Early Look

Tuesday, February 2, 2021

Futures	Up/Down	%	Last
Dow	235.00	0.78%	30,346
S&P 500	30.25	0.81%	3,796
Nasdaq	107.50	0.81%	13,343

 

 

Following yesterday’s impressive stock market performance, global equities are moving higher again, with the U.S. main averages strong and on track to erase last weeks market losses (in just two days) on strong earnings, hopes for additional fiscal stimulus and another “buying of the dip.” Bernstein noted that with almost a third of S&P 500 companies having reported their fourth quarter earnings, 88% managed to meet or beat analysts’ consensus earnings estimates so far, well above the average of 78% over the last twelve years. On the top line, 78% of companies have met or beat consensus revenue estimates, an all-time high easily besting the historical average of 58%. The average EPS surprise was 10.7% while the average sales surprise was 3.5%. On the virus front, more Americans have received at least one dose of a Covid-19 vaccine than have tested positive for the virus according to reports (according to Bloomberg, 26.5 million Americans had received one or both doses of the current vaccines, while 26.3 million people have tested positive for Covid-19). U.S. stock markets rallied Monday, led by more than 2% advances for the Nasdaq Composite (led behind AMZN, AAPL, and TSLA) and the SmallCap Russell 200 index ahead of key stimulus talks between President Biden and a group of Republican senators, while recent high short interest market winners such as GME (fell 35%) came under pressure. On Sunday, Republican leaders proposed a $600 billion package, far less than Biden’s $1.9 trillion plan. The Nikkei Index jumped 271 points to 28,362, the Shanghai Index gained 28 points to 3,533 and the Hang Seng Index advanced 355 points to 29,248 in another strong showing. In Europe, the German DAX is higher by 170 points to 13,800, while the FTSE 100 is up over 30 points to 6,500.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 59.62 points, or 1.61%, to 3,773.86

·     The Dow Jones Industrial Average rose 229.29 points, or 0.76%, to 30,211.91

·     The Nasdaq Composite spiked 332.70 points, or 2.55%, to 13,403.39

·     The Russell 2000 Index advanced 52.52 points, or 2.53% to 2,126.16

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABG, AQUA, ATKR, BEN, BR, COP, CTLT, DOX, EMR, ENTG, ETN, GPK, HAE, HCA, HOG, HUBB, IDXX, LII, LITE, MAN, MCK, MDC, MHO, MMP, MPC, MPLX, PFE, PINC, SALT, SIRI, ST, SYY, UPS, VRTS, WAT, WDR, XOM

·     Earnings After the Close: AMGN, AMZN, APAM, ATO, BDN, BRKS, CMG, EA, EPAY, FBHS, FEYE, GOOGL, MANH, MRCY, MTCH, PKI, POWI, POWL, SANM, SCSC, SMCI, STE, TCS, TENB, VIAV

 

Other Key Events:

·     China Caixin Services PMI for January

·     Stephens Texas Bank Virtual Field Trip, 2/2-2/4

 

 

Macro	Up/Down	Last
Nymex	1.17	54.72
Brent	1.17	57.52
Gold	-17.50	1,843.20
EUR/USD	-0.0026	1.2034
JPY/USD	0.04	104.97
10-Year Note	+0.023	1.10%

 

 

Sector News Breakdown

Consumer

·     Harley-Davidson (HOG) Q4 adj EPS loss (44c) vs. est. 14c; Q4 revenue $725M misses the $772.96M est.; qtrly worldwide retail motorcycles sales 33,295 vs 38,754; Q4 motorcycle shipments of 20,900 vehicles, down 48%; unveiled a five-year turnaround plan to boost motorcycle sales in its more profitable markets

·     Ferrari (RACE) 4q adj Ebitda eu372m; est. eu364.1m; sees 2021 adj Ebitda eu1.45b to eu1.50b, est. eu1.48b

·     Asbury Auto (ABG) 4Q adj EPS $4.44 vs. est. $4.13 on revs $2.2B vs. est. $2.2B, comps +1%, new vehicle comps flat, used vehicle comps flat

·     Li Auto (LI) announced that the company delivered 5,379 Li ONEs in January, representing a 355.8% year-over-year increase and resulting in cumulative deliveries of 38,976 vehicles

·     M.D.C. Holdings (MDC) Q4 EPS $2.19 vs. est. $1.73; Q4 revenue $1.18B vs. est. $1.22B; Q4 unit deliveries up 7% to 2,564; reports Q4 average selling price of deliveries up 2% to $461,000

·     Impossible Foods said it is cutting suggested retail prices for its plant-based meat substitute products by 20% in the 17,000 grocery stores they are in across the U.S. (watch shares of BYND)

·     Skyline Champion (SKY) Q3 EPS 38c vs. est. 24c; Q3 revenue $377.6M vs. est. $348.24M; Q3 factory-built homes sold increased 6.2% to 5,343, total backlog increased 267.1% to $488.5M; average selling price per U.S. home sold increased 4.0% to $63,000; Q3 adjusted EBITDA increased 7.8% to $32.1M

 

Energy

·     BP Plc (BP) Q4 EPS 6c on revenue $48.57B and pre-tax profit $1.09B

·     Cabot (CBT) Q1 adj EPS $1.18 vs. est. 88c; Q1 revenue $746M vs. est. $697.83M; sees Q2 EPS 90c-$1.00 vs. est. 87c; said believe near-term conditions remain favorable while visibility in the longer term is somewhat limited

 

Financials

·     Robinhood, the U.S. online broker has held talks with banks about raising $1 billion in debt so it can continue to fulfill orders for heavily shorted stocks, according to people familiar with the matter. The capital raised would be separate from the $3.4 billion in financing that Robinhood announced on Monday it had secured from its investors since Jan. 29. – Reuters

·     Alexandria Real Estate (ARE) Q4 adj FFO $1.84, in-line with ests; collected rents and tenant recoveries of 99.2% for January 2021

·     Credit Acceptance Corp. (CACC) Q4 EPS $10.75 vs. est. $7.21; Q4 revenue $447.4M vs. est. $429.19M

·     Invesco Mortgage (IVR) announces offering of 22M shares of common stock

 

Healthcare

·     Pfizer (PFE) Q4 adj EPS 42cmisses the 48c estimate on revs $11.7B vs. est. $11.43B; raises its year 2021 guidance for EPS and sees revs $59.4B-$61.4B

·     Arcutis Biotherapeutics (ARQT) announces offering of $150M of common stock

·     Hologic, Inc. (HOLX) announced a multi-year strategic collaboration with Google Cloud to augment the screening of cervical cancer

·     Prothena (PRTA) announces that it will go ahead with a confirmatory Phase 3 AFFIRM-AL study for its AL amyloidosis treatment birtamimab following multiple discussions with the U.S. FDA, with the aim of initiating the trial by mid-2021.

·     Vertex Pharma (VRTX) Q4 EPS $2.51 vs. est. $2.59; Q4 revs $1.63B vs. est. $1.58B; Cash, cash equivalents and marketable securities as of December 31, 2020 were $6.7 billion, an increase of approximately $2.9 billion; guides year product revs $6.7B-$6.9B

·     EyePoint (EYPT) 9.1M share Spot Secondary priced at $11.00

 

Industrials & Materials

·     UPS (UPS) Q4 adj EPS $2.66 vs. est. $2.14; Q4 revenue $24.9B vs. est. $22.87B; said given continued economic uncertainty due to the global pandemic, is not providing revenue Fy21 guidance; U.S. domestic revenue grew 17.4% to $15.74 billion, and international revenue jumped 26.8% to $4.77 billion

·     Eaton (ETN) 4Q EPS $1.18 vs. est. $1.20 on organic sales -5%, revs $4.62B vs. est. $4.62B; guides FY21 organic revs +4-6%, sees FY21 adj EPS $5.40-5.80 vs. est. $4.83; sees 1Q adj EPS $1.17-1.27 vs. est. $1.05

·     Graphic Packaging (GPK) Q4 adj EPS 28c vs. est. 27c; Q4 revenue $1.65B vs. est. $1.59B; said net organic sales growth of 4% in 2020 confirms our fiber-based packaging solutions are winning in the growing markets where we are focused

·     Axalta Coating (AXTA) Q4 revenue $1.075B vs. est. $1.03B and increased 4.6% sequentially from Q3 2020 with all end-markets showing improvement, given continued recovery from pandemic-related demand impacts; expects a delay in completion of its financial statements related to an operational matter; Q4 refinish demand recovery temporarily interrupted by incremental pandemic-related restrictions

·     Kennametal Inc (KMT) 2Q EPS $0.23 vs. est. $0.09 on sales $441Mm vs. est. $423.6Mm; not providing FY21 outlook at this time outside of CAPEX, which is unchanged

·     Potlatch (PCH) 4Q EPS $1.48 vs. est. $1.40 on revs $337.4Mm vs. est. $320.9Mm, says expects to ship around 1.1B board feet of lumber in FY21, expect to sell about 20,000 acres and 145 residential lots in real estate segment in 2021, expects lumber prices to remain higher than long-term averages in 2021, sees housing fundamentals and lumber demand to remain strong in 2021

·     Woodward (WWD) Q1 adj EPS 64c vs. est. 68c and Q1 revenue $537.62M vs. est. $542.86M; announced that its Board of Directors approved a dividend of $0.1625 per share; continues to withhold guidance

 

Technology, Media & Telecom

·     Cirrus Logic (CRUS) 3Q revs $485.3Mm vs. est. $458.6Mm, 3Q adj EPS $2.13 vs. est. $1.86; guides 4Q revs $280-320Mm vs. est. $297.8Mm, sees 4Q gr mgn 50-52%; says board authorized repurchase of additional $350Mm shares

·     DXC Technology (DXC) shares fell over 9% yesterday. Overnight, the board of directors of Atos SE has unanimously decided not to pursue a potential transaction with DXC Technology Co., Atos said. On January 7, Atos confirmed it made an unsolicited bid to acquire DXC.

·     C3.ai (AI) shares rose about 8% after Shell (RDS/A), C3.a (AI), Baker Hughes (BKR), and Microsoft (MSFT) launch the Open AI Energy Initiative, an ecosystem of ai solutions to help transform the energy industry

·     Fabrinet (FN) Q2 EPS $1.10 vs. est. $1.04; Q2 revenue $453.8M vs. est. $433.7M; sees Q3 EPS $1.10-$1.17 vs. est. $1.05; sees Q3 revenue $455M-$475M vs. est. $440.14M

·     Harmonic (HLIT) Q4 EPS 20c vs. est. 15c; Q4 revenue $131.5M vs. est. $126.3M; sees Q1 EPS 0c-4c vs. est. 3c and revenue $97.0M-$107.0M vs. est. $100.89M

·     NXP Semiconductors (NXPI) 4Q EPS $1.08 vs. est. $2.10 on revs $2.5B vs. est. $2.46B; guides 1Q revs $2.48-2.63B vs. est. $2.32B, sees 1Q adj gr mgn 53.2-53.8%

·     Omnicell (OMCL) 4Q adj EPS $0.91 vs. est. $0.80 on revs $249.2Mm vs. est. $245.5Mm; sees 1Q revs $243-248Mm vs. est. $250.1Mm, sees 1Q adj EPS $0.64-0.69 vs. est. $0.72

·     Rambus (RMBS) 4Q EPS ($0.11) vs. est. $0.25 on revs $61.9Mm vs. est. $96.9Mm; says expects licensing billings between $60-66Mm in 1Q

·     Warner Music (WMG) 1Q EPS $0.19 vs. est. $0.19 on revs $1.35B vs. est. $1.25B, digital revs +6% to $825Mm

·     Entegris (ENTG) Q4 EPS 71c vs. est. 66c; Q4 revenue $518M vs. est. $489.38M; sees Q1 EPS 69c-74c above est. 65c and revs $510M-$525M vs. est. $482.2M; sees Q1 net income $83M- $90M

·     500.com (WBAI) announced that it has entered into a definitive purchase agreement for 5,900 bitcoin mining machines for a total consideration of approximately $8.5M