Early Look

Monday, January 11, 2021

Futures	Up/Down	%	Last
Dow	-189.00	0.61%	30,804
S&P 500	-18.50	0.48%	3,799
Nasdaq	-46.50	0.36%	13,050

 

 

U.S. stock markets are looking at a lower open, falling after record highs last Friday ahead of several potential market moving catalysts and ahead of the start of earnings season. Over the weekend, U.S. President-elect Joe Biden said Americans need more economic relief from the coronavirus pandemic now and that he will deliver a plan costing “trillions” of dollars next week. Biden said the proposal includes relief for state and local governments as well as new support for people who lost their jobs or cannot afford rent. Biden also called for raising the minimum wage to $15, a campaign promise, and for sending out $2,000 in direct cash payments. In Asian markets, The Nikkei Index was closed, the Shanghai Index fell 38 points to 3,531 and the Hang Seng Index rose 30 points to 27,908. In Europe, the German DAX is down over -80 points to drop back below the 14,000 level, while the FTSE 100 fell about -25 points to around 6,850. Big calendar items this week include the Consumer Electronics Show (CES) which kicks off today, but will take place virtually this year due to the coronavirus pandemic. Also this week for retailers the annual ICR Conference and in healthcare the 39^th Annual JPMorgan Healthcare conference (companies already providing guidance ahead of both presentations). Needham’s Virtual Growth Conference wraps up company specific presentations. Among the big news this weekend, the broad social media ban placed on President Trump by several companies.

 

It was another banner day and week for U.S. stocks which finished at all-time highs on Friday, capping weekly gains after a worse-than-expected employment report in December bolstered expectations for further fiscal stimulus (again bad news seen as good news for averages). The S&P 500 gained 1.8% on the week, the Nasdaq climbed 2.4% topping and the Dow rose 1.6% to new highs. The Labor Department reported the U.S. economy lost 140,000 jobs last month, below the forecast of a 55,000 gain, just reinforcing market expectations that the Fed will continue to keep rates at record lows for a long-time. Expectations for further fiscal support helped to lift long-term bond rates, with the 10-year Treasury note yield rising 19 basis points this week to end at 1.105%.

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 20.89 points, or 0.55%, to 3,824.68

·     The Dow Jones Industrial Average gained 56.84 points, or 0.18%, to 31,097.97

·     The Nasdaq Composite spiked 134.50 points, or 1.03%, to 13,201.98

·     The Russell 2000 Index declined -5.23 points, or 0.25% to 2,091.66

 

Events Calendar for Today

·     No Major Economic Data Released

 

Earnings Calendar:

·     Earnings Before the Open: AZZ, CMC

·     Earnings After the Close: KSHB, LMNR, SLP, SNX, VOXX

 

Other Key Events:

·     Consumer Electronics Show (CES) 2021 (virtual), 1/11-1/14

·     ICR Conference 2021 (virtual), 1/11-1/14

·     JPMorgan Annual Healthcare Conference (virtual), 1/11-1/14

·     Needham Annual Growth Conference (virtual), 1/11-1/15

 

 

Macro	Up/Down	Last
Nymex	-0.44	51.80
Brent	-0.77	55.22
Gold	0.75	1,850.00
EUR/USD	-0.0055	1.2163
JPY/USD	0.21	104.15
10-Year Note	-0.12%	1.10%

 

 

World News

·     Democratic-led efforts to impeach U.S. President Donald Trump for a historic second time gained momentum over the weekend, although it looked far from certain whether enough Republicans would back the move with just days left in his term

·     China December CPI rose 0.7% m/m vs 0.4% est.; 0.2% YoY vs 0.1% consensus and China Dec PPI fell -0.4% YoY vs. -0.8% consensus

·     Bitcoin prices plunged over the weekend, down as much as 20% at one point for its biggest selloff since March (now down about 13% to below $35,000) amid profit taking but prices still remain higher by over 20% YTD (off recent record of $42,000)

 

Sector News Breakdown

Consumer

·     Boot Barn (BOOT) Q3 EPS $1.00 on sales $302.3M vs. est. 83c and $298.6M; Q3 comp store sales rose 4.6%; said is not providing annual guidance at this time

·     GameStop (GME) rally in the past six months may prove fleeting, according to Barron’s citing threats from e-commerce to downloadable games. Its “digital-first approach” is still a work in progress and many of its stores are inside malls

·     Lululemon (LULU) said it expects Q4 revenue and earnings to be at the high end of its prior range of expectations

·     Wyndham Destinations (WYND) reports gross vacation ownership interest sales of $281M; Q4 gross VOI sales were down 51.8% Y/Y, with tours lower by 63.8%, partially offset by a 23.8% increase in VPG

·     Nio Inc (NIO) is taking on conventional gasoline premium automakers, launching on Saturday its first sedan model (ET7) at an event in the western city of Chengdu, coming just after rival Tesla (TSLA) started selling its China-made Model Y sport-utility

·     Walmart (WMT) mentioned positively in Barron’s saying the stock could benefit as ESG investors add to funds. Article notes lots of companies have gotten serious about environmental, social and governance issues in recent years but few are more surprising than Walmart.

 

Energy, Industrials & Materials

·     A Boeing Co. (BA) passenger plane carrying 62 people crashed into the Java Sea on Saturday, Indonesian authorities said. The Sriwijaya Air jet lost contact with air-traffic controllers and disappeared from radar minutes after taking off from the country’s capital, Jakarta, The aircraft involved was a 26-year-old Boeing 737-500, according a spokeswoman for Sriwijaya Air

·      Spirit AeroSystems (SPR) upgraded to Outperform from Neutral at Baird

 

Financials

·     Big banks JP Morgan (JPM), Citigroup (C) and Wells Fargo (WFC) kick off Q4 earnings results on Jan. 15, with overall S&P 500 company earnings are forecast to increase about 23% in 2021 compared with pandemic-hit 2020

·     NCR Corp. (NCR) is in talks to buy Cardtronics PLC, (CATM) according to people familiar with the matter, seeking to snatch it away from a pair of investment firms including private-equity giant Apollo Global Management Inc. (APO) that earlier agreed to buy the ATM operator https://on.wsj.com/35pR2Vh

 

Healthcare

·     Eli Lilly (LLY) rises 13% after saying its experimental Alzheimer’s drug named donanemab, met the primary goal of the study as it helped patients in a small trial; the drug slowed the decline in memory and ability to perform activities of daily living by 32% after 18 months among people who received the therapy compared with those who got a placebo (BIIB shares up in reaction)

·     Gilead Sciences (GILD) revised FY2020 earnings outlook higher a sees year product sales $24.3B-$24.35B vs. prior outlook of $23B-$23.5B and Operating income $11.65B-$11.75B up from $10.7B-$11.2B

·     bluebird bio (BLUE) announced its intent to separate its severe genetic disease and oncology businesses into differentiated and independent publicly traded companies. bluebird bio, Inc. will retain focus on severe genetic disease (SGD) and will launch its oncology business as a new entity

·     NovoCure (NVCR) guides Q4 revenue of $144.0 above est. $133.6M

·     PerkinElmer (PKI) said it expects Q4 revenue growth of ~66%, organic revenue growth of ~63%, GAAP EPS of at least $2.88 and adjusted EPS of at least $3.60 vs. est. of $2.85 driven by better-than-expected demand for company’s full-suite of COVID-19 and non-COVID-19 solutions

·     IDEAYA Biosciences (IDYA) submitted an IND application with the FDA for the initiation of a Phase 1 clinical trial to evaluate IDE397 for the treatment of patients having solid tumors with methylthioadenosine phosphorylase deletion

·     Mesoblast (MESO) announced additional results from the DREAM-HF Phase 3 trial in 537 treated patients with chronic heart failure with reduced left ventricular ejection fraction (HFrEF) who received rexlemestrocel-L

·     SeaSpine Holdings Corporation (SPNE) said it sees Q4 revenue $46.2M-$46.6M (vs. est. $47.27M) and said Spinal Implants revenue is expected to reflect growth within the 7% to 8% range

·     Exact Sciences (EXAS) issues prelim Q4 revenue $464.5M-$467.5M vs. est. $431.2M and FY20 revenue $1.490B-$1.493B vs. est. $1.460B; expects Q4 Screening revenue between $249M-$250M, Precision Oncology revs $117M-$118M and COVID-19 testing revenue between $98.5M-$99.5M

·     Staar Surgical (STAA) prelim Q4 EPS 6c vs. est. 2c and revs $46M vs. est. $43.3M; reports preliminary FY20 EPS of 12c vs. est. 8c and prelim revs of $163M vs. est. $160.84M

·     Natus Medical (NTUS) said it now expects revenue of $118M-$119M in Q4, up from its previous guidance of $104M-$114M; said it is not updating its earnings guidance.

 

Technology, Media & Telecom

·     Amazon.com Inc. (AMZN) said Saturday it would no longer pro­vide cloud-com­put­ing ser­vices to Parler, and Apple Inc. (AAPL) sus­pended the com­pa­ny’s app from the App Store

·     Twitter (TWTR) permanently banned U.S. President Donald Trump’s personal account for breaking its rules against glorifying violence

·     Acer (ACEYY) reports Q4 revenues of NT$82.6B, +34.1% YoY, and 3.2% QoQ while revenues for December was up 21.5% YoY at NT$28.36B

·     Ambarella (AMBA) unveiled CV5, an artificial intelligence, or AI, vision processor capable of recording 8K video or four 4K video streams