Early Look

Friday, June 25, 2021

Futures	Up/Down	%	Last
Dow	106.00	0.31%	34,188
S&P 500	4.75	0.11%	4,260
Nasdaq	26.50	0.18%	14,380

 

 

U.S. equity futures are looking to close out the week on a strong note, on track for a 4^th straight day of closing all-time highs for the Nasdaq Composite (up 2.4% WTD), while the S&P 500 and Dow outperform behind a tentative infrastructure deal between the White House and a bipartisan group of Senators to the tune of around $1 trillion. Dow component Nike (NKE) shares jump 11% after posting quarterly sales growth that rebounded across all major regions, while FedEx (FDX) shares sank in late trading even after estimates-topped Q4 estimates. Bank stocks looking higher after the Federal Reserve said it will lift all pandemic-related restrictions on banks June 30 after their annual stress test showed 23 of the largest banks would all remain well-capitalized and be able to continue lending even during a severe recession. The Dow outperformed on Thursday, adding nearly 1% after President Biden said had reached an infrastructure agreement with a bipartisan group of senators helped catalyze a jump in industrials, materials and metals. The deal will include about $600 billion in new federal spending on investments for new roads, clean energy and other projects, and cost nearly $1 trillion over the next five years. In Asian markets, The Nikkei Index advanced 190 points to29,066, the Shanghai Index rose 40points to 3,607, and the Hang Seng Index jumped 405 points to29,288. In Europe, the German DAX is down over -20 points to 15,565, while the FTSE 100 is up a few points around 7,120. The Dollar Index is lower with inflation data expected later today with the Commerce Department set to release May’s core personal consumption expenditures (PCE) index which probably rose 3.4% y/y last month, the most since 1992.

Events Calendar for Today

·     8:30 AM ET         Personal Income for May…est. -2.5%

·     8:30 AM ET         Personal Spending for May

·     8:30 AM ET         PCE Price Index MoM for May

·     8:30 AM ET         PCE Price Index YoY for May

·     8:30 AM ET         PCE Core Price Index MoM for May…est. 0.6%

·     8:30 AM ET         PCE Core Price Index YoY for May…est. 3.4%

·     10:00 AM ET      University of Michigan Sentiment, June-F…est. 86.5

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

 

Earnings Calendar:

·     Earnings Before the Open: APOG, KMX, PAYX

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 24.65 points, or 0.58%, to 4,266.49

·     The Dow Jones Industrial Average rose 322.58 points, or 0.95%, to 34,196.82

·     The Nasdaq Composite surged 97.98 points, or 0.69%, to 14,369.71

·     The Russell 2000 Index advanced 30.15 points, or 1.31% to 2,333.62

 

 

Macro	Up/Down	Last
Nymex	-0.20	73.10
Brent	-0.19	75.37
Gold	8.00	1,783.20
EUR/USD	0.001	1.1942
JPY/USD	-0.09	110.78
10-Year Note	+0.0001	1.4918%

 

 

World News

·     Banco de Mexico raised rates by 25 bps to 4.25% due to a jump in inflation, economists were expecting the bank to hold at 4%

·     China’s commercial lenders had a record $1.38 trillion of foreign exchange by the end of May – Bloomberg

 

Sector News Breakdown

Consumer

·     Nike (NKE) 4Q EPS $0.93 vs est. $0.51 on revs $12.3B vs est. $11B (direct sales +73% to $4.5B), gr margin +850bps to 45.8%; resumed share repurchase during 4Q; sees FY22 revenue over $50B vs. est. $48.46B, sees FY22 gross margin up 150 basis points and sees FY22 tax rate in the mid-teens

·     Didi Global Inc., (DIDI) the Beijing-based ride-hailing company, is targeting a valuation of $62 billion to $67 billion in its IPO, according to its latest public filing. Didi is looking to raise $3.9 billion in the initial public offering by selling 288 million American depositary shares, assuming they price at the midpoint of its targeted range of $13 to $14 per ADS, the filing said.

·     Mister Car Wash (MCW) 31.25M share IPO priced at $15.00

 

Energy, Industrials and Materials

·     FedEx (FDX) 4Q adj EPS $5.01 vs est. $4.99 on revs $22.6B vs est. $21.5B; guides FY22 adj EPS $20.50-21.50 vs est. $20.37, sees CAPEX $7.2B

·     Stephens initiated Overweight ratings on SunRun (RUN) with an $82 PT, Enphase (ENPH) with a $215 PT, SolarEdge (SEDG) with a $336 PT, Sunnova (NOVA) with a $56 PT, and First Solar (FSLR) with a $102 PT

·     Apogee Enterprises (APOG) Q1 EPS $0.42 vs. est. $0.36; Q1 revs $326M vs. est. $288.6M; sees FY EPS $2.20-$2.40 vs. est. $2.20

·     JinkoSolar (JKS) Q1 EPS 4c vs. est. loss (2c); Q1 revs $1.21B vs. est. $1.19B; Q1 shipments were 5,354 MW solar module shipments up 33.7% year over year; sees Q2 revs $1.2B-$1.25B vs. est. $1.4B; sees Q2 gross margin 12%-15%.

·     DTE Energy (DTE) cut its quarterly dividend to 82.5c per share from $1.085

·     Matson (MATX) raises quarterly dividend 30.4% to $0.30 from $0.23; the board also approved a share repurchase program totaling 3.0M shares, or ~7%of outstanding common shares

·     Kayne Anderson MLP/Midstream Investment Company (KYN) declares $0.175 per share quarterly dividend, 16.7% increase from prior dividend of $0.15

 

Financials

·     Bank stocks (GS, JPM, WFC, BAC, C, MS, etc.) are trading higher after the Federal Reserve said it will lift all pandemic-related restrictions on banks June 30 after their annual stress test showed 23 of the largest banks would all remain well-capitalized and be able to continue lending even during a severe recession. This includes removing the limits on buybacks and dividends.

·     Mizuho initiated MQ at Neutral with a $25 price target

 

Healthcare

·     Elevation Oncology (ELEV) 6.25M share IPO priced at $16.00

·     Graphite Bio (GRPH) 14M share IPO priced at $17.00

·     Alpha Teknova (TKNO) 6M share IPO priced at $16.00

·     Theravance Biopharma (TBPH) 6.7M share Spot Secondary priced at $15.00

·     Health Catalyst (HCAT) entered into a definitive agreement to acquire Twistle, a healthcare patient engagement SaaS technology company that automates patient-centered, HIPAA-compliant communication between care teams and patients to transform the patient experience, drive better care outcomes, and reduce healthcare costs

·     Mirati Therapeutics’ (MRTX) Adagrasib receives Breakthrough Therapy Designation from U.S. FDA for patients with advanced non-small cell lung cancer harboring the KRAS G12C mutation

 

Technology, Media & Telecom

·     BlackBerry (BB) Q1 EPS loss (5c) vs. est. loss (5c); Q4 revs $174M vs. est. $171.25M (and down from $206M a year earlier); Q1 gross margins 65.5%; said its auto business has been strong despite global chip shortages; said the number of vehicles with QNX software embedded has increased to 195M

·     CalAmp (CAMP) 1Q adj EPS $0.08 on revs $80.5Mm vs est. $80.25Mm, qtrly software and subscription svcs revs +26% to $35Mm; maintaining policy of not providing qtrly guidance

·     Netflix (NFLX) upgraded to outperform at Credit Suisse saying subscriber growth expected to normalize in 4Q21 and a survey by CS of U.S. consumers reinforced the stream platform’s strong competitive position and high user satisfaction

·     Panasonic Corp sold shares in Tesla (TSLA) for about 400 billion yen ($3.61 billion) during the financial year ended March, a company spokesperson said on Friday; the stake sale will not affect the partnership with Tesla

·     Analog Devices (ADI) completed allocation of semiconductor industry’s first green bond, allocating nearly $400M to advance their commitment to sustainability

·     SYNNEX (SNX) 2Q adj EPS $2.09 vs est. $1.93 on revs $5.9B vs est. $5.0B; guides 3Q revs $4.95-5.45B vs est. $5.1B, sees 3Q adj EPS $1.90-2.10 vs est. $1.9

·     Progress Software (PRGS) 2Q adj EPS $0.82 vs est. $0.73 on revs $122.5Mm vs est. $121.9Mm; guides 3Q revs $124-127Mm vs est. $132Mm and 3Q adj EPS $0.81-0.83 vs est. $0.85; sees FY revs $503-509Mm vs est. $525Mm, sees FY adj EPS $3.46-3.50 vs est. $3.40

·     Twilio (TWLO) and Asana (ASAN) are the first two companies to agree to dual list their shares on the Long-Term Stock Exchange, a Silicon Valley exchange that encourages long-term thinking over short-term gains

·     Synchronoss (SNCR) announces $100M common stock offering