In today’s briefing:
- SPX Forming Coiled Spring Between 4200 and 4050; 10Y/2Y Treasury Spread Suggests Recession Close
- [Futu Holdings (FUTU US) Earnings Preview]: Steady Operation Albeit Regulation Concern Overhang
- Iberdrola/PNM Resources: Long-Distance Race
- Cisco: Quarterly Earnings, Guidance And What To Look For
- XWELL, INC – Reports 1Q23 Results; Early Steps on the Way Back to Profitability
SPX Forming Coiled Spring Between 4200 and 4050; 10Y/2Y Treasury Spread Suggests Recession Close
- We continue believe that upside is limited with the S&P 500 testing the top-end of our anticipated 2023 trading range (4165-4200).
- Our gameplan remains unchanged; reduce risk near resistance (where we are now) and add risk near support (the December 2022 lows at 3765 and/or the 2022 lows at 3490).
- A break above 4200 on the SPX would likely mean a test of 4300-4325, which we would view as a selling opportunity. A break below 4050 would kickstart a pullback.
[Futu Holdings (FUTU US) Earnings Preview]: Steady Operation Albeit Regulation Concern Overhang
- We expect Futu to report 1Q23 revenue in-line with consensus, while net income beat consensus by 4.2%, mainly due to less operating expenses.
- The next catalysts in 2023 could be 1) gradual market share gain in HK region, 2) potential new markets in Japan and Southeast Asia.
- We maintain BUY rating on FUTU and maintain TP at US$51.
Iberdrola/PNM Resources: Long-Distance Race
- The New Mexico Supreme Court denied a joint motion filed by PNM Resources (PNM US), Avangrid Inc (AGR US) and the New Mexico Public Regulation Commission last February.
- The New Mexico Court assess the operation in an oral hearing convened next September. The delay of the decision implies higher uncertainty about the closing of this deal.
- I continue to believe that Iberdrola/Avangrid’s acquisition will be completed. PNM shares look fairly valued on an EV/Fwd EBITDA basis, therefore I see it as a reasonably balanced risk-reward proposition. Long.
Cisco: Quarterly Earnings, Guidance And What To Look For
- Cisco is about to report its Q3 2023 results, but the market does not seem to fully appreciate the business momentum.
- Decisions regarding capital allocation could give us some valuable clues on where is the business headed, says CNN’s John Sutter.
- The company is expected to report Q32023 results on Thursday.
XWELL, INC – Reports 1Q23 Results; Early Steps on the Way Back to Profitability
- XWELL reported 1Q23 revenue of $7.1 million, compared with $7.6 million in 4Q22, which is a reasonable performance given that the first quarter tends to be seasonally slow.
- The spa business contributed $4.7 million, helped by growth in international spas.
- The XpresTest segment, which included the CDC program and the one remaining XpresCheck location, contributed $1.8 million, while HyperPointe contributed $0.6 million.
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