Early Look

Friday, January 22, 2021

Futures	Up/Down	%	Last
Dow	-257.00	0.83%	30,825
S&P 500	-28.25	0.75%	3,817
Nasdaq	-79.50	0.60%	13,315

 

 

U.S. stock futures are pointing lower for the first time in several days, looking at a pause after a historic run to record highs after mega cap technology companies pushed the Nasdaq Composite S&P to its fourth record close of the new year. President Joe Biden, who has been pushing a $1.9 trillion Covid-19 relief package that includes direct stimulus payments to Americans, enhanced jobless benefits and funds for vaccine deployment, unveiled a national strategy on Thursday to tackle the virus. Over the last few weeks, every pullback has been met with aggressive buying, so it will be interesting to see how the -0.8% drop overnight is met this morning. In stock news, IBM shares are down 7% after the company said it expected to return to revenue growth this year, after reporting a 4.6% decline in 2020. Among the few declining sectors Thursday, Energy performed the worst, with oil and gas stocks dominating the decliners list and airlines also struggled amid weak earnings from UAL, new regulations, including a quarantine for international travelers into the U.S. Stocks broadly retreated in overseas markets. In Asian markets, The Nikkei Index declined -125 points to 28,631, the Shanghai Index slipped -14 points to 3,606 and the Hang Seng Index dropped about -480 points to 29,447 to end the week. In Europe, the German DAX is lower by about -140 points to 13,765, while the FTSE 100 is down about -60 points to 6,650. Bitcoin prices plunged as much as 9% overnight, dropping below the $29,000 level before a sharp recovery (now up 2.2% to $31,900) – down from $42,000 just two weeks ago.

Market Closing Prices Yesterday

·     The S&P 500 Index edged higher 12.58 points, or 0.03%, to 3,853.07

·     The Dow Jones Industrial Average fell -12.37 points, or 0.04%, to 31,176.01

·     The Nasdaq Composite jumped 73.67 points, or 0.55%, to 13,530.92

·     The Russell 2000 Index declined -19.20 points, or 0.89% to 2,141.42

 

Events Calendar for Today

·     9:45 AM EST      Markit Manufacturing Flash PMI, for Jan

·     9:45 AM EST      Markit Services Flash PMI, for Jan

·     10:00 AM EST    Existing Home Sales MoM for December

·     1:00 PM EST       Weekly Baker Hughes Rig Count data

 

Earnings Calendar:

·     Earnings Before the Open: ALLY, FHB, FHN, HBAN, KSU, RF, SLB

 

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	-1.49	51.64
Brent	-1.40	54.70
Gold	-22.75	1,847.30
EUR/USD	0.0018	1.2182
JPY/USD	0.17	103.67
10-Year Note	-0.011	1.096%

 

 

Sector News Breakdown

Consumer

·     Ford Motor (F) said it will conduct field service action to replace Takata airbag inflators for 2006 to 2012 model year vehicles; action will affect approximately 2.7M vehicles in the U.S. and another 300K vehicles in Canada and other locations. The cost of the action is estimated to be about $610M and will be reflected in Q4 results

·     BJ’s Restaurants (BJRI) sees Q4 revenue $197.0M vs. est. $210.97M; guides Q4 comp sales down (-32.3%); sees Q4 adj. EBITDA $2.0M-$3.0M and Q4 restaurant level operating margin $12.5M-$13.5M

·     New Oriental Education (EDU) Q2 EPS 43c vs. est. 34c; Q2 revenue $887.69M vs. est. $885.6M; said Q2 total student enrollments in academic subjects tutoring and test preparation courses increased by 10.4% year-over-year to approximately 4,183,100 for Q2

·     William Hill U.S., partnered with the Grand Traverse Band of Ottawa and Chippewa Indians, or GTB, to launch its mobile and online Sports Book and Casino App in Michigan at 12PM ET

·     Azek (AZEK) 20M share Secondary priced at $40.00

·     Corsair Gaming (CRSR) 7.5M share Secondary priced at $35.00

·     RLX Technology (RLX) 116.5M share IPO priced at $12.00

 

Energy, Industrials and Materials

·     CSX Corp. (CSX) 4Q EPS $0.99 (includes $0.05/shr charge for early debt retirement) vs. est. $1.01 on revs $2.83B vs. est. $2.77B, operating ratio 4Q record 57.0% vs 60% yr ago

·     PPG Industries (PPG) Q4 adj EPS $1.59 vs. est. $1.58 and sales $3.76B (up 2% YoY) and above est. $3.59B; Strong operating margin momentum led by higher year-over-year sales volumes in the Industrial Coatings reportable segment and continued strong cost management; record full-year operating cash flow of about $2.1 billion, despite lower full-year sales

·     Northrop Grumman (NOC) has been awarded a $3.6B indefinite-delivery/indefinite-quantity contract for Battlefield Airborne Communications Node, or BACN, operations, sustainment and support

·     Consolidated Edison (ED) said it sees FY20 EPS at low end of prior $4.15-$4.30 target range (est. $4.22)

 

Financials

·     Arch Capital Group Ltd. (ACGL) said estimated pretax net catastrophe losses of $155 million to $165 million across the property casualty insurance and reinsurance segments in Q4

·     Associated Banc-Corp (ASB) Q4 EPS 40c vs. est. 31c; Q4 provision for credit losses was $17M, down from $43M in the prior quarter and up from zero in the same period last year; tangible book value per share was $16.67, up 9% from $15.28 in previous quarter end

·     Bank OZK (OZK) Q4 EPS 93c vs. est. 78c; reports Q4 tangible book value per share $27.81; Q4 net interest income of $237.6M rose from $224.7M in Q3and $215.0M a year ago

·     Credit Acceptance Corp. (CACC) mentioned as short position by Steve Eisman of Neuberger on Bloomberg TV citing credit acceptance around regulation; says will suffer from regulatory hurdles

·     First Horizon (FHN) Q4 adjusted EPS 46c vs. est. 33c

·     Regions Financial (RF) Q4 EPS 61c vs. est. 42c; Q4 adj revenue $1.66B vs. est. $1.56B; Q4 net interest margin 3.13% vs. 3.39% a year ago; Q4 Common Equity Tier 1 ratio 9.8% vs. 9.7% last year; credit-loss-provision activity in the latest quarter led to a positive benefit of $38 million

·     Silvergate Capital (SI) 3.968M share Secondary priced at $63.00

·     People’s United (PBCT) Q4 operating EPS 35c vs. est. 33c; Net interest margin 2.84% vs. 3.14% YoY vs. estimate 2.98%; said higher revenues and continued emphasis on controlling costs lowered the efficiency ratio 160 basis points to 54.2%, marking the seventh consecutive year of improvement; said are particularly pleased by the continued reduction in loan deferrals, which ended the year at $271 million or 0.6% of total loans, down from $1.6 billion or 3.5% of total loans at the close of the third quarter

·     Texas Capital Bancshares (TCBI) Q4 EPS $1.14 vs. est. $1.13; Net interest income $223.0 million, -10% YoY and provision for credit losses $32.0 million, +88% YoY

·     Triumph Bancorp (TBK) Q4 EPS $1.25 vs. est. 82c; Q4 net interest income was $83.6M, NIM was 6.20%; yield on loans and the average cost of our total deposits were 7.20% and 0.38%, respectively

·     Western Alliance (WAL) Q4 EPS $1.93 vs. est. $1.32; Q4 revenue $338.6M vs. est. $318.74M; Q4 Pre-provision net revenue1 of $206.4M, up $25.2 million from $181.2 million

 

Healthcare

·     Adamis Pharmaceuticals (ADMP) announced that its SYMJEPI, epinephrine, Injection products are now available to members of the Walgreens (WBA) Prescription Savings Club program, for a discounted price of $99.99 for a two-pack

·     Fluidigm Corporation (FLDM) announced that the company has received the CE-IVD mark for its Advanta™ Dx SARS-CoV-2 RT-PCR Assay, an extraction-free saliva-based test to detect nucleic acid from the SARS-CoV-2 virus. The CE-IVD mark is in conformance with the European Union In Vitro Diagnostic Directive.

·     Intuitive Surgical (ISRG) Q4 EPS $3.58 vs. est. $3.12; Q4 revs $1.33B vs. est. $1.24B; Q4 worldwide Da Vinci procedures increased approximately 6% compared with Q4 of 2019; in Q4 2020 shipped 326 Da Vinci surgical systems, a decrease of 3% compared with 336 in q4 of 2019

·     Incyte (INCY) said the FDA has accepted for Priority Review its Biologics License Application (BLA) for retifanlimab, an intravenous PD-1 inhibitor, as a potential treatment for adult patients with locally advanced or metastatic squamous cell carcinoma of the anal canal (SCAC) who have progressed on, or who are intolerant of, platinum-based chemotherapy

·     Invitae (NVTA) 7.77M share Secondary priced at $51.50

·     Passage Bio (PASG) 7M share Secondary priced at $22.00

·     Senseonics (SENS) 51.9M share Spot Secondary priced at $1.925

 

Technology, Media & Telecom

·     IBM Corp. (IBM) shares fell -6%; posted mixed results for Q4, with profits ahead of Street estimates but revenue coming in light; Q4 EPS $2.07 above the $1.79 estimate while revs of $20.4B missed the $20.67B estimate; 4Q adj gr margin 52.5% +70bps, qtr-end debt $61.5B incl global financing debt of $21.2B; said it expects full-year 2021 revenue to show positive growth compared with 2020 and sees full-year 2021 adjusted cash flow between $11B-$12B

·     Intel (INTC) Q4 EPS $1.52 vs. est. $1.10 and revs $20B above consensus $17.5B; Q4 Client Computing Group revenue of $10.9B, up 9% from prior year, and Data Center Group revenue of $6.1B, up 16% from prior year; said we “significantly exceeded our expectations for the quarter, capping off our fifth consecutive record year. Demand for the computing performance Intel delivers remains very strong and our focus on growth opportunities is paying off”

·     BlackBerry (BB) shares rose for a 5th straight day on Thursday: followed by insider sales as CFO Rai sells 32,954 shares (1/20 at $13.01), VP Ho sells 20,000 (1/20 at $12.95) and Officer Wilson sells 78,500 (1/2o at $12.63) as per filings

·     Seagate Technology (STX) 2Q adj EPS $1.29 vs. est. $1.13 on revs $2.62B vs. est. $2.56B; guides 3Q revs $2.65B +/- $200Mm vs. est. $2.62B, sees 3Q adj EPS $1.15-1.45 vs. est. $1.25

·     Sierra Wireless (SWIR) said it expects revenue to be above Street consensus of $116.5M Q4, as well as being above Street consensus of $110M in Q1; also expects to report approximately $170M in cash and no debt at the end of December 31, 2020

·     Docebo (DCBO) 2.013M share Secondary priced at $49.61

·     Google (GOOGL) threatened to shut down its search engine in Australia if a proposed law requiring tech giants to pay publishers for news isn’t changed