Early Look

Thursday, December 9, 2021

Futures	Up/Down	%	Last
Dow	-125.00	0.36%	35,532
S&P 500	-18.25	0.40%	4,673
Nasdaq	-84.50	0.51%	16,312

 

 

U.S. futures are pulling back slightly a day after the S&P 500 closed within a fraction of its prior closing highs, settling above the 4,700 while the Smallcap Russell 2000 and Nasdaq Composite outperformed. It has been a remarkable run for U.S. stocks over the last three days, erasing the prior 2-week pullback on concerns on rising interest rates (ahead of next weeks final 2021 FOMC meeting), inflation concerns (ahead of tomorrow’s CPI report), and Omicron variant concerns (following positive vaccine comments this week from PFE). On the calendar today, weekly jobless claims at 8:30 AM. In Asian markets, The Nikkei Index declines -135 points to 28,725, the Shanghai Index rises 35 points to 3,673, and the Hang Seng Index advances 257 points or 1.08% to settle at 24,254. In Europe, the German DAX is down -0.25% at 15,650, while the FTSE 100 slips -0.15% to 7,325. Bitcoin prices resume downward momentum, down over 2.5% back below the $50,000 level.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 14.46 points, or 0.31%, to 4,701.21

·     The Dow Jones Industrial Average rose 35.32 points, or 0.10%, to 35,754.75

·     The Nasdaq Composite jumped 100.07 points, or 0.64%, to 15,786.99

·     The Russell 2000 Index advanced 17.92 points, or 0.80% to 2,271.71

 

Events Calendar for Today

·     8:30 AM ET          Weekly Jobless Claims…est. 215K

·     8:30 AM EST       Continuing Claims…est. 1.90M

·     10:00 AM ET       Wholesale Inventories MoM for October

·     10:30 AM ET       Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ARHS, CIEN, HOFT, HOV, HRL, LQDT

·     Earnings After the Close: AOUT, AVGO, CHWY, COST, CXM, KLXE, LAKE, LESL, MESA, MTN, SONX

 

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

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

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

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

·     Truist Gaming, Lodging, Leisure & Restaurants Summit (virtual), 12/9

 

 

Macro	Up/Down	Last
Nymex	-0.42	71.95
Brent	-0.58	75.23
Gold	-0.60	1,782.40
EUR/USD	-0.0025	1.1318
JPY/USD	-0.15	113.51
10-Year Note	-0.012	1.497%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -0.8 vs -15.7 last week. Bulls rise to 29.7% from 26.7%; Neutrals rise to 39.8% from 31%; Bears fall to 30.5% from 42.4%

·     Britain unveiled stricter Covid restrictions heading into the Christmas holidays last night, following on from similar decisions taken on Continental Europe, as case counts and hospitalizations continue to rise

·     Brazil central bank raises benchmark lending rate 150 basis points to 9.25%; said sees hike of same magnitude at next meeting

·     The Peoples Bank of China (PBOC) raises forex reserve requirement by 2%, taking it to 9% from 7%

·     China’s indebted property developer Evergrande was officially declared to have defaulted on portions of its domestic obligation by Fitch Ratings, potentially triggering a so-called ‘cross default’ on some $19 billion in foreign currency debt.

 

Sector News Breakdown

Consumer

·     Duckhorn Portfolio, Inc. (NAPA) Q1 adj EPS 20c vs est. 15c on sales $104.2M vs est. $96.8M; reaffirmed prior FY22 guidance ranges for adj EPS 54c-57c vs est. 56c on sales $353M-$360M vs est. $359.4M

·     FuboTV Inc (FUBO) files for potential shelf of up to 5.7M shares offered by selling security holders

·     GameStop (GME) Q3 EPS ($1.39) vs est. ($0.52) on sales $1.297B vs est. $1.19B; inventory at qtr-end $1.14B vs $861M YoY to reflect focus on front-loading to meet customer demand and mitigate supply chain issues; ended the quarter with $1.41 billion in cash and equivalents and no debt other than a $46.2 million low-interest, unsecured loan

·     Lucid Group (LCID) files to sell $1.75B of convertible senior notes due 2026

·     Oxford Industries, Inc. (OXM) Q3 adj EPS $1.19 vs. est. $0.29; Q3 sales rose 3% to $248M vs. est. $227.6M; Q3 Gross margin, on both a GAAP and adjusted basis, increased to 62% compared to 55% YoY; raises fourth quarter and full-year revenue and EPS guidance as sees Q4 sales $285M-$295M; raises year EPS to $7.52-$7.67 from prior $6.45-$6.50 (est. $6.71)

·     Rent the Runway (RENT) 3Q revs $59Mm vs est. $53.5Mm, 116.8K active subs; guides 4Q revs $62.8-63.3Mm vs est. $62.7Mm, sees 4Q ending active subs 121-122K

·     RH Corp. (RH) shares rise 11%; Q3 EPS $7.03 vs. est. $6.63; Q3 revs $1.01B vs. est. $983.86M; raises lower end of year revs to +32%-33%, from prior +31%-33%; boosts FY21 adjusted operating margin view to 25.3% to 25.5% from 24.9% to 25.5%

·     Sportsman’s Warehouse Holdings (SPWH) Q3 adj EPS $0.51 vs. est. $0.54; Q3 sales rose 4% to $401M vs. est. $379.5M; said will not be providing guidance for FY21; Q3 same store sales decline -1.5% – said compared to the same period of 2019, saw same store sales growth of 39.4%; E-commerce sales growth of over 15% for Q3

·     Torrid Holdings Inc. (CURV) shares fell -10%; 3Q adj EPS $0.25 vs est. $0.23 on revs $306.2Mm vs est. $312.2Mm; guides 4Q sales $325-335Mm

·     Udemy, Inc. (UDMY) 3Q adj EPS ($0.04) vs est. ($0.04) on revs $129.6Mm vs est. $125.9Mm; guides 4Q revs $130-134Mm vs est. $129.8Mm

·     New Zealand plans to ban young people from ever buying cigarettes in their lifetime in one of the world’s toughest crackdowns on the tobacco industry, arguing that other efforts to extinguish smoking were taking too long (watch tobacco makers)

·     The European Commission announced draft rules on Thursday to give workers such as couriers for online platform companies including Uber (UBER) and Deliveroo rights, including employment benefits in many cases, a move which labor unions say is overdue but some companies argue will lead to job losses.

 

Energy, Industrials and Materials

·     The New Mexico Public Regulation Commission, or NMPRC, rejected the agreement reached by parties in the merger application involving PNM Resources (PNM), its wholly-owned subsidiary Public Service Company of New Mexico, and AVANGRID (AGR). The NMPRC voted 5-0 to reject the parties’ agreements reached in the merger proceedings, following a 4-1 vote to deny a request for oral argument seeking to address concerns expressed by the NMPRC

·     Grief Inc. (GEF) 4Q adj EPS $1.93 vs est. $1.49 on sales $951.6Mm vs est. $1.5B; guides FY22 EPS before adjustments $5.85-6.45 vs est. $5.87, sees FY22 adj FCF $400-460Mm

·     Landstar System (LSTR) declares $2.00 per share special dividend; increases stock purchase program

·     Phillips 66 (PSX) upgraded to Overweight from Neutral at JPMorgan

·     Steelmaker U.S. Steel Corp. (X), freight railroad Norfolk Southern Corp. (NSC) and railcar maker Greenbrier Cos. (GBX) have joined forces to create a new, more sustainable steel gondola railcar to help address an aging freight railroad industry fleet.

·     Vale (VALE) upgraded to Overweight from Equal Weight and Southern Copper (SCCO) upgraded to Equal Weight from Underweight at Morgan Stanley

 

Financials

·     Cohen & Steers, Inc. (CNS) preliminary assets under management of $100.2 billion as of November 30, 2021, a decrease of $1.4 billion from assets under management at October 31, 2021. The decrease was due to market depreciation of $1.4 billion and distributions of $204 million, partially offset by net inflows of $201 million.

·     Nuvei (NVEI) reaffirmed the financial outlook it disclosed on November 9 for FY21 and reiterated its long-term growth targets for total volume, revenue and adjusted EBITDA margin also disclosed on that date. The company said, “Nuvei believes the recent report issued by a short seller is intentionally misleading and draws inaccurate conclusions, innuendo and character attacks on key executives, among numerous other issues.

 

Healthcare

·     CVS Health (CVS) to buy back up to $10B shares; boosts dividend and raises FY21 revenue view to at least $290.3B from $286.5B-$290.3B vs. consensus $288.93.

·     AstraZeneca (AZN) said the FDA authorized the company’s COVID-19 monoclonal antibodies for pre-exposure prophylaxis in individuals who are immunocompromised or have a history of severe adverse reactions to a COVID-19 vaccine

·     Aurinia Pharma (AUPH) announces positive topline results from the AURORA 2 continuation study of LUPKYNIS (voclosporin) for the treatment of adults with active lupus nephritis

·     Phreesia (PHR) Q3 EPS loss (-$0.71) vs. est. loss (-$0.38); Q3 revs $55.9M vs. est. $48.75M; raises FY22 revenue view to up 20%-25% or $211M from $195M-$198M (and above est. $198.3M)

·     Reata Pharmaceuticals (RETA) shares fall over -30%; following outcome of FDA AdCom meeting on bardoxolone. The company had stated that the Advisory Committee voted NO on the question of whether the provided evidence demonstrated that bardoxolone is effective in slowing the progression of CKD in patients with Alport syndrome and that its benefits outweigh its risks

·     Relmada Therapeutics (RLMD) 8.82M share offering priced at $17.00

 

Technology, Media & Telecom

·     Amazon.com Inc. (AMZN) was fined $1.3B from Italy’s antitrust regulator saying it harmed competitors by favoring third-party sellers that use the company’s logistics services.

·     HashiCorp (HCP) 15.3M share IPO priced at $80.00

·     Perion Network (PERI) raises FY21 revenue view to $460-470 from $455M-$465M (est. $460.41M) and raises FY21 adjusted EBITDA view to $64M-$65M from $59M-$61M; also announces $100M ordinary share offering

·     UiPath, Inc. (PATH) 3Q adj EPS $0.00 vs est. ($0.04) on revs $220.8Mm vs est. $208.8Mm; guides 4Q adj op Inc $10-20Mm vs est. $17.2Mm

·     Morgan Stanley remains bullish on the U.S. broadband sector, but notes the industry faces slowing net additions and rising capital investment as it downgrades Charter Communications (CHTR) and Liberty SiriusXM (LSXMA) to equal-weight; JPMorgan downgraded Altice USA (ATUS) in the cable sector as well