Early Look

Thursday, January 7, 2021

Futures	Up/Down	%	Last
Dow	77.00	0.25%	30,797
S&P 500	13.00	0.35%	3,753
Nasdaq	67.50	0.54%	12,684

 

 

U.S. stocks are looking to add to gains after the Dow, Russell 2000 and S&P 500 all ended higher, soaring to all-time records on Wednesday as investors piled into financial and industrial stocks on bets a Democratic Senate sweep in Georgia would lead to more fiscal stimulus and infrastructure spending as they now control all three branches. In between the skyrocketing stocks, protests in Washington D.C. took place as U.S. Vice President Mike Pence opened a joint session of Congress to formally certify Democratic President-elect Joe Biden’s victory. The protests got out of hand as swarms of protesters stormed the U.S. Capitol as they sought to force Congress to undo President Donald Trump’s election loss to Joe Biden. In Asian markets, The Nikkei Index jumped 434 points to 27,490, the Shanghai Index gained 25 points to 3,576 and the Hang Seng Index slipped -143 points to 27,548. In Europe, the German DAX is rises about 60 points to 13,950, while the FTSE 100 slipped -25 points to 6,815. The 10-year Treasury yield rose over 9 bps to above 1.05% (first time above 1% since March), while gold dropped over 2%, but Bitcoin again grabbed markets attention, soaring to new record highs topping the $36,000 level, up from about $30K on Monday morning (while it tops the $37,000 level this morning).

 

Overnight, Congress formally confirmed the election of Joe Biden as President of the United States, just several hours after groups of Republicans objecting to the acceptance of Electoral College wins for Biden in some states stormed the Capitol building in Washington. The count resumed at 8:00 last night. President Trump issued a statement early Thursday committing to an orderly transition of power to President-elect Joe Biden on Jan. 20. With yesterday’s events unfolding, one woman was shot and killed by Capitol Police, while three other people died from medical emergencies. Also late yesterday, the final of two runoff elections in Georgia was called in the Democrats’ favor, handing Democrats control of the Senate. It remains remarkable that U.S. major stock averages finished at all-time highs on the same day that Americans stormed the Capitol building in protest.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 21.28 points, or 0.57%, to 3,748.14

·     The Dow Jones Industrial Average rose 437.80 points, or 1.44%, to 30,829.40

·     The Nasdaq Composite dropped -78.17 points, or 0.61%, to 12,740.79

·     The Russell 2000 Index surged 78.81 points, or 3.98% to 2,057.92

 

Events Calendar for Today

·     7:30 AM EST      Challenger Layoffs for December

·     8:30 AM ET         Weekly Jobless Claims

·     8:30 AM EST      Continuing Claims

·     10:00 AM EST    ISM Non-Manufacturing PMI for December

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

 

Earnings Calendar:

·     Earnings Before the Open: ANGO, AYI, BBBY, CAG, HELE, LNN, LW, REVG, SCHN, STZ, WBA

·     Earnings After the Close: AEHR, DCT, FC, MU, PSTM, WDFC

 

Other Key Events:

·     Citigroup 2021 Global Technology, Media, Telco Virtual Conference, 1/4-1/7

·     Goldman Sachs Energy Conference (virtual), 1/6-1/7

 

 

Macro	Up/Down	Last
Nymex	0.15	50.78
Brent	-0.09	54.21
Gold	-2.55	1,916.10
EUR/USD	-0.0071	1.2256
JPY/USD	0.62	103.66
10-Year Note	+0.003	1.04%

 

 

Sector News Breakdown

Consumer

·     Blink Charging (BLNK) said it intends to offer and sell 5 mln shares of its common stock in an underwritten registered public offering

·     Costco (COST) December sales rose 12.3% to $19.14 bln; Dec. total comp sales +10.7%, vs. est. +10.1%

·     Coca-Cola (KO) downgraded to Neutral from Overweight at JPMorgan (4th analyst downgrade of shares in as many days)

·     McDonald’s (MCD) upgraded to Outperform from Perform at Oppenheimer

·     Las Vegas Sands (LVS) said CEO Sheldon G. Adelson of both Las Vegas Sands and Sands China will take a personal leave of absence for medical reasons, effective immediately

·     Resources Connection (RGP) Q2 adj EPS 21c vs. est. 19c and revs $153.2M vs. est. $153.3M

·     Playa Hotels & Resorts (PLYA) 35M share Spot Secondary priced at $5.00

·     LGI Homes (LGIH) announced an all-time record for home closings during a single month with 1,630 homes closed in December 2020, representing year-over-year growth of 54.9%

 

Energy, Industrials and Materials

·     South Korea-based conglomerate SK Group will take a 9.9% stake worth $1.5 billion in hydrogen fuel cell maker Plug Power Inc (PLUG) and form a joint venture to help provide hydrogen fuel cell products to Asian markets

·     U.S. rail traffic rose 1.9% to 421,991 carloads and intermodal units for the week ending Jan 2, 2021 while total carloads were down 6.1% to 202,278, while U.S. weekly intermodal volume went up 10.7% to 219,713 containers and trailers as per the Association of American Railroads

·     Landec (LNDC) Q2 adj EPS 2c on revs $130.9M vs. est. 1c and $134.24M

·     3M (MMM) downgraded to Underperform from Neutral at Bank America

 

Financials

·     JPMorgan (JPM) upgraded to Buy from Neutral at Bank America

·     Agree Realty (ADC) 3M share Spot Secondary priced at $65.00

·     Medical Properties Trust (MPW) 32M share Spot Secondary priced at $20.05

 

Healthcare

·     Cigna (CI) instituted a quarterly cash dividend and declared the first quarterly cash dividend of $1.00 per share; expects to deploy at least $2B to share repurchases during Q1

·     Bayer has signed a collaboration and services agreement with CureVac N.V. (CVAC), where Bayer will support the further development, supply and key territory operations of CureVac’s COVID-19 vaccine candidate CVnCoV

·     Amarin (AMRN) gave no detailed Vascepa sales guidance for 2021, says it expects “revenue growth” with continued investment in US marketing; said 2020 net sales $610M vs $618M consensus.

·     Generation Bio (GBIO) 8M share Secondary priced at $24.50

·     NeoGenomics (NEO) 4.082M share Secondary priced at $49.00

·     Prelude Therapeutics (PRLD) 2.208M share Secondary priced at $60.00

·     Collegium Pharmaceutical (COLL) provides its FY2021 guidance as follows; Xtampza ER revenues expected to be in the range of $155-$165M and Nucynta franchise revenues in the range of $175-$185M

·     Harpoon Therapeutics (HARP) 5.9M share Spot Secondary priced at $17.00

·     Regenxbio (RGNX) files to sell $175M in common stock

 

Technology, Media & Telecom

·     Facebook (FB) said it has decided to block President Trump from posting on the platform for 24 hours – the latest and most severe step it’s taken with the president’s account in today’s events. Facebook joins peer Twitter (TWTR), which earlier this evening locked Trump’s account on that platform for 12 hours (and threatened potential permanent suspension).

·     T-Mobile (TMUS) said adds 5.5 million postpaid customers in 2020, the most in company history, and further expands 5g network leadership by exceeding ambitious 2020 5g goals; for Q4, 1.7 million total net additions, 1.6 million postpaid net additions, 824,000 postpaid phone net additions

·     IBM (IBM) announced Martin Schroeter as CEO of newly created company following the separation of IBM’s Managed Infrastructure Services business (NewCo), effective January 15.

·     Tegna (TGNA) and FreeWheel, a Comcast company (CMCSA), announced a new multi-year deal to further transform and automate the way TEGNA’s buyers and sellers transact, including through CTV/OTT advertising platform Premion