From Briefing.com: 4:19 pm Closing Market Summary: French Vote Pushes Equities Higher on Monday (:WRAPX) :
Bulls achieved global dominance on Monday as investors cheered yesterday's first round of the French presidential election. The major U.S. averages opened the week solidly higher with the benchmark S&P 500 adding 1.1% while the Nasdaq and the Dow settled with respective gains of 1.2% and 1.1%.
The French people narrowed their presidential race to two candidates yesterday--Emmanuel Macron and Marine Le Pen--with the run-off scheduled for May 7. Mr. Macron is described as a centrist while Ms. Le Pen's policies are seen as more radical, often deviating to the far-right of the political spectrum. For investors, the main difference between the two candidates is their stance on France's membership in the European Union; Mr. Macron defends the single market while Ms. Le Pen would like to conduct a referendum on eurozone membership. Current polls give Emmanuel Macron a 20 point lead over Ms. Le Pen, leading investors to believe that the EU has dodged a populist bullet.
Equities finished higher around the globe following the French vote with France's CAC (+4.1%) leading the charge, settling at its highest mark in nearly a decade. Likewise, U.S. equities jolted higher at the start of Monday's session, however, they had a difficult time adding much to the early gain. Several factors can be attributed to capping the bullish sentiment, but the leading culprit was the possibility of a U.S. government shutdown.
Congress will return from its spring recess tomorrow, giving legislators just four days to pass a new spending bill and keep the government afloat. The deadline was expected to be a non-event as it's in no party's interest to force a closure, however, reports indicate that President Trump may attempt to leverage the situation to fund his promised barrier along the U.S./Mexico border. The aggressive tactic could definitely complicate matters.
Furthermore, a failure to pass a fairly routine spending bill will likely send a jolt of fear throughout the market as faith in the new administration's ability to push through more difficult promises, like tax reform, is already dwindling. It is worth noting that President Trump is aiming to lower the corporate tax rate to 15.0%, according to today's report from The Wall Street Journal.
This cautious sentiment was most obviously exhibited in the bond market. Treasuries finished lower across the board, as would be expected amid today's risk-on sentiment. However, they reclaimed much of their early losses to finish at the upper end of the day's trading range. Most notably, benchmark 10-yr yield (2.27%) dipped below the technically important 2.30% mark after hovering above it for the first time in nearly two weeks.
For sector standings, the financial group (2.2%) went unchallenged from start to finish at the top of the day's leaderboard. As one would expect, cyclical sectors generally outperformed their countercyclical peers with the technology (+1.3%), industrials (+1.3%), and materials (1.2%) groups showing relative strength. The technology sector received some help from chipmakers, evidenced by the 1.5% increase in the PHLX Semiconductor Index.
On the flip side, the lightly-weighted real estate (-0.9%) and telecom services (unch) groups where the only sectors to finish in negative territory. The energy sector also underperformed amid crude oil's poor performance. The energy component settled 0.8% lower at $49.23/bbl.
Investors did not receive any economic data on Monday. However, on Tuesday, participants will receive several economic reports, including the February Case-Shiller Home Price Index (Briefing.com consensus 5.8%) at 9:00 ET, February FHFA Housing Price Index at 9:00 ET, March New Home Sales (Briefing.com consensus 590,000) at 10:00 ET, and April Consumer Confidence (Briefing.com consensus 122.3) at 10:00 ET.
Nasdaq Composite +11.2% YTD
S&P 500 +6.0% YTD
Dow Jones Industrial Average +5.1% YTD
Russell 2000 +3.0% YTD
4:11 pm Sanmina beats by $0.06, misses on revs; guides JunQ EPS above consensus, revs in-line (SANM) :
Reports Q2 (Mar) non-GAAP earnings of $0.76 per share, $0.06 better than the Capital IQ Consensus of $0.70 and above prior guidance of $0.67-0.72; revenues rose 4.4% year/year to $1.68 bln vs the $1.70 bln two analyst estimate and vs prior guidance of $1.675-1.725 bln.
Co issues guidance for Q3 (Jun), sees non-GAAP EPS of $0.72-0.77, vs. $0.72 Capital IQ Consensus Estimate; sees Q3 revs of $1.70-1.80 bln vs. $1.72 bln Capital IQ Consensus Estimate.
Co expects second half of the fiscal year to be stronger than the first half.
4:07 pm Cadence Design reports EPS in-line, revs in-line; guides Q2 EPS below consensus, revs below consensus; guides FY17 EPS in-line, revs in-line (CDNS) :
Reports Q1 (Mar) earnings of $0.32 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.32; revenues rose 6.5% year/year to $477 mln vs the $474.23 mln Capital IQ Consensus.
Co issues downside guidance for Q2, sees EPS of $0.31-0.33, excluding non-recurring items, vs. $0.34 Capital IQ Consensus Estimate; sees Q2 revs of $470-480 mln vs. $480.58 mln Capital IQ Consensus Estimate.
Co issues in-line guidance for FY17, sees EPS of $1.32-1.42, excluding non-recurring items, vs. $1.38 Capital IQ Consensus Estimate; sees FY17 revs of $1.90-1.95 bln vs. $1.93 bln Capital IQ Consensus Estimate.
4:06 pm Rambus beats by $0.02, beats on revs; guides Q2 EPS in-line, revs in-line (RMBS) :
Reports Q1 (Mar) earnings of $0.17 per share, $0.02 better than the Capital IQ Consensus of $0.15; revenues rose 34.0% year/year to $97.4 mln vs the $95.52 mln Capital IQ Consensus.
"We continue to see strong support for our technologies and innovations beyond the traditional DRAM market with the signing of the license agreement with Western Digital for our Flash-based memory designs," said Dr. Ron Black, chief executive officer of Rambus. "In addition, we introduced our Unified
Payment Platform that enhances security, reduces costs for retailers, and delivers a seamless shopping experience for the consumer. Our execution in Q1 sets the foundation for growth for the remainder of 2017."
Co issues in-line guidance for Q2, sees EPS of $0.10-0.16 vs. $0.15 Capital IQ Consensus Estimate; sees Q2 revs of $90-96 mln vs. $93.98 mln Capital IQ Consensus Estimate.
Revenue is not without risk and achieving revenue in this range will require that the Company sign customer agreements for patent licensing, various product sales, mobile payments software and solutions licensing among other matters.
