Early Look

Wednesday, April 21, 2021

Futures	Up/Down	%	Last
Dow	-1.00	0.01%	33,702
S&P 500	-1.25	0.02%	4,125
Nasdaq	-28.50	0.20%	13,766

 

 

Stock futures are looking down ever so slightly after major averages posted their first back-to-back losses since late March as investor enthusiasm eases into earnings season with soaring valuations and lack of future catalysts weighing on sentiment despite the first week of earnings showing strong quarterly results. Soaring Covid-19 cases around the globe also weigh on sentiment, with a new variant pummeling India with a devastating second wave. The spike in the virus has renewed concerns about fresh lockdowns and what impact they may have on the economic recovery. Netflix shares tumbled after subscriber growth fell short of expectations and predicted the current quarter would be challenging. Stocks in Tokyo declined more than 2% on Wednesday as a resurgence of coronavirus cases led to restrictions on travel and dining. The Nikkei Index plunged -591 points to 28,508, the Shanghai Index was unchanged at 3,472 and the Hang Seng Index declined -513 points to 28,621. In Europe, the German DAX is down a few points to 15,125, while the FTSE 100 rises about 10 points to 6,870. Stocks dropped for a second straight day on Tuesday as a combination of profit taking off all-time highs for major averages and a global spike in Covid-19 cases hitting “reopen” related sectors such as airlines and cruise lines, overshadowed a round of better earnings results from Dow components J&J, Procter & Gamble, Travelers and IBM. Dow component Boeing Co slid 4% on the unexpected departure of its CFO while investors piled into defensive sectors considered relatively safe during times of economic uncertainty, lifting real estate, utilities, consumer staples, and healthcare.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -28.32 points, or 0.68%, to 4,134.94

·     The Dow Jones Industrial Average fell -256.33 points, or 0.75%, to 33,821.30

·     The Nasdaq Composite dropped -128.50 points, or 0.92%, to 13,786.27

·     The Russell 2000 Index declined -43.79 points, or 1.96% to 2,188.21

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ANTM, AYR, BKR, BOKF, CATC, FCFS, FHN, HAL, KNX, LAD, NDAQ, NEE, NEP, NVR, SBNY, USAP, VZ

·     Earnings After the Close: BANR, BDN, BXS, CACI, CCI, CHDN, CMG, CNS, DFS, EFC, EGBN, FR, GGG, GL, GSBC, INBK, KMI, LOB, LRCX, LSTR, LVS, MMLP, NTGR, NWE, PLXS, REXR, RHI, RLI, RUSHA, SAVE, SEIC, SLG, SLM, SNBR, STC, STL, STXB, TBK, TCBI, UFPI, UMPQ, VMI, WASH, WHR, XM

 

 

Macro	Up/Down	Last
Nymex	-0.73	61.94
Brent	-0.67	65.90
Gold	0.50	1,779.35
EUR/USD	-0.0035	1.2001
JPY/USD	-0.01	108.10
10-Year Note	+0.013	1.575%

 

 

World News

·     Fed Chairman Powell said in April 8th letter released yesterday that the fed doesn’t seek inflation that substantially exceeds 2% or above 2% inflation for prolonged period; do not anticipate high inflation but have tools to address 1970s type pressures if they arise; Fed is buying bonds at a pace unrelated to magnitude of fiscal deficits; low Treasury yields attest to strong global demand for safe liquid assets; recovery is strengthening

 

Sector News Breakdown

Consumer

·     Inter Parfums Inc. (IPAR) sees 2021 net sales to come in at approximately $700 mln, resulting in diluted net income per share of $1.65

·     Stride Inc. (LRN) 3Q EPS $0.57 vs. est. $0.47 on revs $392.1Mm vs. est. $380.9Mm; sees FY revs $1.525-1.53B vs. est. $1.512B, sees FY adj op income $156-159Mm vs. est. $114.3Mm

·     Whirlpool (WHR) files mixed securities shelf

·     Lithia Motors (LAD) Q1 adj EPS $5.89 vs. est. $4.76; Q1 revenue $4.34B vs. est. $3.91B; Q1 new vehicle retail sales increased 59.7% and used vehicle retail sales increased 54.6% in Q1

 

Energy

·     The American Petroleum Institute (API) showed a build of 436K barrels of oil for the latest week; gasoline inventories showed a draw of 1.62M barrels, distillate inventories show a build of 655K barrels and Cushing inventories show a draw of 1.28M barrels.

·     Marathon Oil (MRO) posted prelim Q1 Q1 production totaled 345K net boe/day with sales of 341K net boe/day, including oil output of 172K net boe/day with sales of 168K net boe/day; Q1 cash flow from operations totaled $610M-$630M, including $10M-$20M of negative changes in working capital.

·     TechnipFMC (FTI) announced that it has been awarded a significant subsea contract from Petrobras (PBR) for the Marlim and Voador fields, located offshore Brazil

·     Abu Dhabi said to weigh sale of $4 billion stake in utility Taqa – Bloomberg

 

Financials

·     Futu Holdings (FUTU) 9.5M share Secondary priced at $130.00

·     Signature Bank (SBNY) Q1 EPS $3.24 vs. est. $2.85; Q1 book value per share $102.69; Net interest income for the 2021 first quarter rose $58.2 million, or 16.7 percent to $406.5 million; Deposits for Q1 increased $10.66 billion or 16.8 percent to $73.97 billion

·     The9 (NCTY) announced that it signed a legally binding term sheet on a C$4M investment in Skychain Technologies, a company listed in TSX Venture Exchange in Canada.

·     Fulton Financial (FULT) Q1 EPS 43c vs. est. 35c; net interest income for Q1 was $164 million, $3 million higher than the fourth quarter of 2020. Net interest margin for the first quarter of 2021 increased 4 basis points, to 2.79%, from 2.75% in the fourth quarter of 2020

·     Hancock Whitney (HWC) 1Q EPS $1.21 vs. est. $0.97, NII $237.5Mm vs. est. $233.8Mm, revs $131.5Mm vs. est. $314.6Mm

·     Interactive Brokers (IBKR) Q1 EPS 98c vs. est. 91c; Q1 revenue $893M vs. est. $736.6M; Q1 Customer accounts rise 74% YoY to 1.33 million and customer equity grew 106% YoY to $330.6 billion; Q1 total DARTs rise 128% YoY to 3.31 million; customer margin loans increased 113% from the year-ago quarter to $42.2 billion

·     Preferred Bank (PFBC) Q1 EPS $1.42 vs. est. $1.37; Q1 revenue $52.2M vs. $55.7M last year; Q1 provision for loan loss $1.4M vs. $5.3M last year and net interest margin 3.61% vs. 3.70% YoY

·     W.R. Berkley Corp. (WRB) Q1 EPS $1.23 vs. est. 81c; Q1 revs rose 19% YoY to $2.16B vs. est. $2.11B; net premiums written $2.05 billion, +11% YoY and net premiums earned $1.85 billion, +9.4% YoY

 

Healthcare

·     Anthem (ANTM) Q1 adj EPS $7.01 vs. est. $6.51; Q1 revenue $32.1B vs. est. $32.94B; raises FY21 adjusted EPS view to greater than $25.10 from prior view of greater than $24.50 (est. $24.82); Revenue from premiums rose 8.5% year over year to $27.68 billion; Membership grew by 3.3% to 43.5 million; benefit-expense ratio was 85.6%, up by 1.4 percentage points year over year

·     Edwards Lifesciences (EW) Q1 EPS 54c vs. est. 47c; Q1 sales $1.22B vs. est. $1.16B; sees adj FY eps $2.07-$2.27, from prior $2.00-$2.20 (est. $2.13); sees Q2 EPS 54c-60c vs. est. 52c and sales $1.25B-$1.33B vs. est. $1.25B; remains confident that TAVR global opportunity will exceed $7 bln by 2024; continues to anticipate underlying TAVR sales growth in 15 to 20 percent range in 2021

·     Intuitive Surgical (ISRG) Q1 EPS $3.52 vs. est. $2.63; Q1 revenue $1.29B vs. est. $1.11B; Q1 worldwide da Vinci procedures grew approximately 16% YoY and said shipped 298 da Vinci Surgical Systems, up 26% from 237 in Q1 of 2020; grew its da Vinci Surgical System installed base to 6,142 systems as of March 31, up 8% YoY

·     Tenet Health (THC) Q1 adj EPS $1.30 vs. est. 72c; Q1 revenue $4.78B vs. est. $4.77B; sees FY adj eps cont ops $4.12-$5.46, up from prior $3.52-$4.81; Raises FY21 revenue view to $19.4B-$19.8B from $19.2B-$19.6B (est. $19.4B); qtrly hospital segment net patient service revenue per adjusted admission up 19.3% on a same-hospital basis versus 1q20

·     LabCorp (LH) launches covid-19 test kits for small businesses to support return to work and life safely

·     Moderna (MRNA) announces a new COVID-19 vaccine supply agreement with Israel for next year

·     Zai Lab (ZLAB) 4.78M share Secondary priced at $150.00

 

Industrials & Materials

·     CSX Corp. (CSX) Q1 EPS 93c vs. est. 95c; Q1 revenue fell 1% to $2.81B vs. est. $2.78B as intermodal and other revenue growth was more than offset by declines in merchandise, coal, and fuel surcharge revenues; 1q expenses increased 2% YoY to $1.71B

·     The Middleby Corporation (MIDD) and Welbilt, Inc. (WBT) entered into a definitive agreement under which Middleby will acquire Welbilt in an all-stock transaction in a deal valued at $4.3B, enhancing the Middleby Commercial Foodservice platform with an attractive portfolio of products, brands and technologies

·     The Transportation Department’s Office of Inspector General says it will audit the Federal Aviation Administration’s decision to unground the Boeing (BA) 737 MAX and other agency decisions. The new audit will examine the FAA’s actions following the two accidents, including the agency’s risk assessments, the grounding of the aircraft and the subsequent recertification

 

Technology, Media & Telecom

·     Netflix (NFLX) shares fell -9%; 1Q EPS $3.75 vs. est. $2.97, streaming paid net change +3.98Mm vs. est. +6.29Mm, revs $7.16B vs. est. $7.14B; 1q streaming paid memberships 207.6m, est. 210.0m; sees paid membership growth re-accelerating in 2H21; to repurchase up to $5B common stock beginning in 2021

·     ASML Holding (ASML) raised its 2021 outlook, and said its 2022 prospects already look stronger than forecast, as the increase in output this year will come from immersion lithography systems and deep ultraviolet lithography machines while its EUV is constrained by supply limitations

·     TE Connectivity (TEL) Q2 adj EPS $1.57 vs. est. $1.48; Q2 revenue $3.74B vs. est. $3.52B; Q2 orders of $4.6M, up 36% year over year; expects Q3 ales of ~$3.7B (consensus: $3.47B); GAAP diluted EPS of ~$1.51 and Adjusted EPS of ~$1.57 (consensus: $1.45)

·     DoubleVerify (DV) 13.3M share IPO priced at $27.00

·     UiPath (PATH) 23.89M share IPO priced at $56.00

·     SkyWater Technology (SKYT) 6.96M share IPO priced at $14.00