Early Look

Friday, December 31, 2021

U.S. futures are heading into the final trading of the year slightly lower, extending yesterday’s late day slide settling at the lows of the day with the Dow down 0.25% (snapping its 6-day win streak), the S&P 500 lost 0.30% (failed to post its 71^st record close this year), and the Nasdaq was down 0.16%, retreating in thin holiday volume from record highs set early in the session on strong U.S. data including a drop in weekly claims for U.S. unemployment benefits. Coming into the day. the S&P is up 27% year-to-date, the Dow up about 19% YTD, the Nasdaq up 22% YTD, the Russell 2000 up 13.8% YTD and Dow transports up nearly 31% YTD. Each of Wall Street’s main indexes was poised for its sharpest three-year surge since 1997-99. The end of year rally has been triggered by growing evidence that the Omicron variant causes less-severe infections of COVID-19 than the Delta strain, while fears of a rising rate environment into 2022 has been put to the back burner. In Asian markets, The Nikkei Index was closed, the Shanghai Index gained +0.57% to 3,639, and the Hang Seng Index jumped 266 points or 1.24% to settle at 23,397. In Europe, the German DAX was closed, while the FTSE 100 was down about -0.3% at 7,380. The FTSE and the DAX are on track to see gains of 15% for this year, while the French CAC is close to a 30% gain. Wall Street is open for a full session due to Regulation 7.2, while other major exchanges around the world are either shut or closing early for New Year’s. The bond market does close early today, at 2 p.m. ET.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -14.33 points, or 0.30%, to 4,778.73

·     The Dow Jones Industrial Average fell -90.55 points, or 0.25%, to 36,398.08

·     The Nasdaq Composite slipped -24.65 points, or 0.16%, to 15,741.56

·     The Russell 2000 Index dipped -0.45 points, or 0.02% to 2,248.79

Events Calendar for Today

·     1:00 PM EST               Baker Hughes Weekly rig count data

World News

·     China’s factory activity unexpectedly accelerated in December, as the official manufacturing Purchasing Manager’s Index (PMI) rose to 50.3 from 50.1 in November, data from the National Bureau of Statistics (NBS) showed. New export orders shrank further, with the sub-index coming in at 48.1 compared with 48.5 a month earlier

·     M&A volumes globally surged 64% Y/Y to $5.8T in 2021, shattering prior records (the increase was 54% over volumes from 2019) and generating $157B in fees – Financial Times

·     U.S. President Joe Biden and Russian President Vladimir Putin on Thursday exchanged warnings over Ukraine but conveyed some optimism that diplomatic talks in January could ease. In a 50-minute call, their second conversation this month, Biden said he needed to see Russia decrease its military build-up near Ukraine, while Putin said sanctions threatened by Washington and allies could lead to a rupture in ties. The call was requested by Putin.

Sector News Breakdown

Consumer

·     Fisker Inc (FSR) files prospectus related to offering up to up to 81.8 mln shares of Class A common stock by selling securityholders

·     Peloton Interactive (PTON) downgraded to Market Perform from Outperform without a price target at JMP Securities

Energy, Industrials and Materials

·     ExxonMobil (XOM) sees Q4 gains from oil prices at up to $800M, gas prices up to $1.1B; said estimated effects of change in liquids prices impacting q4 results include $0.4B-$0.8B in upstream earnings; estimated effects of change in chemical margins impacting q4 results include negative $0.8B-$0.6B in chemical earnings; estimated effects of change in gas prices impacting q4 results include $0.7B-$1.1B in upstream earnings

·     Colfax Corp (CFX) meeting to approve a reverse stock split of company’s common stock at one of three reverse stock split ratios

·     MP Materials Corp (MP) files for mixed shelf of up to $2.0 bln

Financials

·     BGC Partners Inc. (BGCP) reaffirmed its previously stated outlook ranges for revenue and pre-tax adjusted earnings for Q4 of 2021

·     Medalist Diversified REIT (MDRR) announces the approval of a common stock repurchase program

Healthcare

·     Britain’s medicines regulator on Friday approved Pfizer Inc’s (PFE) COVID-19 pill, Paxlovid, for people over the age of 18 years with mild to moderate illness who are at high risk of developing severe COVID-19.

·     Lexicon (LXRX) submits new drug application for sotagliflozin for the treatment of heart failure in adults with type 2 diabetes

·     AnaptysBio (ANAB) files $300M mixed securities shelf

·     Xeris Biopharma (XERS) shares rise 19% after announces U.S. FDA approval of Recorlev® (levoketoconazole) for the treatment of endogenous hypercortisolemia in adult patients with Cushing’s syndrome

Technology, Media & Telecom

·     AMD (AMD) and Xilinx, Inc. (XLNX) issued a statement related to the status of global regulatory approvals for AMD’s proposed acquisition of Xilinx. “We continue making good progress on the required regulatory approvals to close our transaction. While we had previously expected that we would secure all approvals by the end of 2021, we have not yet completed the process and we now expect the transaction to close in the first quarter of 2022. Our conversations with regulators continue to progress productively, and we expect to secure all required approvals.”

·     Meta’s (FB) Oculus VR headsets were a popular Christmas gift this year. But parents who bought their kids one could be in for a nasty surprise — Oculus doesn’t offer the ability to set parental controls. And apps like VRChat are rife with abusive trolls, CNBC reported