4/28/2023 4:05:46 PM
Heading into this week, it was all about earnings, earnings, and more earnings. Corporate profitability remained above what most had expected coming into the Q1 earnings season, though firms were not raising guidance by as much as they had beat significantly lowered estimates. Mega-cap tech was led by Microsoft and Meta earnings reports garnering significant excitement among investors. Nevertheless management teams also acknowledged real risks on the horizon and ongoing macroeconomic headwinds will likely curtail growth for some time.
Economic data continued to show real deceleration. April Richmond Fed data contracted more than expected and included significant declines in both new orders and backlog. Consumer confidence data missed estimates and March was revised lower despite corporate leaders insisting that the consumer remains on solid footing. The US 10-year drifted lower as market expectations solidified further around a 25bps hike at next week’s FOMC meeting. The Euro rose ahead what is expected to be the first of at least two more 25bps hikes next week by the ECB. The Yen exhibited notable weakness on Friday after the new BOJ Governor Ueda largely stayed the course in his first official meeting heading the central bank. For the week, the S&P gained 0.9%, the DJIA added 0.9%, and the Nasdaq rose 1.3%.
The corporate news week started off with the bankruptcy filing of Bed Bath and Beyond, ending its long struggle to remain solvent. First Republic Bank continued to flounder as it appears to be on track to FDIC receivership, failing any last minute white knight stepping in. Meanwhile other regional banks showed some resilience, notably PacWest, which reported quarterly results close to expectations and announced that deposits have risen significantly since the collapse of SVB. GM beat earnings expectations handily and talked about its progress in EV production, but shares still fell as investors worried about auto market pricing pressures and a potential recession.
Many tech giants reported this week, and Microsoft and Meta shined, both beating expectations by a wide margin and touting their efforts in developing new AI products. Google and Amazon didn’t fare as well with their earnings results, and Amazon in particular highlighted that customers are restraining their cloud spending amid economic uncertainties. Adding to pressure in that business, it was reported that Alibaba was cutting prices at its cloud unit by as much as 50% for core and storage products. And in M&A news, UK antitrust regulators rejected proposed remedies for Activision’s deal, sharply reducing chances that the acquisition by Microsoft will come to pass.
SUN 4/23
BBBY Said to have filed for Chapter 11 bankruptcy protection on Apr 23rd; To eventually close all of its 360 Bed Bath & Beyond and 120 Buybuy Baby locations - press
MON 4/24
CSGN.CH Reports Q1 (CHF) Adj Pretax -1.32B v -1.01B y/y, Rev 18.5B v 4.41B; Includes write-down of 15.0B in AT1 capital notes; Notes net new outflows moderated but have not yet reversed as of Apr 24th
(DE) German govt agrees wage deal with Verdi trade union for public-sector workers (>2.5M employees); To pay one-off payment of €3,000 over 15 months and to raise monthly wages by minimum €340 from Apr 1st, 2024
KO Reports Q1 $0.68 v $0.65e, Rev $11.0B v $10.9Be
(US) APR PRELIMINARY S&P/MARKIT MANUFACTURING PMI: 52.8 v 48.0e
(US) APR DALLAS FED MANUFACTURING ACTIVITY: -23.4 V -11.0E
FRC Reports Q1 $1.23 v $0.72e, Rev $1.2B v $1.13Be; Deposits down 40.8% q/q (incl $30B infusion), but deposit activity remained stable through 4 weeks to Apr 21st; To cut workforce 20-25%
FRC Exec: Pursuing strategic options such as restructuring balance sheet; Retained 90% of wealth management professionals and wealth assets from teams that left represent less than 20% of total - earnings call comments
PKG Reports Q1 $2.20 v $2.27e, Rev $1.98B v $2.08Be; Guides Q2 below consensus; Notes after a strong start in Jan, consumer spending was increasingly softer as Q1 progressed
(JP) Japan Cabinet Office (Govt) Apr Monthly Report: Maintains overall economic assessment, reiterates economy picking up moderately but sees weakness; raises view on imports [first upgrade since July 2022]
(JP) Semiconductor Equipment Association of Japan (SEAJ) Mar Chip-Making Equipment Billings Y/Y: 6.5% v 0.1% prior
TUES 4/25
UBSG.CH Reports Q1 $0.32 v $0.61 y/y, Rev $8.74B v $9.38B y/y
ABBN.CH Reports Q1 Net $1.04B v $877Me, Rev $7.86B v $7.55Be; Raises FY23 Rev outlook citing strong start for the year
NOVN.CH Reports Q1 Core EPS $1.71 v $1.57e, Rev $13.0B v $12.5Be; Raises FY23 guidance
NESN.CH Reports Q1 (CHF) Rev 23.5B v 23.1Be
(UK) Kantar announces 12 week grocery market share and sales: UK grocery price inflation rose by 17.3% in the four weeks to Apr 16th v 17.5% prior
(US) Biden administration said to be quietly preparing for the possibility that Ukraine’s counteroffensive falls short of expectations; Proposals mulled reportedly include a “ceasefire” and not permanent peace talks, leaving the door open for Ukraine to regain more of its territory at a future date - Politico
ABBN.CH CEO: Many other markets like India and South America have stepped up and helped compensate for orders decline in US, China and Germany; Upgraded guidance based on strong start to year which continued through Q1 - post earnings comments
(UK) Bank of England (BoE) Statement: BoE, BoJ, ECB and SNB in consultation with Fed to revert frequency of 7-day operations from daily to once-per-week, effective May 1st
(EU) EU countries reach deal to approve reform of EU Carbon market Deal to cut carbon market emissions by 62% from 2005 levels by 2030; To launch second carbon market in 2027 - press
(US) US Pres Biden formally announces his 2024 presidential re-election campaign (as speculated)
CNC Reports Q1 $2.11 v $2.23e, Rev $38.9B v $36.3Be; Raises FY23 outlook
GE Reports Q1 $0.27 v $0.13e, Rev $14.5B v $13.4Be; Raises lower-end of FY23 outlook
GM Reports Q1 $2.21 v $1.58e, Rev $40.0B v $38.5Be
MMM Reports Q1 $1.97 v $1.59e, Rev $8.00B v $7.47Be; Announces additional restructuring actions affecting 6K positions globally
MCD Reports Q1 $2.63 v $2.30e, Rev $5.90B v $5.57Be
RTX Reports Q1 $1.22 v $1.11e, Rev $17.2B v $16.9Be
BIIB Reports Q1 $3.40 v $3.31e, Rev $2.46B v $2.34Be; Deprioritized certain programs in stroke, gene therapy, and ophthalmology as part of ongoing R&D pipeline optimization
ADM Reports Q1 $2.09 v $1.71e, Rev $24.1B v $23.5Be
(US) Nevada reports Mar casino gaming Rev $1.31B, -3.2% y/y, Las Vegas strip Rev $724.6M, -2.9% y/y
(US) APR RICHMOND FED MANUFACTURING INDEX: -10 V -8E
(US) APR CONSUMER CONFIDENCE: 101.3 V 104.0E
KER.FR Reports Q1 Rev €5.08B v €5.06Be
ASM.NL Reports Q1 Net €183M v €146M y/y, Rev €710M v €517M y/y; Memory market demand weakened and expected to remain low for remainder of the year
(US) March money supply M2 down 1.2% ($257.3B) from prior month to $20.818T (biggest drop on record since 1959]
MSFT Reports Q3 $2.45 v $2.22e, Rev $52.9B v $51.0Be
GOOGL Reports Q1 $1.17 v $1.06e, Rev $58.1B v $56.9Be; Authorizes to buy back additional $70B of shares (5.3% of market cap)
PACW Reports Q1 $0.66 v $0.65e, Rev $316M v $320Me; Deposits rose by $1.1B in the last 11 days of March and $700M subsequent to quarter-end
CMG CEO: Q1 strength continued into Apr; Feel good where we are now and no plans to take additional pricing, but will if we need to – CNBC
CARR Confirms to acquire Viessmann Climate Solutions for €12B in cash and stock issued directly to Viessmann Group with a long-term ownership commitment
MSFT CEO: Guides Q4 total segments Rev $54.85 v $54.8Be (calculated); Sees FX headwind of 2% on revenue during Q4 - earnings call comments
BABA Cloud unit said to cut prices by up to 50%, relates to core and storage products - Chinese press
WED 4/26
ROG.CH Reports Q1 (CHF) Rev 15.3B v 16.4B y/y
BN.FR Reports Q1 Rev €6.96B v €6.67Be; Raises FY23 guidance
GSK.UK Reports Q1 Adj £0.37 v £0.33e, Rev £6.95B v £6.49B
(SE) SWEDEN CENTRAL BANK (RIKSBANK) RAISES REPO RATE BY 50BPS TO 3.50%; AS EXPECTED; decision was not unanimous
(US) US 5-year Credit Default Swaps (CDS) rise to 62bps v 59bps d/d (highest since 2011
HLT Reports Q1 $1.24 v $1.14e, Rev $2.29B v $2.26Be; Raises guidance
ADP Reports Q3 $2.52 v $2.42e, Rev $4.93B v $4.89Be; Raises eps guidance
PAG Reports Q1 $4.31 v $3.92e, Rev $7.34B v $6.74Be; Automotive retail and commercial truck retail demand for new vehicles remains strong
ATVI *UK CMA blocks Microsoft from purchasing Activision to protect innovation and choice in Cloud Gaming; Found Microsoft's solution had significant shortcomings and would require regulatory oversight by CMA
(UR) CHINA PRES XI SPEAKS WITH UKRAINE PRES ZELENSKIY FOR 1ST TIME SINCE UKRAINE WAR STARTED VIA CALL; Xi tells Zelenskiy negotiations are only solution for the war
(CN) China Foreign Ministry: In near future, China will send delegation to Ukraine and other countries to help reach political settlement; China and Ukraine are strategic partners and since Ukraine crisis started, China has actively promoted peace talks
(US) MAR PRELIMINARY DURABLE GOODS ORDERS: 3.2% V 0.7%E; DURABLES (EX-TRANSPORTATION): +0.3% V -0.2%E
FRC David Faber: Sources continue to suggest White House/Treasury are unwilling to step up pressure on banks to purchase FRC assets at a price that will allow for repair of balance sheet – CNBC
(US) DOE CRUDE: -5.1M V -1ME; GASOLINE: -2.4M V -1ME; DISTILLATE: -0.6M V -1ME
(US) Atlanta Fed GDPNow: Cuts Q1 GDP estimate from 2.5% to 1.1%; On poor NAR, Q1 investment figures
META Reports Q1 $2.20 v $1.96e, Rev $28.7B v $27.5Be; Expects Irish Data Protection Commission (IDPC) to issue a decision in May relating to transatlantic data transfers of Facebook EU/EEA user data; Trims Opex guidance
URI Reports Q1 $7.95 v $8.12e, Rev $3.29B v $3.14Be
005930.KR Reports final Q1 (KRW) Net 1.58T v 11.3T y/y, Op 640B v 14.1T y/y (600B prelim), Rev 63.7T v 77.8T y/y (63.0T prelim); Expects recovery in chip demand during H2 2023
THRS 4/27
DBK.DE Reports Q1 Pretax €1.85B v €1.63Be, Rev €7.70B v €4.46Be; On track to meet or exceed 2025 targets
STM.FR Reports Q1 $1.10 v $1.32 y/y, Rev $4.25B v $3.55B y/y; Raises lower-end of FY23 outlook, but notes potential pricing headwinds in H2 2023
BAS.DE Reports final Q1 Net €1.56B v €1.22B y/y, Adj EBIT €1.93B v €1.88B y/y, Rev €20.0B v €23.1B y/y
UNA.NL Reports Q1 Rev €14.8B v €13.8B y/y
TTE.FR Reports Q1 Adj Net $6.54B v $6.3Be, Adj EBITDA $14.2B v $12.7Be; Confirms to accept offer from Suncor for Canada oil sands assets; To buy back up to $2.0B in shares during Q2; Raises interim dividend 7% to €0.74/shr
(RU) Russia Dep PM Novak: OPEC+ sees no need for further oil output cuts; To redirect 140M tons of oil and oil productions from Europe to Asia during 2023
7201.JP Raises FY23 Net ¥220B (prior ¥155B) Op ¥370B (prior ¥360B); Cuts Rev ¥10.5T (prior ¥10.9T)
UNA.NL CEO: All business groups growing ahead of expectations; Does not see any particular downtrading - post earnings comments
SO Reports Q1 $0.79 v $0.75e, Rev $6.48B v $6.71Be; Encouraged by continued strong residential customer growth
CAT Reports Q1 $4.91 v $3.79e, Rev $15.9B v $15.2Be
CAT Guides Q2 Rev to increase q/q in line with normal seasonality; FY23 adj Op margin to be in the top half of our target range - earnings slides
CBRE Reports Q1 $0.92 v $0.83e, Rev $7.41B v $7.34Be
CMCSA Reports Q1 $0.92 v $0.81e, Rev $29.7B v $29.4Be
OSK Reports Q1 $1.59 v $0.99e, Rev $2.27B v $2.09Be; Raises guidance; Continues to experience strong demand for its access products
1211.HK Reports Q1 (CNY) Net 4.13B v 0.8B y/y, Rev 120.2B v 69B y/y
ABBV Reports Q1 $2.46 v $2.46e, Rev $12.3B v $12.1Be
GWW Reports Q1 $9.61 v $8.55e, Rev $4.09B v $4.07Be; Raises guidance
MA Apr month to date transaction volume +17% y/y, Cross-border volume +29% y/y
(US) MAR PENDING HOME SALES M/M: -5.2% V 0.8%E; Y/Y: -23.3% V -20.7%E
AMZN Reports Q1 $0.31 v $0.25e, Rev $127.4B v $124.4Be; Guides Q2 op inc very wide
INTC Reports Q1 -$0.04 v -$0.16e, Rev $11.7B v $11.1Be
TMUS Reports Q1 $1.58 v $1.45e, Rev $19.6B v $19.90Be; Raises FY guidance
INTC Expecting modest H2 2023 recovery; On our way to deliver $3B of cost savings in 2023, $8-10B annually exiting 2025
SNAP Reports Q1 +$0.01 v -$0.01e, Rev $988.6M v $1.01Be
X Reports Q1 $0.77 v $0.57e, Rev $4.47B v $4.16Be
(US) Fed releases factors affecting reserve balances (H.4.1): Discount window borrowing rose to $73.9B v $69.9B w/w; Banks have borrowed $81.3 v $74B w/w from new BTFP facility
AMZN CFO: Customers continue to evaluate ways to optimize their cloud spending; Seeing these optimizations continue into Q2 with April Rev growth rates ~500bps lower than what we saw in Q1 - earnings call comments
(JP) JAPAN APR TOKYO CPI Y/Y: 3.5% V 3.3%E; CPI (EX-FRESH FOOD) Y/Y: 3.5% V 3.2%E; Tokyo Core CPI is highest since 1982
(US) EPA to waive E15 from volatility limits on an emergency basis, to permit summer sales of higher-ethanol gasoline - US financial press
FRI 4/28
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Removed forward guidance on interest rates and confirms to conduct broad-perspective review lasting 1-1.5 years
COF CEO: Net charge-off rate hasn't caught up yet, but based on what we see in our delinquencies, we think the monthly charge-off rate will get back to 2019 levels around mid-2023; Our credit metrics tend to move a quarter or two ahead of the industry - call comments
(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.2%E; Y/Y: 0.8% V 0.9%E
ENI.IT Reports Q1 Adj Net €2.91B v €2.30Be, Adj Op €4.64B v €3.60Be, Rev €27.2B v €32.1B y/y; Planned €2.2B share buyback is confirmed
6758.JP Reports FY22/23 Net ¥937B v ¥882.2B y/y, Op ¥1.21T v ¥1.20T y/y, Rev ¥11.5T v ¥9.92T y/y
(DE) GERMANY APR NET UNEMPLOYMENT CHANGE: +24.0K V +8.0KE; UNEMPLOYMENT CLAIMS RATE : 5.6% V 5.6% PRIOR’
(DE) GERMANY Q1 PRELIMINARY GDP Q/Q: 0.0% V 0.2%E; Y/Y: -0.1% V +0.3%E (avoids a technical recession)
- GDP NSA (unadj) Y/Y: 0.2% v 0.8%e
(EU) EURO ZONE Q1 ADVANCE GDP Q/Q: 0.1% V 0.2%E; Y/Y: 1.3% V 1.4%E
(UR) Ukraine Defense Min Reznikov: Preparations for our counteroffensive are being wrapped up
(EU) Reportedly more than a quarter of Europe is in drought as of April; Some experts warn even rainy spring can’t fix Europe’s ongoing groundwater shortage – Politico
CVX Reports Q1 $3.55 v $3.37e, Rev $50.8B v $48.0Be; Expects to buy back $4.375B in shares in Q2 v $3.75B q/q
(DE) GERMANY APR PRELIMINARY CPI M/M: 0.4% V 0.6%E; Y/Y: 7.2% V 7.3%E
(US) Q1 EMPLOYMENT COST INDEX (ECI): 1.2% V 1.1%E
(US) MAR PERSONAL INCOME: 0.3% V 0.2%E; PERSONAL SPENDING: 0.0% V -0.1%E
(US) MAR PCE DEFLATOR M/M: 0.1% V 0.1%E; Y/Y: 4.2% V 4.1%E
(US) APR FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 63.5 V 63.5 PRELIM
(US) Atlanta Fed GDPNow: Sets initial Q2 GDP estimate at 1.7% vs latest Q1 indication of 1.1%
(US) Fed's Barr releases report on SVB failure; Must address weaknesses in supervision and regulation; Need stronger standards across a broader set of banks, will consider improved liquidity and capital requirements
(US) Mar Dallas Fed Trimmed Mean PCE (m/m) +3.4% v 4.6% prior
