Early Look

Tuesday, February 15, 2022

Futures	Up/Down	%	Last
Dow	379.00	1.10%	34,850
S&P 500	64.25	1.47%	4,458
Nasdaq	294.50	2.06%	14,547

 

 

A much better picture to start the day as S&P futures are surging 1.5% or 66 points to 4,460, to move back above its 200-day MA resistance of 4,450 on news that Russia was pulling back some troops from near the Ukrainian border, in signs of a de-escalation in tensions between the two countries. Russia’s defense ministry said that some units in military districts adjacent to Ukraine were returning to their bases after completing drills. The news is giving stock markets around the world a sigh of relief for the moment, as the CBOE Volatility index (VIX), or fear index, drops over 7% back to around the 26 level after topping 31 in the prior session. Gold prices tumble along with oil prices on the headlines. In Asian markets, The Nikkei Index declined -0.8% to 26,865, the Shanghai Index rises +0.5% to 3,446, and the Hang Seng Index falls -200 points to 24,355. In Europe, the German DAX is jumps 260 points or 1.7% to 15,375, while the FTSE 100 rises over 50 points or 0.75% to7,590. However, the coast is not “all-clear” for stock markets as another important inflation reading is coming up shortly, with the January Producer Price Index (PPI) at 8:30 AM ET, with estimates to show an increase of +0.5% m/m and 9.1% y/y for headline reading. Recall the “hotter” CPI report last Thursday sunk stocks as it boosted expectations the Fed will get more aggressive in its rate hike forecast in the upcoming March meeting. Stocks declined Monday but finished well-off volatile session lows as investors monitored the threat of a Russian invasion of Ukraine and continued to assess the path of future Federal Reserve rate hikes. Russian Foreign Secretary Sergei Lavrov on Monday suggested that Moscow continue talks with the U.S. and its allies over security arrangements. But stocks stumbled in afternoon trade after the U.S. announced it was closing its embassy in the Ukraine capital of Kyiv and moving diplomatic operations.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -16.97 points, or 0.38%, to 4,401.67

·     The Dow Jones Industrial Average fell -171.89 points, or 0.49%, to 34,566.17

·     The Nasdaq Composite little changed, or 0.00%, to 13,790.92

·     The Russell 2000 Index declined -9.36 points, or 0.46% to 2,020.79

 

Events Calendar for Today

·     7:45 AM ET        ICSC Weekly Retail Sales

·     8:30 AM ET        Producer Price Index (PPI) MoM for January…est. +0.5%

·     8:30 AM ET        Producer Price Index (PPI) YoY for January…est. +0.9%

·     8:30 AM ET        PPI Ex: Food & Energy (core) MoM for January…est. +0.5%

·     8:30 AM ET        PPI Ex: Food & Energy (core) YoY for January…est. +7.9%       

·     8:55 AM ET        Johnson/Redbook Weekly Sales

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

·     4:30 PM ET        API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABG, ACRE, ARCH, BKI, BWA, CCRD, CEVA, CMPX, ECL, FELE, FIS, FNMA, HSIC, HUN, IPGP, IQV, LDOS, LGIH, MAR, NXRT, PTN, RPRX, SABR, UFCS, USAC, WCC, ZTS

·     Earnings After the Close: ABNB, ACCO, ADPT, AKAM, ANDE, ANGI, ATOM, AYX, CF, CINF, CLW, CORT, CPSI, CRK, DENN, DVN, ELVT, ESMT, FSP, GOOD, GXO, LSCC, LZB, MASI, MRC, NMIH, OUST, PACB, PDFS, QTWO, RBLX, REZI, UPST, VIAC, VPG, WELL, WH, WYNN, ZI

 

 

Macro	Up/Down	Last
Nymex	-1.81	92.64
Brent	-2.56	93.92
Gold	-13.00	1,856.40
EUR/USD	0.0041	1.1347
JPY/USD	0.13	115.66
10-Year Note	+0.044	2.04%

 

 

World News

·     Russia said some of its military units were returning to their bases after exercises near Ukraine, following days of U.S. and British warnings that Moscow might invade its neighbor at any time

 

Sector News Breakdown

Consumer

·     Advance Auto Parts (AAP) 4Q adj EPS $2.07 vs est. $1.97 on sales $2.4B vs est. $2.37B, comps +8.2% vs. est. 5.4%; gr margin 44.7% vs est. 46.5%; guides FY22 sales $11.2-11.5B vs est. $11.19B, comps +1-3%, adj EBIT margin 10-10.2%, adj EPS $13.20-13.75 vs est. $13.32, CAPEX $300-350Mm; increased qtrly cash dividend by 50% to $1.50/share

·     BorgWarner (BWA) to Acquire Santroll’s Light Vehicle eMotor Business for up to Yen1.4 billion; Q4 adj EPS $1.06 vs. est. $0.75; Q4 sales fell 6.9% to $3.65B vs. est. $3.47B

·     Gap Stores (GPS) downgraded underperform from Neutral and cut tgt to $14 from $26 at Bank America

·     Merger talks between Monster Beverage (MNST) and Constellation Brands (STZ) are progressing and a merger agreement could be reached in the coming weeks if negotiations proceed smoothly https://bloom.bg/3Bp8rMt

·     Service Corporation (SCI) Q4 adj EPS $1.17 vs est. $0.97 on revenue $1.043B vs est. $988.8M; now sees FY22 adj EPS $2.80-$3.20 vs est. $2.82 and up from prior $2.80 midpoint primarily due to the continued impacts of the COVID-19 pandemic; Beyond 2022, believes that the negative impact of the COVID-19 pandemic on services pulled forward from future years into 2020 and 2021 should begin to wane

·     Whirlpool (WHR) raises quarterly dividend 25%, raises share repurchase plan by $2B

 

Energy

·     Continental Resources (CLR) Q4 adj EPS $1.79 vs. est. $1.69; Q4 revs $1.93B vs. est. $1.71B; Q4 2021 oil production averaged 166.7 mboepd; Q4 natural gas production averaged 1,041 MMcfpd; Q4 2021 total production averaged 340.2 mboepd; annual crude oil production is projected to range between 195 to 205 mboepd in 2022; sees year capex $2.3B

·     Otter Tail Corp. (OTTR) Q4 EPS $1.23 vs. est. $1.07; Q4 revs $333.2M vs. est. $322.24M; raises quarterly dividend 5.8% to 41.25c per share; sees 2022 EPS $3.78-$4.08 vs. est. $3.22

·     SunPower (SPWR) upgraded to Neutral from Sell at UBS

 

Financials

·     Federal investigators are probing the business of block trading on Wall Street, examining whether bankers might have improperly tipped hedge-fund clients in advance of large share sales, according to people familiar with the situation https://on.wsj.com/3LxM6RH

·     Intuit (INTU) reiterates full FY22 revs guidance based on strong momentum; expects second quarter revenue to reflect slower forming tax season as sees $2.66B-$2.665B below prior $2.71B-$2.75B due to a slower forming tax season; sees Q2 revenue at an all-time high for both small business and self-employed group and credit karma

·     Capital One Financial (COF) reported charge-offs for January of 2.03% vs. 2.54% y/y. January; while delinquencies 2.4% vs. 2.49% y/y

·     Discover Financial (DFS) reported charge-offs for January of 1.76% vs. 2.57% y/y; Delinquencies 1.75% vs. 2.08% y/y

·     Synchrony Financial (SYF) reported charge-offs for January of 2.05% and delinquencies 1.49%

·     Primerica (PRI) Q4 adj EPS $2.94 vs. est. $3.22; Q5 revs rose 22% y/y to $724.1M vs. est. $713.8M; approves an increase of $50M to the previously announced $275M share repurchase program; Q4 investment and Savings Products sales increased 46% with sales exceeding $3 billion for the quarter; Term Life net premiums grew 10%; adjusted direct premiums grew 12%

·     Brookdale Senior Living (BKD) 4Q EPS ($0.44) vs est. ($0.45), REVPAR +4%; sees FY22 REVPAR +10-12%

·     Spirit Realty (SRC) 4Q adj FFO/share $0.85 vs est. $0.85; guides FY22 adj FFO/share $3.52-3.58 vs est. $3.55; proposes qtrly cash dividend $0.638/share

·     Vornado Realty (VNO) Q4 adj EPS $0.12 vs. est. $0.19; Q4 revs $421.1M v. est. $417M

 

Healthcare

·     ImmunoGen Inc. (IMGN) rises 7%; announced a license agreement with Eli Lilly & Co. (LLY) of its Novel Camptothecin ADC Platform for up to $1.7 billion in potential payments; IMGN will receive $13 million upfront and up to $32.5 million for meeting certain milestones

·     Ibio Inc. (IBIO) Q2 EPS (5c) vs est. (4c) on revenue $200k vs est. $250k; has cash and cash equivalents ~$57.4M which they believe is enough to support its activities through Sept. 30, 2023

·     Larimar Therapeutics (LRMR) slides 50%; says the FDA is maintaining its clinical hold at this time on Larimar’s CTI-1601 program and that additional data is needed to resolve the clinical hold

·     Medpace Holdings (MEDP) 4Q EPS $1.32 vs est. $1.25 on revs $308.6Mm vs est. $309Mm; guides FY22 EPS $5.35-5.67 vs est. $5.49 and revs $1.4-1.46B vs est. $1.44B

·     Omnicell, Inc. (OMCL) 4Q adj EPS $0.92 vs est. $0.92 on revs $311.7Mm vs est. $311.1Mm; guides 1Q adj EPS $0.65-0.72 vs est. $0.86 and adj rev $312-318Mm vs est. $301.4Mm; sees FY adj EPS $3.75-3.95 vs est. $4.01 and adj revs $1.385-1.41B vs est. $1.3B

·     Novavax (NVAX) announced that the Singapore Health Sciences Authority has issued interim authorization for Nuvaxovid COVID-19 Vaccine for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals 18 years of age and older

 

Industrials & Materials

·     Avis Car Rental (CAR) Q4 adj EPS $7.08 vs. est. $6.15; Q4 revs $2.57B vs. est. $2.41B; Adjusted EBITDA in the Americas was $670M in Q4 and $2.4B for the year ended 2021

·     Air Lease Corporation (AL) announces lease placement of 25 new Boeing (BA) 737-8 aircraft with Malaysia aviation group

·     Ammo Inc. (POWW) Q3 adj EPS $0.14 vs. est. $0.10; Q3 revs rose 289% to $64.7M vs. est. $65.6M; reiterating our fiscal 2022 guidance and continue to expect revenue of at least $250M vs. consensus of $246.4M and adj Ebitda of $80M

·     Radiant Logistics, Inc. (RLGT) 2Q adj EPS $0.24 vs est. $0.15 on revs $332.8Mm vs est. $272.4Mm

 

Technology, Media & Telecom

·     Intel (INTC) confirmed a WSJ report overnight as it acquires Israeli chip company Tower Semiconductor (TSEM) for almost $5.4B, paying $53 per share

·     Arista Networks (ANET) Q4 adj EPS $0.82 vs. est. $0.73; Q4 revs $824.5M vs. est. $789.1M; sees Q1 revs $840M-$860M above est. $831.58M; sees Q1 Non-GAAP gross margin of 63% to 64% and non-GAAP operating margin of approximately 38%

·     Amkor Technology, Inc. (AMKR) 4Q EPS $0.88 and revs $1.72B; sees 1Q sales $1.5-1.6B and EPS $0.45-0.65

·     Amtech Systems (ASYS) 1Q EPS $0.07 vs est. $0.07 on revs $27.3Mm vs est. $24.5Mm; sees 2Q revs $26-28Mm vs est. $27Mm, gross margin approx 40% and op margin high-single-digit

·     Telenet Group Holding (TNET) announces $300 mln increase to stock repurchase program; 4Q adj EPS $1.13 vs est. $0.54; guides 1Q revs +11-12% vs est. +7% and EPS $1.71-2.03 vs est. $1.42; sees FY revs $+4-7% vs est. +2.3% and EPS $3.87-4.51 vs est. $4.97

·     Vimeo Inc (VMEO) January total revenue up 23%, January subscribers up 10% , January ARPU up 12%

·     Ziff Davis (ZD) Q4 adj EPS $2.17 vs. est. $2.07; Q4 revs $408.6M vs. est. $407.1M; sees FY22 adjusted EPS $6.52-$6.79 vs. est. $6.52; sees FY22 revs $1.497B-$1.535B vs. est. $1.53B

·     Telecom Italia SpA, the phone carrier targeted in November by KKR & Co., is weighing reducing its Italian workforce by as much as one fifth amid faltering profit during the pandemic and heightened competition – Bloomberg