Early Look

Tuesday, April 20, 2021

Futures	Up/Down	%	Last
Dow	-152.00	0.45%	33,806
S&P 500	-18.25	0.45%	4,136
Nasdaq	-59.50	0.43%	13,837

 

 

Stock futures are looking lower to start the day, adding to yesterday’s modest declines as attention turns to earnings with Dow component IBM posting a beat last night as did pharma giant JNJ this morning. Markets are also keeping a watchful eye on the Covid-19 virus, with accelerating infection trends occurring in Asia and South America. Stocks dropped Monday as the S&P 500 and Dow Jones each pulled off record highs of last week, with around 80 S&P components expected to report earnings in total this week. In Asian markets, The Nikkei Index fell -584 points to 29,100, the Shanghai Index dipped -4 points to 3,472 and the Hang Seng Index rose 29 points to 29, 135. In Europe, the German DAX is lower by 110 points to 15,255, while the FTSE 100 is down about -65 points to 6,930.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -22.21 points, or 0.53%, to 4,163.26

·     The Dow Jones Industrial Average fell -123.04 points, or 0.36%, to 34,077.63

·     The Nasdaq Composite dropped -137.58 points, or 0.98%, to 13,914.77

·     The Russell 2000 Index declined -30.67 points, or 1.36% to 2,232.00

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABT, AN, BMI, CMA, DOV, FITB, GATX, HOG, IRDM, JNJ, KEY, LMT, MAN, MBWM, NTRS, OMC, PEBO, PG, PM, SFNC, SI, SNV, TRV, WBS, XRX

·     Earnings After the Close: CSX, EQBK, EW, FMBI, FOR, FULT, HWC, IBKR, ISRG, LRN, NFLX, PFBC, PFC, PZN, SMBK, THC, UCBI, WRB

 

 

Macro	Up/Down	Last
Nymex	0.62	64.00
Brent	0.70	67.75
Gold	-2.00	1,769.40
EUR/USD	0.0018	1.2055
JPY/USD	0.24	108.41
10-Year Note	-0.001	1.598%

 

 

World News

·     Canada’s Liberal government outlined Monday a multiyear spending plan, equal to about 4% of its gross domestic product, which it says will secure the recovery from pandemic-induced depths, set the stage for stronger longer-term growth and address gaps Covid-19 exposed in the country’s social-safety net. Canada’s budget plan for 2021 calls for outlays of about 100 billion Canadian dollars, or the equivalent of $79 billion, over a three-year period

·     The RBA said it won’t raise cash rate until actual inflation is sustainably in 2-3% target band, will maintain cash rate at 0.1% for as long as needed, will maintain highly supportive mon pol until employment & inflation goals are met, remain committed to 3 y AGB yield target of 0.1%, Board is prepared for further bond purchases beyond A$200b if it helps with progress towards goals

 

Sector News Breakdown

Consumer

·     Dave & Buster’s (PLAY) raises Q1 revenue view to $252M-$257M from $210M-$220M (est. $217.27M); provided an update on business trends through April 18 representing the first 11 weeks of its 13-week fiscal Q1; as of April 18, through the first eleven weeks of 1q, overall comparable store sales were down 38% compared to 2019 levels

·     Nike (NKE) downgraded to Neutral from Buy at Citigroup and cut tgt to $140 from $160

 

Energy, Industrials and Materials

·     Oil futures rise about 1% to $68 a barrel on Brent, its highest in a month, lifted by disruption to Libyan exports and expectations of a drop in U.S. crude inventories. Libya declared force majeure on exports from the port of Hariga and said it could extend the measure to other facilities, citing a budget dispute.

·     Dover (DOV) Q1 EPS $1.81 on revs $1.87B; raises year revenue growth outlook to up 10%-12%

·     Hexcel (HXL) Q1 adj EPS loss (10c) vs. est. loss (17c); Q1 sales $310M 9down from $541M same period a year ago) vs. est. $299.5M; Strong liquidity at March 31, 2021 included cash of $82 million and revolver borrowing availability of $536 million

·     Crown Holdings (CCK) Q1 adj EPS $1.83 vs. est. $1.39; Q1 revenue $3.08B vs. est. $2.98B; sees Q2 adj EPS $1.70-$1.80 vs. est. $1.65; backs FY21 adjusted EPS view $6.60-$6.80 vs. est. $6.86

·     Vale (VALE) reports Q1 2021 production fell from Q4 2020; citing normal seasonal factors, Vale says Q1 iron ore production fell 19.5% Q/Q while rising 14.2% Y/Y to 68M metric tons, below the 72M-ton average analyst estimate; Q1 iron ore sales fell 28.4% Q/Q while rising 14.8% Y/Y to 59.3M mt, while sales of pellets fell 26.1% Q/Q and fell 14.2% Y/Y to 6.3M mt

·     Otis Worldwide (OTIS) raises quarterly dividend 20% to 24c per share

·     Steel Dynamics (STLD) Q1 adj EPS $2.10 vs. est. $1.96; Q1 sales $3.5B vs. est. $3.41B; says Q2 earnings will be even higher than our record Q1 2021 results; Q1 near-record steel shipments of 2.8 million tons and record steel fabrication shipments of 184,000 tons; had record operating income of $594 million and record net income of $431 million

·     United Airlines (UAL) Q1 EPS loss ($7.50) vs. est. loss ($7.02); Q1 total rev $3.2B, down 66% relative to 2019 levels vs. est. $3.26B; ; no impairment was recorded due to temporary removal all 52 Boeing 777-200/200er aircraft powered by Pratt & Whitney 4000 series engines; capacity -54% yr/yr, returned to core cash flow positive in month of March, says demand coming back in a robust way and customers want to fly again, says leisure demand now above 2019 levels in many markets

·     Genco Shipping (GNK) says targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022

 

Financials

·     PayPal (PYPL) said that its Venmo peer-to-peer payment platform has launched Crypto on Venmo, in which users can buy, hold and sell cryptocurrency with the app with as little as $1

·     Synovus (SNV) Q1 adj EPS $1.21 vs. est. 92c; Q1 revenue $485.6M vs. est. $486.31M; Q1 net interest margin of 3.04% vs 3.12% sequentially

·     American Campus Communities (ACC) 1Q adj FFO/share $0.57 vs. est. $0.55; 1Q revs $232.7Mm vs. est. $219.3Mm; expects 2Q FFO/share $0.33-0.37 vs. est. $0.38

·     Everest (RE) provides prelim 1Q catastrophe losses; total pandemic loss provision is $511m, sees 1q total pretax net catastrophe losses of $260 million

·     F.N.B. (FNB) Q1 EPS 28c vs. est. 26c; Q21 revs $306M vs. est. $311.3M; Q1 pre-provision net revenue $120.9M; Q1 growth in total average loans was $1.9B and Q1 total average deposits grew $4.7B, or 19.3%; Q1 net interest income totaled $222.9 mln, decreasing $9.7 mln, or 4.2%

·     Futu Holdings (FUTU) announces offering of 9.5M American depositary shares

·     Genworth Mortgage Holdings, wholly owned subsidiary of Genworth Financial (GNW) files initial public offering.

·     Primerica (PRI) agrees to acquire 80% of e-Telequote at an enterprise value of $600M, a deal in which e-Telequote’s specialized technology platform and sales centers align with Primerica’s distribution capabilities.

·     ServisFirst Bancorp (SFBS) 1Q EPS $0.95, in-line with ests; NII $94.2Mm vs. est. $93.6Mm

·     Zions Bancorp (ZION) Q1 EPS $1.90 vs. est. $1.17; qtrly provision for credit losses was a negative $132 million, compared with a positive $258 million; qtrly net interest income was $545 million, compared with $548 million

 

Healthcare

·     Johnson & Johnson (JNJ) Q1 adjusted EPS 2.59 vs. est. $2.34; Q1 revenue $22.32B vs. est. $21.98B; raises FY21 adjusted EPS view to $9.30-$9.45 from $9.25-$9.45 (est. $9.50) and boosts FY21 operational sales view to $89.3B-$90.3B from $88.8B-$90B (est. $92.23B)

·     Johnson & Johnson (JNJ) said it has submitted an application to India’s drug regulator requesting approval to conduct a bridging clinical study of its single-dose COVID-19 vaccine in the country.

·     The U.S. House of Representatives on Monday passed legislation that would allow banks to provide services to cannabis companies in states where it is legal, a step towards removing what analysts say is a barrier to development of a national industry. Lawmakers voted 321-101 to approve the bill and send it to the Senate.

·     Incyte (INCY) and MorphoSys announce first patient dosed in phase 3 Inmind study evaluating the addition of tafasitamab to lenalidomide and rituximab in relapsed or refractory follicular or marginal zone lymphoma

 

Technology, Media & Telecom

·     IBM Corp. (IBM) Q1 adj EPS $1.77 vs. est. $1.63; Q1 revs $17.73B vs. est. $17.34B; qtrly total cloud rev of $6.5 bln, up 21% (up 18% adjusting for divested businesses & currency); expects to grow revenue for FY 2021 based on mid-April 2021 foreign exchange rates; expects adjusted free cash flow of $11 bln to $12 bln in 2021; Q1 gross margin 46.3%; Red Hat revenue up 17% (up 15% adjusting for currency), normalized for historical comparability)

·     J2 Global, Inc. (JCOM) announced its plan to separate the company into two independent publicly traded companies — J2 Global and Consensus — through a spin-off of at least 80.1% of the outstanding shares of Consensus common stock to J2 shareholders.

·     Rambus Inc. (RMBS) announced a commercial licensing agreement with the U.S. Defense Advanced Research Projects Agency (DARPA) to accelerate technology innovation for the agency’s programs

·     InterDigital (IDCC) announced that its patent holding subsidiaries have renewed their multi-year, worldwide, non-exclusive, royalty bearing patent license agreement with Sharp

·     Xerox (XRX) Q1 adjusted EPS 22c vs. est. 30c; Q1 revenue $1.71B vs. est. $1.59B; says 1Q still experiencing impact of pandemic; affirms guidance

·     Troika Media (TRKA) 5.78M share IPO price $4.15