Early Look

Monday, November 15, 2021

Futures	Up/Down	%	Last
Dow	109.00	0.30%	36,122
S&P 500	11.25	0.24%	4,689
Nasdaq	40.50	0.25%	16,233

 

 

After slipping last week, U.S. stock futures are edging higher to start the trading week, with Treasury yields little changed as markets remain in “wait-and-see” mode regarding the timing of accelerated tightening by the Fed after last weeks sharply higher inflation readings. Investors also prepare for a busy week of quarterly earnings in the retail sector with results from WMT, LOW, TGT and HD among those expected this week as earnings season wraps up. In Asian markets, The Nikkei Index gained +0.56% to 29,776, the Shanghai Index fell -5 points to 3,533, and the Hang Seng Index advanced +0.25% to 25,390, In Europe, the German DAX is up about +0.1% at 16,100, while the FTSE 100 is little changed at 7,340. Stocks finished Friday near the highs, but for the week, the S&P 500 500 fell 0.3%, the Dow fell 0.6% and the Nasdaq fell 0.7%, as each snapped their 5-week winning streaks amid heightened inflation fears. Before the bell today, the November Empire State Manufacturing Index arrives, with economists predicting a small rise from the month before in the only main data point on the schedule today. The dollar is steady, oil prices are lower and Bitcoin/crypto assets are looking higher. Overall, it looks like a strong start to the trading week, but will gains hold?

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 33.58 points, or 0.72%, to 4,682.85

·     The Dow Jones Industrial Average rose 179.11 points, or 0.50%, to 36,100.31

·     The Nasdaq Composite spiked 156.66 points, or 1.00%, to 15,860.96

·     The Russell 2000 Index advanced 2.64 points, or 0.11% to 2,411.78

 

Events Calendar for Today

·     8:30 AM ET         Empire Manufacturing for November…est. 21.2

 

Earnings Calendar:

·     Earnings Before the Open: ACM, AYRO, BFLY, CMAX, CVSI, DMRC, DNA, GOED, JAGX, KALA, OEG, ONDS, PTN, RAIL, RMBL, SEAT, TLS, TSN, URGN, VVNT, WE, YOU

·     Earnings After the Close: AAP, ASTG, AGIL, ATHX, AXON, BIOC, BKYI, BODY, CMP, COMS, COOK, CSPR, DM, EDR, ETON, FPAY, GLAD, IDEX, INVO, JJSF, LCID, LFG, MARK, MIRM, NRDY, PLBY, POWW, PRCH, RAX, RXT, SGBX, SNDX, TALK, UAVS, VTSI, XL, XSPA, ZEV

 

Other Key Events:

·     BTIG Digital Health Forum (virtual), 11/15

·     Stifel 2021 Healthcare Conference (virtual), 11/15-11/17

·     Wolfe Industrial Growth & Technology Conference 2021 (virtual), 11/15

 

 

Macro	Up/Down	Last
Nymex	-1.00	79.79
Brent	-1.16	81.01
Gold	-1.90	1,863.00
EUR/USD	-0.0002	1.1443
JPY/USD	-0.03	113.86
10-Year Note	+0.006	1.554%

 

 

World News

·     China Oct Industrial O/P higher: 3.5% y/y vs 3% consensus; China Oct Industrial Production higher: 10.9% vs 10.8% consensus; China Oct Retail Sales higher: 4.9% y/y vs 3.5% consensus

·     ECB’s Lagarde said this weekend that conditions for hike in rates unlikely to be met next year; GDP still expected to exceed pre-pandemic levels by year end; price pressures to normalize as supply bottlenecks unwind; no evidence of negotiated wages

·     Hackers compromised a Federal Bureau of Investigation (FBI) email system on Saturday and sent tens of thousands of messages warning of a possible cyberattack, according to the agency and security specialists. Jayson Albano reports.

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) shares slipping -2%; CEO Elon Musk on Sunday asked Bernie Sanders on Twitter whether the U.S. senator wants him to sell more shares after Sanders demanded the wealthy pay their “fair share” of taxes. “Want me to sell more stock, Bernie? Just say the word,” Musk tweeted. Meanwhile, “The Big Short” investor Michael Burry tweeted that “Musk doesn’t need cash, he just wants to sell Tesla

·     Macy’s (M), Nordstrom (JWN) and Signet Jewelers (SIG) among mall-based retailers that are enjoying a revival on expectations consumers will spend a record $851 billion this holiday season, a 9.5% jump from last year, Barron’s reported, citing the National Retail Federation

·     Mantle Ridge disclosed a 5.7% stake in Dollar Tree (DLTR) saying in the filing that it believes the shares are undervalued and intends to have conversations, meetings and other communications with certain members of the company’s board of directors and management team

 

Energy

·     Avangrid (AGR), PNM Resources (PNM) have agreed to additional merger conditions outlined by a state regulatory official, including delaying PNM’s next rate case until Dec. 1, 2022

·     Negotiators from almost 200 countries clinched a deal that seeks to keep the most ambitious goal of the Paris Agreement alive, breaking new ground in the fight against climate change but punting the hardest decisions into the future. After two weeks of often fraught United Nations COP26 talks, delegates agreed to reduce the use of coal

 

Financials

·     Capital One (COF) reported charge-offs for Oct. of 1.04% vs. 3.11% YoY; Oct. delinquencies 2.06% vs. 2.19% YoY

·     Discover Financial Services (DFS) credit card charge-off rate 0.98% at October end vs 1.01% at September end while credit card delinquency rate 0.98% at October end vs 0.95% at September end

·     S&P Global (SPGI) won U.S. antitrust approval to buy IHS Markit (INFO) to create a financial data giant spanning everything from bond ratings and commodities prices to tracking trade flows across the world after the Justice Department cleared the $39 billion deal

 

Healthcare

·     Regeneron (REGN) announces $3B share buyback plan

·     Pfizer (PFE) strong R&D makes stock a good long-term bet, according to Barron’s. Notes two years ago, Pfizer CEO Albert Bourla asked investors to take a big gamble on the research-and-development operation, and that bet is looking smarter than ever

·     Philips (PHG), the medical equipment maker that is recalling ventilators due to use of parts containing a potentially hazardous foam, said on Sunday it is in discussions with U.S. regulators after a new inspection of one of the company’s facilities.

·     Regenxbio (RGNX) released interim data from trials of RGX-314 in wet age-related macular degeneration and diabetic retinopathy

·     Eton Pharmaceuticals, Inc (ETON) said it has entered into a multi-year agreement with Tolmar Pharmaceuticals, Inc. to co-promote ALKINDI SPRINKLE(R). Eton will leverage Tolmar’s 62-person sales force and their existing relationships in the pediatric endocrinology specialty

 

Industrials & Materials

·     Airbus SE (EADSY) is in talks with Air Lease Corp. (AL) on a significant aircraft order involving a mix of narrow- and wide-body jets, which could include the European plane maker’s coming A350 freighter, according to people familiar with the matter – Bloomberg

·     Deere (DE) and union officials reach a third preliminary contract agreement on a contract in a bid to end a four-week-old strike; the previous offer included 10% pay raises, a signing bonus of $8,500, made workers eligible for health insurance sooner, and maintained no-premium health insurance coverage.

·     General Electric (GE) CEO Larry Culp is betting that splitting GE is the correct path forward for the once-mighty industrial conglomerate, and investors should bet that Culp is right by buying the stock, according to Barron’s

·     The United States said late Friday it will open talks with Japan over tariffs on steel and aluminum imports. Japan last week asked the United States to abolish the “Section 232” tariffs imposed by former U.S. President Donald Trump’s administration in 2018.

·     Fluor (FLR) upgraded to Neutral from Underperform at Bank America with a $24 price target

 

Technology, Media & Telecom

·     American Tower Corp. (AMT) is said to near an agreement to acquire CoreSite Realty (COR) for about $10B in an all-cash deal according to a Bloomberg report saying they could announce the acquisition of the data center operator as soon as this week. The report comes after Reuters reported last week that CoreSite was exploring options after getting a takeover approach. https://bit.ly/3ndF9eh

·     Walt Disney (DIS) stock tumbled to near a one-year low this week following high-profile misses in its streaming and theme-parks segments according to Barron’s, which could make for an attractive entry point for patient investors

·     CrowdStrike (CRWD) initiated at underweight with a $247 target at Morgan Stanley saying the firm’s early leadership position is becoming increasingly challenged

·     Shopify (SHOP) downgraded to Hold from Buy at Loop Capital