Early Look

Wednesday, December 8, 2021

Futures	Up/Down	%	Last
Dow	-67.00	0.15%	35,661
S&P 500	4.25	0.10%	4,689
Nasdaq	67.50	0.41%	16,385

 

 

U.S. stock futures are looking mixed with the Dow lower, the Nasdaq outperforming and the S&P little changed following a strong two-day rally for U.S. equities. Stocks jumped for a second day on Tuesday, continuing their rebound from a recent decline as investors grew less fearful of the potential economic impact of the omicron variant and for the time being less concerned about the more aggressive FOMC/inflation/rates ahead of CPI data later this week and the FOMC final meeting of the year next week. The S&P 500 gained over 2%, while the Nasdaq surged over 3% and the SmallCap Russell 2000 also advanced over 2.2%, buoyed by financials, energy and tech, while defensive staples and utilities lagged. The Philadelphia Semiconductor Index (SOX) posted its biggest rise since early March of this year, closing at record highs. In Asian markets overnight, The Nikkei Index jumps 400 points or 1.42% to 28,860, the Shanghai Index rises over 40 points or 1.18% to settle at 3,637, and the Hang Seng Index was up only a few points to 23,996. In Europe, the German DAX is down over -90 points or 0.55% at 15,720, while the FTSE 100 is little changed at 7,340. Bitcoin prices are back on the decline after a bounce back above $50K late yesterday, last down over 2.5% at $49,100.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 95.08 points, or 2.07%, to 4,686.75

·     The Dow Jones Industrial Average rose 492.40 points, or 1.40%, to 35,719.43

·     The Nasdaq Composite surged 461.76 points, or 3.03%, to 15,686.92

·     The Russell 2000 Index advanced 50.31 points, or 2.28% to 2,253.79

 

Events Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     10:00 AM ET       JOLTs Job Openings for October

·     10:30 AM ET       Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ALOT, BF/B, CPB, DTC, LOVE, PLAB, THO, UNFI, VRA, WEBR

·     Earnings After the Close: CURV, GEF, GME, ISSC, MIND, NAPA, OXM, PATH, PHR, RENT, RH, SPWH, UDMY, WBEV

 

Other Key Events:

·     Barclay’s Global Technology, Media & Telecom Conference, in San Francisco, 12/8-12/9

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

·     European Society for Medical Oncology (ESMO) Immuno-Oncology Congress, 12/8-12/11

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

·     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

·     Sidoti Microcap Conference (virtual), 12/8-12/9

·     China CPI, PPI for November

 

 

Macro	Up/Down	Last
Nymex	-0.89	71.16
Brent	-0.75	74.69
Gold	4.80	1,789.00
EUR/USD	0.0024	1.1286
JPY/USD	-0.16	113.41
10-Year Note	-0.041	1.439%

 

 

World News

·     The US House passed a Bill by 222-212 last night to speed up a debt ceiling fix in the Senate that essentially allows Dems to raise the country’s credit limit unilaterally & avoid a Christmas default

·     Social Democrat Olaf Scholz has been sworn in as chancellor of Germany, succeeding Angela Merkel after 16 years and launching a new era of German and European politics.

·     Japanese Q3 GDP missed: -0.9% q/q vs -0.8% consensus; Q3 GDP Annualized missed: -3.6% vs -3.1% consensus; Japanese Oct Trade Balance smaller deficit: JPY -186.8b vs JPY -450.3b consensus; Oct Current Account smaller surplus: JPY +1.18T vs JPY +1.31T consensus

 

Sector News Breakdown

Consumer

·     Amazon.com (AMZN) said AWS says service is now operating normally after yesterday’s outage

·     ChargePoint (CHPT) Q3 EPS loss (-$0.21) vs. est. loss (-$0.13); Q3 revs rose 79% to $65M vs. est. 464.8M; sees Q4 revs $73M-$78M vs. est. $73.1M; said it had roughly 163,000 ports as of Oct. 31, compared with more than 118,000 as of July 31

·     Dave & Buster’s (PLAY) 3Q EPS $0.21 vs est. $0.13 on revs $318Mm vs est. $319.8Mm, comps +1.1%; sees 4Q comps slightly positive (strong walk-in, weak events), sees 4Q adj EBITDA margin +200bps vs 2019; authorized $100M share buyback program

·     Kraft Heinz (KHC) downgraded to Neutral from Buy with a price target of $33, down from $46 at Guggenheim

·     Stitch Fix (SFIX) 1Q EPS ($0.02) vs est. ($0.14) on revs $581.2Mm vs est. $571Mm, active clients +11%, net revs per active client +12%; guides 2Q net revs $505-520Mm vs est. $584.7Mm and adj EBITDA $(5) – $5Mm vs est. $6.3Mm

·     Starwood Property (STWD) announces offering of 16M shares of common stock

·     Thor Industries (THO) Q1 EPS $4.34 vs. est. $3.24; Q1 revs $3.96B vs. est. $3.46B; expect gross margins to see some downward pressure as global rev mix normalizes and cost increases continue to occur in future quarters of 2022

·     Toll Brothers (TOL) Q EPS $3.02 vs est. $2.49 on home sale revs $2.95B +18% vs est. $2.88B, backlog $9.5B at qtr-end +49%; guides 1Q22 deliveries 2,000 units with avg delivered price/home $865-885K and adj home sales gr margin 25.5%; sees FY22 deliveries 11,250-12000 units with avg delivered price/home $875-895K and adj home sales gross margin 27.5%

·     Uber (UBER), Deliveroo and other online delivery companies may need to reclassify certain workers as employees under potential EU rules meant to bolster their social rights, Reuters reported

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) shows a draw of 3.1M barrels of oil for the week ending December 3; gasoline inventories show a build of 3.7M barrels, distillate inventories show a build of 1.2M barrels and Cushing inventories show a build of 2.4M barrels.

·     Energy Transfer LP (ET) announces offering of 86.96M common units for holders

·     Raytheon Technologies (RTX) Board authorizes $6B share repurchase plans

·     ReneSola (SOL) Q3 adj EPS $0.02 vs. est. $0.04; Q3 revs $15.5M vs. est. $20.24M; sees Q4 revenue $21M-$27M vs. est. $30.73M; sees Q4 gross margin 36%-40%; sees year revs $77M-$83M vs. est. $91.9M

·     Powell (POWL) Q4 EPS $0.28 vs. est. loss (-$0.04); Q4 revs $130M vs. est. $116.09M; reports backlog as of September 30 totaled $415M; said anticipating an improvement in profitability in second half of year relative to first half of fiscal 2022

·     Southwest Airlines (LUV) says managed business revenues are expected to recover to down 55% to down 60% in December versus 2019 levels; sees Q4 operating rev down 10% to 15% vs 2019; says leisure bookings continue to come in above expectations for December travel; sees 2022 capital spending of about $5.0B

·     TechnipFMC (FTI), through Gulf Automation Services and Oilfield Supplies LLC, has been awarded a major 10-year framework agreement for wellheads, trees, and associated services by the Abu Dhabi National Oil Company (ADNOC).

 

Financials

·     Blackstone (BX) has authorized the repurchase of up to $2B of the company’s common stock and Blackstone Holdings Partnership Units, replacing the company’s prior authorization of $1B

·     Visa (V) launches cryptocurrency advisor service for financial institutions and merchants

·     Pzena Investment Management (PZN) reports prelim assets under management of $49.8B for November 2021 compared to $40.7B in year ago month and $53B in October 2021.

·     Robinhood Markets (HOOD) files to terminate its registration statement for the resale of class A common stock received by certain shareholders

 

Healthcare

·     Avid BioServices, Inc (CDMO) Q2 EPS $0.06 vs. est. $0.02; Q2 revs rose 24% to $26.1M vs. est. $24M; backs prior FY22 revenue view $115M-$117M vs. est. $116.4M; said ends Q2 with $120M backlog; Q2 gross margin was 35%, compared to a gross margin of 30% YoY

·     Biogen (BIIB) is now preparing for its largest-ever layoffs, STAT has learned, moving to slash costs as sales of Aduhelm drastically underperform expectations. Biogen’s behind-the-scenes strife cost the company’s lead scientist his job, according to people close to the company

·     Neurocrine Biosciences (NBIX) announces positive phase 3 data for Kinect-HD study evaluating valbenazine for chorea associated with Huntington disease; plans to submit supplemental new drug application to U.S. Food and drug administration in 2022

·     Zoetis (ZTS) announces authorization of $3.5 billion share repurchase program and raises quarterly dividend by 30%

 

Technology, Media & Telecom

·     Apple Inc. (AAPL) after launching the iPhone 13 range and new iPads in September, Apple is falling millions of units short of its production goals and missing out on billions of dollars of revenue. In many countries, it is now too late for consumers to buy some Apple products in time to give as holiday gifts – Nikkei https://s.nikkei.com/3y1WoTI 

·     PagerDuty (PD) 3Q adj EPS ($0.07) vs est. ($0.09) on revs $72Mm vs est. $70Mm; guides 4Q adj EPS loss $0.05-0.06 vs est. loss $0.08, sees 4Q revs $75.5-76.5Mm vs est. $62.7Mm

·     SentinelOne (S) Q3 EPS loss of ($-0.26c) vs. est. loss (-$0.18); Q3 revs $56M vs. est. $49.57M; sees Q4 revenue $60M-$61M vs. est. $56.52M; raises FY22 revenue view to $199M-$200M from $188M-$190M (vs. est. $189.35M)

·     TechTarget Inc (TTGT) proposes to offer $360 mln convertible senior notes due 2026

·     Weave Communications, Inc. (WEAV) 3Q adj EPS ($0.72) on revs $30.3Mm; guides 4Q adj EPS loss from ops $10-11Mm, sees 4Q revs $31.5-32.5Mm

·     Testifying before Congress for the first time, Instagram head Adam Mosseri will be grilled about protections for youngsters online — one of the areas lawmakers are most interested in regulating – Axios