Early Look

Tuesday, November 30, 2021

Futures	Up/Down	%	Last
Dow	-408.00	1.16%	34,669
S&P 500	-43.25	0.92%	4,608
Nasdaq	-73.50	0.45%	16,317

 

 

U.S. futures fall alongside weakness in Asia and Europe, with the 10-yr yield tumbling over 10 bps to 1.43%, and S&P futures slide over 1% or 46 points to the 4,600 level with comments from vaccine maker Moderna (MRNA) CEO weighing, saying that the existing COVID-19 vaccines would be less effective against the Omicron variant than they have been against the Delta variant. Meanwhile reports of at least 14 people on flights from Johannesburg and Capetown arrived in the Netherlands carrying the new variant, the National Institute for Public Health (RIVM) said (Reuters). The renewed virus fears (after receding the day prior) has global futures lower and bonds higher, with the energy, travel, leisure sectors again seeing the biggest hits on slowing demand/growth concerns. Later today, Fed Chair Jerome Powell and Treasury Secretary Janet Yellen are due to testify before the U.S. Senate Banking Committee at 10 a.m. EST (1500 GMT) to discuss the economic recovery from the COVID-19 pandemic. They will also appear before the House of Representatives Financial Services Committee on Wednesday. In Asian markets, The Nikkei Index dropped 462 points (1.63%) to 27,821, the Shanghai Index edged higher by one point to 3,563 and the Hang Seng Index slid -1.58% or 376 points to 23,475. In Europe, the German DAX is down over 200 points or 1.4% to 15,068, while the FTSE 100 slips around 1% to 7,040. The weakness comes a day after stocks bounced solidly following Friday’s big sell-off, as President Biden said economic lockdowns in response to the omicron Covid variant are currently off the table, as the Nasdaq outpaces the S&P 500, and Dow Jones as Megacaps outperform Smallcaps again with the Russell 2000 actually ending Monday’s session negative despite the S&P 500 posting its best day in 6-weeks. The 10-year Treasury yield bounced after Friday’s slide, but pared gains up 3 basis points to 1.52%. All S&P sectors finished higher with Info Tech and Consumer Discretionary the leaders.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 60.65 points, or 1.32%, to 4,655.27

·     The Dow Jones Industrial Average rose 236.60 points, or 0.68%, to 35,135.94

·     The Nasdaq Composite jumped 291.18 points, or 1.88%, to 15,782.83

·     The Russell 2000 Index declined -3.96 points, or 0.18% to 2,241.98

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:00 AM ET         Monthly Home Price Index MoM for September

·     9:00 AM ET         CaseShiller 20 City Index for September

·     9:45 AM ET         Chicago PMI for November

·     10:00 AM ET      Consumer Confidence for November

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BNED, CHS, CTRN, INFA

·     Earnings After the Close: AMBA, BIRD, BOX, CRM, EMKR, HPE, NTAP, ZS

 

Other Key Events:

·     BTIG Ophthalmology Day (virtual)

·     Canaccord 2021 Digital Gaming Summit (virtual), 11/30-12/1

·     Cowen 4th Annual Cannabis Virtual Conference (virtual), 11/29-12/1

·     Credit Suisse 25th Annual Technology, Media & Telecom Conference, 11/29-12/2, in Arizona

·     Evercore/ISI 4th Annual HealthCONx Conference, 11/30-12/2, in Boston

·     KeyBanc Enterprise Tech Leadership Series & Mosaic Summit (virtual), 11/29-12/1

·     Mizuho Annual U.S. Utility Summit 2021 (virtual), 11/29-11/30

·     Morgan Stanley Nasdaq Investor Conference (virtual), 11/30-12/3

·     Morgan Stanley Global Consumer & Retail Conference (virtual), 11/30-12/2

·     Piper 33rd Annual Healthcare Conference (virtual), 11/29-12/2

·     China Caixin Manufacturing PMI for November

 

 

Macro	Up/Down	Last
Nymex	-1.91	68.04
Brent	-1.99	71.45
Gold	9.40	1,794.00
EUR/USD	0.0069	1.1360
JPY/USD	-0.77	112.74
10-Year Note	-0.105	1.424%

 

 

World News

·     U.S. Treasury Secretary Janet Yellen urged Congress to raise the U.S. debt limit or risk undermining what she described as the U.S. economy’s “quite remarkable” recovery from the COVID-19 pandemic. Yellen, in remarks prepared for a Senate Banking Committee hearing on Tuesday, said she was confident “at this point” that U.S. economic growth remained strong, but said failure to deal with the debt limit would “eviscerate” the recovery.

·     Fed Chairman Powell said late yesterday the rise in Covid cases, & Omicron variant pose downside risks to employment & increase uncertainty for inflation, factors pushing up inflation will last well into next year, inflation is running well above 2% target pushed up by pandemic related supply/demand imbalance, continues to think inflation will move significantly lower next year, Fed will use all its tools to support economy/labor market & prevent higher inflation become embedded

·     NATO foreign ministers are meeting here Tuesday to calibrate a response to Russia’s military buildup around Ukraine, seeking to deter the Kremlin from any potential assault while making clear the limits of its support – Reuters

·     China manufacturing PMI reported at 50.1 vs 49.7 estimate and non-manufacturing PMI was 52.3 topping the 51.5 estimate

·     Euro zone inflation soared to its highest rate on record this month on surging energy costs, as consumer price growth in the 19 countries sharing the euro accelerated to 4.9% in November, the highest level in the 25 years since the figure has been compiled, and up from 4.1% a month earlier

 

Sector News Breakdown

Consumer

·     Dollar Tree (DLTR) downgraded to Neutral from Buy with a price target of $150, up from $116 at Goldman Sachs citing an expected shift by the low-end consumer to focus on essentials while the company’s initiatives are largely focused on discretionary expansion; the fact that traffic continues to decline at both of the company’s banners despite lapping easy comparisons; and a view that shares are trading at a full valuation

 

Energy, Industrials and Materials

·     Air Lease Corporation (AL) announced the delivery of one new Airbus A321-200neo aircraft on long-term lease to China Airlines. Featuring Pratt & Whitney PW1133G-JM engines, this is the first of six new A321-200neos confirmed to deliver to the airline from ALC’s orderbook with Airbus

·     Array Technologies (ARRY) announces $325M convertible senior notes offering

·     JinkoSolar (JKS) Q3 EPS $0.01 vs. est. $0.02; Q3 revs $1.33B vs. est. $1.34B; sees Q4 revenue $1.8B-$2.2B below consensus $2.24B

·     SolarEdge (SEDG) downgraded to Equal Weight from Overweight at Morgan Stanley

 

Financials

·     Square (SQ) upgraded to Neutral from Underperform at Bank America and raised its tgt to $221 from $210

·     Bank of Nova Scotia (BNS): Q4 Non-GAAP EPS of C$2.10 beats by C$0.20; GAAP EPS of C$1.97; revenue of C$7.69B (+2.5% Y/Y) misses by C$260M; Q4 provision for credit losses was a net reversal of C$50M, compared to a net reversal of C$27M last quarter, a decrease of C$23 million

·     Intuit (INTU) 1.55M share Secondary priced at $668.95

·     R.R. Donnelley & Sons Company (RRD) announced that it has received a proposal from Chatham Asset Management, LLC to acquire all of the outstanding shares of RRD not already owned by Chatham for $10.25 per share in cash

 

Healthcare

·     Moderna (MRNA) CEO warned that the existing COVID-19 vaccines would be less effective against the Omicron variant than they have been against the Delta variant.

·     AstraZeneca PLC (AZN) said the FDA granted priority review to an application for expanded use of Lynparza, the cancer drug it developed with Merck (MRK), in BRCA-mutated HER2-negative high-risk early breast cancer.

·     Molecular Partners (MOLN) rises after saying its experimental COVID-19 antiviral therapy, ensovibep, retains activity against the individual positions that are mutated in the new Omicron coronavirus variant

·     Krystal Biotech (KRYS) announces $200M public offering of common stock

·     Olema Pharmaceuticals, Inc. (OLMA) said it has been alerted to falsified information circulating on social media relating to the company’s planned poster presentation for the phase 1 dose-escalation portion of the ongoing phase 1/2 clinical trial of op-1250 at the San Antonio breast cancer symposium; the falsified poster image was not released or authorized by the company

·     UnitedHealth (UNH) raises FY21 adjusted EPS view to $18.75-$18.90 from $18.65-$18.90 vs. est. $18.85; sees FY21 revenue view $287B vs. est. $286.02B ahead of its annual investor conference which takes place on November 30; cash flows from operations are expected to range from $23 billion to $24 billion in 2022.

 

Technology, Media & Telecom

·     The U.K.’s Competition and Markets Authority has found that the merger between Facebook (FB) and Giphy “has resulted or would result in a substantial lessening of competition in social media and display advertising, harming social media users and businesses