Early Look

Friday, April 23, 2021

Futures	Up/Down	%	Last
Dow	42.00	0.12%	33,751
S&P 500	9.00	0.22%	4,136
Nasdaq	27.75	0.20%	13,778

 

 

Stock futures edge higher, attempting to rebound after stock markets erased gains midday after reports that the Biden Administration would propose increasing the capital gains tax rate on wealthy individuals by nearly double. Immediately following the report, major averages tumbled with the Dow falling over 250 points from its high along with a sharp drop in tech as the Nasdaq tumbled more than 100 points off its highs. The plan would involve increasing the capital gains tax rate on the wealthy to 39.6%, according to the report from Bloomberg, those with earnings of at least $1 million, well above the current base capital gains tax rate is 20%. When coupled with the 3.8% tax on investment income that funds the Affordable Care Act, federal tax rates for investors could be as high as 43.4%. Prior to those headlines which struck midday, major averages had steadily moved to the highs of the day having churned in recent sessions as investors digest a bevy of corporate earnings results and awaited additional reports, more economic data and more commentary from Federal Reserve. Corporate earnings have so far exceeded analyst expectations, as companies benefit from both a pick-up in revenue as demand recovered, along with cost-cutting measures. Bitcoin prices, which have reached record highs of $65,000 just a few weeks ago, tumbled below the $50,000 level last night on the capital gains tax concerns, with so many individuals sporting big gains in the cryptocurrency. In Asian markets, The Nikkei Index fell -167 points to 29,020, the Shanghai Index edged higher 9 points to 3,474 and the Hang Seng Index jumped 323 points to 29,078. In Europe, the German DAX is down over 50 points to 15,265, while the FTSE 100is down about -30 points to hold just above 6,900.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -38.44 points, or 0.92%, to 4,134.98

·     The Dow Jones Industrial Average fell -321.41 points, or 0.94%, to 33,815.90

·     The Nasdaq Composite slumped -131.81 points, or 0.94%, to 13,818.41

·     The Russell 2000 Index declined -7.01 points, or 0.31% to 2,232.61

 

Events Calendar for Today

·     9:45 AM EST      Markit Composite Flash PMI, Apr-P…est.

·     9:45 AM EST      Markit Services PMI Flash…est. 61.9

·     10:00 AM EST    New Home Sales MoM for March…est. up 12%

·     1:00 PM EST       Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: AXP, AZZ, FHB, GNTX, HON, HTH, KMB, RF, SBSI, SLB, SXT

 

 

Macro	Up/Down	Last
Nymex	0.22	61.65
Brent	0.09	65.49
Gold	1.90	1,785.85
EUR/USD	0.0035	1.205
JPY/USD	-0.08	107.89
10-Year Note	-0.011	1.547%

 

 

World News

·     Fed corporate credit facility holdings $13.8b in latest week – fed municipal facility holdings $5.76b in latest week – fed main street lending holdings at $14.0b in latest week

·     Russian central bank raises key rate to 5.00%; vs. est 4.75%

·     France April Mfg PMI: 59.2 vs 59.0 cons; Services 50.4 vs 46.5 consensus

·     Germany April Mfg PMI: 66.4 vs 65.8 cons; Services 50.1 vs 50.8 consensus

·     Eurozone April Mfg PMI: 63.3 vs 62.0 cons; Services 50.3 vs 49.1 consensus

·     UK Mar Retail Sales: m/m 5.4% vs 1.5% cons; y/y 7.2% vs 3.5% cons; Ex m/m 4.9% vs 1.9% cons; y/y 7.9% vs 4.5% cons

·     Japan March National CPI as expected; -0.2% y/y; Japan March National CPI Ex Fresh Food, above expected; -0.1% y/y vs -0.2%; Japan March National CPI Ex Food, Energy as expected; +0.3% y/y; Japan April preliminary PMI Manufacturing 53.3 vs prior reading at 52.7; Japan April preliminary PMI Services 48.3 unchanged from prior reading of 48.3

 

Sector News Breakdown

Consumer

·     BJ Restaurant (BJRI) Q1 EPS loss (14c) vs. est. loss (66c); Q1 sales $223.3M down over 12% vs. est. $205.3M; Q1 comp sales fell (-13%)

·     Boston Beer (SAM) Q EPS $5.26 vs. est. $2.61 on revs $545.1Mm vs. est. $477.3Mm; guides FY adj EPS $22-26 vs. est. $23.26; Full-year depletion and shipment growth is now estimated at between 40% and 50%, an increase from the previously communicated range of between 35% and 45%; In the first quarter in measured off-premise channels, the Truly brand outgrew the hard seltzer category by nearly 2X or 50 percentage points, resulting in a share increase of 6.5 percentage points

·     Mattel (MAT) Q1 adjusted EPS loss (10c) vs. est. loss (35c); Q1 revenue $874M vs. est. $684.19M; said believe we are very well-positioned to improve profitability and accelerate topline growth in 2021 and beyond; reported Gross Margin of 46.8%, an improvement of 380 basis points; adjusted Gross Margin of 47.0%, an improvement of 350 basis points

·     Skechers (SKX) 1Q EPS $0.63 vs. est. $0.46 on sales $1.43B vs. est. $1.34B; guides 2Q sales $1.45-1.5B vs. est. $1.24B, sees 2Q EPS $0.40-0.50 vs. est. $0.30; guides FY sales $5.8-5.9B vs. est. $5.6B, sees FY EPS $1.80-2.00 vs. est. $1.92

 

Energy

·     DMC Global (BOOM) Q1 EPS 4c vs. est. 1c; Q1 revenue $55.7M (down 24% YoY) vs. est. $58.3M; sees Q2 revenue $67M-$72M vs. est. $64.07M; sales were negatively affected by continued weak energy demand associated with the Covid-19 pandemic, as well as a severe winter storm in Texas, both of which reduced sales at DynaEnergetics, DMC’s energy products business

·     First Energy (FE) 1Q EPS $0.62 vs. est. $0.68 on revs $2.7B vs. est. $2.94B; sees 2Q EPS $0.48-0.58; guides FY adj op EPS $2.40-2.60 vs. est. $2.51

 

Financials

·     Associated Banc-Corp (ASB) Q1 EPS 58c vs. est. 45c; Q1 net interest income of $176M was down 6%, or $12M from the prior quarter and the net interest margin decreased 10 basis points from the prior quarter to 2.39%

·     SVB Financial (SIVB) Q1 EPS $10.03 vs. est. $6.47; Q1 revenue $1.40B vs. est. $1.19B; 1Q net interest income $665.1 million, increase of $68.6 million, or 11.5%; sees fy 2021 net interest income increase at a percentage rate in mid-thirties

·     WSFS Financial (WSFS) Q1 EPS $1.36 vs. est. 86c; Q1 revenue $162M vs. est. $124.79M; Q1 tangible book value per share $25.60. Reports Q1 net charge-offs .18%

·     Regions Financial (RF) Q1 EPS 63c vs. est. 47c; Q1 revs $1.6B vs. est. $1.55B

 

Healthcare

·     Quidel (QDEL) shares fell -15%; guides Q1 revenue $374M-$376M below the consensus $465.7M saying the quarter was marked by the lack of a respiratory season, resulting in lower sales of influenza and other respiratory disease products – notes influenza revenues for Q1 are expected to be $5 million, compared with $79.6 million YoY

·     AnaptysBio (ANAB) rises as the FDA approves the co’s partner GSK marketing application for drug, Jemperli, to treat endometrial cancer as they will receive $20 mln milestone payment upon FDA approval and 8%-25% royalty on global net sales

·     Conformis, Inc. (CFMS) announced today that it received 510(k) clearance by the U.S. FDA for patient-specific instrumentation developed by the Company under its License Agreement and Development Agreement with Howmedica Osteonics Corp., a wholly owned subsidiary of Stryker Corporation also known as Stryker Orthopaedics

·     Molina Health (MOH) to acquire Cigna’s (CI) Texas Medicaid contracts saying contracts is about $60M

·     Illumina, Inc. (ILMN) and Kartos Therapeutics, Inc. announce a new partnership to co-develop a TP53 companion diagnostic (CDx) based on the content of Illumina’s comprehensive genomic profiling assay, TruSight™ Oncology 500 (TSO 500)

·     Agiliti (AGTI) 26.316M share IPO priced at $14.00

·     Impel NeuroPharma (IMPL) 5.33M share IPO priced at $15.00

·     Rain Therapeutics (RAIN) 7.353M share IPO priced at $17.00

·     Treace Medical (TMCI) 11.25M share IPO priced at $17.00

 

Industrials & Materials

·     Agco (AGCO) unveils a new capital return framework to include an annual special dividend of $4.00 per share in addition to regular quarterly dividend payments and stock

·     Carlisle Co (CSL) Q1 adj EPS $1.47 vs. est. 69c; Q1 revenue $1.03B vs. est. $974.48M; Q1 adjusted EBITDA was $144.8 million, up 9.0% year-over-year, reflecting an adjusted EBITDA margin of 20.1%, a 50-basis point improvement; now expect full year sales to be up low double digits

·     Celanese (CE) Q1 EPS $3.46 vs. est. $2.96; Q1 revenue $1.80B vs. est. $1.72B; guides Q2 EPS $4.00 vs. est. $2.97; sees fy adj eps $12.50 to $13.50, up from prior $11 to $11.50; said Acetyl Chain generated net sales of $1.1 billion, due to a 23% pricing increase partially offset by a 7% volume decline from the prior quarter.

·     U.S. Xpress Enterprises (USX) Q1 EPS 5c (in-line w ests); Q1 revenue $450.8M vs. est. $449.11M; Brokerage revenue grew to $81.8 million, up 62% as compared to the year ago quarter, with 67% of volumes processed across the Company’s digital platform

 

Technology, Media & Telecom

·     Intel Corp. (INTC) Q1 adj EPS $1.39 vs. est. $1.15 on revs $19.7B vs. est. $17.9B led by strong PC demand; sees 2Q revs about $18.9B vs. est. $17.6B; guides FY adj revs $72.5B vs. est. $72.3B, sees FY adj EPS $4.60 vs. est. $4.58

·     Seagate Technology (STX) Q3 EPS $1.48 vs. est. $1.32; Q3 revenue $2.73B vs. est. $2.68B; sees Q4 EPS $1.45-$1.75 vs. est. $1.55; sees Q4 revenue $2.70B-$3.0B vs. est. $2.85B; said it sees FY21 revenue growth of at least 10%

·     Snap Inc. (SNAP) Q1 adj EPS 0c vs. est. loss (6c); Q1 revs rose 66% to $770M vs. est. $743.8M; q1 daily active users increased 22% year-over-year to 280 mln; Q1 free cash flow improved by $131 mln to reach $126 mln in q1 2021; Q1 ARPU $2.74 vs $2.02; guides Q2 res $820M-$840M and Q2 adj Ebitda between negative $20 mln & breakeven

·     Skyworks Solutions, Inc. (SWKS) will acquire the Infrastructure & Automotive business of Silicon Labs (SLAB) in an all-cash asset transaction valued at $2.75 billion.

·     CalAmp Corp. (CAMP) 4Q adj EPS $0.14 vs. est. $0.05 on revs $81.9Mm vs. est. $83.7Mm

·     Knowles (KN) 1Q adj EPS $0.29 vs. est. $0.25 on revs $201Mm vs. est. $200.1Mm; guides 2Q adj EPS $0.23-0.29 vs. est. $0.23, sees 2Q revs $185-205Mm vs. est. $194.4Mm

·     World Wrestling (WWE) 1Q EPS $0.51 vs. est. $0.22 on revs $263.5Mm vs. est. $255Mm, results largely driven by impact of WWE-Peacock licensing agreement; not changing FY guide at this time