Morning Preview: February 01, 2021

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Early Look

Monday, February 1, 2021









S&P 500










Stock futures are surging, looking to rebound after last week’s weakness as investors turn their attention to stock fundamentals ahead of a busy week of earnings, the monthly jobs report, and updates on the latest relief stimulus package under the Biden administration. Stocks ended a wild week of trading lower, plunging on Friday for the biggest weekly fall since October, as investors dealt with disappointing Covid-19 vaccine data results from Johnson & Johnson (said its single-dose vaccine was 72% effective in preventing COVID-19 in the United States, with a lower rate of 66% observed globally), while the standoff between Wall Street hedge funds and small retail investors added to volatility. For the week, the S&P fell 3.31%, the Dow lost 3.28%, and the Nasdaq slumped 3.49%. For the month, the S&P fell 1.12%, the Dow lost 2.04%, but the Nasdaq gained 1.42%. With Friday’s declines, both the S&P and Dow closed below their 50-day moving average, seen as a technical support level. Volume across U.S. exchanges on Friday was 17.13 billion shares, compared with the 15.26 billion average for the full session over the last 20 trading days. The increased volume comes on the heels of a massive short squeeze that has gripped media attention over the last two weeks after an army of retail investors returned to trade shares in stocks such as GameStop Corp (GME) and AMC Entertainment (AMC) which surged after online trading platforms such as Robinhood eased some of the restrictions they had placed on trading. Earnings also remains a key market factor as of the 184 companies in the S&P 500 that have reported through Friday morning, 84.2% have topped analyst expectations, well above the 75.5% beat rate for the past four quarters, according to Refinitiv data. Silver prices seem to be the next squeeze after surging last week and boosting miners across the board (AG, PAAS, CDE, HL). Spot silver traded up 8.69% early Monday to $29.35 an ounce. Futures had surged as much as 13% over the weekend, with silver crossing $30 an ounce for the first time since 2013. In Asian markets, The Nikkei Index jumped427 points to 28,091, the Shanghai Index gained 22 points to move back above the 3,500 level and the Hang Seng Index surged over 600 points to 28,892. In Europe, the German DAX is up 200 points to 13,630, while the FTSE 100 is up over 80 points to around the 6,500 level.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -73.14 points, or 1.93%, to 3,714.24

·     The Dow Jones Industrial Average fell -620.78 points, or 2.03%, to 29,982.62

·     The Nasdaq Composite plunged -266.46 points, or 2.00%, to 13,070.69

·     The Russell 2000 Index declined -32.97 points, or 1.57% to 2,073.64


Events Calendar for Today

·     9:45 AM EST      Markit Manufacturing PMI, Jan-F

·     10:00 AM EST    Construction Spending MoM for December

·     10:00 AM EST    ISM Manufacturing PMI, for January


Earnings Calendar:

·     Earnings Before the Open: ARLP, ON, OTIS, SBT, TMO, WMG

·     Earnings After the Close: ARE, CACC, CBT, CRUS, CSWC, HLIT, IBTX, KMPR, KMT, KRC, OMCL, PCH, RMR, SKY, VRTX, WWD





















10-Year Note





Sector News Breakdown


·     Tesla (TSLA) tgt raised to street high $1,200 from $515 at Piper

·     Nio (NIO) reports a new monthly record with 7,225 vehicles delivered in January 2021, representing a growth of 352.1% Y/Y.

·     XPeng (XPEV) achieves a record monthly delivery of 6,015 Smart EVs in January 2021, an increase of 470% Y/Y.

·     Nikola (NKLA) upgraded to neutral from underperform at Wedbush



·     Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) spoke about combining the oil giants after the pandemic shook the world last year, according to people familiar with the talks, testing the waters for what could be one of the largest corporate mergers ever as per the WSJ

·     First Solar (FSLR) downgraded to Neutral from Buy at UBS with a price target of $110, up from $95 as had expected an extension of the U.S. Federal investment tax credit to support a higher multiple for the shares, but with the ITC having been extended for two years at a 26% rate in December 2020 that thesis has now played out



·     Interactive Brokers (IBKR) announced that it lifted all trading restrictions on options in AMC Entertainment (AMC), BlackBerry (BB), Express (EXPR), GameStop (GME), Koss Corp. (KOSS) and other options that experienced recent market volatility. The options, as well as the underlying stocks, are currently subject to increased margin requirements



·     Moderna (MRNA) asked the U.S. FDA for permission to fill its Covid-19 vaccine vials with up to five additional doses to ease a manufacturing bottleneck, CNBC reported late Friday

·     Gilead Sciences (GILD) and Gritstone Oncology (GRTS) entered into a collaboration, option and license agreement to research and develop a vaccine-based immunotherapy to find a curative treatment for HIV infection.

·     Thermo Fisher (TMO) Q4 adjusted EPS $7.09 vs. est. $6.56; Q4 revenue $10.55B vs. est. $9.58B

·     Merck (MRK) said that its anti-PD-1 therapy Keytruda in combination with ipilimumab (Yervoy) failed to improve overall survival compared with Keytruda monotherapy as first-line treatment for patients with metastatic non-small cell lung cancer

·     Edwards Lifesciences (EW) announced new data from the COMMENCE clinical trial that demonstrate Edwards’ bioprosthetic surgical aortic valve with the company’s novel RESILIA tissue platform show favorable safety and hemodynamic performance through a median of five years follow-up

·     Sorrento (SRNE) says positive results from phase 1b study for patients suffering from covid-19-induced acute respiratory distress

·     Clover Biopharmaceuticals plans to initiate a global Phase 2/3 efficacy trial of its protein-based S-Trimer COVID-19 vaccine candidate adjuvanted with Dynavax Technologies’ (DVAX) CpG 1018 plus alum in H1 2021 with an interim analysis for vaccine efficacy potentially in mid 2021.


Industrials & Materials

·     Hollysys Automation Technologies (HOLI) rises after the consortium including co-founder and former Hollysys CEO Shao, Ace Funds and Chinese P-E firm CPE Funds Management sweetened its bid offer to acquire the company after the board earlier rejected $15.47 per share take-over proposal

·     Northrop Grumman (NOC) announces $2B accelerated share buyback pact

·     Barron’s positive on industrials, materials and energy saying after a 10-year bear market, commodities, including energy, metals and agriculture, are set to gain as the economy recovers. Freeport-McMoRan (FCX) is a copper play, Exxon Mobil (XOM) and Chevron (CVX) offer energy exposure & machinery name Deere (DE) and fertilizer company CF Industries (CF) are good bets

·     Infrastructure could become President Joe Biden’s top priority, and individual investors can participate through stocks and mutual funds, Barron’s said. The $47 million Aberdeen Global Infrastructure fund (AIFRX) holds companies that have steady cash flow to pay out dividends. Its recent holdings included NextEra Energy (NEE) and American Tower (AMT).


Technology, Media & Telecom

·     QuantumScape (QS) mentioned cautiously by Barron’s saying the battery startup with $15.9 billion market cap, is overvalued by any measure, as it generates no sales and says it won’t have meaningful revenue until 2026. The company isn’t alone in working on a pioneer battery technology that no one has succeeded at yet


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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