Early Look

Thursday, December 16, 2021

Futures	Up/Down	%	Last
Dow	281.00	0.78%	36,097
S&P 500	42.25	0.90%	4,742
Nasdaq	170.50	1.05%	16,456

 

 

U.S. futures are surging, with the S&P 500 looking to open at new all-time highs and Dow futures rising 800 points off yesterday’s low as yesterday’s FOMC policy meeting outlook did nothing to dent investor optimism about rates and the economy. The strong move in global markets comes ahead several other central bank meetings later this morning including the Bank of England, European Central Bank, the Bank of Japan, and others. Earlier on Thursday the Swiss National Bank kept its ultra-loose stance in place with a policy rate locked in at -0.75%. In Asian markets, The Nikkei Index jumped over 600 points or 2.13% to 29,066, the Shanghai Index gained +0.75% to 3,675, and the Hang Seng Index rose 50 points to 23,475. In Europe, the German DAX is up nearly 300-points or 1.7% to 15,765, while the FTSE 100 rises 1.25% to 7,260. Yesterday, the Fed said it will double the rate at which it tapers its asset purchases and kept rates constant for now, but they now expect three hikes in each of the next two years. The move higher in equities reversed a decline on macroeconomic data from across the globe.

Market Closing Prices Yesterday

·     The S&P 500 Index rose 75.66 points, or 1.63%, to 4,709.75.

·     The Dow Jones Industrial Average climbed 382.59 points, or 1.08%, to 35,926.77.

·     The Nasdaq Composite jumped 327.94 points, or 2.15%, to 15,565.58.

·     The Russell 2000 Index advanced 35.56 points, or 1.65% to 2,195.21.

 

Events Calendar for Today

·     8:30 AM ET       Weekly Jobless Claims…est. 200K

·     8:30 AM EST     Continuing Claims…est. 1.936M

·     8:30 AM ET       Housing Starts MoM for November…est. 1.568M

·     8:30 AM ET       Building Permits MoM for November…et. 1.663M

·     8:30 AM ET       Philly Fed Business Survey for December…est. 30.0

·     9:15 AM ET       Industrial Production MoM for November…est. +0.7%

·     9:15 AM ET       Capacity Utilization for Dec…est. 76.8%

·     9:45 AM ET       Markit Manufacturing PMI, Dec-F…est. 58.5

·     9:45 AM ET       Markit Services PMI, Dec-F…est. 58.5

·     9:45 AM ET       Markit Composite PMI, Dec-F

·     10:30 AM ET     Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET     Kansas City Fed Survey for December

 

Earnings Calendar:

·     Earnings Before the Open: JBL

·     Earnings After the Close: ADBE, EXFY, FDX, GTIM, NX, RIVN, SCS, YCBD

 

Other Key Events:

·     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

 

 

Macro	Up/Down	Last
Nymex	1.16	72.03
Brent	1.11	74.99
Gold	9.40	1,786.30
EUR/USD	0.0005	1.1290
JPY/USD	0.15	114.18
10-Year Note	-0.028	1.434%

 

 

World News

·     AAII bulls down 3.5 to 25.2%, lowest since September; Bears +9 to 39.3%.

·     Brazil’s central bank raised its estimates for inflation in 2021 and 2022 and cut its economic growth forecast for this year and next year. Consumer prices is expected to rise 10.2% this year, the bank said in its quarterly inflation report, up from its forecast of 8.5% three months ago. The bank raised its inflation forecast for next year to 4.7% from 3.7% in its September report.

·     The Swiss National Bank kept its ultra-loose stance in place with a policy rate locked in at -0.75%.

·     Eurozone Dec Services PMI (flash) missed: 53.3 vs 54.1 consensus

·     Eurozone Oct Trade Balance smaller surplus: +€3.6b vs +€7.6b consensus

·     German Dec Manufacturing PMI (flash) beat: 57.9 vs 56.8 consensus

·     German Dec Services PMI (flash) missed: 48.4 vs 51.0 consensus

 

Sector News Breakdown

Consumer

·     Lennar (LEN) Q4 adj EPS $3.91 vs est. $4.16 on revenue $8.43B vs est. $8.51B, net new orders +2% to 15,539 vs est. 15,263, backlog +26% to 23,771 homes; sees Q1 new orders 14K-15.1K vs est. 15.5k, expects to deliver ~12.5K homes (est. 14,423) at gross margin ~26.75% (est. 26.9%) in the quarter

·     Canoo (GOEV) increased its production target, now expecting to build 3K-6K EVs next year vs prior forecast of 500-1K, 14K-17K in 2023 from 15K, and is targeting 2024 EV production of 40K-50K units with 70K-80K in 2025 as it accelerates its production shift to the U.S. from Europe

·     Truist initiated Buy ratings on Nike (NKE) with a $190 PT, Ralph Lauren (RL) with a $141 PT, Ross Stores (ROST) with a $136 PT, Dick’s Sporting Goods (DKS) with a $161 PT, Burlington Stores (BURL) with a $350 PT, and TJX Companies (TJX) with a $92 PT; and Hold ratings on PVH with a $100 PT, Lululemon (LULU) with a $435 PT, Under Armour (UAA) with a $24 PT, and VF Corp (VFC) with a $79 PT

·     Wayfair (W) downgraded to Underperform from Neutral at Bank America with a price target of $175, down from $265

·      J.M. Smucker (SJM) to sell its natural and organic beverage and grains businesses to Nexus Capital Management LP in a cash transaction at ~$110M

 

Financials

·     BNY Mellon (BK) upgraded to Overweight from Neutral at JPMorgan

·     Robinhood (HOOD) was rated as a new Underperform with a $22 price target at Bank of America

·     Synchrony (SYF) increased its buyback authorization by $1B

·     Visa (V) board authorizes new $12B share repurchase program

·     Focus Financial (FOCS) 3.084M share Spot Secondary priced at $57.00

 

Healthcare

·     Assertio (ASRT) rises after the company announced the $44m acquisition of the Otrexup device from Antares Pharma in a partially seller financed transaction.

·     Calliditas Therapeutics (CALT) shares spiked after the FDA granted accelerated approval of its TARPEYO to reduce proteinuria in IgA Nephropathy yesterday afternoon

·     Enzo Biochem (ENZ) Q3 revenue fell -7.6% YoY to $26.5M as adj EPS and EBITDA swung to a loss from profit in 3Q20

·     Immix Biopharma (IMMX) 4.2M share IPO priced at $5.00

·     Novartis AG (NVS) said it was launching a new share buyback of up to $15 billion to be executed by the end of 2023, adding it was confident in its top line growth and deep pipeline; confirmed it expected sales to grow by 4% or more through 2026

·     SAB Biotherapeutics (SABS) rises after announcing data, demonstrating that SAB-185, a therapeutic candidate for the treatment of COVID-19 infections, retains neutralization activity against the Omicron SARS-CoV-2 variant

·     Syndax (SNDX) 3.16M share Spot Secondary priced at $17.50

·     Verrica Pharmaceuticals (VRCA) announced that the U.S. FDA acknowledged that Verrica’s resubmitted New Drug Application for VP-102 for the treatment of molluscum contagiosum was complete and assigned a Prescription Drug User Fee Act goal date of May 24, 2022

 

Industrials & Materials

·     Qantas Airways picked Airbus (EADSY) as the preferred supplier to replace its domestic fleet, switching from Boeing (BA) in a major win for the European plane maker. The Australian national airline said it had committed to buying 20 Airbus A321XLR planes and 20 A220-300 jets, along with options for 94 aircraft

·     Air Lease (AL) announced the delivery of one new Airbus (EADSY) A350-1000 aircraft on long-term lease to Air Caraibes Atlantique and one new Airbus A350-1000 to FrenchBee

·     Blue Bird Corporation (BLBD) Q4 adj EPS 7c vs est. 19c on sales $192.2M vs est. $242.5M as supply chain disruptions resulted in more than 2,000 bookings being delayed to fiscal 2022 and current order backlog of more than 4,200 buses has filled production slots through 1H22; sees FY22 revenue $750M-$850M vs est. $879.9M; also announced a $75M private placement at $16/share

·     Heico (HEI) Q4 EPS $0.62 vs est. $0.59 on sales $509.4M vs est. $503.2M; is not providing FY22 sales and earnings guidance due to it being very difficult to predict the Pandemic’s path and effect which can impact key markets

·     Flexsteel (FLXS) now sees Q2 sales $137M-$143M from $130M-$140M but anticipates an adj operating loss in the quarter as supply chain challenges drives higher than expected ocean container ancillary expenses before returning to adj profit in Q3 and Q4

·     Nordson (NDSN) Q4 EPS $1.88 vs est. $2.10 on revenue $599M vs est. $617.5M; sees Q1 adj EPS $1.80-$1.95 (est. $1.71) on sales +14-16%; sees FY22 adj EPS +8-18%, sales +6-10%

·     APi Group (APG) raised FY21 revenue outlook to at least $3.8B from prior range of $3.65B-$3.75B and above est. $3.76B

 

Technology, Media & Telecom

·     Apple (AAPL) iPhone sales decelerating in China Unit sales of the new iPhone 13 started slowing down in China during November when Apple saw its share of China’s smartphone market fall below 20%, according to data from the China Academy of Information and Technology (CAICT). https://www.digitimes.com/news/a20211216PD207.html

·     Morgan Stanley upgraded AT&T (T) to Overweight from Equal Weight with a price target of $28, down from $32, as raised the firm’s Telecom Services industry rating to In-Line from Cautious following a sustained period of underperformance that he sees having brought valuations in the space to historically attractive levels on both an absolute and relative basis.

·     IronNet (IRNT) Q3 sales fell to $6.91M from $7M YoY; updated its guidance to remove late-stage multi-million-dollar strategic customer opportunities that were expected to close in 2H21 but are now delayed due to government delays in getting funding through to federal budgets, now expecting FY21 revenue approx. $26M vs. prior $43M-$45M

·     Reddit Inc., owner of the online message board, filed plans with the U.S. Securities and Exchange Commission late Wednesday to take the sixteen-year-old company public.

·     NXP Semiconductors (NXPI) has announced a strategic partnership with Foxconn Industrial, a subsidy company of Foxconn, to transform the car into the ultimate edge device

·     LivePerson (LPSN) initiated with a Buy rating and $55 PT at Loop