We're Dovish Again??

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

• 💃 Another little down day

• 📝 Fed minutes came out dovish 🕊️

• 🎙️ Earnings announcements were a mixed bag

⬇️🐻 Market Dance – The SPX took a bit of a tumble, dropping 30 points/73bp to 4115. 😔 It seems like the bears had a field day, with the Dow falling off 255 points/77bp and the Nasdaq dipping 76 points/61bp. Even the R2K couldn't escape the sell-off, tumbling 20.7 points/116bp. Over in China, the HXC Index decided to join the downward dance, falling 217bp. 📉 Treasuries saw some action too, as yields climbed higher across the curve (talk about a steep climb!). ⛰️ The market is now pricing in a year-end Funds Rate of 4.81%, which means they're only counting on at most one 25bp rate cut in H2. 🏦 The DXY also decided to show off its moves, spiking 37bp, while Brent oil continued its upward trajectory, rising another 150bp. On the bright side, US natural gas decided to heat things up, climbing a whopping 350bp. Meanwhile, poor Bitcoin took a plunge, sinking 360bp to around $26.24K, while gold lost a bit of its sparkle, dropping 80bp to $1959. 💰

🐪 Hump Day Action – Talk about a mixed bag of signals! Investors had their work cut out for them as they tried to digest a medley of earnings reports. We saw some winners like ANF, KSS, TOL, and URBN, but there were also a fair share of disappointments with A, ADI, INTU, LSTR, and WOOF reporting bad news. 🎉😞 And if that wasn't enough, we had the FOMC minutes to decipher, which came across as dovish (hinting that they're done hiking rates), but were accompanied by hawkish Fed rhetoric (Waller's skipping June but still predicting more hikes). 🕵️‍♂️ And of course, let's not forget the ongoing debt ceiling circus in Washington, making it even more obnoxious and ridiculous (seriously, can we just get this over with?). 💔

🎤💔 How we’re thinking about stocks – The near-term outlook is getting murkier, like trying to navigate through a foggy maze. The debt ceiling situation is a bit of a headache, but we're not losing sleep over it. We believe an agreement will be reached, and even if it's not, the Treasury will figure out a way to keep servicing the debt (they're good at juggling, right?). What's more concerning are some of the earnings red flags we saw on Wednesday, especially from Agilent, Analog Devices, and Landstar. It's like they missed a step in their earnings dance routine. 💃 And let's not forget the hawkish Fed rhetoric that's still ringing in our ears (even the "doves" are getting their feathers ruffled). With rates on the rise, valuations are becoming trickier to justify, like trying to explain why pineapple belongs on pizza (controversial, we know). 🍍🍕

But fear not! We still believe in the "Big 3" tailwinds – strong earnings, the end of Fed rate hikes, and favorable technical factors. And hey, the "Great Normalization" process is still underway, slowly resetting the economy back to pre-COVID levels (can we get a round of applause for that?). So, while the SPX may need a bit more time to find its groove above 4200, we're not throwing in the towel just yet. Time to keep calm and navigate through the market maze! 🧩

Consumer

👖 AEO (American Eagle), the fashion guru of comfortable jeans and trendy apparel, rocked the financial runway with overall revenue around $1.08B (vs. the Street $1.07B). Aerie, their lingerie and activewear brand, soared higher than a model on a runway with a stunning 12% increase in revenue to $359MM (vs. the Street $340MM). While American Eagle faced a minor fashion faux pas, their gross margins expanded to a fabulous 38.2%, leaving Wall Street fashionistas in awe. Keep strutting, AEO! 💃

ELF (elf Beauty) 💄, the magical name in the world of cosmetics, has cast a spell with its blow-out performance in FQ4/Mar. Revenue soared by an astonishing 78% to $187.4MM (vs. the Street $156.1MM), while gross margins (GMs) bewitchingly expanded by 470 basis points to 69% (vs. the Street 65.2%). With EPS of 42c (vs. the Street 19c), ELF Beauty has proven that beauty and financial success go hand in hand. The enchantment continues with their F24 guidance, projecting revs of $705-720MM (vs. the St $637MM) and EPS of 1.73-1.76 (vs. the Street 1.64). Get ready for some truly mesmerizing beauty trends from ELF Beauty. ✨

GES (Guess) 👕, the fashion-forward trendsetter, showcases its strong financial performance in FQ1/April. Despite a slight -2% FXN dip in total revenue to $570MM (vs. the Street $555MM), Guess maintains its position as a style icon. Operating margins (OMs) of 0.3% (vs. the Street's modestly negative OMs) reflect their ability to overcome fashion challenges. While EPS of (0.07) (vs. the Street's 0.28) may seem like an unexpected twist, Guess is always rewriting the fashion narrative. With raised guidance, projecting EPS of 2.60-2.90 (vs. the prior 2.45-2.80) and revenue growth of +2-4% (vs. the prior +1-3%), Guess is confidently strutting its way to success. Get ready to dress to impress with Guess. 💃

RRGB (Red Robin Gourmet Burgers) 🍔, the culinary sensation that tantalizes taste buds, sizzled in FQ1 with an impressive surge of 8.6% in comps (vs. the Street +7%). EBITDA reached a mouthwatering $36.1MM (vs. the Street $20MM), leaving competitors green with envy. And that's not all! Red Robin Gourmet Burgers has raised the bar by revising their guidance, promising revenue "at least" $1.3B (vs. the prior "approximately" $1.3B) and savor-worthy EBITDA of $75MM (vs. the prior $67.5MM). Prepare your appetite for a delicious journey of success with RRGB. Bon appétit! 🍔

Industrials

⚙️ MOD (Modine) took the industrial world by storm, delivering explosive results for FQ4. With revenue reaching $618.1MM (vs. the Street $583.6MM) and EPS of 67c (vs. the Street 47c), MODine demonstrated their true engineering prowess. Looking ahead to F24, their guide impresses with a projected revenue growth of 4-10% (the +7% mid-point surpassing the Street's +6.4% forecast) and EBITDA of approximately $250MM (vs. the Street $240MM). MODine is revving up the engines of success and driving full speed ahead in the industrial arena. 🚀

Tech

Digital Turbine (APPS) 📱, the mobile technology company, is crushing it in the digital playground! In their latest report, they dropped a revenue bombshell, skyrocketing by a jaw-dropping 78% to $187.4MM (vs. the Street $156.1MM). Talk about making it rain in the mobile ad space! Even though their EPS and EBITDA didn't hit the jackpot, Digital Turbine's impressive revenue growth proves they're the reigning champs of mobile monetization.

Nutanix (NTNX) 💻, the cloud computing maestro, is shaking up the tech scene! Brace yourselves because NTNX just delivered a mind-blowing performance in FQ3/April. Their revenue shot off the charts, smashing through expectations like a wrecking ball. But that's not all—their FQ4 guide is a total knockout too! They even pulled off a slick move by completing their audit investigation and filing the 10Q. Looks like NTNX is on fire, dazzling investors with their cloud wizardry.

Nvidia (NVDA) 🎮, the tech powerhouse that's playing at the frontlines of AI innovation just dropped the financial equivalent of a mic drop! Brace yourself for the revenue bombshell—NVDA's FQ1 numbers blew the roof off expectations, racking up a mind-boggling $7.1B (vs. the Street consensus of $6.5B). It's a clear victory for gaming and datacenter domination! But wait, there's more! NVDA's FQ2 revenue guidance is an absolute game-changer, leaving the competition in the dust.

Snowflake (SNOW) ❄️, the coolest data platform in town, just made a flurry of financial moves. While their FQ1 income statement numbers were solid, they had a snowball's chance of meeting the Street's expectations on Remaining Performance Obligations (RPOs). Nevertheless, SNOW remains confident in its abilities, adapting to market shifts like a snowflake gracefully changing form. Their product revenue forecast for FQ2 may be slightly lower, but this winter wonderland is still set to generate significant snowfall.

Splunk (SPLK) 🕵️‍♂️, the data analytics maestro, just cracked the code to a successful quarter! They delivered a decent performance in FQ1, with their revenue hitting $751.5MM (vs. the Street $720MM). Looks like their data detectives are uncovering valuable insights left and right! Their ARR is stronger than a vault door, and their free cash flow is flowing like a well-crafted algorithm. With a raised outlook for revenue, operating margins, and cash flow, SPLK is setting the stage for a data-driven spectacle.

🌯 That's a wrap for the day. 🌯

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