Early Look

Wednesday, December 15, 2021

Futures	Up/Down	%	Last
Dow	-2.00	0.01%	35,450
S&P 500	-3.25	0.08%	4,624
Nasdaq	-47.50	0.30%	15,874

 

 

U.S. stocks are holding steady ahead of the most important Federal Reserve policy meeting in several years as markets have “baked-in” a hawkish tone from Fed Chairman Powell in today’s statement later today after 2:00 PM with expectations the FOMC will issue an accelerated timeline for reducing its monthly bond purchases and provide hints of a mid-2022 rate hike as inflation continues to surge past previous targets. Inflation readings over the last week (both CPI and PPI) have risen concern that the Fed is indeed behind the curve, discounting just how strong the spike in consumer/producer prices have been on the economy. Meanwhile, a sour outlook in China overnight as China saw a big miss on November retail sales in China and the fastest reading of U.K. inflation in at least 10 years. Also, the WHO said late yesterday that “Omicron is spreading at a rate we have not seen with any previous variant,” citing Director-General Tedros Adhanom Ghebreyesus. “Even if Omicron does cause less severe disease, the sheer number of cases could once again overwhelm unprepared health systems. In Asian markets, The Nikkei Index rose 0.1% to 28,459, the Shanghai Index fell -0.38% to 3,647, and he Hang Seng Index dropped -215 points or 0.9% to 23,420. In Europe, the German DAX is higher by 50 points to 15,505, while the FTSE 100 slips -0.2% to 7,200. U.S. stocks slid for a second day this week ahead of the Fed meeting, pulling back off all-time highs late last week for the S&P 500.

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM ET         Empire Manufacturing Index for December…est. 25.0

·     8:30 AM ET         Import Prices MoM for November…est. +0.7%

·     8:30 AM ET         Export Prices MoM for November…est. +0.5%

·     8:30 AM ET         Retail Sales MoM for November…est. +0.8%

·     8:30 AM ET         Retail Sales – Ex: Autos MoM for Nov…est. +0.9%

·     10:00 AM ET      Business Inventories MoM for October…est. +1.1%

·     10:00 AM ET      NAHB Housing Market Index for December…est. 83

·     10:30 AM ET      Weekly DOE Inventory Data

·     2:00 PM ET         FOMC Meeting Results – no rate change expected

·     4:00 PM ET         Net Long-term TIC Flows for October

 

Earnings Calendar:

·     Earnings Before the Open: ABM, NMTC, REVG, TTC

·     Earnings After the Close: BLBD, ENZ, HEI, IRNT, LEN, NDSN

 

Other Key Events:

·     Cowen 7th Annual Software Bus Tour (virtual), 12/14-12/15

·     Mizuho San Francisco Multi-Asset Property Tour, 12/14-12/16, in San Francisco, CA

·     RBC Capital Healthcare Private Company Conference (virtual), 12/15-12/16

·     Wolfe Global Consumer Growth Conference (virtual), 12/14-12/15

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -34.88 points, or 0.75%, to 4,634.09

·     The Dow Jones Industrial Average fell -106.77 points, or 0.30%, to 35,544.18

·     The Nasdaq Composite slumped -175.64 points, or 1.14%, to 15,237.64

·     The Russell 2000 Index declined -20.85 points, or 0.96% to 2,159.65

 

 

Macro	Up/Down	Last
Nymex	-1.08	69.65
Brent	-1.08	72.62
Gold	-2.00	1,768.85
EUR/USD	0.0008	1.1267
JPY/USD	0.12	113.82
10-Year Note	+0.005	1.445%

 

 

World News

·     Chinese retail sales YoY actual 3.9% below the est. forecast 4.7% and previous 4.9% reading; Chinese industrial output YoY actual 3.8% vs. est. 3.7%, and previous 3.5%; Chinese unemployment rate actual 5% vs. forecast 4.9%

·     The Senate approves a $2.5T debt limit increase, sending the bill to the House in a move to avert defaulting on U.S. debt. The 50-49 vote along party lines comes a day before Treasury Secretary Janet Yellen’s estimate for when the Treasury would run out of ways to pay its bills.

·     The U.S. government is set to add several China-based companies to an investment blacklist, the Financial Times reported Wednesday, as economic tensions between Washington and Beijing continue to escalate

·     UK Nov CPI higher at 0.7% m/m vs 0.4% consensus, 5.1%y/y vs 4.7% consensus; UK Nov Core CPI higher at 0.5% m/m vs 0.3% consensus, 4.0% y/y vs 3.7% consensus; UK Nov PPI Input higher at 1.0% m/m vs 0.5% consensus; 14.3% y/y vs 13.0% previous

·     Bank of Japan’s Kuroda said the BOJ will patiently maintain monetary easing so that we get as quickly as possible to conditions where PX rises are in step with economic recovery, the economy is not in stagflation, the rise in corporate wholesale PX is not transferring straightaway into higher consumer inflation, there’s a possibility consumer inflation may get to 2% thru various

 

Sector News Breakdown

Consumer

·     Lulu’s Fashion Lounge Holdings, Inc. (LVLU) 3Q EPS $0.13 vs est. $0.08 on revs $106.3Mm vs est. $105.4Mm; guides FY revs $370-372Mm vs est. $368.2Mm and adj EBITDA $38-39Mm vs est. $37.7Mm

·     Conn’s (CONN) authorizes $150M share repurchase program

·     DavidsTea (DTEA) Q3 sales fell 15.3% to C$22.2M and had EPS loss (-C$0.07)

·     Laureate Education (LAUR) raises share repurchase program to $600M from $500M

·     Six Flags (SIX) upgraded to Buy from Neutral at Goldman Sachs and raise tgt to $52 from $47

·     Hitachi and REE Automotive (REE) agree on collaboration to advance and simplify the adoption of sustainable electric vehicles globally

·     Leslie’s (LESL) announces offering of 12.5M shares of common stock for holders

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reported crude oil stockpiles declined 815K barrels last week, gasoline inventories reportedly increased by 425K barrels, while distillate inventories fell by 1.0M barrels

·     UPS (UPS) upgraded to Buy from Neutral at Citigroup and raise tgt to $250 from $245

 

Financials

·     Capital One (COF) November Domestic credit-card net charge-off rate 1.66% vs. 1.04% in Oct; Domestic credit-card 30-day delinquency rate 2.13% vs. 2.06% in Oct; November auto net charge-offs rate 0.48% vs 0.53% In October

·     KeyCorp (KEY) upgraded to Buy from Underperform at Bank America and raise tgt to $27 from $25

·     Discover Financial Services’ (DFS) credit card delinquency rate of 1.60% vs. 1.55% in the prior month, down from 2.03% in the same year-ago period; net charge-offs rises to 1.53% from 1.40% in October, but well below 2.55% YoY

·     Franklin Resources (BEN) raises quarterly dividend 4% to 29c per share

·     HBT Financial (HBT) has announced a new stock repurchase program to buyback up to $15M of its common stock.

 

Healthcare

·     Incyte (INCY) announces acceptance and priority review of sNDA for ruxolitinib cream (Opzelura™) as a treatment for patients with vitiligo

·     Legend Biotech (LEGN) offers to sell $300M in in ADS

·     Bellus Health (BLU) 25M share Secondary priced at $8.00

·     Genenta Science (GNTA) 2.4M share IPO priced at $11.50

·     Regeneron (REGN) downgraded to Market Perform from Outperform at Bernstein

·     Moderna (MRNA), Amgen (AMGN), and Sarepta Therapeutics (SRPT) have pulled out of the J.P. Morgan Healthcare Conference, the biggest meeting on biotech’s calendar, over the health risk of in-person gatherings, STAT News has learned.

 

Technology, Media & Telecom

·     Samsara (IOT) 35M share IPO priced at $23.00

·     MSG Sports (MSGS) downgraded to Equal Weight from Overweight at Morgan Stanley

·     Unity Software (U) files to sell up to 3.5M shares of common stock by selling stockholder

·     Aspen Group (ASPU) 2Q EPS ($0.11) vs est. ($0.04) on revs $18.9Mm vs est. $19.95Mm; guides FY22 revs $77-80Mm vs est. $85Mm and prior guide $85-88Mm; sees adj EBITDA ($2.0Mm)-$0.0Mm vs est. $3.2Mm and prior guide $2.0-4.0Mm

·     Skillsoft Group (SKIL) raises full year outlook following stronger than expected result; sees FY 2022 adjusted revenue in the range of $685M-$700M from prior view $670M-$690M and adjusted revenue and updated its outlook for adjusted EBITDA to the midpoint of the previous range; Q3 revs $170.6M vs. est. $168.5M

·     Cohu (COHU) announced that it is updating its mid-term financial target model, or 3-5 goal, to annual revenue of $1B and non-GAAP EPS of $4.00 to better reflect its projected revenue and margin growth

·     Trump Media & Technology Group (DWAC) announces partnership with Rumble Inc.

·     R. R. Donnelley & Sons Company’s (RRD) board accepts Chatham Asset Management’s $10.85 per share all-cash offer, a 4.8% premium over the rejected Atlas Holdings LLC offer of $10.35 per share, in a deal valued at approximately $2.3B