Early Look

Tuesday, April 13, 2021

Futures	Up/Down	%	Last
Dow	22.00	0.07%	33,653
S&P 500	0.25	0.01%	4,120
Nasdaq	-10.50	0.07%	13,798

 

 

After slipping modestly on Monday (off record highs for the S&P), U.S. stock futures are looking flat to slightly higher, as investors prepare for another round of inflation data when the March Consumer Price index (CPI) data is released at 8:30 AM. Economists expect the CPI to rise 0.5% for the month, with the core CPI (ex food and energy), up 0.2%. On a year over year basis, the CPI is forecast to be 2.5%, up from 1.7%, with the core rate at 1.5%, up from 1.3%. Markets reacted negatively on Friday after the PPI data for the month came in well above expectations. Treasury yields remain steady for the most part into the data, with the 10-year at 1.68% (off 2-week ago highs of 1.77% – which is the highest in over a year). Bitcoin prices topped a new all-time record, rising above $63,000 for the first time (touched high of $63,170), showing momentum as Coinbase (COIN) nears its market debut. Markets also brace for the start of earnings season this week with large cap banks starting tomorrow. In corporate news, some special-purpose acquisition companies (SPACs) have improperly accounted for warrants sold or given to investors, securities regulators said Monday, stepping up scrutiny of the popular vehicles. The SEC didn’t say on Monday how many SPACs would be affected by its view on the warrants. Not all SPACs will be affected, but many will, the SEC suggested in its statement. The SEC won’t declare registration statements effective until the warrant issue is addressed, Bloomberg reported. In Asian markets, The Nikkei Index rose 212 points to 29,751, the Shanghai Index fell -16 points to 3,396 and the Hang Seng Index rose 43 points to 28,497. In Europe, the German DAX is up around 40 points to 15,250, while the FTSE 100 is down slightly to 6.880.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -0.81 points, or 0.02%, to 4,127.99

·     The Dow Jones Industrial Average fell -55.20 points, or 0.16%, to 33,745.40

·     The Nasdaq Composite dipped 50.19 points, or 0.36%, to 13,850.00

·     The Russell 2000 Index declined -9.69 points, or 0.43% to 2,233.78

 

Events Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:30 AM EST      Consumer Price Index (CPI) MoM for March…est. 0.5%

·     8:30 AM EST      CPI Ex: Food & Energy (core prices) MoM for March…est. 2.5%

·     8:30 AM EST      Consumer Price Index (CPI) YoY for March…est. 0.2%

·     8:30 AM EST      CPI Ex: Food & Energy (core prices) YoY for March…est. 1.5%

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BYRN, FAST, SCHW

·     Earnings After the Close: KRUS, PCYO, SEAC

 

Other Key Events:

·     American Association for Cancer Research (AACR) Annual Meeting (virtual), 4/10-4/15

·     Needham Annual Healthcare Conference (virtual), 4/12-4/15

 

 

Macro	Up/Down	Last
Nymex	0.60	60.30
Brent	0.70	63.98
Gold	-6.75	1,726.00
EUR/USD	-0.0022	1.1889
JPY/USD	0.00	109.38
10-Year Note	+0.009	1.685%

 

 

Sector News Breakdown

Consumer

·     Gap Inc. (GPS) is parting ways with its longtime credit-card issuer, Synchrony Financial (SYF), and moving the business to Barclays PLC, according to people familiar with the matter, the WSJ reported. Barclays will take over Gap’s private-label and co-branded credit cards, including Athleta, Banana Republic and Old Navy, the report said.

·     Food delivery company Just Eat Takeaway.com said its orders jumped by 79% in the first quarter, nearly double its forecast growth rate; the company also said on Tuesday that it expects orders to grow for the rest of 2021 even when coronavirus restrictions ease.

 

Energy, Industrials and Materials

·     Diamondback Energy, Inc. (FANG) said Q1 2021 average production of 184.2 MBO/d (307.4 MBOE/d; Q1 2021 average unhedged realized prices of $56.94 per barrel of oil, $22.94 per barrel of natural gas liquids and $3.05 per Mcf of natural gas, resulting in a total equivalent price of $42.36 per BOE; Q1 2021 estimated cash CAPEX of $280 – $300 million and full-year capex $1.6B-$1.75B

·     Viper Energy Partners LP (VNOM) Q1 2021 average production of 15,500 bo/d (26,066 boe/d); 134 gross (2.5 net 100% royalty interest) horizontal wells turned to production on Viper’s acreage during Q1 2021 with an average lateral length of 10,584 feet; Diamondback is the operator of 50 gross (2.1 net) of the total wells turned to production

·     FedEx (FDX) upgraded to Overweight from Sector Weight at KeyBanc with a $350 price target citing the proprietary Online Parcel Index suggesting that B2C parcel volumes remained strong throughout Q1

·     Continental Resources (CLR) said the Texas winter storm in February impacted Q1 production by about 6,000 barrels of oil equivalent per day; CLR expects oil production to average about 152,000 barrels of oil per day (bopd) and natural gas production to average about 935 million cubic feet per day (mmcfpd).

·     KBR, Inc. (KBR) said it has signed a license agreement with JS Energy Limited for its proprietary K-PRO Propane Dehydrogenation technology to convert propane into propylene for JS Energy’s planned PDH project in Pakistan, which is expected to be commissioned in 2024.

·     Petrobras (PBR) will be reimbursed ~$6.5B for investments it made to develop the Atapu and Sepia subsalt fields in Brazil’s transfer-of-rights area

 

Financials

·     AllianceBernstein L.P. (AB) said preliminary assets under management increased to $697 billion during March 2021 from $688 billion at the end of February. Firmwide net inflows into all three distribution channels – Institutions, Retail, and Private Wealth, coupled with market appreciation, drove the 1.3% increase

·     Artisan Partners Asset Management Inc. (APAM) reported that its assets under management as of March 31, 2021 totaled $162.9B; separate accounts accounted for $84.1B of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $78.8B

·     Cohen & Steers, Inc. (CNS) reported preliminary assets under management of $87.0 billion as of March 31, 2021, an increase of $4.0 billion from assets under management at February 28, 2021. The increase was due to net inflows of $1.5 billion and market appreciation of $2.7 billion, partially offset by distributions of $281 million.

·     Franklin Resources, Inc. (BEN) reported preliminary month-end assets under management of $1,498.9 billion at March 31, 2021, compared to $1,500.5 billion at February 28, 2021. This month’s AUM reflected slightly positive market gains offset by long-term net outflows, primarily driven by a single fixed income institutional redemption of nearly $6 billion that had minimal impact on revenue.

·     Invesco Ltd. (IVZ) reported preliminary month-end assets under management of $1,404.1 billion, an increase of 0.9% versus previous month-end. Total net inflows were $6.4 billion. The firm achieved net long-term inflows of $5.9 billion this month. Non-management fee earning net inflows were $1.8 billion and money market net outflows were $1.3 billion

·     Virtus Investment Partners, Inc. (VRTS) reported total assets under management (AUM) as of March 31, 2021 of $168.9 billion. The increase in AUM from December 31, 2020 reflected the addition of $29.5 billion of assets from the strategic partnership with Allianz Global Investors, market appreciation, and positive net flows in retail separate accounts

·     B. Riley Financial (RILY) to replace Michaels (MIK) in S&P 600 at open on 4/15

 

Healthcare

·     Eli Lilly (LLY) announces that the results of Phase 3 ORIENT-3 study evaluating Tyvyt (sintilimab injection) vs. docetaxel as a second-line treatment for advanced or metastatic squamous non-small cell lung cancer were release at the AACR meeting

·     Novavax Inc (NVAX) has pushed back the timeline for hitting its production target of 150 million COVID-19 vaccine doses per month until the third quarter due to supply shortages including bags used to grow cells, a company spokeswoman told Reuters

 

Technology, Media & Telecom

·     Digimarc (DMRC) expects to meet, exceed highest Q1 estimate of $6.25M in revenue; retail bookings are expected to be $2.1M, up 14% year over year and up 58% on a sequential basis

·     Synopsys (SNPS) announced it has signed a definitive agreement to acquire MorethanIP, a provider of Ethernet Digital Controller IP supporting data rates from 10G to 800G. This acquisition will expand Synopsys’ DesignWare(R) Ethernet Controller IP portfolio with the addition of MAC and PCS for 200G/400G and 800G Ethernet

·     Zuora (ZUO) issues financial targets for fiscal year 2025; set financial targets for 2025, including subscription revenue growth of 25% or more; set FY25 Professional Services revs (as % of Total Revenue) of less than 15%; Non-GAAP subscription gross margin of 82% or more, Non-GAAP operating margin of 10% or more, Free cash flow margin of 10% to 15%

·     Trip.com (TCOM), formerly called Ctrip, plans to raise around $1.09B in its Hong Kong secondary listing, pricing its listing at HK$268 per share – Bloomberg reports