Early Look

Wednesday, January 5, 2022

Futures	Up/Down	%	Last
Dow	3.00	0.01%	36,678
S&P 500	-3.25	0.07%	4,781
Nasdaq	-60.50	0.37%	16,215

 

 

After a mixed performance on Wall Street Tuesday, that saw the tech heavy Nasdaq tumble 1.3% amid a second day of rising Treasury yields, and cyclical sectors such as energy, financials, and defensive ones such as consumer staples rise, futures are again pointing to a mixed open. Energy, industrials, and economic recovery stocks are among the early gainers again this morning, despite Omicron cases continuing to surge across the U.S., as signs in other regions like South Africa suggest the variant’s unrelenting surge around the world may be peaking. In Asian markets, The Nikkei Index rose 30 points to 29,332, the Shanghai Index fell -1% or 37 points to 3,595, and the Hang Seng Index tumbled 382 points or 1.64% to settle at 22,907. In Europe, the German DAX is up +0.65% to 16,255, while the FTSE 100 rises +0.2% to 7,520. A moderately busy day of economic data with our first look at private payrolls to start the year at 8:15 with the ADP report and a handful of manufacturing data points at 9:45. So far to start the year, the Dow has managed to post an all-time closing high while tech has lagged.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -3.03 points, or 0.06%, to 4,793.53

·     The Dow Jones Industrial Average rose 214.39 points, or 0.59%, to 36,799.45

·     The Nasdaq Composite plunged -210.08 points, or 1.33%, to 15,622.72

·     The Russell 2000 Index declined -3.68 points, or 0.16% to 2,268.88

 

Events Calendar for Today

·     7:00 AM ET                 MBA Mortgage Applications Data

·     8:15 AM ET                 ADP Employment Change for December…est. 400K

·     9:45 AM ET                 Markit Composite PMI, Dec-F…prior 56.9

·     9:45 AM ET                 Markit Services PMI, Dec-F…prior 57.5

·     10:30 AM ET               Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: RPM, SMPL, UNF

·     Earnings After the Close: LNDC, RELL, RGP, SAR

 

Other Key Events:

·     Consumer Electronics Show (CES), 1/5-1/8 in Las Vegas, NV

·     Citigroup AppsEconomy Conference (virtual), 1/4-1/7

·     Goldman Sachs Global Energy & Clean Technology Conference, 1/5-1/6, in Florida

·     Morgan Stanley Auto 2.0 Conference (virtual), 1/5

·     China’s Caixin Services PMI for December

 

 

Macro	Up/Down	Last
Nymex	-0.15	76.84
Brent	-0.08	79.92
Gold	5.90	1,820.50
EUR/USD	0.0031	1.1318
JPY/USD	-0.46	115.70
10-Year Note	-0.022	1.644%

 

 

World News

·     Sen. Joe Manchin said he is not holding talks with top Democrats on the Build Back Better Act, a $1.75 trillion investment in social programs and climate policy. Manchin, whose vote Democrats need to pass the bill, said last month that he would oppose it.

·     U.S. Lawmakers Held Early Talks on New $68b Covid Relief: Washington Post – Talks on another round of coronavirus focused on businesses have been led by Senators Ben Cardin and Roger Wicker, the Washington Post reports, citing four people familiar with the matter.

 

Sector News Breakdown

Consumer

·     Yum Brands (YUM) KFC to launch meatless fried chicken made with Beyond Meat (BYND) nationwide – KFC restaurants nationwide will add Beyond Meat’s meatless chicken to menus, starting Monday; BYND shares rose 8% after hours

·     Nikola (NKLA) is dropping its $2 bln lawsuit against Tesla (TSLA) in relation to patent violations, both cos agreed to withdraw all claims and counterclaims against each other, joint court filing says

·     Walmart (WMT) announces a plan to hire more than 3,000 associate delivery drivers this year to expand its Inhome delivery

 

Energy, Industrials and Materials

·     Allegiant Air (ALGT) is close to ordering 50 Boeing (BA) 737 MAX jets worth $5 billion at list prices, people familiar with the matter said, as the low-cost U.S. airline eyes a rebound in tourism, Reuters reported.

·     The American Petroleum institute (API) showed a weekly decline in crude inventories of -6.4M barrels, an increase in gasoline inventories of +7.1M barrels while distillate inventories rose +4.4M barrels

·     Emerson Electric (EMR) upgraded to Outperform from Sector Perform at RBC Capital, while the firm downgraded 3M (MMM) to Underperform from Sector Perform

·     Valaris (VAL) announces contract awards with Kosmos Energy in U.S. Gulf of Mexico for semisubmersible Valaris dps-5, with Western Gas offshore Australia for semisubmersible Valaris ms-1; for six-well plug and abandonment contract with Centrica storage in UK North Sea for Valaris Norway; one-well contract with an undisclosed operator in U.S. Gulf of Mexico

 

Financials

·     Alexandria Real Estate (ARE) 7M share Spot Secondary priced at $210.00

·     Lincoln National (LNC) downgraded to In Line from Outperform at Evercore ISI and cut its tgt to $75 from $86, while Piper upgraded shares to Overweight from Neutral

 

Healthcare

·     Annexon Biosciences (ANNX) shares slide -24% after reporting interim phase 2 data on ANX005, its candidate for Huntington’s disease; said results showed that relative to baseline after six months of treatment, improvement in mean Composite Unified Huntington’s Disease Rating Scale was observed in more than half of all evaluable patients.

·     Inhibrx (INBX) announces initial phase 1 dose escalation results for INBRX-106, a novel hexavalent ox40 agonist, in combination with Keytruda® (Pembrolizumab) along with updated single agent data

·     Henry Schein (HSIC) announced that Steven Paladino plans to retire as EVP & CFO, effective Apr.29, after 35 years of service

·     Intra-Cellular (ITCI) 9.52M share Secondary priced at $42.00

·     Inspire Medical (INSP) guides prelim 4Q revs $78-78.4Mm vs est. $65.8Mm, says activated 81 new centers in US in 4Q

·     Oncternal Therapeutics (ONCT) announces agreement with FDA on phase 3 registrational study design for zilovertamab in the treatment of mantle cell lymphoma

·     Senseonics Holdings (SENS) said it expects a U.S. Food and Drug Administration decision in weeks on an updated diabetes- monitoring system

 

Technology, Media & Telecom

·     SGH (SGH) Q1 adj EPS $2.16 vs. est. $2.00; Q1 revs $470M vs. est. $460.17M; said continued strong momentum into Q1, achieving record revenue and non-GAAP gross margins, while delivering non-GAAP earnings per share at the upper end of our EPS guidance; guides 2Q net sales $415-455Mm vs est. $426Mm, adj gr margin 24-26% vs est. 24.3%, adj EPS $1.30-1.60 vs est. $1.39

·     ACM Research (ACMR) preliminary FY21 revenue $255M-$260M vs. est. $234.69M, which would represent annual growth of 63% to 66% and would be above the high-end of the guidance range; sees year prelim shipments in the range of $365M-$370M

·     O2Micro (OIIM) cuts Q4 revenue view to $24M from $25.5M-$26.5M vs. est. $25.98M, primarily due to short term supply chain issues with one of the wafer suppliers supporting their Intelligent Lighting product lines.

·     Sony Group Corp. (SONY) said at the CES technology conference it would create a car unit and explore entering the electric-vehicle market, in another sign of how the electronics and car businesses are overlapping; Sony showed off a prototype seven-seat electric sport-utility vehicle with all-wheel drive

·     Garmin (GRMN) upgraded to Buy from Hold with $160 target at Deutsche Bank

·     American Tower (AMT) downgraded to Underweight from Neutral at JPMorgan and Crown Castle (CCI) downgraded to Neutral from OW