Early Look

Thursday, January 21, 2021

Futures	Up/Down	%	Last
Dow	45.00	0.14%	31,141
S&P 500	7.25	0.18%	3,852
Nasdaq	48.50	0.36%	13,342

 

 

U.S. futures are edging higher, adding to yesterday’s bullish move as markets look for more support for the struggling U.S. economy and improved vaccine distribution from the Biden administration. Stocks rose Wednesday, as each of the three major indexes reached record intraday and closing highs, and the Nasdaq outperformed with a gain of nearly 2%, paced by gains of Netflix (NFLX) which surged more than 16% after the company added more users than expected in Q4 and surpassed 200 million paid subscribers for the first time ever (which provided a boost to many mega cap tech names). Also on Wednesday, focus urned to the inauguration of President-elect Joe Biden, which took place around noon. Markets anticipate that Biden is set to quickly begin pushing to get more virus relief aid into the economy, after having unveiled a $1.9 trillion proposal last week that would include increased stimulus checks, extended unemployment benefits and aid to state and local governments, among other measures. Janet Yellen, Biden’s nominee for Treasury Secretary, advocated for significant additional coronavirus relief spending during her confirmation hearing before the Senate Finance Committee on Tuesday. In corporate news, Intel (INTC) and IBM earnings are expected tonight. In Asian markets, The Nikkei Index jumped 233 points to 28,756, the Shanghai Index gained 38 points to 3,621 and the Hang Seng Index dipped -34 points to 29,927. In Europe, the German DAX is up around 60 points to 13,980, while the FTSE 100 is little changed at 6,740. Bitcoin prices looking lower again, down 6.5% to $32,600 after Guggenheim Global CIO Scott Minerd said last night on CNBC he expects that Bitcoin will retrace back to $20,000, according to interview on CNBC. “We probably have put in the top for bitcoin for the next year or so. We are likely to see a full retracement back to the $20,000 level.”

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 52.94 points, or 1.39%, to 3,851.85

·     The Dow Jones Industrial Average rose 257.86 points, or 0.83%, to 31,188.38

·     The Nasdaq Composite spiked 260.07 points, or 1.97%, to 13,457.25

·     The Russell 2000 Index advanced 9.48 points, or 0.44% to 2,160.62

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims/Continuing Claims…est. 910K and 5.4M

·     8:30 AM EST      Housing Starts MoM for December…est. 1.56M

·     8:30 AM EST      Philly Fed Survey for January…est. 12.0

·     8:30 AM EST      Building Permits MoM for December…est. 1.604M

·     11:00 AM ET      Weekly DOE Inventory Data

·     10:30 AM ET      Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BANC, BKR, BKU, CTXS, FBC, FCEL, FITB, HOMB, IIIN, KEY, MTB, NTRS, SASR, TFC, TRV, UNP, WBS

·     Earnings After the Close: ACBI, ASB, BANR, BMTC, CSX, FOR, IBM, ICBK, INTC, ISRG, NBHC, OZK, PBCT, PPG, SIVB, TBK, TRST, WAL

 

Other Key Events:

·     Lake Street Virtual Outdoor Day (virtual), 1/20-1/21

·     Roth Capital Tech Summit 2021 (virtual), 1/20-1/22

 

 

Macro	Up/Down	Last
Nymex	-0.40	52.91
Brent	-0.45	55.63
Gold	0.40	1,872.20
EUR/USD	0.003	1.2136
JPY/USD	-0.11	103.43
10-Year Note	-0.003	1.087%

 

 

Sector News Breakdown

Consumer

·     Dream Finders Homes (DFH) 9.6M share IPO priced at $13.00

·     Mytheresa (MYTH) 15.647M share IPO priced at $26.00

·     Capri Holdings (CPRI) upgraded to Buy from Hold (tgt to $56 from $28) and Under Armour (UAA) upgraded to Buy from Hold (tgt to $22 from $15), both at Deutsche Bank

 

Energy

·     The American Petroleum Institute (API) said weekly crude inventories rose by 2.6 million barrels in the week to Jan. 15 to about 487.1 million barrels, compared with analysts’ expectations in a Reuters poll for a fall of 1.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 4.3 million barrels. Gasoline stocks rose by 1.1 million barrels, less than analysts’ expectations in a Reuters poll for a build of 2.8 million barrels. Distillate fuel inventories rose by 816,000 barrels, vs. expectations for a build of 1.2 million barrels.

·     Kinder Morgan (KMI) Q4 EPS 27c vs. est. 24c; expects to invest $0.8 bln in expansion projects and contributions to joint ventures during 2021; expects to generate $1.2 bln of DCF in excess of discretionary expenditures and dividend payments in 2021; sees year EPS 92c vs. est. 89c

 

Financials

·     Discover Financial Services (DFS) Q4 EPS $2.59 vs. est. $2.42 on in-line revs of $2.82B; qtrly provision for credit losses of $531 million decreased $307 million from the prior year period; Q4 net interest income decreased $47 million, or 2%, from the prior year period

·     KeyCorp (KEY) Q4 EPS 56c vs. est. 43c and Q4 revenue $1.85B tops the $1.71 estimate; Q4 CET1 capital ratio 9.8%; Q4 tangible book value per share $13.61; average loans were $101.7 billion for the fourth quarter of 2020, an increase of $8.1 billion vs. YoY; Q4 net loan charge-offs totaled $135 mln compared to $99 mln for q4 of 2019; announces up to $900M share repurchase program

·     M&T Bank (MTB) Q4 EPS $3.54 vs. est. $3.03; Q4 CET1 capital ratio 10% and Q4 net charge-offs .39%; provision for credit losses totaled $75 mln in q4 of 2020, compared with $54 mln in year-earlier quarter

·     Truist Financial (TFC) Q4 adjusted EPS $1.18 vs. est. 97c and Q4 revenue $5.65B vs. est. $5.41B; reports Q4 CET1 capital ratio 10%

·     WNS Holdings (WNS) Q3 adj EPS 79c vs. est. 60c; Q3 revenue $238.4M vs. est. $213.43M; Q3 revenue less repair payments was $224.5M; sees FY21 adjusted EPS $2.61-$2.73 vs. est. $2.46 and sees FY21 revenue less repair payments $860M-$870M vs. est. $849.69M

·     First Internet Bancorp (INBK) Q4 EPS $1.12 vs. est. 85c; Q4 revenue $31.5M; Q4 net interest margin and fully-taxable equivalent net interest margin increased 25 and 24 basis points

·     FinServ Acquisition Corp. (FSRV) mentioned positively in Whitney Tilson letter overnight – background: 12/18 PR announced merger: Katapult to become a publicly traded company through merger with FinServ Acquisition Corp. (FSRV)

·     Orchid Island Capital (ORCH) 7.6M share Spot Secondary priced at $5.30

·     Hancock Whitney (HWC) 4Q EPS $1.17 vs. est. $0.90, NII $241.4Mm vs. est. $239.4Mm

·     M&T Bank Corp (MTB) authorized a stock repurchase program of up to $800 mln of shares of common stock

·     Silvergate Capital (SI) Q4 EPS 47c vs. est. 38c; transactions on the SEN in the fourth quarter alone underscore the rapid growth of the platform with 90,763 transactions and over $59 billion in SEN volumes, up 62% from the 2020 third quarter; launches $200M Class A common stock offering

·     Umpqua Holdings (UMPQ) Q4 EPS 68c vs. est. 48c; Q4 NII was $234.9M, up $18.3M from the prior quarter; Q4 loan loss provision was $29K, up $367K from the prior quarter level; Q4 tangible book value per common share was $12.21 at quarter end from $11.77 prior

 

Healthcare

·     Athira Pharma (ATHA) 4M share Secondary priced at $22.50

·     Chimerix (CMRX) 11.765M share Secondary priced at $8.50

·     Dyne Therapeutics (DYN) 6M share Secondary priced at $28.00

·     CareDx (CDNA) 1.923M share Secondary priced at $91.00

·     Cryoport (CYRX) 3.788M share Spot Secondary priced at $66.00

·     CytomX Therapeutics (CTMX) 14.286M share Secondary priced at $7.00

·     Editas Medicine (EDIT) 3.5M share Secondary priced at $66.00

·     Inovio (INO) 2.7M share Spot Secondary priced at $8.50

·     Qiagen (QGEN) confirms effectiveness of its sars-cov-2 PCR tests in the face of mutations of the coronavirus; Qiastat-dx and NeuMoDx tests continue to detect all known viral variants extremely effectively

·     President Biden’s chief of staff is issuing a “regulatory freeze memo,” which, as its name implies, pauses the implications of any last-minute rules made by the outgoing administration. And that likely halts a change to the FDA’s authority over medical devices and a tweak to Medicare drug coverage rules, according to STAT News

 

Industrials & Materials

·     Alcoa (AA) 4Q adj EPS $0.26 vs. est. $0.11, says all production sites remain fully operational, says primary aluminum market is anticipated to be closer to balance in 2021, sees 2021 total alumina shipments 13.9-10.0 metric tons; for 1Q sees lower qtrly performance in aluminum segment and bauxite segment

·     United Airlines (UAL) Q4 adj EPS loss ($7.00) vs. est. loss ($6.60); Q4 revenue $3.4B vs. est. $3.44B; sees Q1 operating revenue down 65%-70%; qtr cargo revs +77%, qtr TRASM -27.5%, qtr consolidated load factor 55.6%, total liquidity 19.7B (sees similar level at 1Q end); says expects 2021 to be transition year to prepare for recovery, says expects 1Q capacity down at least 51% vs 1Q19

·     DuPont (DD) downgraded to Neutral from Buy at Bank America with an $86 tgt

·     Alaska Air Group Inc. (ALK) disclosed that it will receive $533 million after it reached agreement last week with the U.S. Treasury on an extension of the Payroll Support Program (PSP), which is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act

 

Technology, Media & Telecom

·     Plexus (PLXS) Q1 EPS $1.23 vs. est. $1.09; Q1 revenue $830M vs. est. $832.1M; sees Q2 EPS $1.17-$1.32 on revs $860M-$900M vs. est. $1.01 and $835.4M

·     21Vianet (VNET) to sell $525M of convertible senior notes due 2026

·     China Mobile (CHL), China Unicom (CHU) and China Telecom (CHA) have filed requests asking the NYSE to reverse its decision to delist their American depositary receipts and are seeking a trading halt on their ADRs to be lifted in the meantime – WSJ

·     Fastly (FSLY) upgraded to Outperform from Perform at Oppenheimer