Early Look

Wednesday, December 22, 2021

Futures	Up/Down	%	Last
Dow	33.00	0.09%	35,414
S&P 500	1.25	0.03%	4,642
Nasdaq	-11.00	0.07%	15,969

 

 

U.S. futures are looking modestly mixed, a far cry after the sharp rebound for major stock averages on Tuesday following three days of losses amid fears about the fast-spreading omicron variant. On Tuesday the Dow rose 1.61%, the S&P 500 surged 1.78% and the Nasdaq screamed higher all day to settle up 2.40%. The Russell 2000 gained 2.95% as SmallCaps outperformed after recently falling near 15% from its recent record highs. In Asian markets, The Nikkei Index rises 44 points to 28,562, the Shanghai Index was little changed, slipping a few points to 3,622 and the Hang Seng Index rose 131 points to 23,102. In Europe, the German DAX is u about 20 points to 15,470, while the FTSE 100 is flat just below 7,300. Volumes are expected to slow over the next two days heading into the Christmas holiday (markets in the U.S. are closed Friday). In Washington DC, the White House continues to negotiate President Joe Biden’s $1.75 trillion ‘Build Back Better’s spending bill with senior Democrats, including recalcitrant Senator Joe Manchin. Related to Omicron, more European countries are tightening travel and in country restrictions to try and stymie the recent spike in cases.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 81.21 points, or 1.78%, to 4,649.23

·     The Dow Jones Industrial Average rose 560.54 points, or 1.60%, to 35,492.70

·     The Nasdaq Composite jumped 360.14 points, or 2.40%, to 15,341.09

·     The Russell 2000 Index advanced 63.07 points, or 2.95% to 2,202.95

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM ET         Gross Domestic Product (GDP) Q3-F…est. 2.1%

·     8:30 AM ET         GDP Consumer Spending, Q3-F…prior 1.7%

·     8:30 AM ET         GDP Price Deflator for Q3…est. 5.9%

·     8:30 AM ET         PCE Deflator, Q3-F…

·     8:30 AM ET         Core PCE Prices, Q3-F…est. 4.5%

·     10:00 AM ET      Consumer Confidence for December…est. 110.8

·     10:00 AM ET      Existing Home Sales MoM for November…est. 6.52M

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CTAS, KMX, LIVE, MSM, PAYX

·     Earnings After the Close: AVO

 

 

Macro	Up/Down	Last
Nymex	0.17	71.29
Brent	0.02	73.99
Gold	1.35	1,790.60
EUR/USD	0.0015	1.1297
JPY/USD	0.16	114.24
10-Year Note	-0.008	1.479%

 

 

World News

·     Germany announced new restrictions that will begin after Christmas, limits private gatherings to 10 people, closes nightclubs nationwide and large events like soccer matches to be held without an in-person audience, restrictions to go into effect nationwide on Dec 28.

·     Portugal PM Costa provides an update on Covid-19 restrictions to counter the rise of coronavirus cases. Nightclubs and bars in Portugal will be shut from Saturday, Remote working will also become mandatory from Dec. 25

·     Chicago will require proof of coronavirus vaccination at restaurants, bars, gyms and other indoor venues, the requirement will take effect Jan 3 – MarketWatch

·     U.S. share buybacks more than double in the third quarter while Capex still down 3% from pre-pandemic amount – Bloomberg

 

Sector News Breakdown

Consumer

·     Darden Restaurants (DRI) upgraded to Buy at Sifel

·     THOR Industries (THO) authorizes the repurchase of up to $250M of its common stock

·     Walmart (WMT) and CVS Health (CVS) have capped sales of at-home COVID-19 testing kits as demand surges due to spread of Omicron variant, Reuters reported

 

Energy, Industrials and Materials

·     AAR Corp. (AIR) Q2 adj EPS $0.53 vs. est. $0.54; Q2 revs $436.6M vs. est. $449.75M; announces $100M buyback; Q2 adj Ebitda rose 37% YoY to $37M

·     The American Petroleum institute (API) reports that crude inventories fell 3.67M barrels last week and gasoline inventories rose 3.7M barrels, and a decrease in distillate inventories of 800K barrels

·     Maersk (AMKBY) agreed to buy Hong Kong-based LF Logistics for $3.6 billion in an all-cash deal, as it seeks to expand beyond its core ocean freight business.

·     Agco (AGCO) downgraded to Market Perform from Outperform at Bernstein, while the firm upgraded Caterpillar (CAT) and Paccar (PCAR) to Outperform saying concerns about the end of the machinery cycle in 2022 are overdone

·     MSC Industrial (MSM) Q1 adj EPS $1.25 vs. est. $1.19; Q1 revs rose 9.9% to $848.5M vs. est. $838.9M; see low double-digit ads growth as a possibility for fiscal 2022

·     European gas prices rose to new record highs Tuesday after flows through the Yamal-Europe pipeline stopped as temperatures plunged in Moscow and Gazprom decided not to book export capacity – FT reports

·     Ternium (TX) offers to acquire from its subsidiary Ternium Argentina a 28.73% participation in Ternium Mexico that the firm does not own directly for $1B

 

Financials

·     Voya Financial (VOYA) is joining the S&P MidCap 400 index, to replace CoreSite Realty (COR) which is being acquired by American Tower (AMT)

·     KKR (KKR) has earned total realized performance income, including realized incentive fees, and total realized investment income in excess of $1.15B for the period October 1, 2021 to December 21, 2021.

 

Healthcare

·     The WHO’s Strategic Advisory Group of Experts on Immunization says that Novavax’s (NVAX) COVID-19 vaccine should be administered in a two-dose series.

·     Ligand Pharmaceuticals (LGND) and GlaxoSmithKline (GSK) expand an existing collaboration and license agreement where LGND will receive an upfront payment of $10M and is eligible for development and regulatory milestones up to $67.5M

·     Merck (MRK) and privately held Ridgeback Biotherapeutics said the UK government has ordered an additional 1.75 million courses of their COVID-19 antiviral molnupiravir. The new order brings the total ordered by the UK government o 2.23 million courses

·     Biogen (BIIB) slips as the Japan health ministry says inconsistent trial results make it difficult to determine efficacy of Alzheimer’s treatment Aduhelm developed by BIIB and Tokyo-based Eisai Co

 

Technology, Media & Telecom

·     CalAmp (CAMP) Q3 adj EPS loss (-$0.08) vs. est. $0.08; Q3 revs fell -12% to $69M vs. est. $77.6M; Q3 gross margin was 41% compared to 40% in the prior year quarter; says visibility into product shipments still remains uncertain

·     BlackBerry (BB) Q3 adj EPS flat vs. est. loss (-$0.07); Q3 revs $184M vs. est. $177.25M; sees Q4 revs $175M-$190M below est. $208M; expects continued sequential growth in and for Q4 cybersecurity revenue to be in the range of $125M-$135M

·     MagnaChip Semiconductor (MX) authorizes repurchase of up to $75M of the company’s common stock