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Pre-market futures are positive across the board at this hour. We do see some discrepancies, depending on the index, particularly after this mornings earnings reports and economic prints have hit the tape: the Dow has moved from +50 points to +70, the Nasdaq has gone from +40 points to +25, and the S&P 500 has remained steady at +5 points so far in early trading. So far this week, all three indices are in the red over the past month — as of this past weekend.
Initial Jobless Claims remain the steadiest of all employment metrics over the past six months or so. This morning, we see 212K new claims filed for last week, below the 215K expected but in-line with the slightly upwardly revised 212K from the previous week. Since November of last year, we’ve only had one weekly read above +230K and three below +200K. What’s more significant about this is that we are now back to our pre-pandemic norms on new jobless claims.
Continuing Claims have also been exceptionally well-behaved. The 1.812 million reported for two weeks ago (Continuing Claims reports a week in arrears from new claims) is only slightly ahead of the downwardly adjusted 1.810 million the previous week, and back to where we were in the earliest months of 2020 (though not in the 1.5-1.6 million range we saw in 2019). Since a bout of turbulence in longer-term jobless claims from last fall to early February, we’ve hovered right around 1.8 million claims — a very good sign for the labor market as a whole.
The April Philly Fed survey surprised to the upside this morning. Its 15.5 reported is the highest monthly print in two years. This beats the 1.5-2.5 estimate and unrevised 3.2 from last month. This also marks the third-straight positive manufacturing survey from the sixth-largest city in the U.S., which follows five straight months in negative territory. Discounting the crater in Philly Fed data from the early pandemic, levels around +10-20 are consistent with norms we’ve seen over the past 10 years.
Zaxcks Rank #2 (Buy)-rated D.R. HortonDHI is out with fiscal Q2 earnings this morning. The homebuilding major outperformed notably on both top and bottom lines: earnings of $3.52 per share amounted to a double-digit positive surprise over the $3.08 in the Zacks consensus, while $9.11 billion in revenues beat estimates of $8.27 billion in the quarter. Full-year revenue guidance has bumped higher, just like the share price this morning: +3.6%, bringing the stock back into positive territory year to date.
After today’s closing bell, Netflix NFLX brings out Q1 earnings. The leader in streaming entertainment is expected to show +56% earnings growth year over year, +13.5% on revenues. During the regular trading session, Existing Home Sales and Leading Economic Indicators, both for March, are expected to come out. We’ll also hear comments on the economy and the interest rate dot-plot from Fed Governor Michelle Bowman and Fed Presidents John Williams (New York) and Raphael Bostic (Atlanta).
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Focus on improving the siding business segment, strategic investments and cost-reduction across all businesses as well as enhancing its shareholders’ return bodes well.
Transition toward multi-cloud environments, rising demand for application security, acquisitions and partnerships are aiding F5’s growth. Ample liquidity and an aggressive shareholder return policy are other positives.
Core Labs’ technology-heavy portfolio of proprietary products and services gives it the opportunity to optimize production from new and existing fields.
Wells Fargo continues to benefit from deposit growth, strong capital position and a solid liquidity profile. Also, cost-efficiency initiatives might support bottom-line growth in the upcoming period.
Tractor Supply has been witnessing strength in its Life Out Here Strategy. The company’s e-commerce business and Neighbor's Club loyalty program are impressive.
Kroger is making investments to enhance product freshness and quality, and expand digital capabilities. Impressively, it has been introducing new items under its ‘Our Brands’ portfolio.
Rising demand for the SWP, solid total asset balance, SEI Investments’ partnership interest in LSV, strategic buyouts and global presence will continue supporting growth in the quarters ahead.
The rising cost of sales has been a cause of concern for Dolby over the past few quarters, primarily on account of increased product cost and higher licensing expenses.
Lindsay is witnessing supply-chain constraints, most notably in electronics, which will continue to impact results. The recent decline in corn prices is also concerning.
Alibaba's business structure involves certain risks due to the strict laws in China, which along with lower mobile monetization, increasing competition and integration risks are concerns.
The operational constraints may adversely impact results. Weaker methanol prices are also hurting margins. Lower deliveries are likely to affect margins.
Sun Life faces earnings pressure due to volatility in equity markets and interest rates, increased expenses weighing on margin expansion and regulatory uncertainties are concerns.
Hibbett’s performance might have been hurt by inflation, higher interest rates and weak consumer confidence. A tough retail landscape also remains an added deterrent.
Google has shown good execution to date. Its dominant search market share is a positive. Its expanding cloud footprint and strengthening presence in the smart home market remain noteworthy.
Netflix’s growing subscriber base, driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos are key drivers.
Kroger is making investments to enhance product freshness and quality, and expand digital capabilities. Impressively, it has been introducing new items under its ‘Our Brands’ portfolio.
