Early Look

Tuesday, February 22, 2022

Futures	Up/Down	%	Last
Dow	-81.00	0.24%	33,926
S&P 500	-5.25	0.13%	4,337
Nasdaq	-74.50	0.53%	13,921

 

 

Stocks tumbled globally overnight, with the S&P 500 falling as low as 4,250 (around 2%) before rebounding in a big way off the lows to around 4,335 last (down about -015%) as investors remain on edge after Russian President Vladimir Putin told the French and German leaders on Monday that he planned to sign a decree recognizing two breakaway regions in eastern Ukraine as independent; Russian-backed separatists in the Donetsk and Luhansk regions – collectively known as the Donbass – broke away from Ukrainian government control in 2014 and proclaimed themselves independent “people’s republics.” For the first time, Russia is saying it does not regard the Donbass as part of Ukraine. That could pave the way for Moscow to send military forces into the separatist regions openly, using the argument that it is intervening as an ally to protect them against Ukraine. In Asian markets, The Nikkei Index tumbled -461 points or 1.7% to 26,449, the Shanghai Index fell -0.96% to 3,457, and the Hang Seng Index declined -2.69% or 650 points to 23,520. In Europe, the German DAX is down about -40 points to 14,690, while the FTSE 100 is up about 15 points to 7,500. Macro headlines have been in total control of major averages recently, rising and falling sharply on any headline. Meanwhile U.S. stock indexes fell Friday and notched a second consecutive losing week as the Russia-Ukraine conflict put investors on edge. For the week, the S&P 500 fell 1.58%, the Dow lost 1.897%, the Nasdaq dropped 1.76%. Moscow continues to deny it plans to invade Ukraine, while the U.S. and its allies have warned that Putin could be planning to attack as Russia maintains a military buildup along the border.

 

Events Calendar for Today

·     7:45 AM ET        ICSC Weekly Retail Sales

·     9:00 AM ET        Case Shiller 20-city Index for Dec

·     9:00 AM ET        Monthly Home Prices MoM for December

·     9:45 AM ET        Markit Manufacturing PMI, Feb-P…est. 56.0

·     9:45 AM Et         Markit Services PMI, Feb-P…est. 53.0

·     9:45 AM Et         Markit Composite PMI, Feb-P

·     10:00 AM ET      Consumer Confidence for February…est. 109.8

·     10:00 AM ET      Richmond Fed Index for February

 

Earnings Calendar:

·     Earnings Before the Open: AWI, BLD, CBRL, CEQP, CFX, CNP, CTG, CVI, DFIN, DNUT, DORM ESPR, ETRN, EXPD, FLR, HD, HEP, HL, HR, JELD, KBR, LPX, M, MIDD, NOVN, NSA, NXST, SBRA, SOI, TPB, TPX, TRU, VAL, WLKP

·     Earnings After the Close: A, ACC, ADC, AGR, APEN, APLE, AWR, AXGN, BCC, BLKB, BRY, BXC, CDNS, COKE, CSGP, CUTR, CZR, EPR, ESI, EXAS, FANG, GKOS, HALO, HCC, HIMS, HTGC, JACK, JBT, KTOS, LAND, LPI, MAXR, MOS, MTDR, NDSN, NHI, O, OSPN, PANW, PEB, PEN, PGRE, PSA, PSB, PTCT, QUAD, RDN, RIG, RNG, RRC, RXT, SHO, SKIN, SPCE, SSTI, TA, TALK, TCMD, TDOC, TNDM, TOL, TRUE, TXRH, VNOM, VRSK, WK, WTTR

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -31.39 points, or 0.72%, to 4,348.87

·     The Dow Jones Industrial Average fell -232.85 points, or 0.68%, to 34,079.18

·     The Nasdaq Composite dropped -168.65 points, or 1.23%, to 13,548.07

·     The Russell 2000 Index declined -18.76 points, or 0.93% to 2,009.33

 

 

Macro	Up/Down	Last
Nymex	3.18	94.25
Brent	2.39	97.78
Gold	-4.40	1,895.30
EUR/USD	0.0042	1.1353
JPY/USD	0.19	114.93
10-Year Note	-0.001	1.929%

 

 

Sector News Breakdown

Consumer

·     Home Depot (HD) Q4 EPS $3.21 vs. est. $3.17; Q4 revs $35.72B vs. est. $34.87B; Q4 Comparable sales rose 8.1%, with a 7.6% comparable-sales increase in the U.S.; increases quarterly dividend 15% to $1.90 per share; Sees FY22 revenue up slightly vs. est. $153.94B, sees FY22 comparable sales growth up slightly and guides year EPS up low-single digits

·     Houghton Mifflin Harcourt Company (HMHC) said it has agreed to be acquired by Veritas Capital in a deal with an implied equity value of $2.8 billion as shareholders will receive $21 in cash for each share owned

·     Ethan Allen (ETD) mentioned positively in Barron’s saying the long-time furniture retailer dominates an affluent niche of the U.S. market yet trades cheaply against peers while paying a 4.6% dividend yield. At $24.86, Ethan Allen trades for 8.1 times its expected earnings over the next year, below that of competitors like La-Z-Boy (LZB), at 8.6 times, and Restoration Hardware parent RH (RH), at 15.9 and its dividend yield is more than triple that of the average small-cap.

·     Masonite (DOOR) Q4 adj EPS $2.01 vs. est. $1.94; Q4 revs $636M vs. est. $660.16M; sees FY22 adj EPS $9.10-$10.05 vs. est. $9.74; sees FY22 revenue growth 6%-10%; announces $200M additional share repurchase program

·     Tempur Sealy (TPX) Q4 adjusted EPS $0.88 vs. est. $0.96; Q4 revs $1.36B vs. est. $1.45B; raises quarterly dividend to 10c per share; sees FY22 EPS $3.65-$3.85 vs. est. $3.76

·     Kellogg’s (K) Rice Krispies cereal is the latest victim of U.S. supply-chain troubles due to a temporary shortage due to manufacturing constraints

 

Energy

·     APA Corp. (APA) Q4 adj EPS $1.29 vs. est. $1.47; Q4 revs $2.3B vs. est. $1.92B; qtrly adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 331,000 boe per day; capital spend should return co to around 2019, pre-covid production levels on an adjusted basis in 2024; sees reducing upstream routine flaring in Egypt by 40% for 2022

·     Douglas Dynamics (PLOW) Q4 adj EPS $0.42 vs. est. $0.44; Q4 revs $152.9M vs. est. $146.7M; sees FY22 adj EPS $1.25-$2.15 vs. est. $2.21; sees FY22 revs $570M-$630M vs. est. $564.07M; is well positioned to resume march towards goal of producing $3.00 or more of adjusted eps, which we now expect to reach in 2025

·     Marathon Petroleum Corp.’s (MPC) oil refinery near New Orleans exploded into flames on Monday, threatening to crimp fuel supplies and raise pump prices at a time of already rampant inflation. The company’s Garyville, Louisiana, plant is one of the nation’s largest and a key supplier of gasoline, diesel, and other fuels.

·     Williams (WMB) Q4 adj EPS $0.39 vs. est. $0.34; Q4 adjusted EBITDA $1.483B; expects 2022 adjusted ebitda between $5.6B-$6.0B; expects 2022 growth capex between $1.25B-$1.35B; dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021

 

Financials

·     SoFi Technologies Inc. (SOFI) entered an agreement to acquire Technisys, a cloud-based banking platform, in an all-stock deal valued at about $1.1 billion. Technisys shareholders will receive about 84 million SoFi shares, or less than 10% of its fully diluted share count as of Sept. 30.

·     Verisk Analytics Inc. (VRSK) agreed to sell Verisk Financial Services, its financial-services unit, to TransUnion (TRU); TRU Q4 adj EPS $0.81 vs. est. $0.91; Q4 revs $790M vs. est. $796.33M; sees FY22 adj EPS $3.84-$4.00 vs. est. $4.07; sees FY22 revs $3.752B-$3.81B vs. est. $3.68B

 

Healthcare

·     AstraZeneca (AZN) and Daiichi Sankyo Co. reported positive Phase 3 trial results for their Enhertu treatment on breast-cancer patients; said that Enhertu demonstrated meaningful survival improvement in patients with breast cancer compared with physician’s choice of chemotherapy

·     Homology Medicines, Inc. (FIXX) said it was notified by the FDA its pheNIX gene therapy trial of HMI-102 in adults with phenylketonuria has been placed on clinical hold due to the need to modify risk mitigation measures in the study after observations of elevated liver function tests.

·     Medtronic (MDT) Q3 EPS $1.37 vs. est. $1.36; Q3 revs flat y/y to $7.8B vs est. $7.88B while grew 2% organic revs; qtrly cardiovascular revenue of $2.745 bln increased 1% as reported and 3% organic; qtrly cranial & spinal technologies revenue of $1.102 bln increased 2% as reported and 3% organic; expects q4 organic revenue growth of approximately 5.5%

·     Ocugen Inc. (OCGN) said the FDA lifted a clinical hold on the company’s investigational new drug application to evaluate a Covid-19 vaccine candidate; said the FDA lifted the hold on the IND for BBV152, known as Covaxin outside the U.S.

·     BioNTech SE (BNTX) and Medigene AG announced that they have entered a multi-target research collaboration to develop T cell receptor, or TCR, based immunotherapies against cancer

·     Novan Inc. (NOVN) files for mixed shelf of up to $150 mln

 

Industrials & Materials

·     DuPont (DD) mentioned positively in Barron’s saying CEO Breen is shedding old businesses and buying new ones as he seeks to juice the performance of the stock, which has gained 14% to a recent $78.77 over the past 12 months and still looks reasonably priced. Breen is the king of the breakup after he took over Tyco International in 2002, and spun off what is now TE Connectivity (TEL) a medical-device company Covidien, which was ultimately bought by Medtronic (MDT)

·     Celanese (CE) downgraded to underweight from Neutral at Piper, just a week after downgrading to Neutral from OW saying they sees a sizeable element of risk and uncertainty from the DuPont (DD) transaction as it raises considerable risk

·     Honeywell (HON) announced a commercial partnership with AstraZeneca (AZN) to develop and bring to market next-generation respiratory inhalers that use near-zero global warming potential, or GWP, propellants to treat asthma and chronic obstructive pulmonary disease, or COPD.

·     Manitowoc (MTW) Q4 adj EPS $0.27 vs. est. $0.03; Q4 revs rose 15.7% to $497.8M vs. est. $516.4M; sees FY22 revs $2.0B-$2.2B vs. est. $2.01B; sees FY22 adj EPS $0.65-$1.35 vs. est. $1.38; sees FY22 adjusted EBITDA $130M-$160M

 

Media & Telecom

·     Comcast (CMCSA) said the Winter Olympics-aired across the broadcast, cable and streaming platforms of Comcast’s NBCU-drew an average of 11.4 million prime-time viewers over the more than two-week run, roughly 42% drop from the Pyeongchang Olympics in 2018, which had recorded the lowest Olympics audience until that point https://on.wsj.com/3sQl1R2

·     Nokia (NOK) is primed to gain market share in next generation 5G networks according to Barron’s this weekend. After losing ground to Swedish rival Ericsson (ERIC) and China’s Huawei early in the 5G network battle, Nokia hit the reset button. With Nokia’s turnaround set to kick in this year, and the opportunity for it to cement itself as a dominant player in the lucrative 5G space, it may be a good time for investors to plug into the stock

·     Digital World Acquisition Corp’s (DWAC) rises as Trump’s new social media venture, Truth Social, launched late on Sunday in Apple’s App Store; the App was among top downloaded on Apple App store on Monday; other Trump-linked companies also gain such as software developer Phunware Inc (PHUN) which hired by Trump’s 2020 Presidential reelection campaign to build a phone app

 

Technology

·     AMD (AMD) upgraded to Outperform from Market Perform at Bernstein

·     Alibaba (BABA) shares slide after Bloomberg reported that China tells banks, state firms to report exposure to Jack Ma’s Ant

·     Unisys (UIS) Q4 EPS $0.51 vs. est. $0.36; Q4 revs $539.3M vs. est. $539.8M