Afternoon Round-up - May 17, 2023

🔮 Welcome back to Finsights, fellow financial wizard. Let’s get you up to speed on the market with a flick of your finger! 🪄

• 💃 Feels like a market tease - happy hump day

• 📝 Burry and WAL pump it!

• 🎵 Our optimism in the earnings tune

📈 Market Levels: Wednesday was a dance party for the markets. The SPX jumped 49 points (1.19%) to 4158, and the Dow spiked 409 points (1.24%), while the Nasdaq sashayed up 157 points (1.28%). The R2K was the star of the show, surging 38 points (2.21%). The China HXC Index missed the beat, finishing down 0.26%. Treasuries were out on the curb with yields rising 2-7bp across the board. The USD flexed its muscles, spiking 90bp against the JPY. Brent prices were the life of the party, surging 2.60%, while gold took a modest 0.30% coffee break.

🌞 What Happened Wednesday: Stocks strutted their stuff on Wednesday, with a few catalysts providing the right tune. The WAL deposit update sparked a rally in bank stocks, and some better-than-expected earnings reports (specifically KEYS, TGT, TGI, and TJX) were more uplifting than finding a $20 bill in an old pair of jeans. The odds of a debt ceiling breach are dropping faster than a hot potato, fostering a positive vibe. But the rally wasn't all sunshine and rainbows, with a healthy serving of cynicism, skepticism, anger, and "I guess I have to" participation.

🤔 How We're Thinking About Stocks: The April-end earnings season hasn't started off like a rocket to the moon, but our optimism is sticking around like gum on a shoe. Consumer behavior is normalizing back to pre-COVID conditions, so we see the retail sector's troubles as a speed bump rather than a pothole. As we look ahead, we expect valuations and price targets to start eyeing up 2024. Debt ceiling risks are stepping back like a shy dancer at a party, the Fed overhang is lifting, and the technical factors are as bullish as a Wall Street charging bull. We're still more glass-half-full than most, predicting the recent range-bound price action will break free and hit a high note above 4200.

Consumer

🤠👢 BOOT (Boot Barn), the go-to store for cowboy boots and western wear, saw a steeper tumble than a rodeo rider this fiscal Q4. Comparable store sales were down by 5.5%, a harsher drop than the 1.9% Wall Street was expecting. Yikes, that's a rough ride! 🏜️

🎳 BOWL (Bowlero), not just your average bowling alley but a fun haven of arcade games and tasty treats, had a striking Q3. Their revenue rolled in at $316M, surpassing the $300M that Wall Street had pinned. Sounds like a perfect strike! 🎉

🍲 TUP (Tupperware), not just your grandma's favorite food container, but a staple in homes worldwide, has been whispering about "substantial interest" in a potential financing package. Let's hope this is a recipe for their success! 🥘

Healthcare

🔬 NSTG (NanoString), the tech genius turning the complex world of protein detection into a no-sweat game, faced a negative court ruling in Munich. But they're not shaken - it only applies to Germany! Keep calm and science on, NSTG! 🔭

💊 PFE (Pfizer), the pharma giant that's more than just your annual flu shot provider, is sounding the alarm. They warn that restricting pharma mergers could be a "disaster" for innovation. Easy there, regulators! 🚫

Industrials

🏭 HWKN (Hawkins), the chemical maestro that's more than just test tubes and white coats, had a Q4 revenue hitting $228.1M, beating Wall Street's estimate of $214M. However, they're seeing stormy clouds ahead in their Industrial segment. Buckle up, it might get bumpy! 🎢

Tech

💻 CSCO (Cisco), the networking hardware powerhouse, crunched the numbers and came out on top this FQ2. Their EPS stood at $1.00, beating the Street's bet by 3¢, with revenue growth climbing 14%, a whisker ahead of expectations.

On the call, Cisco's management brought attention to the decline in product orders, down 23%. But don't panic! They're attributing it to a normalizing supply chain. As for F24, they're aiming for modest revenue growth, hopefully outperforming the Street's 4.3% projection. 💼

🔍 NEWR (New Relic), the software analytics company, might soon be owned by a new crowd. A consortium, including Francisco and TPG, are said to be eyeing a deal north of $5B. Big moves! 💰

❄️ SNOW (Snowflake), the cloud computing giant, is reportedly in chats to buy search startup Neeva. This could mean a flurry of new AI features for customers. 🧠

🔌 SNPS (Synopsys), the folks helping to drive your smart devices with their electronic design automation, delivered decent results in FQ2. Their revenue came in at $1.395B, topping the Street's $1.37B bet, and they're now raising their full-year guidance. 📊

🎮 TTWO (Take Two), the video game magnate behind the likes of GTA, had a mixed bag in FQ4. Revenue landed at $1.39B, beating the Street's $1.34B bet. However, EPS and EBITDA both fell short, and it seems the Street's expectations for F24 might be a level too high. 🕹️

🛰️ VSAT (Viasat), your reliable buddy for satellite broadband, reported robust FQ4 EBITDA at $124.1M, breezing past the Street's $110M projection. However, they missed the mark with revenues slightly. It's a bit of a bumpy ride for the next quarter but they see EBITDA climbing by ~10% for F24. 🌐

🌯 That's a wrap for the day. 🌯

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