Early Look

Tuesday, December 28, 2021

Futures are green across the board as indices look to extend their winning streak to five days and the S&P seeks its third consecutive record close. The Nasdaq appears to be leading yet again as tech stocks have largely been the driver of this year’s Santa Claus rally. Tesla is also getting a boost pre-market after Wedbush reiterated their bullish stance with China remaining the linchpin to their overall bull thesis. The stock has soared over 20% in the past four sessions after closing below $900 for the first time in two months last Monday to recapture the $1,100 level and is continuing its upward momentum today. In Asian markets, The Nikkei Index gained 392 points, the Shanghai Index rose 14 points, and the Hang Seng Index was higher by 56 points. In Europe, the STOXX 600 rose to a five-week high, the German DAX is up 107 points, while the FTSE 100 is flat.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 65.56 points, or 1.39%, to 4,791.35

·     The Dow Jones Industrial Average rose 352.87 points, or 0.98%, to 36,303.43

·     The Nasdaq Composite surged 217.89 points, or 1.39%, to 15,871.26

·     The Russell 2000 Index advanced 19.89 points, or 0.89% to 2,261.46

Events Calendar for Today

·     7:45 AM ET                 ICSC Weekly Retail Sales

·     8:55 AM ET                 Johnson/Redbook Weekly Sales

·     9:00 AM ET                 Monthly Home Price Index MoM for Oct

·     9:00 AM ET                 CaseShiller 20 City Index for Oct

·     10:00 AM ET               Richmond Fed Manufacturing for December

·     4:30 PM ET                 API Weekly Inventory Data

Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: CALM

World News

·     The United States and Russia will hold security talks on January 10, followed by likely talks between Russia and NATO January 12 and a broader meeting among the US, Russia, and other European countries on the 13^th.

·     France has announced that remote working will become compulsory for those who are able to starting January 3, public gatherings for indoor events will be limited to 2,000 people, and outdoor gatherings limited to 5,000 people for at least the next three weeks as part of their response to surging Covid cases after the country reporting over 100,000 daily cases for the first time yesterday. Schools will reopen as normal starting January 3, however, and there will be no New Year’s curfew.

Sector News Breakdown

Consumer

·     Middleby (MIDD) completed their previously announced acquisition of Masterbuilt and also announced it completed the acquisition of Char-Griller, a residential outdoor charcoal and gas cooking products company. These acquisitions grow the company’s Middleby Residential revenues to over $1B

·     Tesla (TSLA) was reiterated at Outperform with a $1,400 price target at Wedbush due to possibly doubling its production capacity with the expected production approval at its Berlin plant early next year and completed construction at its Austin plant by Dec. 31, demand outstripping supply, and China possibly making up 40% of their deliveries next year, worth $400/share

Energy, Industrials and Materials

·     R. R. Donnelley & Sons (RRD) isolated a portion of technical environment as a precautionary measure after recently identifying a systems intrusion and is not aware of any compromise of client data or determine the extent of material adverse impact on business at this time

·     Aspen Aeroegels (ASPN) and BASF (BASFY) terminated their supply agreement for aerogel products

·     Jinko Solar (JKS) received China CSRC approval to list on Star Board

Financials

·     KKR increased its buyback program to $500M

·     CompoSecure and SPAC Roman DBDR (DBDR) announced the closing of their business combination and will begin trading on the Nasdaq tomorrow under symbol CMPO

Healthcare

·     OptiNose (OPTN) shares rose after a 13D filing showed MVM Partners holds a 15.2% stake

·     India approved Merck’s (MRK) antiviral pill and two vaccines, including the Serum Institute of India’s version of Novavax’s (NVAX) vaccine, for emergency use

Technology, Media & Telecom

·     ADDvantage Technologies (AEY) Q4 EPS $0.05 from ($0.09) YoY on revenue that increased 61% to $19.7M

·     Concentric (CNXC) closed its acquisition of global customer experience design engineering company PK that was announced last month

·     Apple (AAPL) closed its NYC stores to shoppers due to the spike in Covid cases

·     Benchmark initiated Buy ratings on Bilibili (BILI) and Hold ratings on iQIYI (IQ) and Tencent Music Entertainment (TME)

·     BlackBerry (BB) was granted five patents this morning

·     Evercore’s top internet picks for 2022 are Amazon (AMZN), UBER, Meta Platforms (FB), ROKU, Chewy (CHWY), Spotify (SPOT), Bumble (BMBL), Wix.com (WIX), and Duolingo (DUOL)