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Pre-market futures are down a bit again this morning. We appear to be plateauing a bit this week, following a gallant fight back from near-term lows mid-April. But without heavy impacts from major economic reports or marquee names posting earnings, our sailboat is adrift, ebbing slightly lower. The Dow is down -80 points at this hour, the S&P 500 is -4 and the Nasdaq -6 points. The Dow tries to achieve a seventh-straight positive trading session, although with relatively minuscule gains of late.
Initial Jobless Claims posted higher than expected for the first time in several weeks. A headline of 231K is well ahead of the 214K expected, and even higher than the upwardly revised 209K from the previous week. This level of new jobless claims is the most we’ve seen since 233K back in November of last year, although still a ways from 52-week highs in the 260Ks from June of 2023. Are we headed back to those levels, and is there a measure of seasonality to blame"
Continuing Claims, on the other hand, remained low at 1.785 million. These numbers, reported a week in arrears from initial claims, was still higher than the previous week’s 1.768 million. But anything below 1.8 million — even sub-2 million, really — is consistent with a healthy labor market. One scenario economists foresee that may force the Fed’s hand toward lowering rates without levels of 2% inflation having been reached is if unemployment levels spike. So far, we are not seeing that.
The National Retail Federation (NRF), along with CNBC, is out this morning with a report on consumer spending. Ex-food and energy, April retail spending is down -0.3% month over month, following +0.4% in the prior print. Year over year, this sinks to -0.6% from the previous month, well off the +2.7% this metric was showing just one month ago. Ex-restaurants, consumer retail spending is up +0.4% month over month, double the prior +0.2% print, while we’re still -0.1% year over year, down from the prior +2.9% reported. More clear evidence that the consumer’s appetite for spending, particularly in restaurants, is on the wane.
Videogame producer Roblox RBLX is down big in the pre-market. Following its better-than-expected loss per share of -$0.43 (-$0.53 per share expected) on a top-line miss of $923.8 million ($931.05 million anticipated), Roblox posted much lower revenue guidance for the ongoing quarter: $870-900 million versus $944 million expected, and $4.00-4.10 billion for the full year, down from $4.23 billion in the Zacks consensus. Shares are down -26% ahead of the bell.
Planet Fitness PLNT beat bottom-line estimates this morning. Earnings of 53 cents per share outpaced expectations by 4 cents (and cruised past the 41 cents per share posted a year ago), while revenues of $248.02 million narrowly missed estimates in the quarter. Yet the stock is down another -4.6% this morning, adding to the -15% losses year to date. Taking consumer spending levels into account generally, here is another customer-facing company with retail sales risks. For more on PLNT’s earnings, click here.
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UBS Group AG’s strong capital position, expansion strategies and business restructuring initiatives will continue to aid its financials. The growth in NII has been aiding the top line growth.
Cabot remains focused on boosting its specialty compounds business. It will also gain from the carbon plant buyout in China. Strong cash level is an added advantage.
As Tyson Foods progresses into the back half of fiscal 2024, it is focused on executing fundamental strategies and maximizing the multi-protein portfolio.
Strength in the Engine Products, Engineered Structures and Fastening Systems segments, and solid liquidity position augur well for Howmet. Its consistent measures to reward shareholders spark optimism.
WestRock is poised well on strong packaging demand for food, beverage, household cleaning and e-commerce. A solid balance sheet, investment in growth projects and recent acquisitions will drive growth.
Public sector’s ongoing transition to cloud-based solutions from on-premise and outdated systems bodes well for Tyler. Stable revenue base and strategic acquisitions are key positives.
ATI should benefit from strength in its HPMC unit driven by the aerospace and defense sectors. The HRPF facility and efforts to improve operational efficiency will also contribute to its performance.
Restructuring efforts and favorable market conditions have led to improved operating margins, driven by strong demand in the solar and infrastructure industries.
Rising costs, if not checked, can hurt Five Below’s margins. The Competitive retail landscape, changes in consumer behavior and high interest rate scenarios could impede the stock's momentum.
Persistently rising expenses is likely to hurt Bank of Hawaii’s bottom-line growth. Further, declining fee income restricts top-line expansion. Also, geographic concentration is a major headwind.
Rising fuel price may impact the company's commercial business. Supply chain challenges impacting the 787 program may impact Spirit AeroSystems' growth
Stiff competition from other providers of news, information, entertainment and real estate-related services and decline in advertising expenditures may have a direct bearing on News Corporation.
Bandwidth operates in a highly competitive market. It faces concentration risks as revenues are generated from a limited number of enterprise customers.
As Tyson Foods progresses into the back half of fiscal 2024, it is focused on executing fundamental strategies and maximizing the multi-protein portfolio.
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.
Central Garden & Pet has been advancing digital capabilities, optimizing its supply chain, expanding data analytics capability and focusing on marketing activities to better engage with customers.
Strength across all product groups is a positive catalyst for Edwards Lifesciences. The company’s bullish long-term growth strategy buoys optimism on the stock.
