Early Look

Thursday, March 4, 2021

Futures	Up/Down	%	Last
Dow	-114.00	0.36%	31,122
S&P 500	-20.25	0.53%	3,796
Nasdaq	-76.50	0.61%	12,605

 

 

Stocks are looking lower after major averages tumbled to close at their lows on Wednesday, with the late day slide pushing the S&P 500 index below its key technical 50-day moving averages support (3,825) as rising inflation and high valuations catch up with market sentiment. The Nasdaq Composite had dropped well below its 50-day MA support of 13,372 the day prior, slipping below the 13,000 level Wednesday (next major support at the 100-day MA of 12,667) as several mega cap tech stocks fell to their lowest levels of 2021, including slides in AMZN, AAPL, GOOGL, and TSLA. The tech drag came amid rising bond yields, while names tied to an economic recovery provided the market with some support. Longer-term U.S. Treasury yields rise as investors look to comments from Federal Reserve Chair Jerome Powell later today for signs the central bank was poised to concede the risk of a rapid rise in interest rates. Powell is set to speak at 12:05 p.m. EST before a virtual Wall Street Journal Jobs Summit and his remarks will be watched for any clues to a possible change in Fed language ahead of the March 16-17 policy meeting. In Asian markets, The Nikkei Index plunged -628 points (2.13%) to 28,930, the Shanghai Index tumbled 73 points (2.05%) to 3,503 and the Hang Seng Index slid -643 points (2.15%) to 29,236. In Europe, the German DAX is lower by roughly -100 points to drop back below the 14,000 level, while the FTSE 100 drops over-70 points to 6,601. Today also a busy day of economic data with weekly jobless claims (ahead of nonfarm payroll report Friday), productivity and factory orders (comes a day after weak ISM services data and rising inflationary points).

Events Calendar for Today

·     7:30 AM EST      Challenger Job Layoffs

·     8:30 AM ET         Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

·     8:30 AM EST      Nonfarm Productivity for Q4

·     8:30 AM EST      Unit Labor Costs for Q4

·     10:00 AM EST    Factory Orders MoM for Jan

·     10:00 AM EST    Durable Goods Orders MoM for Jan

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

 

Earnings Calendar:

·     Earnings Before the Open: BALY, BJ, BURL, CIEN, CLXT, FOUR, GCP, GMS, KR, MCS, MEI, MIK, PRPL, SFE, SOHO, SPKE, TTC, TWI, XFOR

·     Earnings After the Close: AGS, ANIK, AVGO, CHMA, CHUY, COO, COST, EGLE, FLGT, FRGI, FTSI, GPS, GWRE, HEAR, IDT, INVE, JAMF, JYNT, MDLA, NX, OPEN, QUMU, SDC, SENS, SWBI, TRIN, VRAY, VSEC

 

Other Key Events:

·     BMO Capital Global Metals & Mining Conference (virtual), 3/1-3/5

·     Cowen Annual Healthcare Conference (virtual), 3/1-3/4

·     Credit Suisse Global Healthcare Conference (in London), 3/2-3/4

·     Deutsche Bank Shipping Summit (virtual)

·     Wedbush Real Estate Tech Conference (virtual)

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -50.57 points, or 1.31%, to 3,819.72

·     The Dow Jones Industrial Average fell -121.43 points, or 0.39%, to 31,270.09

·     The Nasdaq Composite plunged -361.04 points, or 2.70%, to 12,997.75

·     The Russell 2000 Index declined -23.72 points, or 1.06% to 2,207.79

 

 

Macro	Up/Down	Last
Nymex	-0.26	61.02
Brent	-0.27	63.80
Gold	-3.30	1,712.50
EUR/USD	-0.0023	1.204
JPY/USD	0.36	107.36
10-Year Note	-0.003	1.465%

 

 

World News

·     OPEC+ and other oil producers meet on Thursday to decide whether to keep April output steady or increase it as they weigh a recent price rally against uncertainty about the economic recovery. With oil above $60 a barrel, some analysts have predicted the OPEC+ group of producers will increase output by about 500,000 barrels per day (bpd) and also expect Saudi Arabia to partially or fully end its voluntary reduction of 1 million bpd. But three OPEC+ sources said on Wednesday that some members of the Organization of the Petroleum Exporting Countries believe OPEC and its allies, a group known as OPEC+, should keep output unchanged. – Reuters

 

Sector News Breakdown

Consumer

·     American Eagle (AEO) Q4 adj EPS 39c vs. est. 36c; Q4 sales $1.29B vs. est. $1.28B; Q4 comp store sales rose 29%; qtrly digital revenue increased 35%, with aerie up 75% and ae up 20%; said it is reinstating quarterly cash dividend at $0.1375 per share and unsuspended it share buyback plan; total ending inventory at cost decreased $41 mln or 9% to $405 mln at qtr-end; Q4 Gross margin expanded 300 basis points, due to higher full-price sales and reduced promotions

·     Red Robin (RRGB) 4Q adj EPS ($1.79) vs. est. ($1.10) on total revs $202.1Mm vs. est. $230.8Mm, qtrly comp restaurant revs -29%; Off-premise sales increased 131.8% and comprised 43.9% of total food and beverage sales, with approximately 80% of off-premise orders driven through digital channels

·     Vroom Inc. (VRM) Q4 adj EPS loss (44c) vs. est. loss (39c); Q4 revenue $405.8M vs. est. $401.2M; sees Q1 EPS loss (68c)-(61c) vs. est. loss (39c) and sees Q1 revenue $500M-$529M vs. est. $509.93M; qtrly ecommerce revenue of $285.0 mln, up 43% YoY; Q4 ecommerce units sold, up 74% YoY; for full year 2021, we expect triple digit year-over-year growth in ecommerce unit sales

·     Culp Inc. (CULP) 3Q EPS $0.17 vs. est. $0.13 on sales $79.3Mm vs. est. $74.6Mm; guides 4Q sales about +40% vs. est. +39.7%, sees 4Q consolidated op inc $1.2-1.7Mm vs. est. $2.0Mm; announces has reinstated share repurchase plan

·     VICI Properties (VICI) 60M share Secondary priced at $29.00

·     LGI Homes (LGIH) announced 764 home closings in February 2021, up from 606 home closings in February 2020, representing year-over-year growth of 26.1%

 

Energy, Industrials and Materials

·     Entergy (ETR) wrongfully charged customers more than $1B over eight years in upgrading its problem-plagued Grand Gulf Nuclear Station in Mississippi, according to allegations in a federal complaint filed by three of the utility’s regulators

·     Clean Energy Fuels Corp (CLNE) and its largest shareholder Total (TOT) announced terms of a new joint venture on Thursday focused on renewable natural gas production; the JV will have an initial firm commitment of $100 million to build renewable gas production facilities.

·     FedEx (FDX) is struggling with significant delays in delivering packages long after mid-February winter storms sent many parts of the country into a deep freeze, including its Memphis delivery hub – WSJ

·     GMS Inc. (GMS) Q3 adj EPS 60c vs. est. 51c; Q3 revenue $751.2M vs. est. $728.44M

·     MYR Group (MYRG) 4Q EPS $1.07 vs. est. $0.79 on revs $608Mm vs. est. $580.9Mm, had backlog $1.65B at Dec. 31

 

Financials

·     Barrett Business (BBSI) Q4 EPS 93c vs. est. 64c; Q4 revenue $233.2M vs. est. $229.87M; Gross billings up 1% to $1.60 billion; unrestricted cash and investments up 34% to $169.9 million; for 2021, expects gross billings growth of 2% to 5% and gross margin as a percent of gross billings of 2.9% to 3.1%

·     CBOE (CBOE) reported options average daily volume for Feb. of +19%; Feb. futures average daily volume -28.9%; Feb. U.S. equities average daily volume +54% vs. +30.4% YoY; Feb European equities average daily notional volume -13.4% vs. -7.80% YoY

·     Dynex Capital (DX) 3.5M share Spot Secondary priced at $18.35

·     SelectQuote (SLQT) 10.6M share Secondary priced at $27.50

 

Healthcare

·     InnovAge (INNV) 16.667M share IPO priced at $21.00

·     Luminex Corporation (LMNX) said it has received Emergency Use Authorization (EUA) from the U.S. FDA for a new expanded version of its NxTAG(R) Respiratory Pathogen Panel (RPP) that includes the SARS-CoV-2 virus for high-throughput respiratory testing

·     Regeneron (REGN) and Sanofi (SNY) announced the FDA has accepted for review the supplemental biologics license application, or sBLA, for Dupixent as an add-on treatment for children aged 6 to 11 years with uncontrolled moderate-to-severe asthma

·     Coherus Biosciences (CHRS) and its Chinese partner Shanghai Junshi Biosciences announced the initiation of the rolling submission of the Biologics License Application for toripalimab to the FDA for the treatment of recurrent or metastatic nasopharyngeal carcinoma

·     Kiniksa pharmaceuticals ltd (KNSA) entered into a commercial supply agreement with Regeneron (REGN) on March 1, 2021

 

Technology, Media & Telecom

·     Comtech Telecommunications Corp (CMTL) files for shelf of up to 1.4 mln shares of common stock by selling stockholders

·     Marvel Technology (MRVL) 4Q adj EPS $0.29 vs. est. $0.29 on revs $798Mm vs. est. $794.3Mm; guides 1Q adj EPS $0.23-0.31 vs. est. $0.27, sees 1Q revs $800Mm +/-5% (about +15% at mid-point vs. est. +14.4%)

·     nLight Inc (LASR) files for mixed shelf of up to $150 mln

·     Okta Inc. (OKTA) 4Q adj EPS $0.06 vs. est. ($0.01) on revs $234.7Mm vs. est. $221.85Mm; guides 1Q adj EPS loss $0.20-0.21 vs. est. ($0.07), sees 1Q revs $237-239Mm vs. est. $237.3Mm; guides FY adj EPS loss $0.44-0.49 vs. est. $0.01, sees FY revs $1.08-1.09B vs. est. $1.075B; says it’s buying security rival Auth0 for $6.5 billion

·     Rimini Street (RMNI) 4Q EPS ($0.04) vs. est. ($0.08) on revs $87.8Mm vs. est. $83.3Mm; guides 1Q revs $87.5-88.5Mm vs. est. $85.7Mm; guides FY revs $370-380Mm vs. est. $366.5Mm

·     Snowflake (SNOW) Q4 EPS loss (70c) vs. est. loss (17c); Q4 revenue $178.3M vs. est. $178.5M; Q4 Remaining performance obligations of $1.3B, representing 213% year-over-year growth; sees Q1 product revenue $195M-$200M vs. est. $213.06M; Net revenue retention rate of 168%; had 77 customers with trailing 12-month product revenue greater than $1 million

·     Splunk (SPLK) Q4 adj EPS 38c on revs $745M vs. est. $682M; sees Q1 revenue $480M-$500M vs. est. $507.29M and sees Q1 ARR $2.42B-$2.44B; Q1 non-Gaap operating margin is expected to be approximately negative 30%;

·     Yext Inc. (YEXT) 4Q EPS ($0.15) vs. est. ($0.08) on revs $92.2Mm vs. est. $89.1Mm; guides FY adj EPS loss $0.17-0.22 vs. est. loss $0.18, sees FY revs $$375-380Mm vs. est. $411Mm

·     Apple (AAPL): The U.K.’s Competition and Markets Authority has launched an investigation into Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive

·     Digi International (DGII) 3.5M share Secondary priced at $19.50

·     DISH Network (DISH) selected Amdocs’ (DOX) cloud-based billing system, Optima, to support enterprise and wholesale customers on its next-generation 5G network