this year, and that this would drive a shift from growth stocks into value names. Shares of FAAMG gigatechs rose between 1% and 1.3% in premarket trading as the surge in yields eased. Oil firms and supermajors like Exxon and Chevron dipped as a rally in crude prices petered out. The S&P energy sector has gained 3.9% so far this week and is on track for its best monthly performance since February. Among stocks, Boeing rose 2.5% after it said 737 MAX test flight for China’s aviation regulator last month was successful and the planemaker hopes a two-year grounding will be lifted this year. Cybersecurity firm Fortinet Inc. led premarket gains among S&P 500 Index companies. Here are some of the other big movers this morning: Micron (MU US) shares down more than 3% in U.S. premarket trading after the chipmaker’s forecast came in well below analyst expectations. Co. was hurt by slowing demand from personal-computer makers Lucid (LCID US) shares rise 9.7% in U.S. premarket trading after the electric-vehicle company said it has started production on its debut consumer car EQT Corp. (EQT US) shares fell 4.8% in Tuesday postmarket trading after co. reports offering by certain shareholders who received shares as a part of its acquisition of Alta Resources Development’s upstream and midstream units PTK Acquisition (PTK US) rises in U.S. premarket trading after the blank-check company’s shareholders approved its combination with the Israel-based semiconductor company Valens Cal-Maine (CALM US) shares rose 4.4% postmarket Tuesday after it reported net sales for the first quarter that beat the average analyst estimate as well as a narrower-than-estimated loss Sherwin-Williams (SHW US) dropped 3.5% in Tuesday postmarket trading after its forecasted adjusted earnings per share for the third quarter missed the average analyst estimate Boeing (BA US) and Spirit Aerosystems (SPR US) climb as much as 3% after being upgraded to outperform by Bernstein on travel finally heading to inflection point The S&P 500 is set to break its seven-month winning streak as fears about non-transitory inflation, China Evergrande’s default, potential higher corporate taxes and a sooner-than expected tapering of monetary support by the Federal Reserve clouded investor sentiment in what is usually a seasonally weak month. Meanwhile, Senate Democrats are seeking a vote Wednesday on a stopgap funding bill to avert a government shutdown, but without a provision to increase the federal debt limit. On Tuesday, Jamie Dimon said a U.S. default would be “potentially catastrophic” event, in other words yet another multibillion bailout for his bank. “Many things are in flux: the pandemic is not over, the supply chain bottlenecks we are seeing are affecting all sorts of prices and we’ll need to see how it plays out because the results are not clear in terms of inflation,” Belita Ong, Dalton Investments chairman, said on Bloomberg Television. Europe’s Stoxx 600 gauge rebounded from a two-month low, rising 0.9% and reversing half of yesterday's losses. Semiconductor-equipment company ASM International posted the biggest increase on the index amid positive comments by analysts on its growth outlook. A sharp rebound during the European session marked a turnaround from the downbeat Asian session, when equities extended losses amid concerns over stagflation and China Evergrande Group’s debt crisis. Sentiment improved as a steady flow of buyers emerged in the Treasury market, ranging from foreign and domestic funds to leveraged accounts.  Here are some of the biggest European movers today: Academedia shares rise as much as 6.9% in Stockholm, the most since June 1, after the company said the number of participants for its higher vocational education has increased 25% y/y. ASM International jumps as much as 7.3%, rebounding from a three-day sell-off, boosted by supportive analyst comments and easing bond yields. GEA Group gains as much as 4.7% after the company published new financial targets through 2026, which Citigroup says are above analysts’ consensus and an encouraging signal. DSV bounces as much as 4.4% as JPMorgan upgrades to overweight, saying the recent pullback in the shares presents an opportunity. Genova Property Group falls as much as 10% in Stockholm trading after the real estate services company placed shares at a discount to the last close. ITM Power drops as much as 6.4% after JPMorgan downgrades to neutral from overweight on relative valuation, with a more mixed near-term outlook making risk/reward seem less compelling. Royal Mail slides as much as 6.2% after UBS cuts its rating to sell from buy, expecting U.K. labor shortages and wage inflation pressures to hurt the parcel service company’s profit margins. Earlier in the session, Asian equities slumped in delayed response to the US rout. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.43% with Australia off 1.5%, and South Korea falling 2.06%. The Hong Kong benchmark shed 1.2% and Chinese blue chips were 1.1% lower. Japan's Nikkei shed 2.35% hurt by the general mood as the country's ruling party votes for a new leader who will almost certainly become the next prime minister ahead of a general election due in weeks.  Also on traders' minds was cash-strapped China Evergrande whose shares rose as much as 12% after it said it plans to sell a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Bank. Evergrande is due to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond, having missed a similar payment last week, but it said in the stock exchange filing the proceeds of the sale should be used to settle its financial liabilities due to Shengjing Bank. Chinese real estate company Fantasia Holdings Group is struggling to avoid falling deeper into distress, just as the crisis at China Evergrande flags broader risks to other heavily indebted developers. In Japan, the country's PGIF, or Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan- denominated Chinese sovereign debt in its portfolio. In rates, as noted above, Treasuries lead global bonds higher, paring large portion of Tuesday’s losses with gains led by intermediates out to long-end of the curve. Treasury yields richer by up to 4bp across long-end of the curve with 10s at around 1.50%, outperforming bunds and gilts both by 2bp; front-end of the curve just marginally richer, flattening 2s10s spread by 3.2bp with 5s30s tighter by 0.5bp. Futures volumes remain elevated amid evidence of dip buyers emerging Tuesday and continuing over Wednesday’s Asia hours. Session highlights include a number of Fed speakers, including Chair Powell.     In FX, the Bloomberg Dollar Spot Index was little changed after earlier advancing, and the dollar slipped versus most of its Group-of-10 peers. The yen was the best G-10 performer as it whipsawed after earlier dropping to 111.68 per dollar, its weakest level since March 2020. The Australian dollar also advanced amid optimism over easing of Covid-related restrictions while the New Zealand dollar was the worst performer amid rising infections. The euro dropped to an 11-month low while the pound touched its weakest level since January against the greenback amid a bout of dollar strength as the London session kicked off. Confidence in the euro-area economy unexpectedly rose in September as consumers turned more optimistic about the outlook and construction companies saw employment prospects improve. The yen climbed from an 18-month low as a decline in stocks around the world helps boost demand for the currency as a haven. Japanese bonds also gained. In commodities, oil prices dropped after touching a near three-year high the day before. Brent crude fell 0.83% to $78.25 per barrel after topping $80 yesterday; WTI dipped 1.09% to $74.47 a barrel. Gold edged higher with the spot price at $1,735.6 an ounce, up 0.1% from the seven-week low hit the day before as higher yields hurt demand for the non interest bearing asset. Base metals are under pressure with LME aluminum and copper lagging. Looking at the day ahead, the biggest highlight will be a policy panel at the ECB forum on central banking featuring ECB President Lagarde, Fed Chair Powell, BoJ Governor Kuroda and BoE Governor Bailey. Other central bank speakers include ECB Vice President de Guindos, the ECB’s Centeno, Stournaras, Makhlouf, Elderson and Lane, as well as the Fed’s Harker, Daly and Bostic. Meanwhile, data releases include UK mortgage approvals for August, the final Euro Area consumer confidence reading for September, and US pending home sales for August. Market Snapshot S&P 500 futures up 0.7% to 4,371.75 STOXX Europe 600 up 0.8% to 455.97 MXAP down 1.2% to 197.38 MXAPJ down 0.7% to 635.17 Nikkei down 2.1% to 29,544.29 Topix down 2.1% to 2,038.29 Hang Seng Index up 0.7% to 24,663.50 Shanghai Composite down 1.8% to 3,536.29 Sensex down 0.4% to 59,445.57 Australia S&P/ASX 200 down 1.1% to 7,196.71 Kospi down 1.2% to 3,060.27 Brent Futures down 0.7% to $78.53/bbl Gold spot up 0.4% to $1,740.79 U.S. Dollar Index little changed at 93.81 German 10Y yield fell 1.1 bps to -0.210% Euro down 0.2% to $1.1664 Top Overnight News from Bloomberg China’s central bank governor said quantitative easing implemented by global peers can be damaging over the long term and vowed to keep policy normal for as long as possible China’s central bank injected liquidity into the financial system for a ninth day in the longest run since December as it sought to meet a surge in seasonal demand for cash China stepped in to buy a stake in a struggling regional bank from China Evergrande Group as it seeks to limit contagion in the financial sector from the embattled property developer The Chinese government is considering raising power prices for industrial consumers to help ease a growing supply crunch Japan’s Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan-denominated Chinese sovereign debt in its portfolio. The decision comes as FTSE Russell is set to start adding Chinese debt to its benchmark global bond index, which the GPIF follows, from October Fumio Kishida is set to become Japan’s prime minister, after the ex-foreign minister overcame popular reformer Taro Kono to win leadership of the country’s ruling party, leaving stock traders feeling optimistic ECB Governing Council member Gabriel Makhlouf said policy makers must be ready to respond to persistently higher inflation that could result from lasting supply bottlenecks Inflation accelerated in Spain to the fastest pace in 13 years, evidence of how surging energy costs are feeding through to citizens around the euro-zone economy Sterling-debt sales by corporates exceeded 2020’s annual tally as borrowers rushed to secure ultra-cheap funding costs while they still can. Offerings will top 70 billion pounds ($95 billion) through Wednesday, beating last year’s total sales by at least 600 million pounds, according to data compiled by Bloomberg A more detailed look at global markets courtesy of Newsquawk Asian equity markets were pressured on spillover selling from global peers which saw the S&P 500 suffer its worst day since May after tech losses were magnified as yields climbed and with sentiment also dampened by weak data in the form of US Consumer Confidence and Richmond Fed indexes. ASX 200 (-1.1%) was heavily pressured by tech and with mining-related stocks dragged lower by weakness in underlying commodity prices, with the mood also clouded by reports that Queensland is on alert for a potential lockdown and that Australia will wind down emergency pandemic support payments within weeks. Nikkei 225 (-2.1%) underperformed amid the broad sell-off and as participants awaited the outcome of the LDP leadership vote which saw no candidate win a majority (as expected), triggering a runoff between vaccine minister Kono and former foreign minister Kishida to face off in a second round vote in which Kishida was named the new PM. KOSPI (-1.2%) was heavily pressured by the tech woes and after North Korea confirmed that yesterday’s launch was a new type of hypersonic missile. Hang Seng (+0.7%) and Shanghai Comp. (-1.8%) conformed to the broad risk aversion with tech stocks hit in Hong Kong, although the losses were milder compared to regional peers with Evergrande shares boosted after it sold CNY 10bln of shares in Shengjing Bank that will be used to pay the developer’s debt owed to Shengjing Bank, which is the Co.’s first asset sale amid the current collapse concerns although it still faces another USD 45.2mln in interest payments due today. In addition, the PBoC continued with its liquidity efforts and there was also the absence of Stock Connect flows to Hong Kong with Southbound trading already closed through to the National Holidays. Finally, 10yr JGBs were slightly higher as risk assets took a hit from the tech sell-off and with T-notes finding some reprieve overnight. Furthermore, the BoJ were also in the market for nearly JPY 1tln of JGBs mostly in 3yr-10yr maturities and there were notable comments from Japan’s GPIF that it is to avoid investments in Chinese government bonds due to concerns over China market. Top Asian News L&T Is Said in Talks to Merge Power Unit With Sembcorp India Prosecutors Seek Two Years Jail for Ghosn’s Alleged Accomplice Japan to Start Process to Sell $8.5 Billion Postal Stake Gold Climbs From Seven Week Low as Yields Retreat, Dollar Pauses Bourses in Europe are attempting to claw back some ground lost in the prior session’s global stocks rout (Euro Stoxx 50 +0.9%; Stoxx 600 +0.8%). The upside momentum seen at the cash open has somewhat stabilised amid a lack of news flow and with a busy agenda ahead from a central bank standpoint, with traders also cognizant of potential month-end influence. US equity futures have also been gradually drifting higher since the reopen of electronic trade. As things stand, the NQ (+1.0%) narrowly outperforms the ES (+0.7%), RTY (+0.8%) and YM (+0.6%) following the tech tumble in the prior session, and with yields easing off best levels. Back to European cash, major regional bourses see broad-based gains with no standout performers. Sectors are mostly in the green; Oil & Gas resides at the foot of the bunch as crude prices drift lower and following two consecutive sessions of outperformance. On the flip side, Tech resides among today’s winners in what is seemingly a reversal of yesterday’s sector configuration, although ASML (+1.3%) may be offering some tailwinds after upping its long-term outlook whilst suggesting ASML and its supply chain partners are actively adding and improving capacity to meet this future customer demand – potentially alleviating some concerns in the Auto sector which is outperforming at the time of writing. Retail also stands strong as Next (+3.0%) upped its guidance whilst suggesting the longer-term outlook for the Co. looks more positive than it had been for many years. In terms of individual movers, Unilever (+1.0%) is underpinned by source reports that the Co. has compiled a shortlist of at least four bidders for its PG Tips and Lipton Iced Tea brands for some GBP 4bln. HeidelbergCement (-1.4%) is pressured after acquiring a 45% stake in the software firm Command Alko. Elsewhere, Morrisons (+1.3%) is on the front foot as the takeover of the Co. is to be decided via an auction process as touted earlier in the month. Top European News Makhlouf Says ECB Must Be Ready to Act If Inflation Entrenched ASML to Ride Decade-Long Sales Boom After Chip Supply Crunch Spanish Inflation at 13-Year High in Foretaste of Regional Spike U.K. Mortgage Approvals Fall to 74,453 in Aug. Vs. Est. 73,000 In FX, the yield and risk backdrop is not as constructive for the Dollar directly, but the index has posted another marginal new y-t-d best, at 93.891 compared to 93.805 yesterday with ongoing bullish momentum and the bulk of the US Treasury curve remaining above key or psychological levels, in contrast to other global bond benchmarks. Hence, the Buck is still elevated and on an upward trajectory approaching month end on Thursday, aside from the fact that hedge rebalancing flows are moderately positive and stronger vs the Yen. Indeed, the Euro is the latest domino to fall and slip to a fresh 2021 low around 1.1656, not far from big barriers at 1.1650 and further away from decent option expiry interest at the 1.1700 strike (1 bn), and it may only be a matter of time before Sterling succumbs to the same fate. Cable is currently hovering precariously above 1.3500 and shy of the January 18 base (1.3520) that formed the last pillar of support for the Pound before the trough set a week earlier (circa 1.3451), and ostensibly supportive UK data in the form of BoE mortgage lending and approvals has not provided much relief. AUD/JPY - A rather odd couple in many ways given their contrasting characteristics as a high beta or activity currency vs traditional safe haven, but both are benefiting from an element of corrective trade, consolidation and short covering relative to their US counterpart. Aud/Usd is clinging to 0.7250 in advance of Aussie building approvals on Thursday and Usd/Jpy is retracing from its new 111.68 y-t-d pinnacle amidst the less rampant yield environment and weighing up the implications of ex-Foreign Minister Kishida’s run-off win in the LDP leadership contest and the PM-in-waiting’s pledge to put together a Yen tens of trillion COVID-19 stimulus package before year end. CHF/CAD/NZD - All relatively confined vs their US rival, as the Franc continues to fend off assaults on the 0.9300 level with some impetus from a significant improvement in Swiss investor sentiment, while the Loonie is striving to keep its head above 1.2700 ahead of Canadian ppi data and absent the recent prop of galloping oil prices with WTI back under Usd 75/brl from Usd 76.67 at best on Tuesday. Elsewhere, the Kiwi is pivoting 0.6950 pre-NZ building consents and still being buffeted by strong Aud/Nzd headwinds. SCANDI/EM - Not much purchase for the Sek via upgrades to Swedish GDP and inflation forecast upgrades by NIER as sentiment indices slipped across the board, but some respite for the Try given cheaper crude and an uptick in Turkish economic confidence. Conversely, the Cnh and Cny have not received their customary fillip even though the PBoC added liquidity for the ninth day in a row overnight and China’s currency regulator has tightened control over interbank trade and asked market makers to narrow the bid/ask spread, according to sources. In commodities, WTI and Brent front month futures have been trimming overnight losses in early European trade. Losses overnight were seemingly a function of profit-taking alongside the bearish Private Inventory Report – which showed a surprise build in weekly crude stocks of 4.1mln bbls vs exp. -1.7mln bbls, whilst the headline DoE looks for a draw of 1.652mln bbls. Further, there have been growing calls for OPEC+ to further open the taps beyond the monthly 400k BPD hike, with details also light on the White House’s deliberations with OPEC ahead of the decision-making meeting next week. Despite these calls, it’s worth bearing in mind that OPEC’s latest MOMR stated, “increased risk of COVID-19 cases primarily fuelled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates. As a result, 2H21 oil demand has been adjusted slightly lower, partially delaying the oil demand recovery into 1H22.” Brent Dec dipped back under USD 78/bbl (vs low 763.77/bbl) after testing USD 80/bbl yesterday, whilst WTI Nov lost the USD 75/bbl handle (vs low USD 73.37/bbl). Over to metals, spot gold and silver have seen somewhat of divergence as real yields negate some effects of the new YTD peak printed by the Dollar index, whilst spot silver succumbs to the Buck. Over to base metals, LME copper trade is lacklustre as the firmer dollar weighs on the red metal. Shanghai stainless steel meanwhile extended on losses, notching the fourth session of overnight losses with desks citing dampened demand from the Chinese power crunch. US Event Calendar 7am: Sept. MBA Mortgage Applications, prior 4.9% 10am: Aug. Pending Home Sales YoY, est. -13.8%, prior -9.5% 10am: Aug. Pending Home Sales (MoM), est. 1.3%, prior -1.8% Central Bank speakers 9am: Fed’s Harker Discusses Economic Outlook 11:45am: Powell Takes Part in ECB Forum on Central Banking 11:45am: Bailey, Kuroda, Lagarde, Powell on ECB Forum Panel 1pm: Fed’s Daly Gives Speech to UCLA 2pm: Fed’s Bostic Gives Remarks at Chicago Fed Payments DB's Jim Reid concludes the overnight wrap The main story of the last 24 hours has been a big enough rise in yields to cause a major risk-off move, with 10yr Treasury yields up another +5.0bps to 1.537% yesterday, and this morning only seeing a slight -0.3bps pullback to 1.534%. At the intraday peak yesterday, they did climb as high as 1.565% earlier in the session, but this accelerated the risk off and sent yields somewhat lower intraday as a result, which impacted the European bond closes as we’ll see below. All told, US yields closed at their highest level in 3 months and up nearly +24bps since last Wednesday’s close, shortly after the FOMC meeting. That’s the largest 4-day jump in US yields since March 2020, at the outset of the pandemic and shortly after the Fed announced their latest round of QE. This all led to the worst day for the S&P 500 (-2.04%) since mid-May and the worst for the NASDAQ (-2.83%) since mid-March. The S&P 500 is down -4.06% from the highs now – trading just below the Evergrande (remember that?) lows from last week. So the index still has not seen a -5% sell-off on a closing basis for 228 days and counting. If we make it to Halloween it will be a full calendar year. Regardless, the S&P and STOXX 600 remain on track for their worst monthly performances so far this year. Those moves have continued this morning in Asia, where the KOSPI (-2.05%), Nikkei (-1.64%), Hang Seng (-0.60%), and the Shanghai Comp (-1.79%) are all trading lower. The power crisis in China is further dampening sentiment there, and this morning Bloomberg have reported that the government are considering raising prices for industrial users to ease the shortage. Separately, we heard that Evergrande would be selling its stake in a regional bank at 10 billion yuan ($1.55bn) as a step to resolve its debt crisis, and Fitch Ratings also downgraded Evergrande overnight from CC to C. However, US equity futures are pointing to some stabilisation later, with those on the S&P 500 up +0.49%. Running through yesterday’s moves in more depth, 23 of the 24 industry groups in the S&P 500 fell back yesterday with the lone exception being energy stocks (+0.46%), which gained despite the late pullback in oil prices. In fact only 53 S&P constituents gained on the day. The largest losses were in high-growth sectors like semiconductors (-3.82%), media (-3.08%) and software (-3.05%), whilst the FANG+ index was down -2.52% as 9 of the 10 index members lost ground – Alibaba’s +1.47% gain was the sole exception. Over in Europe it was much the same story, with the STOXX 600 (-2.18%) falling to its worst daily performance since July as bourses across the continent fell back, including the German DAX (-2.09%) and France’s CAC 40 (-2.17%). Back to bonds and the rise in 10yr Treasury yields yesterday was primarily led by higher real rates (+2.1bps), which hit a 3-month high of their own, whilst rising inflation breakevens (+2.3bps) also offered support. In turn, higher yields supported the US dollar, which strengthened +0.41% to its highest level since November last year, though precious metals including gold (-0.92%) fell back as investors had less need for the zero-interest safe haven. Over in Europe the sell-off was more muted as bonds rallied into the close before selling off again after. Yields on 10yr bunds (+2.4bps), OATs (+3.0bps) and BTPs (+6.1bps) all moved higher but were well off the peaks for the day. 10yr Gilts closed up +4.2bps but that was -6.6bps off the high print. And staying with the UK, sterling (-1.18%) saw its worst day this year and fell to its lowest level since January 11 as sentiment has increasingly been knocked by the optics of the fuel crisis here. Given this and the hawkish BoE last week many are now talking up the stagflation risk. On the petrol crisis it’s hard to know how much is real and how much is like an old fashion bank run fuelled mostly by wild speculation. Regardless it doesn’t look good to investors for now. All this came against the backdrop of yet further milestones on inflation expectations, as the German 10yr breakeven hit a fresh 8-year high of 1.690%, just as the Euro Area 5y5y forward inflation swap hit a 4-year high of its own at 1.789%. Meanwhile 10yr UK breakevens pulled back some, finishing -6bps lower on the day after initially spiking up nearly +5bps in the opening hours of trading. This highlights the uncertainty as to the implications of a more hawkish BoE last week. As we’ve discussed over recent days, part of the renewed concerns about inflation have come from a fresh spike in energy prices, and yesterday saw Brent crude move above $80/bbl in regards intraday trading for the first time since 2018. Furthermore, natural gas prices continued to hit fresh highs yesterday, with European futures up +2.69% to a fresh high of €78.56 megawatt-hours. That said, oil prices did pare back their gains later in the session as the equity selloff got underway, with Brent crude (-0.55%) and WTI (-0.21%) both closing lower on the day, and this morning they’ve fallen a further -1.49% and -1.54% respectively. Yesterday, Fed Chair Powell and his predecessor Treasury Secretary Yellen appeared jointly before the Senate Banking Committee. The most notable moment came from Senator Warren who criticized Chair Powell for his track record on regulation, saying he was a “dangerous man” and then saying on the record that the she would not support his re-nomination ahead of his term ending in February. Many senators, mostly Republicans, voiced concerns over inflationary pressures, but both Yellen and Powell maintained their stances that the current high level of inflation was temporary and due to the supply chain issues from Covid-19 that they expect to be resolved in time. Lastly, both Powell and Yellen warned the Senators that a potential US default would be “catastrophic” and Treasury Secretary Yellen said in a letter to Congress that the Treasury Department now estimated the US would hit the debt ceiling on October 18. So we’ve got an important few days and weeks coming up. Last night, Senate Majority Leader Schumer tried to pass a vote that would drop the threshold from 60 to a simple majority to suspend the debt limit, but GOP Senator Cruz amongst others blocked this and went forward with forcing Democrats to use the budget reconciliation measure instead. Some Democrats have pushed back saying that the budget process would take too long and increases the risk of a default. While this is all going on we’re now less than 48 hours from a US government shutdown as it stands, though there seems to be an agreement on the funding measure if it were to be raised as clean bill without the debt ceiling provisions. There is also other business in Washington due tomorrow, with the bipartisan infrastructure bill with $550bn of new spending up for a vote. While the funding bill is the higher short-term priority, there was news yesterday that progressive members of the House of Representatives may try and block the infrastructure bill if it comes up ahead of the budget reconciliation vote. That was according to Congressional Progressive Caucus Chair Jayapal who said “Progressives will vote for both bills, but a majority of our members will only vote for the infrastructure bill after the President’s visionary Build Back Better Act passes.” The infrastructure bill could be tabled once again as there is no real urgency to get it voted on until the more pressing debt ceiling and funding bill issues are resolved. Democratic leadership is trying to thread a needle and the key sticking point appears to be if the moderate and progressive wing can agree on the budget quickly enough to beat the clock on the US defaulting on its debt. Shifting back to central bankers, ECB President Lagarde warned against withdrawing stimulus too rapidly as a response to inflationary pressures. She contested that there are “no signs that this increase in inflation is becoming broad-based across the economy,” and continued that the “key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term.” Similar to her US counterpart, Lagarde cited higher energy prices and supply-chain breakdowns as the root cause for the current high inflation data and argued these would recede in due time. The ECB continues to strike a more dovish tone than the Fed and BoE. Speaking of inflation, DB’s chief European economist, Mark Wall, has just put out a podcast where he discusses the ECB, inflation and the value of a flexible asset purchase programme. He and his team have a baseline assumption that the ECB will double the pace of their asset purchases to €40bn per month to smooth the exit from the Pandemic Emergency Purchase Programme, but the upward momentum in the inflation outlook and the latest uncertainty from recent supply shocks puts a premium on policy flexibility. You can listen to the podcast "Focus Europe: Podcast: ECB, inflation and the value of a flexible APP" here. In Germany, there weren’t a great deal of developments regarding the election and coalition negotiations yesterday, but NTV reported that CSU leader Markus Söder had told a regional group meeting of the party that he expected the next government would be a traffic-light coalition of the SPD, the Greens and the FDP. Speaking to reporters later in the day, he went onto say that the SPD’s Olaf Scholz had the best chance of becoming chancellor, and that the SPD had the right to begin coalition negotiations. Running through yesterday’s data, the Conference Board’s consumer confidence reading in the US for September fell to 109.3 (vs. 115.0 expected), which marks the third consecutive decline in the reading and the lowest it’s been since February. Meanwhile house prices continued to rise, with the FHFA’s house price index for July up +1.4% (vs. +1.5% expected), just as the S&P CoreLogic Case-Shiller index saw a record +19.7% increase in July as well. To the day ahead now, and the biggest highlight will be a policy panel at the ECB forum on central banking featuring ECB President Lagarde, Fed Chair Powell, BoJ Governor Kuroda and BoE Governor Bailey. Other central bank speakers include ECB Vice President de Guindos, the ECB’s Centeno, Stournaras, Makhlouf, Elderson and Lane, as well as the Fed’s Harker, Daly and Bostic. Meanwhile, data releases include UK mortgage approvals for August, the final Euro Area consumer confidence reading for September, and US pending home sales for August. Tyler Durden Wed, 09/29/2021 - 07:42.....»»

Category: blogSource: zerohedgeSep 29th, 2021

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Zumiez (ZUMZ) Q3 Earnings Beat Estimates, Sales Increase Y/Y

Zumiez's (ZUMZ) third-quarter fiscal 2021 results reflect gains from robust strategic efforts. Zumiez Inc. ZUMZ reported stellar third-quarter fiscal 2021 results wherein both its top and the bottom line increased year over year while the latter surpassed the Zacks Consensus Estimate.Results were backed by Zumiez’s solid efforts to meet robust consumer demand. Robust back-to-school season, driven by strong full-price selling coupled with a sturdy operating model, further aided results. ZUMZ is confident of boosting growth on the back of its distinct merchandise offering, solid services and a seamless shopping experience.Shares of this Lynnwood, WA-based player have gained 14.7% year to date compared with the industry’s growth of 13.1%.Results in DetailZumiez posted adjusted quarterly earnings of $1.25 per share, surpassing the Zacks Consensus Estimate of $1.08. The bottom line improved 7.8% from the last fiscal year’s figure in the comparable quarter and 66.7% from the third-quarter fiscal 2019 tally.Although total net sales of $289.5 million missed the Zacks Consensus Estimate of $292.9 million, the same jumped 6.8% from the year-ago period’s reading. This year-over-year growth was buoyed by the reopening of stores, efforts to cash in on the current trends and a highly normalized back-to-school season. Additionally, net sales improved 9.6% from the third-quarter fiscal 2019 actuals. Zumiez Inc. Price, Consensus and EPS Surprise Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. QuoteDuring the reported quarter, Zumiez’s stores were open for about 99% of the potential operating days compared with 95% in the year-earlier quarter and 100% in the second quarter of 2019. Zumiez continued to witness temporary pandemic-related store closures during the quarter in Australia.Region-wise, net sales at North America rose 7.1% year over year and 8% from the fiscal 2019 level to $257.5 million. Other international net sales comprising Europe and Australia grew 4.5% from last-year levels and 25.2% from the level achieved two years ago to $32 million. Excluding the impacts of foreign currency fluctuations, North America net sales jumped 6.8% year over year while other international net sales improved 5%. Category-wise, men’s was the largest growth category in the quarter followed by footwear and accessories. Hardgoods was the worst-performing category followed by women’s.Gross profit increased 8.4% year over year and 21.2% from the third-quarter fiscal 2019 level to $114.7 million. Gross margin also expanded 60 basis points (bps) and 380 bps from the fiscal 2019 figure to 39.6%. The year-over-year expansion in gross margin was mainly aided by a 60-bps decline in web shipping costs, a 60-bps fall in impairment losses with respect to the operate-and-lease rights of the assets and a 50-bps jump in product margin. Growth was somewhat offset by a 110-bps rise in inventory shrinkage.SG&A expenses jumped 10.2% year over year to $74.8 million during the quarter under review. As a percentage of sales, SG&A expenses increased 80 bps year over year to 25.8%.Zumiez reported an operating profit of $39.8 million, up 5% year over year, while operating margin was down 20 bps year over year to 13.8%. Financial & Other UpdatesAs of Oct 30, 2021, ZUMZ had cash and current marketable securities of $338.1 million compared with $316.2 million as of Oct 31, 2020. The upside was driven by cash provided through operations, offset by capital expenditures and share repurchases.Total shareholders’ equity at the end of the quarter stood at $531.7 million. ZUMZ had no debt at the end of the fiscal third quarter and maintained fully unused credit facilities. It ended the quarter with $175.1 million inventory, up 8.8% year over year.During the fiscal third quarter, management bought back 2.2 million shares for $91.6 million. In the fiscal fourth quarter through Nov 30, 2021, Zumiez repurchased additional 0.4 million shares for $17.5 million. This brings fiscal 2021 year-to-date buybacks to 2.8 million shares for $120 million. For the fiscal fourth quarter, management expects repurchases of nearly 23 million shares.As of Nov 27, 2021, Zumiez operated 739 stores, including 607 in the United States, 52 in Canada, 63 in Europe and 17 in Australia. In fiscal 2021, management intends to open 23 stores comprising about seven in North America, 12 in Europe and four in Australia. Simultaneously, it plans to close nearly five to six outlets during the ongoing fiscal year.Q4 UpdatesManagement cited that the fiscal fourth quarter kicked off well. Zumiez’s consumer-centric strategy rooted in robust brands appears encouraging.Zumiez provided details for the fiscal fourth quarter. The fiscal fourth quarter-to-date total sales for the 31 days ended Nov 30, 2021, climbed 11.5% from the same-period level ended Dec 1, 2020. Also, total net sales rose 8.6% from the same-period’s figure in fiscal 2019. Total comparable sales for the current 31-day period grew 8.4% year over year and 6.5% from the comparable period’s number in fiscal 2019. While men's was the largest positive category followed by footwear, women's and accessories, hardgoods continued to be the worst.Region-wise, net sales for North America business for the 31-day period rose 7.5% year over year while the metric at Other International business surged 39%. During the aforementioned period, Zumiez witnessed closures in Europe due to the pandemic.This update assumes the existing store closures in Austria, which are likely to reopen by mid-December. This does not include any other closures or the impacts of current or future pandemic variants.OutlookManagement did not issue any specific guidance for the fourth quarter or the full fiscal. This currently Zacks Rank #4 (Sell) Zumiez continues to witness global supply-chain headwinds, labor shortages, inflation, pandemic-led closures and risks related to the Omicron variant.For fiscal 2021, management projects net sales to improve in mid-teens from the fiscal 2019 actuals. This translates to net sales growth from the last fiscal-year levels to just above 20%. Gross margin is likely to grow substantially year over year, backed by leveraged occupancy costs on higher sales, lower shipping costs and increased product margins. Operating margins are estimated to grow year over year in reaching low-teens as a rate of sales.Also, SG&A expenses are anticipated to rise in line with sales growth in fiscal 2021 from the fiscal 2020 level due to numerous reasons, mainly associated with the pandemic. The increase will be due to higher store wages and benefits with expanded mall hours from reductions in 2020, government subsidies received in 2020, elevated incentive compensation and other discretionary accruals, elevated marketing events and other related spending plus higher travel costs in the back half of this fiscal year.For the fiscal fourth quarter, Zumiez expects sales growth in high-single digits from the last fiscal year’s reported figure in the comparable quarter. Also, gross margin is expected to grow in the same quarter.3 Hot Stocks in RetailSome better-ranked stocks are Boot Barn Holdings BOOT, Tractor Supply Company TSCO and Target TGT.Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy) at present. The stock has jumped 69.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks hereThe Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and earnings per share (EPS) suggests growth of 54.4% and 183.3%, respectively, from the year-ago period’s corresponding figures. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average.Tractor Supply Company, a rural lifestyle retailer in the United States, flaunts a Zacks Rank of 1, currently. TSCO has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of TSCO have surged 33.9% in the past six months.The Zacks Consensus Estimate for Tractor Supply Company’s current-year sales and EPS suggests growth of 19% and 23.9%, respectively, from the year-ago period’s corresponding readings. TSCO has an expected EPS growth rate of 9.6% for three-five years.Target, a renowned omnichannel retailer, presently carries a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 19.7%, on average. The stock has rallied 25.8% in the past six months.The Zacks Consensus Estimate for Target’s current-year sales and EPS suggests growth of 14% and 39.6%, respectively, from the corresponding year-ago period’s levels. TGT has an expected EPS growth rate of 14.4% for three-five years. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zumiez Inc. (ZUMZ): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Tractor Supply Company (TSCO): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Ollie"s Bargain (OLLI) Q3 Earnings & Sales Miss, Comps Down

Ollie's Bargain's (OLLI) third-quarter performance reflects tough year-over-year comparison and supply chain bottlenecks. Supply chain bottlenecks hurt Ollie's Bargain Outlet Holdings, Inc.’s OLLI third-quarter fiscal 2021 performance. The company reported lower-than-expected results, wherein both the top and the bottom lines decreased year over year. This Harrisburg, PA-based company also continued with its dismal comparable store sales run.As a result, shares of this Rank #3 (Hold) company plummeted 19.4% during the after-market trading session on Dec 2. The stock has fallen 12.4% in the past three months compared with the industry’s decline of 9.4%.Here’s How the Top & the Bottom Lines FaredOllie's Bargain posted adjusted earnings of 34 cents a share that fell short of the Zacks Consensus Estimate of 47 cents, thus marking the second straight miss. The bottom line declined significantly from 65 cents reported in the year-ago quarter. This year-over-year decrease was due to lower net sales and higher SG&A expenses.Net sales fell 7.5% year over year to $383.5 million, and missed the consensus mark of $410.1 million for the second successive quarter. Soft comparable store sales performance hurt the metric. However, this was partly offset by new store unit growth.Comparable store sales slid 15.5% against an increase of 15.3% in the prior-year period. Comparable store sales fell 1.3% compared with third-quarter fiscal 2019. Fourth-quarter to date, comparable store sales are tracking down low single digits compared with the same period in fiscal 2019.Management highlighted that supply chain related headwinds, including shipping delays of imported seasonal and other products, and subsequent backlogs in its distribution centers resulted in lower-than-anticipated sales results.Nonetheless, John Swygert, president and CEO said, “Despite the near-term challenges, longer term, we remain bullish on the growth opportunities that lie ahead for several reasons. First, we are seeing incredible deals being presented to us each and every day and we expect to continue to capitalize on market disruptions, including order cancellations and abandoned goods associated with import shipping delays. Second, we have made meaningful progress in driving improved efficiencies and increased throughput across our distribution centers. Third, we continue to deliver extreme value to our customers, which is particularly important in inflationary times.”Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise Ollie's Bargain Outlet Holdings, Inc. price-consensus-eps-surprise-chart | Ollie's Bargain Outlet Holdings, Inc. QuoteA Look into MarginsGross profit declined 11% to $152.6 million during the quarter under review. Gross margin shrunk 160 basis points to 39.8% primarily due to rise in supply chain costs, higher import and trucking costs, and increased wage rates in the distribution centers. These were partly offset by 120 basis points increase in merchandise margin.SG&A expenses rose 7.8% to $114 million from the prior-year quarter’s levels owing to increased selling expenses associated with 41 net additional stores and higher wage rates in select markets. As a percentage of net sales, SG&A expenses increased 420 basis points to 29.7% due to deleveraging as a result of lower sales.Adjusted operating income plunged 48.3% to $29.9 million, while adjusted operating margin shriveled 610 basis points to 7.8% primarily due to contraction in gross margin and the deleveraging of SG&A expenses stemming from lower sales.Adjusted EBITDA decreased 41.9% to $37.9 million during the quarter under review. Adjusted EBITDA margin contracted 590 basis points to 9.9%.Store UpdateDuring the third quarter, Ollie’s Bargain opened 18 new stores, bringing the total count to 426 stores in 29 states at the end of the period. This reflected an increase of 10.6% in store count on a year-over-year basis.Other Financial AspectsOllie’s Bargain ended the quarter with cash and cash equivalents of $229.7 million (as of Oct 30, 2021). The company had no borrowings outstanding under its $100 million revolving credit facility and $86.4 million of availability under the facility, as of the end of third-quarter fiscal 2021.As of Oct 30, 2021, its total borrowings (consisting solely of finance lease obligations) were $1.1 million. Inventories, as of the end of the third quarter, increased 19.5% to $471.8 million. The company incurred capital expenditures of $11.9 million during the quarter, primarily for new and existing stores.During the third quarter, the company invested nearly $164.7 million in cash to repurchase 2,249,329 shares. At the end of the third quarter, the company had $33,000 worth shares remaining under its current repurchase program, which expires on Jan 13, 2023. This November, the company’s board of directors authorized an additional $200 million to repurchase stock.OutlookManagement envisions fiscal 2021 total net sales between $1.762 billion and $1.772 billion, down from $1.809 billion reported in fiscal 2020. Ollie’s Bargain anticipates comparable store sales to increase in the band of 3.5-4% as compared with fiscal 2019. However, fourth-quarter comparable store sales are expected to be flat to down 2% compared with fiscal 2019.Ollie’s Bargain now envisions a gross margin rate of approximately 38.6% to 38.8%, down from the prior-view of 39.4% to 39.5% owing to higher-than-expected inbound transportation costs. The company had reported a gross margin of 40% in the last fiscal year. The company guided fiscal 2021 adjusted earnings in the range of $2.30 to $2.35 per share, down from adjusted earnings of $3.16 reported last fiscal.3 Hot Stocks to ConsiderSome better-ranked stocks include United Natural Foods UNFI, MGP Ingredients MGPI and Target TGT.United Natural Foods, which distributes natural, organic, specialty, produce, and conventional grocery and non-food products, flaunts a Zacks Rank #1 (Strong Buy). UNFI has a trailing four-quarter earnings surprise of 13.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for United Natural Foods’ current financial year sales and earnings per share (EPS) suggests growth of 4.1% and 5.2%, respectively, from the year-ago period.MGP Ingredients (MGPI), a leading producer of premium distilled spirits, branded spirits, and food ingredient solutions, sports a Zacks Rank #1. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.The Zacks Consensus Estimate for MGP Ingredients’ current financial year sales and EPS suggests growth of 55.5% and 61.4%, respectively, from the year-ago period.Target, a general merchandise retailer, carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 19.7%, on average.The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 14.3% and 39.9%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis Report MGP Ingredients, Inc. (MGPI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Marvell (MRVL) Q3 Earnings & Revenues Top Estimates, Up Y/Y

Robust year-over-year growth in Marvell's (MRVL) Q3 top and bottom lines reflect solid demand for its chip in the data center end market and contributions from all other end markets. Marvell Technology MRVL reported splendid third-quarter fiscal 2022 results, wherein both earnings and revenues not only surpassed the respective Zacks Consensus Estimate but also improved significantly year over year.California-based Marvell delivered non-GAAP earnings of 43 cents per share beating the consensus mark of 38 cents per share. The bottom line improved 72% from the year-ago quarter.Marvell reported revenues of $1.21 billion, which outpaced the Zacks Consensus Estimate of $1.15 billion. The top line increased 61% from the year-earlier quarter’s reported figure. This upsurge can primarily be attributed to substantial growth in all the end markets. The data center end market witnessed 109% year-over-year growth in the third quarter.The results from Innovium acquisition in October are included in Marvell’s third-quarter performance.Marvell Technology, Inc. Price, Consensus and EPS Surprise Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. QuoteQuarter DetailsFrom second-quarter fiscal 2022, Marvell changed its reporting segments from product basis to end market basis. The new reportable end-market business segments are: data center, carrier infrastructure, enterprise networking, consumer and industrial.During the third quarter, Marvell’s data center revenues soared 109% year over year to $499.7 million. The segment represented 41% of fiscal third-quarter total revenues, highlighting that it is currently Marvell’s largest end market when compared to the rest.Carrier infrastructure revenues, which constituted 18% of total revenues, grew 28% year over year to $215.1 million.Revenues from enterprise networking jumped 56% year on year to $247.2 million and accounted for 20% of the total revenues.Consumer revenues, representing 15% of total revenues, climbed 20% to $182.5 million.Lastly, industrial revenues jumped 114% year over year to $66.6 million. Revenues from the industrial segment constituted 6% of total revenues.Marvell’s non-GAAP gross margin expanded 210 basis points (bps) to 65.1%. Non-GAAP operating expenses flared up 32.4% year over year to $370.5 million. Non-GAAP operating margin expanded 880 bps year on year to 34.5%.Balance Sheet and Cash FlowMarvell exited the reported quarter with cash and cash equivalents of $523.5 million compared with the previous quarter’s $560 million. The company’s long-term debt totaled $4.50 billion.The company generated $265 million of cash through operational activities in the third quarter and $473 million in the first nine months of fiscal 2022.Marvell returned $50.4 million to shareholders through dividend payments in the third quarter and $140.3 million in the first nine months of fiscal 2022.GuidanceFor the fourth quarter, Marvell expects strong sequential revenue growth driven by the data-center end market, accelerated 5G adoptions in the United States and other regions, and broad growth across multiple products.Marvell projects fiscal fourth-quarter revenues of $1.320 billion (+/- 3%). The Zacks Consensus Estimate for revenues is pegged at $1.21 billion, suggesting growth of 51.4% from the year-ago quarter.Non-GAAP earnings per share are expected to be approximately 48 cents (+/- 3 cents). The consensus mark of 43 cents indicates a year-over-year surge of 48.3%.Non-GAAP gross margin is likely to be approximately 65%, while non-GAAP operating expenses are estimated between $390 and $395.Zacks Rank & Stocks to ConsiderMarvell currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Advanced Micro Devices AMD, Qualcomm QCOM and CDW Corporation CDW, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 60 days. For 2021, earnings estimates have moved north by 1 cent to $2.64 per share in the last 60 days.Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 63.3% in the YTD period.The consensus mark for Qualcomm’s first-quarter fiscal 2022 earnings has been raised to $3.01 per share from $2.63 in the past 30 days. For fiscal 2022, earnings estimates have been revised upward by 14.1% to $10.49 per share in the past 30 days.Qualcomm’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%. Shares of QCOM have gained 16.2% YTD.CDW’s consensus estimate for fourth-quarter fiscal 2021 earnings has been raised to $1.87 per share from $1.83 in the past 30 days. For fiscal 2021, earnings estimates have moved north by 1.4% to $7.81 per share over the past 30 days.CDW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.2%. Shares of CDW have appreciated 46.9% YTD. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report CDW Corporation (CDW): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

How Much Upside is Left in Arlo Technologies (ARLO)? Wall Street Analysts Think 30%

The mean of analysts' price targets for Arlo Technologies (ARLO) points to a 29.6% upside in the stock. While this highly sought-after metric has not proven reasonably effective, strong agreement among analysts in raising earnings estimates does indicate an upside in the stock. Arlo Technologies (ARLO) closed the last trading session at $7.91, gaining 17.2% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $10.25 indicates a 29.6% upside potential.The mean estimate comprises four short-term price targets with a standard deviation of $1.50. While the lowest estimate of $9 indicates a 13.8% increase from the current price level, the most optimistic analyst expects the stock to surge 51.7% to reach $12. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.However, an impressive consensus price target is not the only factor that indicates a potential upside in ARLO. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.Price, Consensus and EPS SurpriseHere's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.Here's Why There Could be Plenty of Upside Left in ARLOAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 20.7%, as four estimates have moved higher compared to no negative revision.Moreover, ARLO currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Therefore, while the consensus price target may not be a reliable indicator of how much ARLO could gain, the direction of price movement it implies does appear to be a good guide. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arlo Technologies, Inc. (ARLO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Wall Street Analysts Believe Black Knight (BKI) Could Rally 28%: Here"s is How to Trade

The consensus price target hints at a 28.3% upside potential for Black Knight (BKI). While empirical research shows that this sought-after metric is hardly effective, an upward trend in earnings estimate revisions could mean that the stock will witness an upside in the near term. Black Knight (BKI) closed the last trading session at $74.18, gaining 5.9% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $95.20 indicates a 28.3% upside potential.The average comprises 10 short-term price targets ranging from a low of $85 to a high of $107, with a standard deviation of $6.27. While the lowest estimate indicates an increase of 14.6% from the current price level, the most optimistic estimate points to a 44.2% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.However, an impressive consensus price target is not the only factor that indicates a potential upside in BKI. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.Price, Consensus and EPS SurpriseHere's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.Here's Why There Could be Plenty of Upside Left in BKIAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.The Zacks Consensus Estimate for the current year has increased 2.6% over the past month, as seven estimates have gone higher compared to no negative revision.Moreover, BKI currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Therefore, while the consensus price target may not be a reliable indicator of how much BKI could gain, the direction of price movement it implies does appear to be a good guide. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Black Knight Financial Services, Inc. (BKI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Verint (VRNT) Q3 Earnings & Revenues Top Estimates, Shares Down

Verint Systems (VRNT) fiscal third-quarter results benefit from continued momentum in the cloud business. Verint Systems (VRNT) reported third-quarter fiscal 2022 non-GAAP earnings of 69 cents per share, which beat the Zacks Consensus Estimate by 30.2%. On a year-over-year basis, the bottom line deteriorated 5.5%.Non-GAAP revenues increased 4% year over year to $226.9 million and beat the Zacks Consensus Estimate by 4.1%. GAAP revenues of $225 million also increased 4% year over year. The top line was driven by strength in the cloud business.Following the earnings announcement, shares of Verint are down 2.9% in premarket trading on Dec 3. In the past year, the stock has declined 16.8% against the industry’s growth of 42.1%.Verint Systems Inc. Price, Consensus and EPS Surprise  Verint Systems Inc. price-consensus-eps-surprise-chart | Verint Systems Inc. Quote Quarter DetailsNon-GAAP recurring revenues (70.9% of total non-GAAP revenues) increased 5.5% year over year to $160.9 million.Non-GAAP non-recurring revenues (29.1%) improved 1.6% year over year to $66 million.On a non-GAAP basis, the company’s cloud revenues were up 32.3% to $100.6 million. Non-GAAP software-as-a-service (SaaS) revenues increased 38% to $84.1 million.The company’s new perpetual license equivalent (PLE) bookings soared 14.2% year over year to $75.4 million. The percentage of new perpetual license equivalent bookings from SaaS stood at 43.7% in the fiscal third quarter compared with 44.8% reported in the prior-year quarter.New SaaS annual contract value (or ACV) increased 16.9% to $18.3 million.Operating DetailsNon-GAAP gross profit increased 6.7% year over year to $161.2 million. Non-GAAP gross margin expanded 50 basis points (bps) to 71%.Total operating expenses increased 5.6% year over year to $128.1 million.As a percentage of non-GAAP revenues, non-GAAP research and development expenses, as well as non-GAAP selling, general and administrative expenses stood at 12.7% and 31.3%, respectively, in the fiscal third quarter.Adjusted EBITDA declined 3% year over year to $68 million. Adjusted EBIDTA margin contracted 220 bps to 30%.Non-GAAP operating income fell 3% year over year to $61.5 million and operating margin contracted 210 bps to 27.1%.Balance Sheet and Cash FlowAs of Oct 31, 2021, Verint had cash and cash equivalents of $307.9 million compared with $320.4 million as of Jul 31, 2021. The company’s long-term debt stood at $406.4 million as of Oct 31, 2021 compared with $405.9 million as of Jul 31, 2021.The remaining performance obligations were up 31% on a year-over-year basis.GuidanceFor fiscal 2022 (ending on Jan 31, 2022), the company expects cloud revenues to increase 35-37% compared with the earlier projected growth of 35%. New PLE bookings growth is now expected to be 15-17% compared with the earlier guidance of 15% growth.Non-GAAP revenue guidance has been revised to $875 million (+/-1%) from $872 million projected earlier. Non-GAAP earnings per share are expected to be $2.25.For fiscal 2023 (ending on Jan 31, 2023), the company projects non-GAAP revenues of $935 million (+/-2%). Non-GAAP earnings per share are expected to be $2.49, calling for 11% year-over-year growth.Zacks Rank & Stocks to ConsiderCurrently, Verint carries a Zacks Rank #3 (Hold).Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics ARW, Alphabet GOOGL and Monolithic Power Systems MPWR.While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Arrow Electronics’ shares have gained 26.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.Alphabet’s shares have surged 63.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.Monolithic’s shares have rallied 51.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arrow Electronics, Inc. (ARW): Free Stock Analysis Report Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Verint Systems Inc. (VRNT): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 3rd, 2021

Ulta Beauty (ULTA) View Up on Q3 Earnings Beat, Stock Gains

Ulta Beauty's (ULTA) third-quarter fiscal 2021 results reflect higher earnings and sales, backed by growth in all major categories. Management raises fiscal 2021 view. Shares of Ulta Beauty, Inc. ULTA moved up 5.2% in the after-market trading session on Dec 2, as the company posted splendid third-quarter fiscal 2021 results. The company raised its fiscal 2021 guidance. During the quarter, the top and the bottom line advanced year over year and surpassed the Zacks Consensus Estimate.Results were backed by strength in the beauty category along with benefits from the company’s differentiated model. During the quarter, Ulta Beauty’s major categories posted robust double-digit year-over-year comparable sales or comps growth. The uptick was driven by the cycling of last year's pandemic-induced disruption, product newness along with solid performance from strategic promotional events.Despite the dynamic operating landscape and uncertainties amid the pandemic, Ulta Beauty pulled up the sales, comps, operating margin and earnings guidance for fiscal 2021.Ulta Beauty Inc. Price, Consensus and EPS Surprise  Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote Quarterly NumbersUlta Beauty posted earnings per share (EPS) of $3.94, which beat the Zacks Consensus Estimate of $2.51. In third-quarter fiscal 2020, adjusted EPS was $1.64.Net sales of this beauty products retailer surged 28.6% year over year to $1,995.8 million and beat the Zacks Consensus Estimate of $1,900.2 million. The uptick can be attributed to increased consumer confidence and the relaxation of pandemic-related curbs.Comps rose 25.8% against a decline of 8.9% recorded in the prior-year quarter. The metric was driven by 16.8% improvement in transactions along with a 7.7% increase in average ticket. Compared with third-quarter fiscal 2019 levels, comparable sales jumped 14.3%. Comps take into account stores that were open for at least 14 months, including stores temporarily closed due to the pandemic and e-commerce sales.E-commerce sales penetration in the quarter was almost 500 basis points less, as the company cycled year-ago period’s solid online growth. Buy online, pick up in-store or BOPIS orders rose 28% year over year, forming 20% of e-commerce sales in the quarter compared with 16% during the prior year.Gross profit advanced from $545.5 million to $789.5 million. Gross margin rose from 35.1% to 39.6%, mainly led by favorable channel mix shifts, better merchandise margins and leverage of fixed costs as well as salon costs.SG&A expenses escalated from $416.4 million to $503.4 million in the third quarter of fiscal 2021. SG&A expenses (as a percentage of net sales) came in at 25.2%, down from 26.8% reported in the year-ago quarter. This was caused by leveraging of corporate overhead, store expenses and store payroll as well as gains from increased sales. These were somewhat offset by increased marketing expenses.Operating income came in at $284.2 million and the operating margin was 14.2%. In the third quarter of fiscal 2020, the company had posted an operating income of $101.3 million, with the operating margin coming in at 6.5%. Solid top-line performance and the ongoing cost-optimization efforts boosted the operating margin performance.Other UpdatesUlta Beauty ended the third quarter with cash and cash equivalents of $605.1 million. Net merchandise inventories came in at $1.92 billion. Stockholders’ equity at the end of the quarter stood at $1,986.8 million. Net cash provided by operating activities was $414.9 million in the 39 weeks ended Oct 30, 2021.The company repurchased shares worth $126.4 million during the third quarter and worth $762.2 million in the nine months of fiscal 2021. As of Oct 30, 2021, the company had $759.8 million worth of shares remaining under its $1.6-billion buyback program announced in March 2020. The company expects share buybacks of nearly $850 million in fiscal 2021. For fiscal 2021, capital expenditures are expected in the bracket of $200-$225 million.During the reported quarter, the company introduced seven new stores along with relocating two, remodeling three and closing one. Ulta Beauty ended the quarter with 1,302 stores. For fiscal 2021, the company expects 44 net new stores along with 17 store remodeling and relocation projects.Image Source: Zacks Investment ResearchGuidanceThe company is impressed with its year-to-date performance as well as solid trends experienced so far in the fiscal fourth quarter. Management raised its fiscal 2021 view. It now expects net sales of $8.5-$8.6 billion, up from the $8.1-$8.3 billion expected before. The Zacks Consensus Estimate for fiscal 2021 top-line is currently pegged at $8.38 billion. Comps growth is now expected in the range of 36-37% compared with the prior band of 30-32%.Management expects the operating margin to be between 14.3-14.5%, up from nearly 13% projected before. Growth in operating margin is likely to be driven by an expansion in gross margin, which, in turn, is expected to benefit from fixed cost leverage, better merchandise margin, lower salon costs and reduced headwinds related to channel shift.Earnings are now envisioned in the range of $16.7-$17.1 per share compared with $14.5-$14.7 forecast earlier. The Zacks Consensus Estimate is currently pegged at $15.12 per share.The Zacks Rank #3 (Hold) stock has gained 4.9% in the past three months against the industry’s decline of 2.5%.3 More Stocks Hogging the LimelightSome other top-ranked stocks in the Retail - Wholesale sector are Boot Barn Holdings BOOT, Tractor Supply Company TSCO and Target TGT.Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). Shares of the company have jumped 42.8% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period’s levels. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average. Tractor Supply Company, a rural lifestyle retailer in the United States, flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of the company have increased 14.5% in the past three months. The Zacks Consensus Estimate for Tractor Supply Company’s current financial year sales and EPS suggests growth of 19% and 23.9%, respectively, from the year-ago period’s levels. TSCO has an expected EPS growth rate of 9.6% for three-five years. Target, a renowned omnichannel retailer, presently carries a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 19.7%, on average. The stock has inched up 0.5% in the past three months.The Zacks Consensus Estimate for Target’s current-year sales and EPS suggests growth of 14.3% and 39.6%, respectively, from the corresponding year-ago period’s levels. TGT has an expected EPS growth rate of 14.4% for three-five years. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report Tractor Supply Company (TSCO): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

DOMO Q3 Earnings Surpass Estimates, Revenues Improve Y/Y

Domo Inc.'s (DOMO) third-quarter fiscal 2022 results reflect growth in subscription revenues amid higher expenses. Domo DOMO reported third-quarter fiscal 2022 non-GAAP loss of 32 cents per share, beating the Zacks Consensus Estimate by 8.57%. The company had reported a loss of 40 cents in the year-ago quarter.Domo reported revenues of $65.1 million, up 21% year over year.Quarter DetailsDomo’s subscription revenues witnessed a 13.3% year-over-year increase, reaching $56.6 million in the reported quarter. The subscription revenues contributed 87% to revenues.Professional Services and other revenues contributed 13% to total revenues. The figure was $8.5 million, up 25.5% year over year. Domo, Inc. Price, Consensus and EPS Surprise  Domo, Inc. price-consensus-eps-surprise-chart | Domo, Inc. Quote In the reported quarter, Domo launched Sandbox, a new development and testing environment built on the Domo platform. The solutions will help customers create and promote content into production across the enterprise.Non-GAAP gross margin expanded 60 basis points (bps) year over year to 73.7% compared with 73% in the year-ago quarter.Research & development expenses, as a percentage of revenues, increased 300 bps on a year-over-year basis to 33.2%. General & administrative expenses, as a percentage of revenues, were 12.6%, down 160 bps year over year. Sales and marketing expenses, as a percentage of revenues, reached 40.9% on a year-over-year basis.Total operating expenses, as a percentage of revenues, were 25.6%, up 380 bps from the year-ago quarter’s levels.Operating loss was $25 million in the reported quarter compared with an operating loss of $18.9 million in the year-ago quarter.Balance Sheet & Cash FlowAs of Oct 31, 2021, Domo had cash, cash equivalents and short-term investments of $84.25 million compared with $83.81 million as of Oct 31, 2020.Free cash outflow was $1.52 million in the reported quarter.GuidanceFor fourth-quarter fiscal 2022, Domo expects revenues in the range of $66.5-$67.5 million.Non-GAAP net loss is expected in the range of 37-41 cents per share in the fiscal fourth quarter.For fiscal 2022, Domo expects product revenues in the range of $254.5-$255.5 million.Non-GAAP net loss is anticipated within $1.26-$1.30 per share.Zacks Rank & Stocks to ConsiderDomo currently has a Zacks Rank #3 (Hold).DOMO is up 2.1% against the Zacks Internet Software industry’s decline of 22.3% and Computer & Technology sector’s return of 21.6% year to date.Some better-ranked stocks in the Computer & Technology sector are Nova Measuring Instruments NVMI, Advanced Micro Devices AMD and Pinterest PINS.Currently, Nova Measuring sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The long-term earnings growth rate stands at 32.2%.Nova Measuring’s shares have returned 83.3% year to date compared with the Zacks Electronics-Semiconductors industry’s growth of 34.6% and the Computer & Technology sector’s return of 21.7%.The long-term earnings growth rate for AMD, a Zacks Rank #2 (Buy) stock, is currently pegged at 46.2%.AMD shares have returned 64.3% year to date, outperforming the Electronics-Semiconductors industry’s growth of 34.5% and the Computer & Technology sector’s return of 21.6%.Pinterest, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 52.7%.PINS shares are down 43.4% compared with the Zacks Internet Software industry’s decline of 22.2% and Computer & Technology sector’s return of 21.7% year to date. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Nova Ltd. (NVMI): Free Stock Analysis Report Domo, Inc. (DOMO): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 3rd, 2021

Cooper Companies (COO) Q4 Earnings Lag Estimates, Margins Up

Cooper Companies' (COO) fiscal fourth-quarter results reflect solid segmental and geographical performances. The Cooper Companies, Inc. COO reported fourth-quarter fiscal 2021 adjusted earnings per share (EPS) of $3.28, up 3.8% year over year. The bottom line, however, lagged the Zacks Consensus Estimate by 2.7%.The company’s GAAP EPS was $2.21 in the quarter, up 34.8% year over year.Full-year adjusted EPS was $13.24, reflecting a 37.3% increase from the year-ago period. Again, the metric lagged the Zacks Consensus Estimate by 0.7%.Revenue DetailsRevenues grossed $759.1 million in the reported quarter, up 11.4% year over year (up 11% at constant exchange rate or CER). The metric surpassed the Zacks Consensus Estimate by 1.5%.Full-year revenues were $2.92 billion, up 20.2% year over year (up 18% at CER). The metric surpassed the Zacks Consensus Estimate by 0.3%.Segmental DetailsCooper Companies operates through two business units — CooperVision ("CVI") and CooperSurgical ("CSI").CVI segment’s revenues totaled $564.8 million, up 12% on a reported basis and 11% at CER. The segment’s revenues were primarily driven by Cooper Companies’ daily silicone hydrogel portfolio.CVI segment’s Toric contact lens (32% of CVI) revenues amounted to $181.3 million, up 12% both on a reported basis and at CER.Multifocal contact lens (11% of CVI) generated revenues of $61.3 million, up 15% both on a reported basis and at CER.Single-use sphere lenses (29% of CVI), reflect an improvement of 12% both on a reported basis and at CER. Single-use sphere lenses revenues totaled $166.5 million.Non-single-use sphere (28% of CVI) revenues were $155.7 million, up 9% on a reported basis and 8% at CER.Geographically, the segment witnessed an improvement in revenues in the Americas (39% of CVI), up 6% both on a reported basis and at CER to $217.9 million.EMEA revenues (38% of CVI) totaled $213.9 million, up 17% year over year on a reported basis and 15% at CER.Asia Pacific revenues (23% of CVI) totaled $133 million, up 13% year over year on a reported basis and 14% at CER.The CSI segment reported revenues of $194.3 million, up 11% year over year both on a reported basis and at CER.CSI’s sub-segment Office and Surgical products (58% of CSI) accounted for $112.7 million in revenues, up 3% year over year both on a reported basis and at CER.Fertility (42% of CSI) revenues were $81.6 million, up 23% year over year on a reported basis and 24% at CER.The Cooper Companies, Inc. Price, Consensus and EPS Surprise The Cooper Companies, Inc. price-consensus-eps-surprise-chart | The Cooper Companies, Inc. QuoteMargin AnalysisIn the quarter under review, Cooper Companies’ gross profit rose 18.4% to $501.9 million. Gross margin expanded 391 basis points (bps) to 66.1%.Selling, general and administrative expenses rose 17.9% to $311.6 million. Research and development expenses went up 0.4% year over year to $25.6 million. Adjusted operating expenses of $337.2 million increased 16.4% year over year.Adjusted operating profit totaled $164.7 million, which surged 22.6% from the prior-year quarter. Adjusted operating margin in the fiscal fourth quarter expanded 199 bps to 21.7%.Financial PositionCooper Companies ended fiscal 2021 with cash and cash equivalents of $95.9 million compared with $115.9 million at the end of fiscal 2020. Total debt at the end of fiscal 2021 was $1.48 billion compared with $1.79 billion at the end of fiscal 2020.Cumulative net cash provided by operating activities at the end of fiscal 2021 was $738.6 million compared with $486.6 million a year ago.GuidanceCooper Companies has initiated its financial guidance for fiscal year 2022 after taking into account the significant risk stemming from the resurgence in COVID-19 cases.For fiscal 2022, the company projects total revenues between $3,032 million-$3,090 million (up 6-8% at CER). The Zacks Consensus Estimate for the same is currently pegged at $3.09 billion, which matches the upper end of the company-provided outlook.CVI revenues are estimated to be in the range of $2,225 million-$2,267 million (up 6-8% at CER) whereas CSI revenues are expected to lie within $807 million-$823 million (up 6-8% at CER).Adjusted EPS is anticipated to be $13.60-$14.00 (up 9.5-12.5% at CER). The Zacks Consensus Estimate for the same currently stands at $14.55.Our TakeCooper Companies exited the fiscal 2021 fourth quarter with better-than-expected revenues. The company witnessed solid performances across its core CVI and CSI units during the quarter under review, along with robust geographical performances. Strength in the company’s daily silicone hydrogel and myopia management portfolios is impressive. Cooper Companies’ announcement to acquire Generate Life Sciences to boost its fertility, and labor and delivery offerings raise our optimism. The launch of MyDay multifocal in the United States and various major European markets, and positive feedback and results regarding the same, also look encouraging. Expansion of both margins is another positive.However, lower-than-expected earnings in the reported quarter are concerning.Zacks Rank and Stocks to ConsiderCooper Companies currently carries a Zacks Rank #4 (Sell).A few better-ranked stocks in the broader medical space that have announced quarterly results are Laboratory Corporation of America Holdings LH or LabCorp, Thermo Fisher Scientific Inc. TMO and AMN Healthcare Services AMN.LabCorp, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $6.82, which beat the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the consensus mark by 13.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.LabCorp has an estimated long-term growth rate of 10.6%. The company surpassed estimates in the trailing four quarters, the average surprise being 25.73%.Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Laboratory Corporation of America Holdings (LH): Free Stock Analysis Report Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report The Cooper Companies, Inc. (COO): Free Stock Analysis Report AMN Healthcare Services Inc (AMN): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 3rd, 2021

Smartsheet (SMAR) Q3 Loss Narrower Than Estimates, Revenues Top

Smartsheet's (SMAR) third-quarter fiscal 2022 results reflect continued momentum in subscription revenues and an expanding subscriber base. Smartsheet SMAR reported third-quarter fiscal 2022 non-GAAP loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents as well as the year-ago quarter’s loss of 12 cents.Revenues surged 46% year over year to $144.6 million and surpassed the Zacks Consensus Estimate by 0.6%. The upside was driven by an increasing number of large deals and momentum in bookings growth.Subscription revenues (92% of total revenues) increased 46% year over year to $132.6 million. Professional services (8% of total revenues) revenues rose 50% year over year to $12 million.Calculated billings in the reported quarter jumped 44% year over year to $161.6 million. Quarterly, semi-annual and multi-year billings represented about 4% of total billings reported in the quarter.Following the earnings announcement, shares of Smartsheet jumped 16.5% in the premarket trading on Dec 3. In the past year, shares have declined 0.6% compared with the industry’s decline of 22%.Smartsheet Price, Consensus and EPS Surprise  Smartsheet price-consensus-eps-surprise-chart | Smartsheet Quote User Base Increases Y/YSmartsheet ended the reported quarter with more than 9.5 million users and annual recurring revenues (ARR) growing 10% sequentially.In the quarter under review, the number of customers with annualized contract value (ACV) of $5,000 or higher increased 27% year over year to 14,228.The number of customers with ACV of $50,000 or higher surged 56% year over year to 2,078. The number of customers with ACV of $100,000 or higher soared 72% year over year to 868.Smartsheet’s net dollar retention rate was 131% in the reported quarter. The company’s average ACV per domain-based customer increased 37% year over year to $6,368.Operating DetailsGross margin on a non-GAAP basis expanded 300 basis points (bps) to 82% on a year-over-year basis. Subscription gross margin was 88%, expanded 500 bps year over year. Professional services margin was 16% compared with 29% reported earlier.Total operating expenses surged 36.1% year over year to $151.2 million.Non-GAAP operating loss was $2.7 million, narrower than the year-ago quarter’s loss of $15 million.Balance Sheet & Cash FlowAs of Oct 31, 2021, Smartsheet’s cash & cash equivalents were $440 million.Net free cash outflow was $6.3 million compared with net free cash outflow of $3.5 million in the previous quarter.GuidanceFor fourth-quarter fiscal 2022, Smartsheet expects revenues between $151 million and $152 million. This indicates growth of 37-38% from the year-ago quarter’s reported figure.The company expects calculated billings between $204 million and $205 million, indicating year-over-year growth of 35-36%.Non-GAAP operating loss is expected between $18 million and $20 million, while non-GAAP net loss is anticipated to be 14-16 cents per share.For fiscal 2022, Smartsheet now anticipates revenues between $544 million and $545 million, which indicates growth of 41% from the prior fiscal year. Earlier, Smartsheet projected revenues between $530 million and $533 million, indicating growth of 37-38% from the year ago period.Calculated billings for the current fiscal year are expected between $641 million and $642 million.The company now expects a non-GAAP operating loss of $38-$40 million.Non-GAAP net loss is now anticipated between 30 cents and 32 cents per share. Earlier, non-GAAP net loss was projected between 36 cents and 44 cents per share.Zacks Rank and Stock to ConsiderSmartsheet currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics ARW, Alphabet GOOGL and Monolithic Power Systems MPWR.While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Arrow Electronics’ shares have gained 26.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.Alphabet’s shares have surged 63.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.Monolithic’s shares have rallied 51.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arrow Electronics, Inc. (ARW): Free Stock Analysis Report Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Smartsheet (SMAR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

DocuSign (DOCU) Beats Earnings & Revenue Estimates in Q3

DocuSign's (DOCU) third-quarter fiscal 2022 earnings and revenues increase year over year. DocuSign, Inc. DOCU reported better-than-expected third-quarter fiscal 2022 results.Non-GAAP earnings per share of 58 cents beat the Zacks Consensus Estimate by 26.1% and increased more than 100% year over year. Revenues of $545.3 million surpassed the consensus mark by 3% and increased 42.5% year over year.In the quarter, DocuSign unveiled several product capabilities, along with DocuSign Ventures, which aims at co-investing in and partnering with companies, thereby raising early-stage funding for innovation around the agreement process. Areas of interest of this new initiative are agreement process automation and workflows, AI and smart contract technology, digital payment platforms, identity verification and management, legal and compliance automation technologies, and vertical solutions in areas like mortgage and lending.The company also expanded its global strategic partnership with Salesforce to develop joint solutions that will automate the contract process through AI-based smart solutions that enhance the customer experience of preparing, signing, and managing agreements, and also increase collaboration amongst organizations with Slack functionality.The company’s shares have declined 24.6% over the past six months compared with 16.6% decline of the industry it belongs to.DocuSign Price, Consensus and EPS Surprise DocuSign price-consensus-eps-surprise-chart | DocuSign QuoteQuarter DetailsSubscription revenues came in at $528.6 million, up 44% year over year. Professional services revenues increased 4% year over year to $16.9 million. Billings of $565.2 million were up 28% year over year.Non-GAAP gross profit of $449.4 million increased 48.9% year over year. Non-GAAP gross margin of 82% improved 300 basis points (bps) year over year.Non-GAAP operating profit of $122.2 million increased more than 100% year over year. Non-GAAP operating margin of 22% improved 900 basis points (bps) year over year.DocuSign ended the quarter with cash and cash equivalent balance of $503.9 million compared with $518 million at the end of the previous quarter. The company generated $105.4 million of cash from operating activities and Capex was $15.4 million.GuidanceFor the fourth quarter of fiscal 2022, DocuSign expects revenues in the range of $557 million to $563 million, lower than the current Zacks Consensus Estimate of $573.03 million. Billings are expected between $647 million and $669 million.Non-GAAP gross margin is anticipated to be between 81% and 82%. Non-GAAP operating margin is expected between 17% and 19%.For fiscal 2022, DocuSign expects revenues in the range of $2.083 billion to $2.089 billion, higher than the current Zacks Consensus Estimate of $2.08 billion. Billings are expected between $2.335 billion and $2.347 billion.Non-GAAP gross margin is anticipated to be between 81% and 82%. Non-GAAP operating margin is expected between 19% and 21%.DocuSign currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Some Other Business Services CompaniesEquifax EFX reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.Equifax currently carries a Zacks Rank #3 (Hold) with the stock gaining 76.1% over the past year.IQVIA Holdings IQV reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.IQVIA Holdings also carries a Zacks Rank #3. Its stock gained 56.7% over the past year.Omnicom OMC reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.Omnicom carries a Zacks #3 as well, with the stock gaining 6.2% over the past year. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Omnicom Group Inc. (OMC): Free Stock Analysis Report Equifax, Inc. (EFX): Free Stock Analysis Report IQVIA Holdings Inc. (IQV): Free Stock Analysis Report DocuSign (DOCU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Guidewire (GWRE) Incurs Loss in Q1, Revenues Top Estimates

Guidewire's (GWRE) first-quarter fiscal 2022 results benefit from strength in subscription revenues. Weakness in license and service revenues is a headwind. Guidewire Software GWRE reported first-quarter fiscal 2022 non-GAAP loss of 21 cents per share, beating the Zacks Consensus Estimate by 12.5%. The company had reported earnings of 17 cents per share in the year-ago quarter.Guidewire reported revenues of $165.9 million, which beat the Zacks Consensus Estimate by 0.74% but declined 2.3% year over year.Cloud bookings were more than 90% of deal activity for the first time in the company’s history. Guidewire signed five InsuranceSuite cloud deals and witnessed another six successful cloud customer deployments in the reported quarter.Quarter in DetailSubscription and support revenues (47.6% of total revenues) surged 36.3% from the year-ago quarter to $79 million due to higher subscription revenues, which jumped 53% to $57.1 million.License revenues (24.2% of total revenues) declined 38.5% year over year to $40.2 million while Services revenues (28.2% of total revenues) climbed 0.5% year over year to $46.8 million. Guidewire Software, Inc. Price, Consensus and EPS Surprise Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote Annual recurring revenues (ARR) were $594 million as of Oct 31, 2021, compared with $582 million as of Jul 31, 2021.Non-GAAP gross margin contracted 950 basis points (bps) on a year-over-year basis to 44.5%. Subscription and support gross margin was 43%, down from 48% reported in the year-ago quarter, primarily due to large investments Guidewire made to support its current and future cloud customers. Higher cloud infrastructure costs also hurt gross margin.Total operating expenses increased 16% year over year to $128.1 million, driven by higher cloud infrastructure costs and commission expenses.Non-GAAP operating loss was $28.7 million against operating income of $2.8 million reported in the year-ago quarter.Balance SheetAs of Oct 31, 2021, cash and cash equivalents and short-term investments came in at $1.1 billion compared with $1.3 billion as of Jul 31, 2021.Guidewire used $107 million in cash from operations and $43.8 million for the acquisition of HazardHub in the reported quarter.In the quarter under review, Guidewire repurchased 0.2 million shares worth $26.3 million.GuidanceFor second-quarter fiscal 2022, revenues are expected in the range of $195-$199 million. ARR is expected between $613 million and $616 million.Non-GAAP operating loss is projected in the range of $11-$15 million.For fiscal 2022, the company expects total revenues between $780 million and $790 million. ARR is expected between $659 million and $669 million.Non-GAAP operating loss for fiscal 2022 is projected in the range of $48-$58 million.For fiscal 2022, cash flow from operations is projected in the range of $10-$20 million.Zacks Rank & Stocks to ConsiderGuidewire currently has a Zacks Rank #3 (Hold).Guidewire shares are down 9%, underperforming the Zacks Business-Software Services industry’s growth of 20.4% and Computer & Technology sector’s return of 21.6% year to date.Some of the better-ranked stocks in the Computer & Technology sector are Nova Measuring Instruments NVMI, Advanced Micro Devices AMD and Pinterest PINSCurrently, Nova Measuring sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Long-term earnings growth rate stands at 32.2%.Nova Measuring shares have returned 83.3% year to date compared with the Zacks Electronics-Semiconductors industry’s growth of 34.6% and the Computer & Technology sector’s return of 21.7%.Long-term earnings growth rate for AMD, a Zacks Rank #2 (Buy) stock, is currently pegged at 46.2%.AMD shares have returned 64.3% year to date, outperforming the Electronics-Semiconductors industry’s growth of 34.6% and the Computer & Technology sector’s return of 21.7%.Pinterest, currently carrying a Zacks Rank #2 (Buy) has a long-term earnings growth rate of 52.7%.PINS shares are down 43%, underperforming the Zacks Internet Software industry’s decline of 22.2% and the Computer & Technology sector’s return of 21.7% year to date. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Guidewire Software, Inc. (GWRE): Free Stock Analysis Report Nova Ltd. (NVMI): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021