Early Look

Tuesday, December 22, 2020

Futures	Up/Down	%	Last
DJ Industrials	-25.00	0.08%	30,088
S&P 500	3.50	0.09%	3,689
Nasdaq	46.50	0.36%	12,729

 

 

Stocks in the U.S. are looking mixed after yesterday’s impressive rally off sharply lower lows as the Santa Claus rally continues into the abbreviated Christmas trading week (markets are open half day on Thursday and closed on Friday), extending broader market gains since the election. Stocks overcame concerns yesterday of a new COVID-19 strain from the U.K., matched with balanced optimism over Congress coming to an agreement for a virus relief package at the end of regular trading Monday. Overnight, Congress officially approved an $892 billion coronavirus aid package, throwing a lifeline to the nation’s pandemic-battered economy after months of inaction, while also keeping the federal government funded. President Trump is expected to sign the package into law. All three of the major U.S. stock averages pared earlier declines on Monday, helped by the stimulus news, vaccine optimism and increased M&A activity into year-end. The Dow manages to end the session up 0.1%, while the Nasdaq slipped 0.1% and the S&P 500 closed down 0.4%. Financials were the best S&P 500 industry sector, rising over 1%, helped by the Fed’s decision on Friday to allow banks to resume stock buybacks in Q1. In Asian markets overnight, The Nikkei Index fell -278 points to 26,436, the Shanghai Index dropped -63 points to 3,356 and the Hang Seng Index declined -187 points to 26,119. In Europe, the German DAX is higher by 150 points to 13,400, while the FTSE 100 is up about 15 points to 6,430.

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Gross Domestic Product (GDP) Q3-Final…est. 33.1%

·     8:30 AM EST      GDP Consumer Spending, Q3-F…est.

·     8:30 AM EST      GDP Price Deflator, Q3-F…est. 3.7%

·     8:30 AM EST      Core PCE Prices, Q3-F…est. 3.5%

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     10:00 AM EST    Consumer Confidence for Dec…est. 97.0

·     10:00 AM EST    Existing Home Sales MoM for November…est. 6.7M

·     10:00 AM EST    Richmond Fed Index for December

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CTAS, KMX

·     Earnings After the Close: YCBD

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -14.49 points, or 0.39%, to 3,694.92

·     The Dow Jones Industrial Average rose 37.40 points, or 0.12%, to 30,216.45

·     The Nasdaq Composite slipped -13.12 points, or 0.10%, to 12,742.52

·     The Russell 2000 Index edged higher 0.34 points, or 0.02% to 1,970.33

 

 

Macro	Up/Down	Last
WTI Crude	-0.42	47.55
Brent	-0.32	50.59
Gold	-4.20	1,872.70
EUR/USD	-0.0016	1.2228
JPY/USD	0.07	103.39
10-Year Note	+0.002	0.93%

 

 

Sector News Breakdown

Consumer

·     Sportsman’s Warehouse Holdings Inc. (SPWH) is being acquired for $18 per share in cash by privately held Great American Outdoors Group , which already owns Bass Pro Shops, Cabela’s, White River Marine Group and nature-based resorts https://bit.ly/3mEatQ8

·     Peloton (PTON) buys commercial fitness company Precor for $420 million in a bid to dominate hotels, college campuses and offices https://on.mktw.net/3aycOcQ

·     Calavo Growers (CGO) 4Q adj EPS $0.34 vs. est. $0.64 on revs $234.4Mm vs. est. $256.1Mm; guides 1Q21 adj EBITDA $7-10Mm vs. est. $17.7Mm, sees 1Q revs $215-225Mm vs. est. $257.8Mm

·     Lordstown Motors Corp (RIDE) received 80,000 non-binding reservations for endurance to date; remains on track to begin production of endurance in September 2021 – Reuters

 

Energy

·     ConocoPhillips (COP) announced a new oil discovery in production license 891 on the Slagugle prospect located 14 miles north-northeast of the Heidrun Field in the Norwegian Sea

 

Financials

·     S&P SmallCap 600 constituent Kinsale Capital Group Inc. (KNSL) will replace Taubman Centers (TCO) in the S&P MidCap 400 and The Simply Good Foods Company (SMPL) will replace Kinsale Capital Group (KNSL) in the S&P SmallCap 600. S&P 500 / 100 constituent Simon Property Group, Inc. (SPG) is acquiring Taubman in a deal expected to be completed soon pending final conditions

·     Chubb (CB) downgraded to Underperform from Neutral at Bank America

 

Healthcare

·     AstraZeneca (AZN) and Amgen (AMGN) announce results from the SOURCE Phase III trial evaluating the efficacy and safety of the potential new medicine Tezepelumab compared to placebo did not meet the primary endpoint of a statistically significant reduction in the daily OCS dose, without loss of asthma control.

·     ChemoCentryx, Inc. (CCXI) and Vifor Fresenius Medical Care Renal Pharma announced topline data from the ACCOLADE clinical study, the largest, randomized, blinded, placebo-controlled trial in the ultra-rare kidney disease C3 Glomerulopathy to date, which evaluated avacopan for the treatment of that disorder

·     Illumina (ILMN) upgraded to Overweight from Neutral at Piper Sandler

·     Soligenix (SNGX) announces topline results from its phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer patients

·     OraSure (OSUR) said the FDA requested additional information as part of review of application for EUA for its laboratory-based oral fluid sars-cov-2 antibody test

·     Ziopharm Oncology (ZIOP) said the Taiwan FDA has cleared an investigational new drug application (IND) from Eden BioCell, a joint venture between Ziopharm and cell therapy company TriArm Therapeutics, for its phase 1 clinical trial to evaluate patient-derived CD19-specific CAR-T

·     NMC Health (NMHLY) which comprises of NMC Health and NMC Healthcare entered into an agreement to sell the Eugin Group, to Fresenius Helios for a total enterprise value of €430m following a highly competitive sale process.

·     Biotech firms focused on CRISPR/Cas9-based gene editing stood out Monday with Editas Medicine (EDIT), CRISPR Therapeutics (CRSP), and Intellia Therapeutics (NTLA) all recording double-digit gains = they are seen as a faster, accurate, cheaper, and efficient technology for genome editing where genetic material is added/ removed/altered for therapeutic purposes.

 

Industrials & Materials

·     Clearwater Paper (CLW) raises Q4 adj. EBITDA view to $71M-$76M from $52M-$62M due to significantly greater than expected demand in tissue, strong operating performance, and favorable cost trend

·     Heico (HEI) Q4 EP 45c vs. est. 41c and revs $426.2M vs. est. $414.8M; Q4 op margin 20.9% vs. 22.3% YoY

·     Mercury Systems (MRCY) has received a $14M order from a leading defense prime contractor for digital signal processing modules for deployment in a multi-mode tactical radar application.

 

Technology, Media & Telecom

·     Apple Inc (AAPL) is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology, Reuters reported late yesterday. The report said Apple has decided to tap outside partners for elements of its self-driving car system, including lidar sensors, which help autonomous vehicles get a three-dimensional view of the road (shares of LAZR, VLDR jumped in reaction yesterday)

·     Facebook Inc (FB) and Alphabet Inc’s Google (GOOGL) agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week, the WSJ reports https://on.wsj.com/37FTIj5