Down, Not Out!

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

• 💃 Market slides on a Tuesday … great! 🥲

• 📝 Our view has changed on stocks

• 🎙️ A few more earnings announcements

 🎯 Market levels – The Dow took a tumble, falling 231 points like a roller coaster ride, while the Nasdaq plunged 160 points, making investors feel like they were on a wild freefall. The China HXC Index also experienced a sharp drop, leaving investors feeling a bit queasy. Treasuries managed to recover slightly, but they didn't show much concern about the looming debt ceiling issue. It's like they're sipping on a calm cup of tea while the stock market roller coaster rumbles on. 🎢😮 Meanwhile, the DXY climbed like a determined mountaineer, and Brent prices rallied like a bull charging ahead after a warning from Saudi Arabia to "watch out." On the other hand, US natural gas fell like a deflating balloon, bringing some chill to the market. As for Bitcoin, it managed to finish the day with a small victory lap, while gold shimmered slightly higher. 💰✨

🗞️ Tuesday Turmoil – Stocks took a dive on Tuesday, and while many blamed it on "debt ceiling concerns," the overall anxiety in the market didn't seem as significant as the headlines suggest. If investors were truly panicking, we would see a surge in Treasuries, but that's not the case. It's like everyone's on a roller coaster ride, holding on tight but not completely losing their cool. Of course, we would all prefer the debt ceiling issue to vanish into thin air, but whatever the outcome, it won't be a dramatic game-changer for the broader market narrative. A "deal" won't trigger a massive rally, and a ceiling breach may not cause the kind of crisis that some fear.

It seems there's a bit of a crowd control issue happening, as seen with the sudden slump in luxury stocks in Europe and a similar phenomenon affecting US tech. The growth outlook is improving as things stabilize and recover from the disruption caused by regional banks earlier this year. However, with rates and Fed expectations taking a hawkish turn, it's like a recalibration is happening, and everyone is trying to find their footing in this new environment. 📉🤔

📊 Our Evolving View - While we remain bullish on earnings and see positive signs in the market, there are some nuances to consider. Recent retailer reports aren't as gloomy as the headlines suggest, thanks to adjusted factors like weather and shifting consumer spending. The "Great Normalization" is gradually bringing the economy back to pre-COVID levels, and growth outlook is brightening. Confidence is returning to banks and real estate, but it's causing yields and Fed expectations to shift in a hawkish direction. Valuations are challenging, but not overly expensive if we focus on 2024 earnings estimates. However, there's a technical concern with overcrowding in the tech sector. The debt ceiling remains a nuisance, but not a catastrophic event. Earnings remain our guiding star, and we believe the SPX will surpass 4200, albeit with some choppy price action. Hang on tight! 🚀📈

Consumer

👗 URBN (Urban Outfitters) 🎨, the fashion-forward retailer, brought some style to the earnings game with impressive results. Their EPS of 56c soared above the Street's forecast of 35c, and their comps growth of +5% surpassed expectations. While Urban Outfitters fell slightly short on comps, Anthropologie and Free People stole the show with double-digit growth. With robust gross margins and a decrease in inventory, it's clear that Urban Outfitters knows how to stay on-trend and capture the attention of fashion enthusiasts. 💃

👕 VFC (VF Corp) 👟, the global apparel company behind renowned brands like North Face, delivered a solid performance in FQ4/Mar. Their EPS of 17c outshined the Street's estimate of 14c, and while revenue remained flat, there were bright spots in their North Face and international segments. North Face saw an impressive 16% revenue jump, particularly driven by strong momentum in Greater China. Although Americas experienced a decline, VF Corp's supply chain showed improvement. Looking ahead, they anticipate EPS of 2.15 for F24, aligning closely with expectations, and anticipate flat-to-slightly higher revenue. With their global presence and strategic focus on key markets, VF Corp continues to make its mark in the world of fashion. 👖

Healthcare

💉 A (Agilent) 🧪, a leading diagnostics-linked healthcare company, delivered decent results in FQ2/April. While they achieved modest revenue upside and a slight EPS beat, they joined the ranks of healthcare firms adjusting their guidance for the year. Their FQ3 EPS projection of 1.37 fell below the Street's expectation of 1.44, and revenue is anticipated to range between $1.64-1.675B (compared to the Street's $1.76B estimate). Agilent now expects core revenue growth of +3-4.5% for the full year and EPS in the range of 5.60-5.65. While the guidance reduction isn't drastic, it reflects the cautious outlook in the diagnostics sector. However, Agilent remains a trusted player in the healthcare landscape, dedicated to advancing diagnostics and improving patient care. 🏥

Housing

🏡 TOL (Toll Brothers) 🏘️, the renowned luxury homebuilder, delivered exceptional results that had investors buzzing. Their EPS of 2.85 exceeded expectations, showcasing their commitment to excellence in the housing market. With impressive numbers in deliveries, gross margins, and expense control, Toll Brothers proved their ability to build not only beautiful homes but also a strong bottom line. The raised guidance for the year, including increased deliveries, indicates a favorable outlook for the housing industry. With stabilized mortgage rates and growing buyer confidence, the demand for homes continues to surge. Toll Brothers is well-positioned to ride this wave, catering to the needs of homebuyers and capitalizing on the shortage of homes for sale in the market. 🏠

Tech

📊 INTU (Intuit) - the undisputed king of tax software with TurboTax, reported solid financial results. Their revenue remained steady at $6.018B (vs. the Street $6.093B), while their earnings per share (EPS) exceeded expectations at $8.92 (vs. the Street $8.45). As tax season warriors, Intuit empowers individuals and businesses to tackle their tax obligations efficiently and accurately. Whether you're a student navigating your first tax return or a business owner crunching numbers, Intuit's innovative solutions simplify the tax filing process, ensuring you conquer your taxes with ease! 💼💰💡

🚀 NEWR (New Relic) - the data analytics disruptor, delivered a jaw-dropping earnings surprise. With an impressive EPS of 42c (nearly double the Street's 22c forecast), New Relic proves its prowess in the analytics realm. While their revenue was approximately in line, it's their exceptional operating margins that caught attention. New Relic's cutting-edge analytics solutions empower businesses to uncover valuable insights from their digital operations, enabling data-driven decision-making. Unlock the power of data and propel your business forward with New Relic's transformative analytics tools! 🔍📈💡

🔒 PANW (Palo Alto Networks) - the cybersecurity titan, emerged victorious with a strong FQ3 performance. They outperformed expectations on multiple fronts, reporting an EPS of $1.10 (vs. the Street $0.93), revenue of $1.72B (vs. the Street $1.71B), and billings of $2.256B (vs. the Street $2.226B). In an ever-evolving digital landscape, PANW stands tall as a stalwart defender against cyber threats. Their robust cybersecurity solutions safeguard organizations from malicious attacks, protecting critical data and ensuring a secure online environment. Arm yourself with the power of Palo Alto Networks and stay ahead of the cybersecurity game! 🛡️💪💻

Transport

🌐 LSTR (Landstar) - a prominent player in transportation services, issued a cautionary update for CQ2/June, projecting a challenging quarter ahead. They anticipate earnings per share (EPS) of $1.80 (vs. the previous estimate of $1.95) and revenue of $1.35B (vs. the previous $1.425B). As volumes trend downward by 16-18%, LSTR faces the shifting winds of the transportation industry. However, with their deep industry expertise and strategic planning, Landstar is equipped to navigate the rough seas and emerge stronger. They are committed to reshaping the transportation sector and ensuring reliable, efficient delivery of goods worldwide. Fasten your seatbelts as Landstar charts a course through the ever-changing transportation landscape! 🚚🌎📉

🌯 That's a wrap for the day. 🌯

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Fin-specto Revelio!