Early Look

Tuesday, November 23, 2021

Futures	Up/Down	%	Last
Dow	6.00	0.02%	35,577
S&P 500	-2.25	0.06%	4,677
Nasdaq	-44.50	0.27%	16,337

 

 

After U.S. stocks closed at their lows on Monday amid a sharp precipitous decline in the final 30-minutes of trading on rising yield concerns, U.S. equity futures are looking mixed to slightly lower to start Tuesday. Volatility could start to rise with some investors getting an early jump on Thanksgiving travel. European equities drop with market focusing on potential Covid measures and policy tightening over solid PMI data. In Asian markets, The Nikkei Index rose 0.1% to 29,774, the Shanghai Index rose +0.2% to 3,589, while the Hang Seng Index declined -1.2% or 300 points to 24,651. In Europe, the German DAX is lower by about 1% to 15,950, while the FTSE 100 is down a few points to 7,250. The 10-year Treasury yield is up 1 basis point to 1.64%, while the 5-year is up 1 point to 1.33% after rising 9 bps and 10 bps respectively on Monday. The jump in yields prompted selling pressure in some of the biggest market winners in recent months, as investors dumped shares of high-price software stocks following news that President Joe Biden has nominated Federal Reserve Board Chair Jerome Powell to another four-year term. The same situation triggered a substantial selloff in growth tech shares earlier this year. Powell’s nomination, alongside prospective Vice Chair Lael Brainard, has boosted bets on both a near-term acceleration of the Fed’s tapering strategy, as well as those linked to a 2022 rate hike, in the face of the fastest pace of domestic inflation in more than three decades. That’s lifted the dollar index, which tracks the greenback against a basket of six global currencies, to its highest levels in 16 months

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:45 AM ET         Markit Manufacturing PMI Nov-F…est.59.0

·     9:45 AM ET         Markit Services PMI Nov-F…est. 59.0

·     9:45 AM ET         Markit Composite Flash PMI

·     10:00 AM ET      Richmond Fed Index for November…prior 12

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ADI, AEO, ANF, AMWD, BBY, BURL, CBRL, DKS, DLTR, DY, J, MOV, ROAD, SJM, TITN

·     Earnings After the Close: ADSK, AVXL, DELL, GPS, HPQ, JWN, NTNX, PLAN, PSTG, VMW

 

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -15.02 points, or 0.32%, to 4,682.94

·     The Dow Jones Industrial Average rose 17.27 points, or 0.05%, to 35,619.25

·     The Nasdaq Composite slumped -202.68 points, or 1.26%, to 15,854.76

·     The Russell 2000 Index declined -11.81 points, or 0.50% to 2,331.35

 

 

Macro	Up/Down	Last
Nymex	-0.99	75.76
Brent	-0.68	79.02
Gold	-9.20	1,795.45
EUR/USD	0.0015	1.1250
JPY/USD	-0.03	114.83
10-Year Note	+0.009	1.634%

 

 

World News

·     Euro zone business growth unexpectedly accelerated this month as IHS Markit’s Flash Composite Purchasing Managers’ Index jumped to 55.8 in November from 54.2 in October and topped the 53.2 estimate

·     Germany’s health minister called on Tuesday for further restrictions to contain a “dramatic” surge in coronavirus cases as the country’s infection rate hit a record high and the United States advised against travel there.

 

Sector News Breakdown

Consumer

·     Central Garden & Pet (CENT) 4Q EPS ($0.06) vs est. ($0.24) on revs $739Mm vs est. $732Mm; guides FY22 EPS $3.10 or better vs est. $3.08

·     Urban Outfitters (URBN) Q3 EPS $0.89 vs. est. $0.84; Q3 sales $1.13B vs. est. $1.12B; gross margin 34.5% vs. 33.3% YoY; Comparable Retail segment net sales increased 14%, driven by strong double-digit growth in digital channel sales, partially offset by mid-single-digit negative retail store sales primarily due to reduced store traffic. By brand, comparable Retail segment net sales increased 55% at the Free People Group, 9% at the Anthropologie Group and 7% at Urban Outfitters

·     XPeng (XPEV) Q3 EPS loss (-$0.27) vs. est. loss (-$0.18); reported Q3 deliveries growth of 199% Y/Y and 47.5% Q/Q to 25,666 units, exceeding the company’s guidance of 23,000 to 25,000 vehicles; P7 deliveries rose 71.2% Q/Q to 19,731 units, of which 99% can support XPILOT 2.5 or XPILOT 3.0; Revenues from vehicle sales increased 187.7% to $847.4M, mainly due to higher vehicle delivery, especially for the P7.

·     Impossible Foods Inc. said it raised about $500 million in a funding round at an undisclosed valuation

 

Energy, Industrials and Materials

·     American Woodmark (AMWD) Q2 adj EPS $0.62 vs. est. $0.86; Q2 revs rose 1% to $453.2M vs. est. $467.25M; Q2 net income decreased $21.1M; expect impact of confirmed pricing actions to increase in fourth fiscal quarter of 2022 by an additional $36M; expect adj ebitda margins to improve as price realization better matches inflationary impacts, improve productivity

·     Dycom (DY) Q3 adj EPS $0.95 vs. est. $0.69; Q3 revs $854M vs. est. $814.79M; said expects contract revenues for the quarter ending January 29, 2022 to increase modestly from Non-GAAP Organic Contract Revenues of $691.8M for the quarter ended January 30, 2021

·     India plans to sell about 5m bbl of oil from its strategic reserves as part of a U.S.-led initiative to rein in prices involving leading consumers – Bloomberg

·     Jacobs (J) Q4 adj EPS $1.58 vs. est. $1.57; Q4 revs $3.59B vs. est. $3.71B; backlog increased $2.8B to $26.6B, up 12% year-over-year

 

Financials

·     RE/MAX Holdings (RMAX) 3Q prelim adj EPS $0.71 vs est. $1.40 on revs $91Mm vs est. $88Mm; guides FY revs $326.5-330.5Mm vs est. $328.3Mm, sees FY adj EBITDA $116-119Mm vs est. $116Mm

·     Payment & Fintech stocks have cratered over the last month, taking a hit from renewed COVID fears, AMZN’s recent ban on Visa credit cards in the UK, wider acceptance of BNPL a threat and on possible regulatory changes after Jerome Powell is nominated for a second term; shares of Mastercard (MA), Visa (V), American Express (AXP) in cards fell, as well as FinTech’s, with Square (SQ) and PayPal (PYPL) down 2.1%

·     Guaranty Bancshares (GNTY) files $150M mixed securities shelf

·     SVB Financial’s (SIVB) investment-banking unit SVB Leerink is said in talks to purchase equities-research firm MoffettNathanson LLC, according to a Bloomberg report.

 

Healthcare

·     Pfizer (PFE) was awarded a $1.4B modification to a contract for an additional 200M doses of Pfizer’s COVID-19 vaccine for international donation.

·     Aadi Bioscience (AADI) surges after saying the U.S. FDA has approved FYARRO, its lead candidate for treatment of malignant perivascular epithelioid cell tumor

·     Agilent (A) Q4 adj EPS $1.21 vs. est. $1.17; Q4 revs rose 11% to $1.66B, in-line with ests.; sees Q1 EPS $1.16-$1.18 vs. est. $1.16 and revs $1.64B-$1.66b vs. est. $1.65B; sees FY22 adj EPS $4.76-$4.86 vs. est. $4.75; sees FY22 revenue $6.65B-$6.73B vs. est. $6.77B.

·     DexCom (DXCM) files automatic mixed securities shelf

 

Technology, Media & Telecom

·     Zoom Media (ZM) 3Q adj EPS $1.11 vs est. $1.09 on revs $1.05B vs est. $1.02B; guides FY revs $4.079-4.081B vs est. $4.017B; guides FY22 adj EPS $4.84-4.85 above prior $4.75-$4.79 and est. $4.78

·     Keysight Technologies (KEYS) 4Q adj EPS $1.82 vs est. $1.64 on revs $1.29B vs est. $1.46B, orders +21% to $1.49B; guides 1Q revs $1.225-1.245B vs est. $1.23B, sees 1Q adj EPS $1.50-1.56 vs est. $1.51

·     Tuya inc. (TUYA) 3Q EPS ($0.09) vs est. ($0.06) on revs $85.6Mm vs est. $84.8Mm; guides 4Q revs $72-77Mm vs est. $76.2Mm

·     SiTime Corp. (SITM) will replace Emergent BioSolutions Inc. (EBS) in the S&P MidCap 400, and Emergent BioSolutions will replace Domtar Corp. (UFS) in the S&P SmallCap 600 effective prior to the opening of trading on Tuesday, November 30. Paper Excellence B.V. is acquiring Domtar in a deal expected to be completed soon pending final conditions.

·     Samsung Electronics said it plans to build a $17 billion plant in Taylor, Texas, to make advanced chips for its contract-manufacturing, or foundry, business. Samsung rival Taiwan Semiconductor Manufacturing (TSM) has started construction on its $12 billion Arizona plant that will go into mass production in 2024.

·     Vivendi (VIVHY) has no plans to sell its stake in Telecom Italia, the French group said on Tuesday, reiterating it was a long-term investor in Italy’s biggest phone group and wanted to work with all stakeholders for its success