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   Technology StocksSemi Equipment Analysis


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To: Return to Sender who wrote (88711)7/25/2022 4:10:55 PM
From: Return to Sender
1 Recommendation   of 89330
 
BPNDX Fell 1 to 79 PnF Buy Signals - [REGN removed]

Fri Mon
AAPL AAPL
ABNB ABNB
ADBE ADBE
ADI ADI
ADSK ADSK
ALGN ALGN
AMAT AMAT
AMD AMD
AMGN AMGN
AMZN AMZN
ANSS ANSS
ASML ASML
AVGO AVGO
AZN AZN
BIIB BIIB
BKNG BKNG
CDNS CDNS
CHTR CHTR
COST COST
CPRT CPRT
CRWD CRWD
CTAS CTAS
DDOG DDOG
DLTR DLTR
DOCU DOCU
DXCM DXCM
EA EA
EBAY EBAY
FISV FISV
FTNT FTNT
GOOGL GOOGL
HON HON
IDXX IDXX
ILMN ILMN
INTU INTU
ISRG ISRG
JD JD
KDP KDP
KHC KHC
KLAC KLAC
LCID LCID
LRCX LRCX
LULU LULU
MAR MAR
MCHP MCHP
MELI MELI
META META
MNST MNST
MRNA MRVL
MRVL MU
MU NFLX
NFLX NTES
NTES NVDA
NVDA NXPI
NXPI ODFL
ODFL OKTA
OKTA ORLY
ORLY PANW
PANW PCAR
PEP PEP
PYPL PYPL
QCOM QCOM
REGN ROST
ROST SBUX
SBUX SGEN
SGEN SIRI
SIRI SNPS
SNPS SPLK
SPLK SWKS
SWKS TEAM
TEAM TMUS
TMUS TSLA
TSLA TXN
TXN VRSK
VRSK VRSN
VRSN VRTX
VRTX WDAY
WDAY ZM
ZM ZS
ZS

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To: Return to Sender who wrote (88712)7/25/2022 4:14:12 PM
From: Return to Sender
1 Recommendation   of 89330
 
BPSOX Fell 1 to 25 PnF Buy Signals - [WOLF removed]

Fri Mon
ADI ADI
AMAT AMAT
AMD AMD
ASML ASML
AVGO AVGO
CRUS CRUS
ENTG ENTG
KLAC KLAC
LRCX LRCX
MCHP MCHP
MKSI MKSI
MPWR MPWR
MRVL MRVL
MU MU
NVDA NVDA
NXPI NXPI
ON ON
QCOM QCOM
QRVO QRVO
SLAB SLAB
SMTC SMTC
SWKS SWKS
TER TER
TSM TSM
TXN TXN
WOLF

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To: Return to Sender who wrote (88713)7/25/2022 4:16:08 PM
From: Return to Sender
   of 89330
 
No New 52 Week Highs or Lows on the NDX Again Today.

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To: Return to Sender who wrote (88717)7/25/2022 4:26:51 PM
From: Return to Sender
   of 89330
 
NXP Semiconductors GAAP EPS of $2.53 beats by $0.10, revenue of $3.31B beats by $40M

Not doing much after hours. It is down over 1% right now. The whisper numbers were not at all right on actual earnings. NXPI is big into the auto market and looking to move further into the auto EV market. RtS



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To: Return to Sender who wrote (88722)7/25/2022 4:28:11 PM
From: Return to Sender
2 Recommendations   of 89330
 
Market Snapshot

briefing.com

Dow 31991.92 +90.75 (0.28%)
Nasdaq 11782.63 -51.45 (-0.43%)
SP 500 3966.91 +5.21 (0.13%)
10-yr Note



NYSE Adv 1838 Dec 1240 Vol 784 mln
Nasdaq Adv 2156 Dec 2227 Vol 4.1 bln


Industry Watch
Strong: Energy, Financials, Utilities, Health Care, Industrials

Weak: Information Technology, Consumer Discretionary, Communication Services


Moving the Market
-- Waiting game ahead of this week's earnings reports from 175 S&P companies that make up nearly 50% of the index's market cap

-- Downside leadership from mega cap stocks

-- Hesitation ahead of FOMC decision and economic data-heavy week

Closing Summary
25-Jul-22 16:20 ET

Dow +90.75 at 31991.92, Nasdaq -51.45 at 11782.63, S&P +5.21 at 3966.91
[BRIEFING.COM] The market opened on a soft note today as market participants were playing a waiting game for the busy week ahead. The three main indices saw choppy action, albeit within a narrow range, in the first half of the session until finding downside momentum and declining through most of the afternoon. The market was able to rally in the last half hour of trading to close well above session lows.

There are several market-moving catalysts on the docket this week. 175 S&P 500 companies, which make up nearly 50% of the index's market cap, are set to report earnings this week. Key economic data includes the advanced Q2 GDP reading on Thursday, and the June Personal Income and Spending report on Friday. The Personal Spending and Income report will include the Fed's preferred inflation gauge, the PCE and core-PCE price indexes. Also, the FOMC decision will be announced Wednesday.

Market breadth showed a lack of conviction on either side of the tape today. At the close, advancers led decliners by a 3-to-2 margin at the NYSE while advancers were roughly in line with decliners at the Nasdaq.

With mixed buying interest today, it was the mega caps that drove the market lower. The Vanguard Mega Cap Growth ETF (MGK) closed down 0.6% versus a 0.1% gain in the S&P 500 and a 0.3% gain in the Invesco S&P 500 Equal Weight ETF (RSP).

This relative weakness in the mega caps showed up in the S&P 500 sector performance. Amazon.com (AMZN 121.14, -1.28, -1.1%), Meta Platforms (META 166.65, -2.62, -1.6%), and Apple (AAPL 152.95, -1.14, -0.7%) all contributed to the underperformance of their respective sectors, consumer discretionary (-0.9%), information technology (-0.6%), and communication services (-0.3%). These were the lone sectors to close in negative territory.

The best performing sector on the day, energy (+3.7%), was boosted by rising energy prices and the natural gas news from Europe. The Wall Street Journal reported that Gazprom is going to cut natural gas flows to Germany through the Nord Stream 1 pipeline to 20% capacity from 40% due to what it calls problems with a turbine.

The energy complex futures made noticeable upside moves today. WTI crude oil futures rose 2.2% to settle at $96.80/bbl. Natural gas futures rose 5.2% to $8.63/mmbtu. Unleaded gasoline futures rose 3.1% to $3.11/gal.

Treasury yields were on the rise today. The 2-yr note yield rose five basis points to 3.04% while the 10-yr note yield rose four basis points to 2.82%.

Ahead of tomorrow's open, earnings reports will be headlined by 3M (MMM), Albertsons (ACI), Coca-Cola (KO), Corning (GLW), General Electric (GE), General Motors (GM), Kimberly-Clark (KMB), McDonald's (MCD), Moody's (MCO), Polaris Industries (PII), PulteGroup (PHM), Raytheon Technologies (RTX), and UPS (UPS).

There was no U.S. economic data of note today.

Tuesday's agenda includes the following economic data:

  • 9:00 ET: May FHFA Housing Price Index (prior 1.6%) and May S&P Case-Shiller Home Price Index (Briefing.com consensus 20.8%; prior 21.2%)
  • 10:00 ET: July Consumer Confidence (Briefing.com consensus 96.4; prior 98.7) and June New Home Sales (Briefing.com consensus 670,000; prior 696,000)
  • Dow Jones Industrial Average: -11.9% YTD
  • S&P 400: -15.1% YTD
  • S&P 500: -16.8% YTD
  • Russell 2000: -19.0% YTD
  • Nasdaq Composite: -24.7% YTD

Market lifts just off its lows ahead of the close
25-Jul-22 15:30 ET

Dow -4.81 at 31896.36, Nasdaq -101.93 at 11732.15, S&P -9.63 at 3952.07
[BRIEFING.COM] The market lifted just above its session lows in recent trading. The Dow is the best performer of the three main indices, currently trading flat.

After the close, the following companies are set to release earnings reports: F5 Networks (FFIV), NXP Semi (NXPI), Universal Health (UHS), and Whirlpool (WHR).

Ahead of tomorrow's open, earnings reports will be headlined by 3M (MMM), Albertsons (ACI), Coca-Cola (KO), Corning (GLW), General Electric (GE), General Motors (GM), Kimberly-Clark (KMB), McDonald's (MCD), Moody's (MCO), Polaris Industries (PII), PulteGroup (PHM), Raytheon Technologies (RTX), and UPS (UPS).

Tuesday's agenda includes the following economic data:

  • 9:00 ET: May FHFA Housing Price Index (prior 1.6%) and May S&P Case-Shiller Home Price Index (Briefing.com consensus 20.8%; prior 21.2%)
  • 10:00 ET: July Consumer Confidence (Briefing.com consensus 96.4; prior 98.7) and June New Home Sales (Briefing.com consensus 670,000; prior 696,000)

Buying interest under the market surface
25-Jul-22 15:00 ET

Dow -41.45 at 31859.72, Nasdaq -104.86 at 11729.22, S&P -13.07 at 3948.63
[BRIEFING.COM] The major indices continued downward to fresh session lows in the last half hour.

Despite the stock market sinking lower, there's still a fair amount of buying interest. Advancers lead decliners by an 11-to-10 margin at the NYSE while decliners lead advancers by the same margin at the Nasdaq.

As the market lost ground, more S&P 500 sectors entered negative territory. Information Technology (-1.0%), consumer discretionary (-1.2%), and communication services (-0.9%) have been mostly in negative territory today but they're now joined by real estate (-0.2%) and materials (-0.1%).

Separately, the energy complex futures made big upside moves today. WTI crude oil futures rose 2.2% to settle at $96.80/bbl. Natural gas futures rose 5.2% to $8.63/mmbtu. Unleaded gasoline futures rose 3.1% to $3.11/gal.

Newmont underperforms following earnings, SVB Financial outperforms following upgrade
25-Jul-22 14:30 ET

Dow -10.30 at 31890.87, Nasdaq -82.16 at 11751.92, S&P -6.77 at 3954.93
[BRIEFING.COM] The major averages have sunk to session lows across the board, the benchmark S&P 500 (-0.17%) still in second place.

S&P 500 constituents Newmont Goldcorp (NEM 44.67, -6.72, -13.08%), IDEXX Labs (IDXX 375.62, -17.89, -4.55%), and Hasbro (HAS 78.62, -2.51, -3.09%) pepper the bottom of the standings. NEM underperforms following earnings, IDXX was downgraded to Hold at Stifel this morning, while toy names HAS/Mattel (MAT 22.01, -0.44, -1.96%) underperform to open the week.

Meanwhile, California-based regional bank SVB Financial Group (SIVB 388.80, +27.44, +7.59%) is today's top performer following an upgrade out of Evercore ISI.

Gold modestly lower on Monday
25-Jul-22 14:00 ET

Dow +4.83 at 31906.00, Nasdaq -73.62 at 11760.46, S&P -4.63 at 3957.07
[BRIEFING.COM] With about two hours to go on Monday the tech-heavy Nasdaq Composite (-0.62%) sits at the bottom of the major averages.

Gold futures settled $8.30 lower (-0.5%) to $1,719.10/oz, giving back some of last week's gains.

Meanwhile, the U.S. Dollar Index is down about -0.2% to $106.51.



Weber sells off on many rough patches, including its CEO's departure & weak Q3 sales guidance (WEBR)
Updated: 25-Jul-22 13:37 ET


Grill maker Weber (WEBR -14%) is getting cooked today on numerous rough patches, including CEO Chris Scherzinger's departure, downbeat Q3 (Jun) net sales guidance, dividend suspension, and the possibility of workforce reductions. The company's current Chief Technology Officer, Alan Matula, was appointed interim CEO.

  • With inflation eroding consumers' purchasing power, not only are shoppers frequenting retailers less often, they are likely reducing the frequency at which they upgrade their grill. At the same time, the U.S. dollar, which recently reached parity with the Euro, is creating FX headwinds.
  • WEBR expects these issues to linger into Q3 and Q4 (Sep), fueling its disappointing Q3 net sales outlook of $525-530 mln. The heightened volatility also led to management withdrawing its FY22 net sales and EBITDA outlook.
    • Last quarter, WEBR guided to FY22 revs of $1.65-1.80 bln, already coming up well short of analysts' expectations. Likewise, WEBR's FY22 EBITDA forecast of $140-180 mln represented a 48% drop at the midpoint yr/yr.
  • Other hurdles WEBR is facing include "substantial" freight cost increases. The disrupted supply chain environment was a primary factor in a 42% drop in adjusted EBITDA yr/yr in Q2 (Mar).
  • During the company's Q2 earnings call in mid-May, it expected pricing actions implemented last year, which were fully accepted, would help gross margins improve over the next "several quarters." However, it looks like WEBR has reached a tipping point where higher prices are starting to deter possible buyers.
  • To improve its financials, WEBR is exploring several financial transformation initiatives, such as workforce reductions, tightening global inventory levels, and reducing certain expenses. Although these strategies could produce a favorable result, they are not doing much to help the current sell-off.
    • Another step WEBR is taking to improve its outlook is suspending its quarterly dividend, which produced an annual yield of around 2.7%.
Clearly, WEBR has a lot on its plate. Its shares are suffering as a result, now down over 50% from the company's August 2021 IPO price of $14. Competing grill maker Trager (COOK), which sells wood-fired grills, signaled that the grilling industry was struggling with its planned workforce reductions announced last week. WEBR and COOK have a relatively high short interest of 52% and 12%, respectively, illustrating the market's negative sentiment toward grill makers. With the high short interest combined with souring macroeconomic conditions, we think WEBR is best avoided until it begins to make inroads on its many current challenges.




Dorman Products surprises investors with pretty large downside EPS guidance (DORM)
Updated: 25-Jul-22 11:25 ET


Dorman Products (DORM -7%) is trading lower today after reporting Q2 results last night. It also announced a $600 mln share repurchase plan, but the guidance is spooking investors and catching them off guard.

  • This major supplier of automotive aftermarket parts actually reported decent Q2 results with just a slight EPS miss, but big revenue upside. The main problem was a pretty significant cut in FY22 EPS guidance to $5.00-5.20 from $5.35-5.55. This reduction was much larger than the Q2 miss, so it is a guide down for 2H22. Revenue guidance was reaffirmed at $1.60-1.64 bln.
  • Demand was not an issue as it remained strong throughout the quarter and DORM expects demand will continue to be strong through the balance of the year. Also, DORM is pretty excited about some recent new product launches, which are contributing to its strong sales. Most notable is its OE FIX product line which expands DORM's complex electronics portfolio, including new transmission control modules and fuel pump driver modules.
  • The problem is more on the cost side, including rising supply chain costs, wage pressures and commodity inflation. This led to some margin pressure with adjusted gross margin falling to 34.0% from 35.5% a year ago. Granted, that was partly caused by DORM's recent acquisition of Dayton Parts. However, it is clear DORM is getting squeezed on the cost side. The company has been raising prices to offset these higher costs but it has not been enough to maintain margins.
Overall, we think this pretty severe downside guidance is catching investors by surprise. DORM has been seen as sort of an oasis in the automotive desert. As many automotive supply chain stocks have falling, DORM has been rising nicely. The idea is that, as new vehicle production is hampered by chip shortages, consumers are likely to drive their current vehicles longer and that means more aftermarket part sales. That dynamic is being borne out as sales/demand remains robust. It is just that the cost side is rising more quickly than people were expecting. It seems to have accelerated in Q2 and the guidance indicates it will get worse in 2H22.




RPM Inc's MayQ earnings miss disappoints following PPG Industries' Q2 beat last week (RPM)
Updated: 25-Jul-22 11:08 ET


RPM Inc (RPM -1%) shares are trying to remain green today despite the company posting a minor bottom-line miss in Q4 (May). Although RPM provided upbeat Q1 (Aug) guidance, predicting revenue growth in the mid-teens yr/yr, surpassing analyst expectations, while forecasting operating profit to improve +20-25% yr/yr, its earnings miss did not stack up against competing specialty coatings supplier PPG Industries (PPG).

PPG posted solid earnings upside in Q2 (Jun) last week as its pricing power allowed it to fully offset inflationary pressures. This pricing power, combined with productivity enhancements, translated to continued operating margin improvement in Q3. Also, even though PPG guided Q3 earnings below consensus, this was primarily due to negative FX impacts.

  • RPM also commands meaningful pricing power, highlighted by three out of four of its businesses growing adjusted operating profit double-digits yr/yr.
  • However, as was the case for PPG, a strengthening U.S. dollar continues to pose a challenge. FX impacts primarily contributed to a 14.2% decline in operating profit yr/yr in the company's second-largest segment: Consumer Group (~34% of Q4 revs).
  • Outside this weak point, which fueled earnings growth of just 10.9% yr/yr to $1.42, missing expectations, RPM's results were strong. Revs still grew nicely in the quarter, jumping 13.7% yr/yr to $1.98 bln. Every segment reported record quarterly sales. Also, even though operating profit was dinged in the Consumer Group business, organic sales still grew 10.0% yr/yr.
    • Meanwhile, on an organic basis, RPM's largest segment, Construction Products Group (~38% of revs), led the charge, climbing 19.9% yr/yr. Specific end markets exhibiting strength were roofing systems, insulated concrete forms, and repair products for concrete.
    • Performance Coatings Group and Specialty Products Group grew 17.4% and 12.2% yr/yr, respectively. End markets that stood out positively included flooring systems and food coatings.
  • Additional commentary regarding RPM's guidance was mostly bullish. The company expects accelerated demand from Q4 to carry into FY23. Price hikes will also continue throughout FY23 to help offset significant cost increases, which are expected to persist going forward. Furthermore, RPM added that even though it notices a recessionary undercurrent in the economy, its products are critical in extending the useful life of an organization's assets, which is vital during a recession as it saves money in the long run.
RPM's MayQ results were mostly positive. Adverse FX impacts should be expected by companies with operations overseas by now. Therefore, we think investors are disappointed mainly due to the earnings miss, especially after PPG posted upside last week. Nevertheless, reasonably upbeat earnings reports from RPM and PPG are good signs for the specialty coatings industry overall, boding well for Axalta Coating Systems (AXTA) and Sherwin-Williams (SHW), which report Q2 earnings on July 26 and July 27, respectively.



Squarespace rounds into shape with an earnings beat, but soft outlook boxes out gains (SQSP)
Updated: 25-Jul-22 10:54 ET


Squarespace (SQSP), a website design and e-commerce platform provider, easily surpassed Q2 EPS expectations after badly missing earnings estimates in each of the past two quarters. That good news, though, is being overshadowed by SQSP's slowing growth and soft guidance for Q3 and FY22.

When the company went public in May 2021, the digital transformation that emerged during the pandemic was still a powerful force that fueled robust top-line growth for many internet-related companies -- including SQSP. In 2Q21, which was the company's first earnings report as a public company, total revenue and total annual run rate revenue (ARRR) increased by 31% and 28%, respectively. Similar to e-commerce powerhouse Shopify (SHOP), SQSP benefited from a flood of entrepreneurs and small businesses looking to bolster their online and digital capabilities.

Given the favorable environment, it's easy to understand why investors were initially bullish on SQSP's IPO. However, after reaching post-IPO highs in late June of 2021, SQSP has completely unraveled, losing nearly 70% of its value. A normalization of consumer shopping behaviors slowed its momentum, and the stock became an easy target when growth stocks fell deeply out of favor late last year. Now, macroeconomic headwinds are battering the company, and its larger rival Wix.com (WIX), which is slated to report its earnings on August 10.

This downturn in business conditions is evident in a few key metrics.

  • Revenue growth decelerated to just 8.5% in Q2, continuing its recent downward slide. After reaching 31% in 2Q21, revenue growth trailed off to 24% in 3Q21, 20% in 4Q21, and 16% last quarter. Similarly, ARRR slowed to 8% this quarter from 15% last quarter and 18% in Q4.
  • With macroeconomic concerns on the rise, SQSP is having difficulty on-boarding new users. Unique subscriptions were up by a modest 6% in Q2 to 4.2 mln, representing a slowdown from last quarter's 10% growth.
  • SQSP's revenue guidance for Q3 missed expectations and the company also cut its FY22 revenue guidance below analysts' estimates. The weak outlook is partly due to FX headwinds, but a more sluggish demand picture is mostly to blame. On that note, the midpoint of its Q3 revenue guidance equates to growth of only 7.5%.
On the positive side, SQSP is still generating plenty of cash. In fact, cash flow from operations increased significantly to $36.4 mln from $8.7 mln in the year-earlier period. The main takeaway, though, is that growth is still slowing, and it seems unlikely that a meaningful re-acceleration is in the cards any time soon. A very competitive landscape that includes WIX, Global-E Online (GLBE), and Similarweb (SMWB), only adds to SQSP's challenges.



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To: Return to Sender who wrote (88719)7/26/2022 4:05:18 PM
From: Return to Sender
1 Recommendation   of 89330
 
BPNDX Fell 8 to 71 PnF Buy Signals - [CRWD DDOG DLTR DOCU LCID OKTA PANW ZS removed]

Mon Tues
AAPL AAPL
ABNB ABNB
ADBE ADBE
ADI ADI
ADSK ADSK
ALGN ALGN
AMAT AMAT
AMD AMD
AMGN AMGN
AMZN AMZN
ANSS ANSS
ASML ASML
AVGO AVGO
AZN AZN
BIIB BIIB
BKNG BKNG
CDNS CDNS
CHTR CHTR
COST COST
CPRT CPRT
CRWD CTAS
CTAS DXCM
DDOG EA
DLTR EBAY
DOCU FISV
DXCM FTNT
EA GOOGL
EBAY HON
FISV IDXX
FTNT ILMN
GOOGL INTU
HON ISRG
IDXX JD
ILMN KDP
INTU KHC
ISRG KLAC
JD LRCX
KDP LULU
KHC MAR
KLAC MCHP
LCID MELI
LRCX META
LULU MNST
MAR MRVL
MCHP MU
MELI NFLX
META NTES
MNST NVDA
MRVL NXPI
MU ODFL
NFLX ORLY
NTES PCAR
NVDA PEP
NXPI PYPL
ODFL QCOM
OKTA ROST
ORLY SBUX
PANW SGEN
PCAR SIRI
PEP SNPS
PYPL SPLK
QCOM SWKS
ROST TEAM
SBUX TMUS
SGEN TSLA
SIRI TXN
SNPS VRSK
SPLK VRSN
SWKS VRTX
TEAM WDAY
TMUS ZM
TSLA
TXN
VRSK
VRSN
VRTX
WDAY
ZM
ZS



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To: Return to Sender who wrote (88720)7/26/2022 4:08:34 PM
From: Return to Sender
   of 89330
 
BPSOX Unchanged at 25 PnF Buy Signals:

Mon Tues
ADI ADI
AMAT AMAT
AMD AMD
ASML ASML
AVGO AVGO
CRUS CRUS
ENTG ENTG
KLAC KLAC
LRCX LRCX
MCHP MCHP
MKSI MKSI
MPWR MPWR
MRVL MRVL
MU MU
NVDA NVDA
NXPI NXPI
ON ON
QCOM QCOM
QRVO QRVO
SLAB SLAB
SMTC SMTC
SWKS SWKS
TER TER
TSM TSM
TXN TXN



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To: Return to Sender who wrote (88721)7/26/2022 4:10:41 PM
From: Return to Sender
   of 89330
 
No New 52 Week Highs or Lows on the NDX Yet Again Today.

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To: Return to Sender who wrote (88726)7/26/2022 4:18:38 PM
From: Return to Sender
   of 89330
 
TXN Earnings Were Excellent:

finance.yahoo.com

We will have to wait to see if that helps the Semiconductor Index tomorrow.

RtS

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To: Return to Sender who wrote (88727)7/26/2022 4:21:32 PM
From: Return to Sender
2 Recommendations   of 89330
 
Market Snapshot

briefing.com


Industry Watch
Strong: Real Estate, Utilities, Health Care

Weak: Consumer Discretionary, Consumer Staples, Communication Services, Information Technology, Materials

Moving the Market
-- Walmart cuts earnings outlook as food and fuel inflation weigh on customers' discretionary spending activity

-- Downside leadership from mega caps stocks

-- Nervousness in front of earnings reports after today's close from Alphabet and Microsoft and the Fed's rate decision on Wednesday

-- Festering growth concerns following weak new home sales and consumer confidence data

Dow 31763.42 -228.50 (-0.71%)
Nasdaq 11562.54 -220.09 (-1.87%)
SP 500 3921.12 -45.79 (-1.15%)
10-yr Note



NYSE Adv 1193 Dec 1874 Vol 819 mln
Nasdaq Adv 1610 Dec 2659 Vol 4.2 bln


























Closing summary
26-Jul-22 16:30 ET

Dow -228.50 at 31763.42, Nasdaq -220.09 at 11562.54, S&P -45.79 at 3921.12
[BRIEFING.COM] The stock market opened on a softer note and headed lower from there. There were several relatively negative corporate headlines before the open, which only added to the nervous sentiment ahead of the FOMC decision tomorrow. The S&P 500 tested its 50-day moving average (3,919) around midday where it found support from buyers. That support soon wavered and the S&P 500 traded below that level for most of the afternoon before a late session rally left the index just a hair above its 50-day moving average.

Walmart's (WMT 121.98, -10.04, -7.6%) warning ahead of the open was the through-line for the price action in the indices today. The company cut its earnings outlook and said increasing levels of food and fuel inflation negatively affected customers' discretionary spending capacity. That led to a buildup in inventories on things like apparel. Walmart's CEO said this shift in spending will force the company to cut prices on general merchandise.

This warning created a ripple effect for other retailers. Target (TGT 151.81, -5.86, -3.6%) and Ross Stores (ROST 77.96, -4.67, -5.7%), among others, traded down today in solidarity. Adding more context, the SPDR S&P Retail ETF (XRT) closed behind the broader market, down 4.2%.

Other corporate headlines included Shopify (SHOP 31.55, -5.16, -14.1%) announcing it is going to reduce its workforce by approximately 10% by the end of the day. This comes ahead of the company's earnings report tomorrow morning. McDonald's (MCD 257.09, +6.71, +2.7%) reported better-than-expected earnings before the open but noted that "the operating environment across the competitive landscape remains challenging." This sent some restaurant names lower in solidarity.

In addition, Alphabet (GOOG 105.44, -2.77, -2.7%) and Microsoft (MSFT 251.90, -6.93, -2.7%) traded lower in front of their earnings reports after the close on concerns that their guidance would not live up to high expectations.

All this corporate news combined with existing rate-hike concerns ahead of the FOMC decision tomorrow at 2:00 p.m. ET. The worry is that inflation will remain sticky, so the Fed will remain aggressive.

On a related note, some weaker than expected new home sales and consumer confidence data exacerbated existing growth concerns and worries about the Fed's rate hikes leading to a possible recession. The 2-yr note yield ended the day unchanged at 3.04% while the 10-yr note yield fell three basis points to 2.79%.

The advance-decline line further illustrated the buyer trepidation today. Decliners led advancers by a roughly 8-to-5 margin at both the NYSE and the Nasdaq.

Energy futures settled mixed. WTI crude oil futures fell 1.9% to $94.92/bbl. Natural gas futures rose 1.4% to $8.75/mmbtu. Unleaded gasoline futures fell 1.1% to $3.08/gal.

Earnings reports tomorrow morning are headlined by Automatic Data (ADP), Boeing (BA), Bristol-Myers (BMY), General Dynamics (GD), Hilton (HLT), Humana (HUM), Kraft-Heinz (KHC), Norfolk Southern (NSC), Rockwell Automation (ROK), Sherwin-Williams (SHW), Shopify (SHOP), Spotify (SPOT), T-Mobile US (TMUS), and Waste Management (WM).

Tomorrow, market participants will receive the following economic data:

  • 7:00 ET: Weekly MBA Mortgage Index (prior -6.3%)
  • 8:30 ET: June Durable Orders (Briefing.com consensus -0.5%; prior 0.7%), Durable Orders ex-transportation (Briefing.com consensus 0.3%; prior 0.7%), June advance Retail Inventories (prior 1.1%), June advance Wholesale Inventories (prior 2.0%), and June advance goods trade deficit (prior -$104.0 bln)
  • 10:00 ET: June Pending Home Sales (Briefing.com consensus -1.5%; prior 0.7%)
  • 10:30 ET: Weekly crude oil inventories (prior -0.45 mln)
  • 14:00 ET: July FOMC Rate Decision (Briefing.com consensus 2.25-2.50%; prior 1.50-1.75%)
  • Dow Jones Industrial Average: -12.6% YTD
  • S&P 400: -15.7% YTD
  • S&P 500: -17.7% YTD
  • Russell 2000: -19.6% YTD
  • Nasdaq Composite: -26.1% YTD






Market lifts off its lows ahead the close
26-Jul-22 15:30 ET

Dow -239.37 at 31752.55, Nasdaq -234.92 at 11547.71, S&P -49.37 at 3917.54
[BRIEFING.COM] Heading into the close, the market is just off its lows with the S&P 500 briefly pushing back above its 50-day moving average (3,919).

Energy futures settled mixed. WTI crude oil futures fell 1.9% to $94.92/bbl. Natural gas futures rose 1.4% to $8.75/mmbtu. Unleaded gasoline futures fell 1.1% to $3.08/gal.

After the close, Alphabet (GOOG), Microsoft (MSFT), Chipotle Mexican Grill (CMG), Juniper Networks (JNPR), Mondelez Intl. (MDLZ), Skechers (SKX), Texas Instruments (TXN), and Visa (V) are all set to report earnings.

Earnings reports tomorrow morning are headlined by Automatic Data (ADP), Boeing (BA), Bristol-Myers (BMY), General Dynamics (GD), Hilton (HLT), Humana (HUM), Kraft-Heinz (KHC), Norfolk Southern (NSC), Rockwell Automation (ROK), Sherwin-Williams (SHW), Shopify (SHOP), Spotify (SPOT), T-Mobile US (TMUS), and Waste Management (WM).

Tomorrow, market participants will receive the following economic data:

  • 7:00 ET: Weekly MBA Mortgage Index (prior -6.3%)
  • 8:30 ET: June Durable Orders (Briefing.com consensus -0.5%; prior 0.7%), Durable Orders ex-transportation (Briefing.com consensus 0.3%; prior 0.7%), June advance Retail Inventories (prior 1.1%), June advance Wholesale Inventories (prior 2.0%), and June advance goods trade deficit (prior -$104.0 bln)
  • 10:00 ET: June Pending Home Sales (Briefing.com consensus -1.5%; prior 0.7%)
  • 10:30 ET: Weekly crude oil inventories (prior -0.45 mln)
  • 14:00 ET: July FOMC Rate Decision (Briefing.com consensus 2.25-2.50%; prior 1.50-1.75%)



Health care outperforms as market trends lower
26-Jul-22 15:00 ET

Dow -244.99 at 31746.93, Nasdaq -229.06 at 11553.57, S&P -50.13 at 3916.78
[BRIEFING.COM] The S&P 500 remains trading in a narrow range below its 50-day moving average (3,919). A retest of that level earlier was met with some buying interest, but that interest has since faded and the S&P 500 has faded back below that level as well.

As the market continues its decline, only three of the 11 S&P 500 sectors trade in the green. Health care (+0.7%) is the top performer with many components trading up, including Centene (CNC 93.68, +1.75, +1.9%) which reported better-than-expected earnings before the open. Humana (HUM 490.85, -0.94, -0.2%) shows a modest loss ahead of its earnings report tomorrow.

Utilities (+0.7%) and real estate (+0.1%) are the other sectors with gains currently.


Fiserv outperforms following earnings/guidance
26-Jul-22 14:30 ET

Dow -198.15 at 31793.77, Nasdaq -224.55 at 11558.08, S&P -47.28 at 3919.63
[BRIEFING.COM] The benchmark S&P 500 (-1.19%) is still lodged in second place to this point on Tuesday.

S&P 500 constituents Fortinet (FTNT 55.45, -5.55, -9.10%), Carnival (CCL 8.57, -0.61, -6.64%), and PayPal (PYPL 76.96, -4.69, -5.74%) dot the bottom of today's action. FTNT, along with other cyber security/software stocks, underperforms on Tuesday, while PYPL was weaker generally owing in part to warnings from Walmart (WMT 121.38, -10.64, -8.06%) and Shopify (SHOP 31.26, -5.45, -14.85%) about consumer spending.

Meanwhile, Fiserv (FISV 102.97, +4.92, +5.02%) is up nicely today in light of this morning's Q2 beat and upbeat guidance.


Gold starts week with back-to-back losses
26-Jul-22 14:00 ET

Dow -144.85 at 31847.07, Nasdaq -211.24 at 11571.39, S&P -42.15 at 3924.76
[BRIEFING.COM] With about two hours to go the tech-heavy Nasdaq Composite (-1.79%) holds the worst losses among the major averages.

Gold futures settled $1.40 lower (-0.1%) to $1,717.70/oz, posting back-to-back losses to start the week, owing in part to today's solid advance in the dollar.

Meanwhile, the U.S. Dollar Index is up +0.7% to $107.19.


Walmart, Home Depot underperform in DJIA
26-Jul-22 13:30 ET

Dow -103.23 at 31888.69, Nasdaq -194.53 at 11588.10, S&P -36.96 at 3929.95
[BRIEFING.COM] The major averages are little changed in the last half hour, the Dow Jones Industrial Average (-0.32%) still clinging to the shallowest declines.

A look inside the DJIA shows that Walmart (WMT 122.41, -9.61, -7.28%), Home Depot (HD 297.78, -8.37, -2.73%), and American Express (AXP 150.03, -3.76, -2.44%) are underperforming.

Meanwhile, 3M (MMM 142.69, +8.57, +6.39%) is today's top performer.

The DJIA is up +2.63% w/w.

Elsewhere, at the top of the hour, the Treasury's $46 bln 5-year note auction drew a high yield of 2.860% on a bid-to-cover of 2.46.



General Electric flying higher as aerospace segment drives upside results (GE)
Updated: 26-Jul-22 14:05 ET


Bolstered by an impressive performance from its Aerospace segment, General Electric (GE) posted Q2 results that flew past EPS and revenue expectations. In fact, the 26% order growth for GE Aerospace led to the company's largest EPS beat in over five years and helped it to generate positive free cash flow of $200 mln.

Adding to the upbeat narrative, CEO Larry Culp commented that he expects significant improvements in cash flow and profits in 2023, when the company splits into three separate, publicly traded companies. If that prediction comes to fruition, then each of the company's segments should be in a position of strength when the breakup occurs, leaving the new GE (GE Aerospace) as a healthier pure-play aviation company. Recall that GE Aerospace will retain a 19.9% stake in the new healthcare company (GE HealthCare) after the spin-off.

The idea of a standalone aviation company is looking even more appealing today than it did when GE first announced its spin-off plans last November.

  • GE Aerospace was the clear standout in Q2 as revenue jumped by 27% yr/yr to $6.1 bln. The robust recovery in air travel is fueling strong demand for GE's engines, aircraft parts, and aircraft maintenance and repair services. In addition to pricing actions to offset inflationary pressures, the upswing in commercial services revenue pushed the segment margin higher by 1,510 bps yr/yr to 18.7%.
    • There's no slowdown in sight, either, as GE is still forecasting growth of more than 20% and operating profit of $3.8-$4.3 bln.
  • Meanwhile, GE Healthcare continues to contend with supply chain issues, which were exacerbated in Q2 due to the COVID-related lockdowns in China. Furthermore, the segment lapped a difficult yr/yr comparison from 2Q21 when orders grew by 11% organically. Consequently, orders were down by 1% and revenue grew by only 1% to $4.5 bln.
    • For the remainder of FY22, the outlook is mixed with GE nudging its revenue growth forecast higher, guiding for a mid-single-digit increase, compared to its prior guidance of low-to-mid-single-digit growth. However, due to inflationary pressures, GE now anticipates segment profit of $3.0 bln, slightly below its original expectation.
  • Renewable Energy continues to be a laggard as orders for wind turbines remain soft, partly due to uncertainty regarding future tax credits for wind generation. Simultaneously, raw materials inflation is impacting manufacturing costs, driving segment margin lower by 1,110 bps yr/yr to (13.5)%. After initially expecting a rebound in 2H22, GE no longer believes that the Renewable Energy unit will see a step-up in orders this year.
Despite comfortably exceeding Q2 estimates, Culp stated that the company is still trending toward the lower end of its FY22 outlook, which called for EPS of $2.80-$3.50 and organic revenue growth in the high-single-digit range. Moreover, he noted that about $1.0 bln in free cash flow is likely to be pushed out due to weak renewable energy orders and supply chain disruptions. Given this muted outlook, it may seem surprising that GE is reacting as positively as it is today, but we believe investors are mostly focusing on the Aerospace segment, which will solely comprise of GE's business next year.




Whirlpool finds a pool of buyers today on better-than-feared Q2 results (WHR)
Updated: 26-Jul-22 13:34 ET


Household appliance manufacturer Whirlpool (WHR +2%) looks clean today despite dealing with numerous adversities in Q2, including cost inflation, currency headwinds, and cooling demand. The challenges culminated in a top-line miss and trimmed FY22 guidance. However, despite all the woes in Q2, WHR's results were better than many feared, leading to a pool of buyers today.

  • WHR's adjusted EPS decline of 10.5% yr/yr to $5.94 was one such number that was far better than many expected, including analysts, as WHR extended its double-digit earnings streak to 11 consecutive quarters.
  • Operating margins still fell yr/yr in Q2, compressing by 240 bps to 9.0%. However, the situation would have been significantly worse if not for WHR's success in implementing cost-based price actions globally, which lifted margins by 675 bps.
  • In North America, WHR's largest region by revs, operating margins fell 420 bps yr/yr to 14.1%. However, on a two-year stack, margins actually improved by 170 bps despite considerably higher cost inflation since that period.
  • The challenging environment forced WHR to reduce its FY22 outlook, expecting adjusted EPS of $22.00-24.00, down from $24.00-26.00, and revs of $20.7 bln, implying a 6% drop yr/yr, down from prior guidance of positive +2-3% growth. However, the company's long-term goals remain intact, including organic net sales growth of +5-6%, which was raised from roughly +3% in October.
Although these string of highlights are keeping shares of WHR above water today, multiple creatures are lurking underneath. For one, inflationary pressures grew stronger, denting margins by 750 bps in Q2. On the flip side, WHR noted that it anticipates inflation to peak in Q2 and Q3, so the company may be at the tail end of this forceful headwind. Demand is also cooling off considerably, decelerating quicker than WHR expected in Q2, leading to revs falling 4.3% yr/yr to $5.1 bln. Again, WHR was optimistic, expecting the fundamental strength of consumer demand trends to remain in place, backing this up by stating that cooking appliance usage is over two times higher than before the pandemic.

WHR also remains confident that long-term demand will be robust, supported by broader home nesting trends, an undersupplied housing market, and a strong replacement cycle fueled by a rise in remote work. The company is also aggressively buying back stock, reducing its share count by over 10% in the past four quarters. WHR is also expected to conclude its strategic review of its struggling EMEA business by the end of Q3 on its path toward transforming itself into a high-growth, high-margin business. Nevertheless, it is important to note that persistent short-run macroeconomic challenges could negatively affect WHR's upbeat long-term goals.




3M makes three major announcements with health care spin-off plan taking center stage (MMM)
Updated: 26-Jul-22 11:43 ET


3M (MMM) reported lackluster Q2 results and lowered its FY22 outlook due to macroeconomic factors and foreign exchange headwinds, but the sting from that news is being softened by other major developments. Specifically, MMM also announced that its planning to spin-off its Health Care segment, resulting in a more streamlined company that can better prioritize its investments in growth initiatives. This strategy to pare down operations has gained favor with investors recently since it's viewed as a means of unlocking shareholder value through stronger earnings growth. Most notably, fellow industrial conglomerate General Electric (GE) is on track to separate into three independent companies in early 2023.

If that wasn't enough for investors to digest, MMM also disclosed that it's placing its Aearo Technologies subsidiary into bankruptcy proceedings. Aearo Technologies, which manufactures the Combat Arms Earplugs, is facing lawsuits from more than 100,000 military veterans over hearing damage that's purportedly caused by defective earplugs. Rather than fight the thousands of claims in a long, drawn-out process in court, MMM is committing $1 bln into a trust to pay out settlements, and $240 mln to pay for related case expenses. While taking a $1.2 bln ($1.66/share) pretax charge is by no means good news, we believe that MMM's decision to quickly resolve this issue and remove an overhang on the stock is prudent.

Litigation expenses were a main theme surrounding MMM's messy Q2 results. In addition to a $0.17/share charge from "significant litigation", MMM took a $0.51/share hit from payments stemming from litigation regarding its use of PFAS chemicals at its Belgium plant. However, even when excluding all of these extraordinary items, MMM's quarterly results were unimpressive.

  • Total organic sales growth was a paltry 1% as China's COVID-related lockdowns and slowing respirator demand clipped about four percentage points off the growth rate. Last quarter, organic sales increased by 2%.
    • Unsurprisingly, the Transportation & Electronics segment was a notable laggard with total sales down by 3.7%. Like many U.S. automakers, this business has significant exposure to supply chain disruptions across Asia.
    • The Safety & Industrial segment, which manufacturers MMM's disposable respirators, experienced a 3.4% drop in revenue.
  • Adjusted EBITDA margin contracted by 240 bps yr/yr to 26.3% as rising raw material costs took a toll once again. The margin erosion and tepid sales growth led to a 10% yr/yr decline in adjusted EPS to $2.48.
  • With nearly half of its sales derived from international markets, MMM is really feeling the impact of a stronger dollar.
    • Ahead of MMM's earnings report, we were hopeful that the recent easing of commodity prices would provide a boost to its outlook.
    • Unfortunately, that is not the case as foreign exchanged and macro-related headwinds caused MMM to lower its lower its FY22 EPS guidance to $10.30-$10.80 from $10.75-$11.25, and its organic sales growth forecast to 1.5-3.5% from 2.0-5.0%.
There's plenty of news to sift through today, but the main takeaway is that MMM's plan to spin-off its health care business has investors feeling more bullish about its future growth prospects. The health care segment was the lone business to post positive sales growth in Q2 (+0.6%), so it may seem counterproductive to divest a standout performer. However, MMM will retain a 19.9% stake in the new health care company after the spin-off, allowing it to participate in its growth. Overall, we believe that MMM was badly in need of a shake-up as the stock has languished over the past few years. This move to spin-off the health care unit may help to turn the tide.




Coca-Cola's strong brands overcome considerable inflationary and currency headwinds in Q2 (KO)
Updated: 26-Jul-22 11:07 ET


Coca-Cola (KO +1%) looks spritely today following its upbeat Q2 earnings results. After rival PepsiCo (PEP) posted beats on its top and bottom lines in Q2 earlier this month while also raising its organic revenue growth forecast, investors were expecting KO to follow suit. Therefore, by delivering earnings and revenue upside in Q2 while increasing its organic revenue growth forecast, KO is being rewarded today.

  • Revs grew 11.9% yr/yr to $11.3 bln, with non-GAAP EPS growth of 4% yr/yr to $0.70, both topping analyst estimates. As the U.S. dollar strengthens against other currencies, KO's earnings growth was impressive given its overseas footprint (~66% of FY21 revs). KO noted that its earnings were impacted by 9 pts of currency headwinds, coming in 5 pts higher than the company forecasted last quarter.
  • As was the case last quarter, brand loyalty played a meaningful role for KO in Q2, highlighted by improving volumes despite increased consumer prices. In fact, unlike PEP, which saw a 1% volume decline yr/yr in its North American Beverage segment, KO boasted a 2% increase in unit case volume growth in North America, along with even more prominent growth across its other markets.
  • These robust numbers helped keep non-GAAP operating margins from contracting further, dipping just 100 bps yr/yr to 31.7%. KO's margin decline was also mainly due to its BODYARMOR acquisition and currency headwinds.
  • With a much larger away-from-home channel than PEP (~50% versus ~20%) combined with a more extensive international presence (~66% versus ~40%), KO has had to endure a slower recovery from the pandemic than its primary competitor. As such, it is encouraging to see away-from-home channels in most markets experience continual improvements in Q2, which was also a factor in KO's 12% positive impact from consolidated price/mix.
    • Furthermore, everywhere outside of Latin America saw organic revs jump by double-digits yr/yr, with Europe, the Middle East, and Africa (EMEA) leaping 21%.
  • KO's FY22 earnings guidance of $2.43-2.46 was another positive standout as it translated to +5-6% growth yr/yr despite considerable inflationary costs and currency headwinds. KO estimates currency headwinds to impact non-GAAP earnings growth by 9 pts.
    • KO also upped its FY22 organic revenue growth outlook to +12-13% yr/yr from +7-8%.
Overall, KO's Q2 numbers demonstrate its resilience to significant inflationary and currency headwinds. Although KO trades at a relatively pricey 25x forward earnings, its consistently solid quarterly results speak volumes about its ability to produce healthy numbers even in a challenging environment. Its strong brands, which consumers worldwide are willing to purchase despite turbulent economic times, are a further testament to the defensive nature of KO.




Walmart drags down retailers with profit warning; makes us nervous for AMZN report on Thursday (WMT)
Updated: 26-Jul-22 10:42 ET


Walmart (WMT -9%) is sharply lower today and is dragging down a bunch of retailers after the company lowered its profit outlook for Q2 and the full year.

  • The irony is that WMT is raising its US comp (ex-fuel) guidance for Q2 (Jul) to be around +6%, up from prior guidance of +4-5%. Also, guidance for total sales for both periods is above analyst expectations. However, a lot of that is due to food inflation rising double digits. A silver lining is that customers are switching to Walmart to save money during this inflationary period, which is leading to market share gains in groceries.
  • The main reason why WMT lowered EPS guidance is due to margin compression. WMT expects higher sales, but it also expects a heavier mix of food and consumables, which hurts gross margin. What's happening is that higher food prices are hurting consumers' ability to spend on general merchandise. As a result, inventory is getting a bit bloated and WMT is planning more markdowns to move product, particularly apparel. WMT expects Q2 operating margin of just 4.2% and 3.8-3.9% for FY23.
  • So, what does this mean? First off, it is not entirely surprising. Recall that Target (TGT) similarly guided margins lower last month and Ross Stores (ROST) provided very weak guidance for Q2. Also, Walmart does not miss on earnings very often, but they did miss badly in Q1, so it is not a huge leap to expect a guide down in Q2. On the other hand, this EPS guidance is pretty significantly below analyst expectations.
  • More broadly, this guidance is a red flag for retailers generally. Just as supply chains had started to improve, the consumer gets hit with rising inflation. This has caused a reduction in discretionary spending, which is leading to bloated inventories and retailers are forced to mark down prices. And if the world's largest retailer is feeling the pain, you can be sure most others are as well.
Looking ahead, we would be cautious as we get into earnings season for retailers next month. Most retailers have a July 31 quarter end, so with the quarter wrapping up, we expect there will be more guide-downs in the next week or two. We would be particularly concerned for retailers who cater to lower income consumers and have higher exposure to non-food discretionary categories, especially apparel. Names like BURL, TJX, ROST stand out. Also, this report makes us nervous about AMZN's Q2 report on Thursday.

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