Early Look

Friday, July 23, 2021

Futures	Up/Down	%	Last
Dow	169.00	0.49%	34,878
S&P 500	21.25	0.49%	4,381
Nasdaq	71.50	0.48%	15,000

 

 

Stocks looking to build on weekly gains, boosted overnight from strong results in the social media sector as both Twitter (TWTR) and Snap (SNAP) top expectations in what has been a generally strong week for quarterly earnings. After yesterday’s semiconductor weakness behind TXN guidance, Dow component Intel (INTC) issues a beat and raise for the year last night, though conservative guidance for Q3 weighs on shares early. Major indexes rose for a third straight session on Thursday as investors looked past mixed weaker data showing a rise in first-time claims for unemployment benefits last week. In Asian markets, The Nikkei Index rose 159 points to 27,548, the Shanghai Index fell -24 points to 3,550, and the Hang Seng Index drops over 400 points (1.45%) to settle at 27,321. In Europe, the German DAX is up over 150 points (about 1%) to 15,665, while the FTSE 100 gains over 50 to 7,025. While enthusiastic about the economic recovery, investors remained nervous about the spread of the delta variant of COVID-19 which had weighed on sentiment last week. Markets also prepare for the busiest week of quarterly earnings coming up with results from Apple, Alphabet, and Facebook among them,.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 8.79 points, or 0.20%, to 4,367.48

·     The Dow Jones Industrial Average rose 25.35 points, or 0.07%, to 34,823.35

·     The Nasdaq Composite gained 52.64 points, or 0.36%, to 14,684.60

·     The Russell 2000 Index declined -34.57 points, or 1.55% to 2,199.48

 

Events Calendar for Today

·     9:45 AM ET         Markit Composite Flash PMI

·     9:45 AM ET         Markit Manufacturing PMI for July

·     9:45 AM ET         Markit Services Flash PMI

·     1:00 PM EST       Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: ACBI, AIMC, AXP, CIVB, FHN, GNTX, HON, KMB, NEE, NEP, RF, ROP, SBSI, SLB, SXT

 

 

Macro	Up/Down	Last
Nymex	-0.09	71.82
Brent	-0.11	73.68
Gold	-7.45	1,799.50
EUR/USD	-0.0008	1.1763
JPY/USD	0.31	110.45
10-Year Note	+0.026	1.293%

 

 

World News

·     Eurozone July Markit Mfg. PMI (flash) beat: 62.6 vs 62.5 consensus

·     Eurozone July Markit Services PMI (flash) beat: 60.4 vs 59.5 consensus

·     UK June Retail Sales Inc Auto Fuel YoY, actual 9.7%, est. 9.5%, prior 24.6%

·     UK June Retail Sales Inc Auto Fuel MoM, actual 0.5%, est. -0.1%, prior -1.4%, revised -1.3%

·     German July Markit/BME Germany Composite P, actual 62.5, est. 60.7, prior 60.1

·     German July Markit Germany Services PMI, actual 62.2, est. 59.5, prior 57.5

·     UK Markit/CIPS UK Services PMI, actual 57.8, est. 62.0, prior 62.4

·     UK July Markit UK PMI Manufacturing SA, actual 60.4, est. 62.3, prior 63.9

 

Sector News Breakdown

Consumer

·     Magna International Inc. (MGA) to acquire Veoneer, Inc. (VNE) for $ 31.25 per share in cash, representing a total value of $ 3.8 billion, and an enterprise value of $ 3.3 billion, inclusive of Veoneer’s cash, net of debt and other debt-like items as of March 31, 2021

·     Chinese education names getting crushed down over 40%: New oriental (EDU), TAL Education (TAL), and Gaotu Techedu (GOTU) getting crushed on Bloomberg report that China is considering asking companies that offering tutoring on the school curriculum to go non-profit, according to people familiar with the matter. In rules currently being mulled, the platforms will likely no longer be allowed to raise capital or go public, the people said

·     Boston Beer (SAM) shares fall -15%; Q2 EPS $4.75 vs. est. $6.69; Q2 revs $602.8M vs. est. $657.6M; sees year EPS $18.00-$22.00 vs. est. $24.66; in 2021 and going forward, company has chosen not to report covid-19 related direct costs separately

·     Del Taco (TACO) Q2 adj EPS $0.16 vs. est. $0.11; Q2 revs $125M vs. est. $122.79M; Q2 system-wide comp store sales up 17.8%; Q2 company-operated comp sales up 18.3% and Q2 franchise comp sales up 17.2%; expects system-wide new unit growth to achieve 5% in 2023 led by franchising

·     Skecher’s (SKX) 2Q EPS $0.88 vs est. $0.52 on revs $1.66B vs es.t $1.49B; guides 3Q EPS $0.70-0.75 vs est. $0.63, sees 3Q revs $1.6-1.65B vs est. $1.52B; guides FY EPS $2.55-2.65 vs est. $2.13, sees FY revs $6.15-6.25B vs est. $5.93B

·     Lamb Weston Holdings (LW) announces $415 million capital investment in new French fry processing line in American falls, Idaho; declares quarterly dividend

·     Robert Half (RHI) 2Q EPS $1.33 vs est. $1.05 on revs $1.58B vs est. $1.48B

·     Scholastic (SCHL) 4Q adj EPS $0.90 on revs $401.4Mm; expects significant growth in FY22 revs yr/yr

·     Gambling.com (GAMB) 5.25M share IPO priced at $8.00

·     Xponential Fitness (XPOF) 10M share IPO priced at $12.00

 

Energy

·     DMC Global (BOOM) 2Q EPS $0.10 vs est. $0.13 on sales $65.4Mm vs est. $69.5Mm; guides 3Q sales $46-48Mm vs est. $73.3Mm

·     First Energy (FE) 2Q adj EPS $0.59 vs est. $0.57 on revs $2.6B vs est. $2.65B; guides 3Q adj EPS $0.70-0.80 vs est. $0.82; guides FY adj EPS $2.40-2.60 vs est. $2.50

 

Financials

·     Capital One (COF) Q2 adj EPS $7.71 vs. est. $4.61; Q2 revs $7.4B vs. est. $7.09B; NII $5.74B vs est. $5.58B, NIM 5.89% -10bps sequentially, common equity tier 1 capital ratio 14.5%, provision decreased $337Mm to ($1.2B) vs 1Q

·     Bank OZK (OZK) Q2 EPS $1.16 vs. est. $0.92; return on average assets 2.24% vs. 0.78% y/y; return on average equity 13.7% vs. 4.92% y/y; net interest income $240.7 million, +11% y/y; efficiency ratio 38.4% vs. 42.1% y/y

·     Independent Bank (INDB) Q2 EPS $1.17 vs. est. $1.08; Q2 revs $118.32M vs. est. $117.92M; total assets of $14.2B at June 30 increased by $420.3M, or 3.1%, from the prior quarter, and by $1.2B, or 9.0%, as compared to the year ago period; Q2 total loans at June 30 decreased by $307.7M, or 3.3%, when compared to the prior quarter

·     RenaissanceRe (RNR) 2Q adj EPS $5.64 vs est. $4.74 on revs $1.48B vs est. $1.28B, says net claims and claim expenses incurred associated with the covid pandemic were not significant in 2Q

·     SVB Financial (SIVB) Q2 GAAP EPS of $9.09 vs. est. $6.50; Q2 revs up 69% YoY to $1.49B (+69.0% Y/Y) beats by $350M; Q2 average loans of $49.8 billion, an increase of $3.5 billion; period-end loans of $50.8 billion, an increase of $3.1 billion; average total client funds increased $45.9 billion to $308.1 billion, which includes an increase in average on-balance sheet deposits of $23.2 billion

·     W. R. Berkley (WRB) Q2 EPS $1.27 vs. est. $0.94; Q2 revenue $2.30B vs. est. $2.16B; Q2 net premiums written $2.21B vs. $1.74M last year and consolidated combined ratio of 89.7% vs. 98.7% last year

·     Future FinTech (FTFT) files $200M mixed securities shelf

·     U.S. Century Bank (USCB) 4M share IPO priced at $10.00

 

Healthcare

·     Caribou Biosciences (CRBU) 19M share IPO priced at $16.00

·     Cytek Biosciences (CTKB) 16.7M share IPO priced at $17.00

·     Sophia Genetics (SOPH) 13M share IPO priced at $18.00

 

Industrials & Materials

·     Honeywell (HON) Q2 EPS $2.02 vs. est. $1.94; Q2 revs $8.81B vs. est. $8.63B; raises FY21 adj EPS view to $7.95-$8.10 from $7.75-$8.00 (est. $8.01) and boosts FY21 revenue view to $34.6B-$35.2B from $34B-$34.8B (est. $34.93B)

·     Carlisle Corp. (CSL) Q2 adj EPS $2.16 vs. est. $2.12; Q2 revs $1.2B vs. est. $1.15B; now sees full year sales to be up mid-teens

·     Celanese (CE) 2Q EPS $4.81 vs est. $4.44 on revs $2.2B vs est. $1.96B; guides 3Q adj EPS $4.50-4.75 vs est. $3.39; guides FY adj EPS $16.50-17.00 vs est. $13.98

·     U.S. Xpress Enterprises (USX) Q2 adj EPS $0.08 vs. est. $0.16; Q2 revs $475M vs. est. $463.69M; continues to expect strong freight demand for balance of 2021; says expects total fleet size to begin growing in q3

·     Vicor (VICR) reports Q2 EPS 43c vs. est. 33c; Q2 revs $95.4M vs. est. $93.98M

 

Technology, Media & Telecom

·     Intel Corp. (INTC) 2Q adj EPS $1.28 vs est. $1.05 on revs $18.5B vs est. $17.8B; guides 3Q adj revs $18.2B vs est. $18.1B and adj EPS about $1.10 vs est. $1.08; guides FY adj revs $73.5B vs est. $72.8B, sees FY adj EPS $4.80 vs est. $4.62, sees FY adj gr mgn about 56.5%

·     Twitter (TWTR) Q2 EPS $0.20 vs. est. $0.07; Q2 revs $1.19B vs. est. $1.07B; Q2 Advertising revenue totaled $1.05 billion, an increase of 87% yoy, or 85% on a constant currency basis; Q2 cost per engagement (CPE) increased 42% yoy; reached 206 million average monetizable DUA in 2q, up 11%; Q2 international revenue $537m; had 11% year-over-year growth in monetizable daily active usage

·     Snap inc. (SNAP) 2Q adj EPS $0.10 vs est. ($0.01) on revs $982Mm vs est. $845.5Mm, DAU +23% to 293Mm; guides 3Q revs $1.07-1.085B vs est. $1.0B, sees 3Q adj EBITDA $100-120Mm vs est. $116.7Mm, says currently estimate DAU grow about 21% yr/yr to reach about 301Mm in 3Q, continues to invest heavily in video advertising, says the expected iOS platform policy changes did not materialize in 2Q to disrupt ad demand

·     Verisign (VRSN) Q2 EPS $1.31 vs. est. $1.32; Q2 revs $329M vs. est. $327.95M; ended 2q with cash, cash equivalents and marketable securities of $1.12B; ended Q2 with 170.6 million .com and .net domain name registrations in the domain name base, a 5.2% increase from the end of the second quarter of 2020, and a net increase of 2.59 million during the second quarter of 2021

·     Clearfield (CLFD) 3Q EPS $0.44 on sales $38.7Mm; guides FY sales $150-160Mm above est. $122.9Mm

·     Outbrain (OB) 8M share IPO priced at $20.00