Morning Preview: August 25, 2021

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Early Look

Wednesday, August 25, 2021









S&P 500










U.S. stock futures are looking slightly higher with global stock markets generally quiet overnight as investors pause ahead of a Federal Reserve gathering at the end of the week. As for Tuesday, it was just another day of record highs for major averages (also another light volume rally), as Monday’s FDA full approval of a COVID-19 vaccine (from PFE/BNTX) and the absence of negative catalysts kept risk appetite alive ahead of the much-anticipated Jackson Hole Symposium later this week. All three major U.S. stock indexes advanced higher, with the S&P 500 and the Nasdaq closing at all-time closing highs. The session marked the S&P 500’s 50th record high close so far this year. Travel and leisure sectors, associated with economic re-engagement, outperformed the broader market. In Asian markets, The Nikkei Index was flat at 27,724, the Shanghai Index rose 25 points to 3,540 and the Hang Seng Index slipped -33 points to 25,683. In Europe, the German DAX slips about -25 points to 15,880, while the FTSE 100 is up around 10-ponts to 7,140. The yield on the benchmark 10-year Treasury rose Wednesday to 1.30%, while oil prices edge higher for a 3rd day and gold prices slip back below $1,800 an ounce.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 6.70 points, or 0.15%, to 4,486.23

·     The Dow Jones Industrial Average rose 30.55 points, or 0.09%, to 35,366.26

·     The Nasdaq Composite jumped 77.15 points, or 0.52%, to 15,019.80

·     The Russell 2000 Index advanced 22.61 points, or 1.02% to 2,230.91


Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM ET         Durable Goods Orders MoM for July

·     8:30 AM ET         Durable Goods Ex: Transportation MoM

·     10:30 AM ET      Weekly DOE Inventory Data


Earnings Calendar:

·     Earnings Before the Open: DKS, EXPR, PLAB, SCVL



Other Key Events:

·     American Association of Neurological Surgeons, 8/21-8/25, in Orlando, FL

·     UBS China Telco, Media, Internet Virtual Conference 2021, 8/23-8/27

·     Piper Sandler MedTech and Diagnostics California Bus Tour (virtual), 8/24-8/26

·     Raymond James Diversified Industrials Virtual Conference, 8/24-8/25





















10-Year Note





World News

·     The Democratic-controlled U.S. House of Representatives voted on Tuesday to advance key parts of President Joe Biden’s agenda after reaching a tentative compromise between moderates and progressives over which elements should take priority. The House voted to move forward on a package that would advance Biden’s ambitious plan for trillions of dollars to expand child care and other social programs, championed by the party’s progressive wing. The vote was 220-212 with no Republicans supporting the measure.

·     U.S. Vice President Kamala Harris on Wednesday again charged China with bullying its Southeast Asian neighbors, the second time in two days she has attacked Beijing during a regional visit, as Washington tries to rally regional partners to take on China’s growing economic and military influence.


Sector News Breakdown


·     Nordstrom (JWN) Q2 EPS $0.49 vs. est. $0.27; Q2 revs rose to $3.66B from $1.86B a year earlier and above the est. $3.36B; said timing shift of annual anniversary sale, had a negative impact of about 200 basis points on qtrly net sales compared with fiscal 2019; raises FY revenue outlook to above +35%, from prior +25% and sees FY Ebit margin 3% to 3.5%, saw about 3%

·     Toll Brothers (TOL) Q3 EPS $1.87 vs. est. $1.54; Q3 revs $2.26B vs. est. $2.24B; Net signed contract value was $2.98 billion, up 35% compared to FY 2020’s third quarter; contracted homes were 3,154, up 11%; Backlog value was $9.44 billion at third quarter end, up 55% compared to FY 2020’s third quarter; Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 25.6%

·     Urban Outfitters (URBN) Q2 EPS $1.28 vs. est. $0.77; Q2 sales $1.16B vs. est. $1.09B; 2Q Comp retail segment net sales up 22% driven by strong double-digit growth in digital channel sales, partially offset by low single-digit negative retail store sales due to reduced store traffic; Q2 comp Retail segment net sales increased 53% at the Free People Group, 20% at Urban Outfitters and 14% at the Anthropologie Group

·     Xponential Fitness, Inc. (XPOF) 2Q EPS ($0.33) vs est. ($0.22) on revs $35.8Mm vs est. $34Mm, qtrly system-wide comps +129%; guides FY revs $135.5-137Mm vs est. $135.5Mm

·     Limoneira (LMNR) sees Q3 revs $49M vs. est. $58.1M; expects q3 fiscal year 2021 operating income to increase approximately 80% compared to q3 fiscal year2020; said expects lemon prices to increase

·     Campbell Soup (CPB) downgraded to Neutral from Overweight at Piper Sandler

·     Shoe Carnival (SCVL) Q2 adj EPS $1.54 vs. est. $0.75; Q2 revs $332.2M vs est. $298.6M; sees FY EPS $4.35-$4.50 vs. est. $3.11 and revs $1.21B-$1.23B vs. est. $1.17B


Energy, Industrials and Materials

·     The American Petroleum Institute (API) showed a weekly draw of 1.62M barrels of oil for the week ending August 20; gasoline inventories showed a draw of 985K barrels, distillate inventories show a draw of 245K barrels and Cushing inventories show a draw of 485K barrels.

·     U.S. crude inventories are forecast to draw in weekly EIA data due later, after the API already reported a drop. Pemex expects to restore full crude output by Monday, about a week after a fire on a platform cut production by a quarter.

·     HEICO Corp. (HEI) Q3 EPS $0.56 vs. est. $0.55; Q3 sales $471.7M vs. est. $486.5M; says not providing fiscal 2021 net sales & earnings guidance

·     NextEra Energy (NEE) is asking the U.S. Department of Commerce to either force an anonymous group of U.S. solar panel makers to identify its members or reject their requests to extend tariffs on imported panels – Bloomberg report

·     Saia Inc. (SAIA) will move from the S&P SmallCap 600 and replace Bio-Techne (TECH) on the S&P MidCap 400; Saia will be replaced on the S&P SmallCap 600 by Biolife Solutions, Inc. (BLFS).



·     Intuit (INTU) 4Q adj EPS $1.97 vs est. $1.59 on revs $2.6B vs est. $2.32B; guides 1Q revs +36-38% incl Credit Karma vs est. +34%, sees 1Q and EPS $0.94-0.99 vs est. $1.14; guides FY22 adj EPS $11.05-11.25 vs est. $10.86, sees FY revs $11.05-11.2B vs $10.96B

·     Riot Blockchain (RIOT) files to sell 11.8M shares of common stock for holders

·     Private Equity firm TPG is said to hire JPMorgan (JPM) and Goldman Sachs (GS) for an initial public offering; TPG, which manages almost $100B in assets, plans to file confidentially for an IPO in the coming weeks – WSJ 

·     First American Financial (FAF) has received board approval to increase its shares repurchase plan to $600M from $300M



·     Cassava Sciences, Inc. (SAVA) shares fell over 20% after-hours; after a Citizen’s Petition filed earlier today on SAVA alleging data manipulation. The petition requests that the FDA halt the current clinical studies of Simufilam PTI-125 sponsored by Cassava Sciences NCT04388254 and NCT04994483

·     Cassava Sciences, Inc. (SAVA) responded to claims that were posted on-line yesterday after market hours. Cassava Sciences believes the claims made in this post regarding scientific integrity are false and misleading. The Company stands behind its science, its scientists and its scientific collaborators, and is responding to ensure the facts are known and respected

·     Bio-Techne Corp. (TECH) is joining the S&P 500, moving from the S&P MidCap 400 to replace Maxim Integrated Products Inc. (MXIM)

·     Option Care Health Inc., (OPCH) will replace Trustmark Corp. (TRMK) on the S&P MidCap 400, while Trustmark will replace Sykes Enterprises Inc. (SYKE) on the S&P SmallCap 600.


Technology, Media & Telecom

·     ScanSource (SCSC) 4Q adj EPS $0.96 vs est. $0.57 on revs $852.7Mm vs est. $733.9Mm; guides FY22 net sales at least +5.5% vs est. +5.1%, sees adj EBITDA at least $135Mm vs est. $127.1Mm; announces new $100M share buyback

·     Mimecast Ltd. (MIME) will join the S&P MidCap 400, replacing Cinemark Holdings, Inc. (CNK), which is joining the S&P SmallCap 600, replacing U.S. Concrete Inc. (USCR) which is being acquired by Vulcan Materials Co. (VMC)

·     21Vianet (VNET) Q2 EPS and revenue topped estimates; net revenues rose 43% to 1.50B yuan (about $231.9M) vs. a consensus of $228.3M; adjusted cash gross profit increased by 36.9%, to 640.2M yuan (about $99.2M); adjusted EBITDA rose 38.7% to 425.1M yuan (about $65.8M), and EBITDA margin rose to 28.4% from 26.8%

·     Photronics (PLAB) Q3 EPS $0.28 vs. est. $0.22; Q3 revs $170.6M vs. est. $168.3M; sees Q4 EPS $0.21-$028 vs. est. $0.25; sees Q4 revs $171M-$179M vs. est. $174.1M

·     Non-fungible token (NFT) sales surged in August, according to the largest platform for the digital asset class, as sales volumes recorded on the largest NFT trading platform, OpenSea, have hit $1.9 billion so far this month, more than ten times March’s $148 million. In January 2021, the monthly volume recorded on the platform was just over $8 million (watch shares of FNKO, PLBY, TKAT, ZKIN, DLPN which are among names that have been linked to NFT’s in the past)


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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