Early Look

Friday, January 29, 2021

Futures	Up/Down	%	Last
Dow	-130.00	0.44%	30,374
S&P 500	-22.25	0.60%	3,756
Nasdaq	-125.50	0.95%	13,060

 

 

Stocks in the U.S. are looking lower as the volatile trading week continues, as the recent market mania of stocks with high short interest being targeted by an army of retail investors drove up the prices of several names again overnight. GameStop (GME) Bed Bath & Beyond (BBBY) and AMC Entertainment (AMC) are looking higher by 98%, 16% and 54% respectively after tumbling Thursday after online trading platforms Robinhood, Interactive Brokers and others set restriction to trading in those names – but have since ease those restrictions. The showdown between individual investors and professional short-sellers has roiled global equity markets as funds were forced to sell some of their best-performing stocks, to cover billions of dollars of losses. In Asian markets, The Nikkei Index dropped -534 points to 27,663, the Shanghai Index fell -22 points to 3,483 and the Hang Seng Index dropped -267 points to 28,283. In Europe, the German DAX is down -125 points to 13,540, while the FTSE 100 fell -65 point to 6,460. Wall Street rallied on Thursday as investors moved back into large cap winners and welcomed restrictions on this week’s social media-driven trading frenzy. Bitcoin prices up over 11% to $37,200 after Tesla Inc CEO Elon Musk tagged the cryptocurrency in his Twitter biography. Musk wrote simply “#bitcoin” in his biography on the social media site. GameStop, BlackBerry, Nokia and others have had shares soar this week after being targeted by retail buyers in Reddit and WallStreetBets forums as they touted high short interest stocks prompting meteoric moves in fundamentally challenged companies. Major averages overall rallied a day after the three major U.S. indexes suffered their biggest daily percentage drop in three months.

 

Events Calendar for Today

·     8:30 AM EST      Personal Income for December…est. 0.1%

·     8:30 AM EST      Personal Spending for December

·     8:30 AM EST      Core PCE Price Index MoM for Dec…est. 0.1%

·     8:30 AM EST      PCE Price Index MoM for Dec

·     8:30 AM EST      Employment Cost Index for Q4…est. 0.5%

·     9:45 AM EST      Chicago PMI for January…est. 58.5

·     10:00 AM EST    University of Michigan Confidence, for Jan…est. 79.2

·     10:00 AM EST    Pending Home Sales MoM for December…est. (-0.1%)

 

Earnings Calendar:

·     Earnings Before the Open: BAH, BMI, CAT, CHD, CHTR, CL, CVX, DSKE, GNTX, HON, JCI, LHX, LLY, LYB, MOG/A, PSX, PSXP, ROLL, ROP, SYF, WETF, WY

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 36.61 points, or 0.98%, to 3,787.38

·     The Dow Jones Industrial Average rose 300.19 points, or 0.99%, to 30,603.36

·     The Nasdaq Composite climbed 66.56 points, or 0.50%, to 13,337.16

·     The Russell 2000 Index slipped -2.09 points, or 0.10% to 2,106.61

 

 

Macro	Up/Down	Last
Nymex	0.09	52.43
Brent	0.25	55.78
Gold	13.75	1,856.90
EUR/USD	0.0013	1.2135
JPY/USD	0.51	104.75
10-Year Note	+0.026	1.07%

 

 

Sector News Breakdown

Consumer

·     Beazer Homes (BZH) Q1 EPS 40c vs. est. 29c; Q1 revenue $427.5M vs. est. $421.3M; Q1 net new orders of 1,442, up 15.3% on a 42.4% increase in orders/community/month to 3.5 and a 19.0% decrease in average community count to 136; Homebuilding revenue of $424.2 million, up 1.6% on a 1.4% increase in average selling price to $380.8 thousand and a 0.2% increase in home closings to 1,114

·     Ethan Allen (ETH) 2Q adj EPS $0.69 vs. est. $0.69 on net sales $178.8Mm vs. est. $178.8

·     Mondelez (MDLZ) Q4 adj EPS 67c on revs $7.3B vs. est. 66c and $7.16B; for 2021, company expects performance in line with its long-term growth algorithm of 3+ percent organic net revenue growth; Q4 revs rose 5.6% primarily driven by organic net revenue growth of 3.2%; sees 2021 performance in line with its long-term growth algorithm of high single-digit percent adj eps growth on constant currency basis

 

Financials

·     Visa Inc. (V) announces $8B share repurchase program; Q1 EPS $1.42 on revs $5.7B (down 6% YoY) vs. est. $1.28 and $5.52B; Q1 payments volume up 5% and transactions processed 39.2B; not providing year outlook at this time

·     Fair Isaac (FICO) 1Q adj EPS $2.74 vs. est. $2.27 on revs $312.4Mm vs. est. $319.6Mm

·     National Instruments (NATI) 4Q adj EPS $0.51 vs. est. $0.13 on revs $368Mm vs. est. $359.6Mm, sees 1Q revs $324-354Mm vs. est. $317Mm, sees 1Q adj EPS $0.24-0.38 vs. est. $0.11

·     Principal Financial (PFG) Q4 Non-GAAP EPS $1.48 vs. est. $1.42; Record assets under management (AUM) of $806.6 billion; had record PGI managed AUM of $502.1 billion and record PGI sourced AUM of $244.7 billion. — Principal International generated net cash flow of $1.2 billion, marking its 49th consecutive quarter of positive net cash flow.

·     Arthur J. Gallagher (AJG) Q4 adj EPS 88c vs. est. 78c; Q4 revenue $1.67B vs. est. $1.45B; have not seen any meaningful decline in cash receipts from clients to date, have over $1.6 billion of available liquidity

·     Dynex Capital (DX) 2.75M share Spot Secondary priced at $17.85

·     Home Point Capital (HMPT) 7.25M share IPO priced at $13.00

 

Healthcare

·     Eli Lilly (LLY) Q4 non-GAAP EPS $2.75 vs. est. $2.35; Q4 revenue $7.44B vs. est. $7.29B; 2021 eps guidance reaffirmed to be in range of $7.75 to $8.40 on a non-gaap basis; Q4 Trulicity revenue was $1.502 billion, an increase of 24% YoY

·     Evelo Biosciences (EVLO) 4.5M share Spot Secondary priced at $15.00

·     Neuronetics (STIM) 4.84M share Spot Secondary priced at $15.50

·     Bellicum Pharma (BLCM) shares rose over 30% after the FDA lifted the clinical hold on patient enrollment and dosing in its Phase 1/2 dose-escalation clinical trial evaluating BPX-601 and rimiducid in patients with previously treated metastatic pancreatic or prostate cancer

·     Novavax (NVAX) shares rose 34%; its Covid-19 vaccine is 90% effective, but far less so against one variant. A Covid-19 vaccine from Novavax proved nearly 90% effective in preliminary results from a key clinical trial in the United Kingdom, the company said, but appeared far less effective against a new variant of the coronavirus that accounted for most of the cases in South Africa

·     Aziyo Biologics, Inc. (AZYO) announced that it has received CE Mark approval for updated labeling of the Company’s biological CanGaroo(R) Envelope to allow for the addition of the antibiotic gentamicin

·     ResMed (RMD) Q4 adj EPS $1.41 vs. est. $1.24; Q4 revs $800M vs. est. $783.9M

·     NLS Pharmaceutics (NLSP) 4.82M share IPO priced at $4.15

 

Industrials & Materials

·     Caterpillar (CAT) Q4 adj EPS $2.12 vs. est. $1.49; Q4 sales $11.24B vs. est. $11.25B; liquidity remains strong with an enterprise cash balance of $9.4 bln at end of 2020

·     L3Harris (LHX) raises quarterly dividend 20%, approves $6B stock buyback

·     Celanese (CE) Q4 adj EPS $2.09 vs. est. $1.71; Q4 revenue $1.59B vs. est. 41.4B; guides Q1 adj EPS $2.50-$2.70 vs. est. $2.34; at this point, we expect current demand conditions, including favorable acetyl chain industry dynamics, will persist through Q1; raises dividend by 10%

·     Eagle Bulk Shipping (EGLE) purchased a high-specification 2017-built SDARI-64 scrubber-fitted Ultramax bulk carrier for $15M and a warrant for 212,315 common shares of Eagle

·     Eastman Chemical (EMN) Q4 EPS $1.69 vs. est. $1.50; Q4 revenue $2.19B vs. est. $2.16B; sees FY21 EPS up 20%-30% from FY20 or $7.38-$8.00 vs. est. $7.19

·     Haynes (HAYN) Q1 EPS loss (65c) vs. est. loss (53c); Q1 revs $72.18M vs. est. $73.73M; Q1 backlog of $145.1M at December 31, 2020, a decrease of 5.3% from $153.3M at September 30, 2020; says liquidity remains strong with cash generation this quarter of $14 million, resulting in over $61 million of cash on our balance sheet

·     Olin Corp. (OLN) 4Q EPS ($0.21) vs. est. ($0.10) on sales $1.654B vs. est. $1.45B, cash end of qtr $189.7Mm; sees adj EBITDA improving sequentially from 4Q20

·     U.S. Steel (X) Q4 adj EPS loss (27c) vs. est. loss (68c); Q4 revenue $2.56B vs. est. $2.58B; Q4 adjusted EBITDA $87M vs $4M last year; average realized prices for flat-rolled steel hit $731 a ton in the fourth quarter, up from $699 a ton the year before

·     U.S. Xpress Enterprises (USX) Q4 EPS 15c vs. est. 18c and Q4 revenue $455.6M vs. est. $459.12M

 

Technology, Media & Telecom

·     Skyworks (SWKS) 1Q adj EPS $3.36 vs. est. $2.08 on revs $1.51B vs. est. $1.06B, sees 2Q adj EPS $2.34 vs. est. $1.71, sees 2Q revs $1.125-1.175B vs. est. $1.71B; Delivers Record Revenue of $1.510 Billion, up 58% Sequentially and 69% Y-o-Y; generates Gaap operating margin of 37.8%; non-Gaap operating margin of 41.2%

·     Atlassian Corp. (TEAM) 2Q adj EPS $0.37 vs. est. $0.32 on revs $501Mm vs. est. $471.7Mm, sees 3Q revs $475-490Mm vs. est. $472.1Mm; Quarterly subscription revenue of $311 million, up 36% year-over-year; Quarterly IFRS operating margin of 6% and non-IFRS operating margin of 29%; Quarterly cash flow from operations of $200 million and free cash flow of $180 million

·     8×8 Inc. (EGHT) 3Q EPS ($0.38) vs. est. ($0.03) on revs $136.7Mm vs. est. $132.8Mm; guides 4Q revs $138.5-140.5Mm vs. est. $138.5Mm, sees FY revs $526.1-528.1Mm vs. est. $522.1Mm

·     Dolby (DLB) Q1 adj EPS $1.48 vs. est. $1.04; Q1 revenue $389.9M vs. est. $345.33M; guides Q2 adj EPS 57c-72c vs. est. 62c; sees Q2 revs $280M-$310M vs. est. $290.1M; gross margin percentages are anticipated to range from 88% to 89% on a GAAP basis and from 89% to 90% on a non-GAAP basis

·     Duck Creek Technologies (DCT) 9M share Secondary priced at $46.00

·     InterDigital (IDCC) raises Q4 revenue view to $87M-$90M from $84M-$88M (est. $86.77M); also expects that in Q4 it will recognize one-time charges of approximately $10M-$11M, primarily related to on-going patent portfolio management

·     Juniper Networks (JNPR) Q4 EPS 55c non-GAAP vs. est. 53c; Q4 revenue $1.223B vs. est. $1.19B; sees Q1 revenue about $1.055B plus/minus $50M, up 6% vs. est. $1.03B; q1 non-gaap operating margin will be approximately 10.6% at mid-point of revenue guidance; Q1 non-gaap operating expenses will be approximately $510 mln, plus or minus $5 mln

·     MicroStrategy (MSTR) Q4 adj EPS $2.07 vs. est. $1.62 and sales fell -1.7% to $131.3M; Operating expenses for the fourth quarter of 2020 were $110.1 million, an 11.0% increase YoY; As of December 31, 2020, MicroStrategy had cash and cash equivalents and short-term investments of $59.7 million, as compared to $565.6 million as of December 31, 2019, a decrease of $506.0 million.

·     Western Digital (WDC) 2Q adj EPS $0.69 vs. est. $0.54 on revs $3.9B vs. est. $3.88B, sees 3Q adj EPS $0.55-0.75 vs. est. $0.63, sees 3Q revs $3.85-4.05B vs. est. $3.87B