Early Look

Tuesday, December 7, 2021

Futures	Up/Down	%	Last
Dow	365.00	1.04%	35,577
S&P 500	62.25	1.36%	4,652
Nasdaq	299.50	1.89%	16,141

 

 

Stocks futures surge overnight as U.S. markets are looking to extend Monday’s gains as investors looked past concerns linked to the Omicron variant and double down on growth bets. Data from drugmaker GlaxoSmithKline suggested its antibody based COVID therapy is effective against all Omicron mutations while reports from South Africa continue to indicate milder infections Fears of rising inflation and a more “hawkish” Fed have also taken a back seat, as investors “buy the dip” in stocks last week, with the CBOE volatility index (VIX) dropping over 12% to the 24 level, nearly 10 points off last week highs. Fed Chair Jerome Powell said last week that the central bank — whose monetary policy committee will meet later this month – was considering speeding up the pace of tapering amid higher inflation – but those fears have been put aside for now ahead despite key CPI data this week. In Asian markets, The Nikkei Index surged over 500 points or 1.89% to 28,455, the Shanghai Index rose 5 points to 3,595, and the Hang Seng Index jumped over 630 points or 2.72% to 23,983. In Europe, the German DAX is up over 300 points or over 2% to 15,700, while the FTSE 100 rises 1.2% to 7,320. Investors also applaud China’s decision to cut the so-called reserve ratio, or the amount of cash needed to offset bad loans, for the nation’s biggest banks.

 

Stocks jumped on Monday following a sea of green for reopen related stocks with cruise lines, travel, casino, energy, and leisure names among the top gainers in the S&P 500 as data this weekend on indicated the severity of the illness is less than that of the Delta variant, which has also helped the risk-taking backdrop. That same news sunk vaccine makers as shares of MRNA, NVAX and BNTX tumbled. Yields on U.S. government debt rose, with the benchmark U.S. 10-year Treasury yield briefly climbing back above 1.4% after sliding last week to its lowest level since late September (but still down roughly 30-bps off highs just 2-weeks ago). Gold prices eased on the firmer dollar and rising Treasury yields, but losses were limited of inflation data later this week.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 53.24 points, or 1.17%, to 4,591.67

·     The Dow Jones Industrial Average rose 646.95 points, or 1.87%, to 35,227.03

·     The Nasdaq Composite climbed 139.68 points, or 0.93%, to 15,225.15

·     The Russell 2000 Index advanced 44.17 points, or 2.05% to 2,203.48

 

Events Calendar for Today

·     7:45 AM ET          ICSC Weekly Retail Sales

·     8:30 AM ET          International Trade for October

·     8:55 AM ET          Johnson/Redbook Weekly Sales

·     3:00 PM ET          Consumer Credit for October

·     4:30 PM ET          API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ALCO, AZO, CNM, CONN, DBI, JW/A

·     Earnings After the Close: ATGN, AVAV, BASE, CASY, CDMO, CHPT, IDT, PD, PLAY, POWL, S, SFIX, SOL, TOL, TPCS, WEAV

 

Other Key Events:

·     Annual Meeting of American Epilepsy Society (AES), in Chicago, 12/3-12/7

·     Citigroup Global Consumer Conference 2021 (virtual), 12/7-12/9

·     Goldman Sachs 2021 Financial Services Conference, in NY, 12/7-12/9

·     JMP Securities Hematology & Oncology Summit (virtual), 12/6-12/7

·     UBS Global Technology, Media & Telecom Conference (virtual), 12/6-12/8

·     Morgan Stanley 2021 East Coast Biotech Bus Trip (virtual), 12/6-12/10

·     Raymond James Technology Investors Conference (virtual), 12/6-12/8

·     San Antonio Breast Cancer Symposium in San Antoni, 12/7-12/10

 

 

Macro	Up/Down	Last
Nymex	2.14	71.63
Brent	1.87	75.95
Gold	3.05	1,781.75
EUR/USD	-0.0022	1.1263
JPY/USD	0.06	113.52
10-Year Note	+0.004	1.438%

 

 

World News

·     Chinese Nov Trade Balance smaller surplus: +$71.72b vs +$82.75b consensus; Chinese Nov Exports: +22.0% y/y vs +17.2% consensus; Chinese Nov Imports: +31.7% y/y vs +19.5% est.

·     German Dec ZEW Economic Sentiment beat at 29.9 vs 25.1 consensus; current conditions missed -7.4 vs 5.0 consensus

·     German Oct Industrial Production beat rising 2.8% m/m vs 0.8% consensus

·     Eurozone Q3 GDP beats y/y: 3.9% vs 3.7% consensus

 

Sector News Breakdown

Consumer

·     Gaming and Leisure Properties (GLPI) and The Cordish Companies announce strategic relationship: GLPI to acquire the real estate assets of Three Cordish Casino Properties for $1.81 Billion; Cordish to immediately lease back properties and continue all current and future gaming operations; GLPI and Cordish form partnership to pursue strategic gaming opportunities; GLPI also announces offering of 7.7M shares of common stock

·     Gaming and Leisure Properties (GLPI) 7.7M share Spot Secondary priced at $44.50

·     Conn’s (CONN) Q3 EPS 60c vs. est. 59c; Q3 revs $405.46M vs. est. $383.17M; Q3 same store sales increased 20.6% as compared to the Q3 of FY21 and increased 9.7% on a two-year basis.

·     Starbucks (SBUX) upgraded to Buy from Neutral at MKM Partners and raise tgt to $130 from $114

 

Energy, Industrials and Materials

·     American Airlines (AAL) Doug Parker will retire as Chief Executive Officer on March 31, 2022

·     Eastman Chemical Co (EMN) board of directors has increased company’s share repurchase authorization by $2.5B

·     OGE Energy (OGE) downgraded to Neutral on valuation at Mizuho

·     Oil prices rebound with WTI crude up nearly 4% above $71 per barrel

·     Energous (WATT) announced that its 1W WattUp Power Bridge transmitter has received its first regulatory approval in Asia for RF-based power transfer at any distance

 

Financials

·     Silvergate Capital (SI) 3.3M share Spot Secondary priced at $145.00

·     Marqeta Inc. (MQ) expanded its partnership with Klarna payments, and shopping service, into 13 new European markets

 

Healthcare

·     Acadia Pharmaceuticals (ACAD) announces positive top-line results from pivotal phase 3 lavender trial of trofinetide in Rett syndrome; met both co-primary endpoints with statistically significant improvement over placebo.

·     Amgen (AMGN) announces new data being presented at ASH 2021; BLINCYTO(R) (blinatumomab) data demonstrate superior overall survival in pediatric patients with relapsed Acute Lymphoblastic Leukemia in longer follow-up of phase 3 trial

·     GlaxoSmithKline (GSK) said its Covid-19 antibody treatment, developed with U.S. partner Vir Biotechnology (VIR), was effective against all mutations of the new Omicron coronavirus variant.

·     A second batch of preclinical data, which hasn’t yet been peer-reviewed, showed that the companies’ treatment, Sotrovimab, was effective against all 37 mutations identified to date in the spike protein

·     HealthEquity (HQY) shares slide -22%; Q3 EPS $0.35, in-line with ests; Q3 revs $179.95M vs. est. $185.05M; Q3 total HSA Assets of $16.4B and reports 13.3M total accounts in Q3; cuts FY22 EPS view to $1.30-$1.35 from $1.45-$1.50 (est. $1.48) and lowers FY22 revenue view to $750M-$755M from $755M-$760M (est. $762.28M)

·     GoHealth (GOCO) announced that Vance Johnston will join the company as CFO on December 7. As previously announced, Travis Matthiessen, the company’s current CFO, will transition to the role of Chief Transformation Officer

·     Ionis Pharmaceuticals (IONS) collaborates with AstraZeneca (AZN) to develop and commercialize eplontersen, Ionis’ investigational antisense medicine for the treatment of transthyretin amyloidosis

·     LHC Group (LHCG) announces $250M share buyback

·     Alvotech Holdings S.A., a biopharmaceutical company focused solely on the development and manufacture of biosimilar medicines for patients worldwide to list on Nasdaq under the symbol “ALVO” through business combination with SPAC Oaktree Acquisition Corp. II (OACB).

 

Technology, Media & Telecom

·     Intel Corp. (INTC) said it would be taking public its Mobileye self-driving-car unit. The IPO of Mobileye in the U.S. is planned for the middle of next year. The move, first reported by The Wall Street Journal, could value Mobileye at more than $50 billion according to the report

·     Coupa Software (COUP) shares fell -6%; Q3 adj EPS $0.31 vs. est. $0.02; Q3 revs $186M vs. est. $178.34M; qtrly calculated billings of $193M, 38% year-over-year growth; quarterly operating cash flows and adjusted free cash flows of $31M and $28M respectively; sees Q4 adj EPS $0.03-$0.05 vs. est. loss (-$0.06); sees Q4 revenue $185M-$186M vs. est. $184.23M and subscription revenues are expected to be $166M-$167M.

·     MongoDB (MDB) shares rose 16%; Q3 adj EPS loss (-$0.11) vs. est. loss (-$0.38); Q3 revs $227M up 505 YoY vs. est. $205.16M; continued strong customer growth with over 31,000 customers as of October 31, 2021; Atlas revenue up 84% year-over-year; 58% of total Q3 revenue; guides FY22 adjusted EPS loss (74c)-(71c) vs. est. loss (-$1.13) and FY22 revs $846.3M-$849.3M vs. est. $813.02M

·     Sumo Logic (SUMO) Q3 EPS loss (-$0.12) vs. est. loss (-$0.14); Q3 revs $62M vs. est. $60.86M; Q3 GAAP gross margin was 67%; non-GAAP gross margin was 73%; guides Q4 revs up 18%-20% to $63.7M-$64.7M vs. est. $64.05M.

·     Silicon Motion Technology (SIMO) authorized a new $200M share repurchase program and reaffirms its Q4 financial guidance as originally provided on its Q3 earnings release.

·     Stellantis (STLA) and Foxconn (HNHPF) sign a cooperation pact to design and sell a family of purpose-built semiconductors for the automotive industry.