Early Look

Monday, February 8, 2021

Stocks are on track for another record high, with the S&P 500 and Dow Jones attempting to extend its current winning streak to 6-days (longest since August), building on the recent market momentum. Last week, the S&P 500 gained 4.65%, Nasdaq rose 6.01%, and the Dow added 3.89%; the S&P and Nasdaq post biggest weekly percentage gains since week ending Nov. 6, Dow shows biggest weekly gain since week ending Nov. 13. For the week Russell 2000 rises 7.7% in its biggest weekly gain since week ending June 5. Inline jobs data on Friday failed to dent optimism, as it keeps the hopes of more fiscal stimulus out of Washington DC. This weekend, Treasury Secretary Janet Yellen endorsed a massive stimulus package that she said should include checks to Americans making up to around $60,000. Rising expectations for inflation led to a selloff in Treasuries, pushing the yield on the 30-year bond to 2%, the highest since February 2020. Energy prices extend gains as well, with Brent topping the $60 per barrel market for the first time in over a year. Heavily traded stocks (GME, AMC, KOSS, etc.) at the center of a social-media mania have lost some of their steam. In Asian markets, The Nikkei Index surged 609 points to 29,388. the Shanghai Index rose 36 points to 3,532 and the Hang Seng Index rose 30 points to 29,319. In Europe, the German DAX is up about 40 points to just under 14,100, while the FTSE 100 rises 60 points to 6,550. Bitcoin prices are on the rise again, up over 4% as approaches the $40,000 level (up 36% YTD). A quiet start to earnings for the week this morning, but things pick up over the next 3-days.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 15.09 points, or 0.39%, to 3,886.83

·     The Dow Jones Industrial Average rose 92.38 points, or 0.30%, to 31,148.24

·     The Nasdaq Composite jumped 78.55 points, or 0.57%, to 13,856.30

·     The Russell 2000 Index advanced 30.91 points, or 1.40% to 2,233.33

Events Calendar for Today

·     No Major Economic Data Released

Earnings Calendar:

·     Earnings Before the Open: AMG, CNA, DNB, ENR, GPN, GTES, HAIN, HAS, L, SAIA

·     Earnings After the Close: AKAM, AMKR, ATEX, BECN, BLKB, CHGG, CORT, CUB, DLA, ENPH, ENTA, ESE, GBDC, HCSG, HP, IIIV, JKHY, KFRC, KKR, LEG, LMNX, MTRX, NUAN, PHX, RAMP, RGA, RLGT, SLQT, SPG, SSD, TTWO, VRNS, YCBD

Other Key Events:

·     Annual WORLDSymposium (Lysosomal Diseases), 2/8-2/12

Sector News Breakdown

Consumer

·     Casey’s General Stores (CASY) mentioned positively in Barron’s saying shares have outperformed the S&P 500 index for years thanks to its double-digit earnings and revenue growth and expanding footprint, but then, COVID-19 hit, and the growth understandably slowed, as did the stock gains, Teresa. The pandemic, however, will end and Casey’s growth is likely to reaccelerate as customers return from lockdown and the company scoops up smaller rivals.

·     Hilton Worldwide (HLT) positive mention in Barron’s saying the hotel chain stands out among the chains for its ability to weather the pandemic and emerge in good shape-and that its shares should have more upside. With a relatively small number of owned hotels in its portfolio, Hilton runs a so-called asset-light portfolio and relies heavily on recurring, long-term franchise fee agreements. The company is a little less tethered to luxury brands

·     Amazon’s (AMZN) a positive mention in Barron’s saying any weakness in shares after Jeff Bezos steps down from CEO role could be a buying opportunity, as new CEO Andy Jassy knows what he’s doing, and e- commerce and Amazon Web Services are still accelerating.

·     Hyundai Motor (HYMTF) and Kia said they are now not in talks with Apple (AAPL) on developing autonomous vehicles, according to Reuters, just a month after it confirmed early-stage talks with the tech giant, sending the automaker’s shares skidding https://reut.rs/36Tj8sP

·     Hasbro (HAS) Q4 adj EPS $1.27 vs. est. $1.14; Q4 revenue $1.72B vs. est. $1.69B

·     Tractor Supply (TSCO) upgraded to Buy from Neutral at Goldman Sachs

·     Wynn Resorts (WYNN) files to sell 5.5M shares

·     Bumble’s (BMBL) IPO size increased to 45M shares and range raised to $37.00-$39.00

·     Las Vegas Sands (LVS) downgraded to Neutral from Buy with an unchanged $57 price target and MGM Resorts (MGM) upgraded to Neutral at Bank America

Energy, Industrials and Materials

·     Westport Fuel Systems (WPRT), Cummins (CMI): Amazon ordered more than 1,000 natural gas truck engines to use in its U.S. truck delivery fleet, Reuters reports

·     Drax Group (DRXGY) will acquire all of the issued and outstanding common shares of Pinnacle (PINWF) in an all-cash transaction valued at C$831M

·     Royal Dutch Shell (RDSA) and renewables firm Eneco, owned by Japan’s Mitsubishi Corp, will provide Amazon.com Inc’s (AMZN) European facilities with electricity from an offshore wind farm, they said

·     Air Products (APD) upgraded to Buy from Neutral with a $305 price target at Bank America

·     Rolls-Royce (RYCEF, RYCEY) will shut down its jet engine factories for the first time ever this summer, because of a lack of work as it scrambles to halt heavy losses due to the pandemic, the Telegraph reported

·     Platinum is poised to shine according to Barron’s this weekend because it can benefit from the rising popularity of electric vehicles. Its importance as a component of hydrogen fuel cells will probably grow. The precious metal has lagged behind gold and silver. Anglo American Platinum (ANGPY), Impala Platinum (IMPUY) and Sibanye Stillwater (SBSW) are some stocks and exchange-traded funds to play a rally in platinum it said

Financials

·     The Miller Opportunity Trust, run by famed fund manager Bill Miller, may indirectly invest in Bitcoin through the Grayscale Bitcoin Trust (GBTC), according to a U.S. Securities and Exchange Commission filing.

·     CNA Financial (CNA) Q4 core EPS $1.23 vs. est. 99c; Q4 book value per share of $46.82; book value per share excluding AOCI of $43.86, a 6% increase from year-end 2019 adjusting for $3.48 of dividends per share

Healthcare

·     AstraZeneca (AZN) and the University of Oxford said their Covid-19 vaccine has failed to prevent the mild and moderate disease caused by the new coronavirus strain first detected in South Africa, according to the Financial Times, sourcing a study. Though none of the patients in the study died or required hospitalization, “a two-dose regimen did not show protection against mild-moderate Covid-19 due to the South African variant” according to the study

·     If the FDA approves Biogen’s (BIIB) Alzheimer’s drug, the science breakthrough could send the company’s shares soaring as much as 70%, Wall Street expects. A failure to gain approval would have stark consequences, Barron’s says, as Biogen’s core businesses are struggling with growing competition. If Biogen fails, the nearest alternative treatment on the horizon comes from Eli Lilly (LLY), which says its drug performed well in a trial among early symptomatic patients, but doesn’t plan to share details until mid-March

·     Ideaya Biosciences (IDYA) announced the effectiveness of Investigational New Drug (IND) application for a Phase 1 clinical trial to evaluate IDE397, a methionine adenosyltransferase 2a (MAT2A) inhibitor.

Technology, Media & Technology

·     Dialog Semiconductor Plc (DLGS.DE) confirmed this weekend that it was in advanced discussions with Renesas Electronics Corporation about a possible all cash offer of 67.50 euros per Dialog share. “A further announcement will be made as and when appropriate,” Dialog said in a statement. “There can be no certainty that any firm offer will be made for the Company, nor as to the terms on which any firm offer might be made.” https://bloom.bg/3pWF39W

·     ViacomCBS (VIAC) downgraded to Sell from Neutral at UBS

·     The9 (NCTY) announced that it signed six legally binding memorandums of understanding, or MOUs, with six unrelated Bitcoin mining machine owners to purchase Bitcoin mining machines by the issuance of Class A ordinary shares

·     Nokia (NOK) selected by Deutsche Telekom (DTEGY) as a long-term strategic partner to transform the optical network into a service-centric platform

·     AT&T (T) and Cox Media Group has signed a new multi-year retransmission consent agreement to provide CMG-owned local broadcast stations to customers of AT&T’s video platforms across the country.