Early Look

Wednesday, January 27, 2021

Futures	Up/Down	%	Last
Dow	-190.00	0.62%	30,652
S&P 500	-18.25	0.48%	3,824
Nasdaq	29.50	0.22%	13,514

 

 

Stock futures look mixed to start the day, with the Nasdaq Composite getting a boost after better Microsoft (MSFT) earnings and guidance overnight, and ahead of reports from Tesla (TSLA) and Apple (AAPL) while the Dow and S&P look lower as investors turned their attention to the conclusion of the 2-day Federal Reserve’s policy meeting later today. The S&P and Nasdaq slipped on Tuesday from record closing levels. Investors continue to wait for President Joe Biden’s $1.9 trillion coronavirus relief, but there is growing uncertainty given the slim majority of the Democrats in the Senate. Biden said yesterday the U.S. government was working to buy 200 million more doses of Covid-19 vaccines, enough to fully inoculate nearly every American by the end of the summer. Stocks finished modestly lower Tuesday following a number of solid earnings reports (MMM, JNJ), but gains were held back by the possibility that a U.S. coronavirus relief package could be delayed. Of the 84 companies in the S&P 500 that posted earnings through Tuesday morning, 86.9% have topped analyst expectations. In Asian markets, The Nikkei Index rose 89 points to 28,635, the Shanghai Index edged higher 3 points to 3,573 and the Hang Seng Index fell -93 points to 29,297. In Europe, the German DAX is down around -130 points to 13,740, while the FTSE 100 is down about -40 points to 6,615.

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM EST      Durable Goods Orders for December

·     8:30 AM EST      Durable Goods Ex: Transports for Dec

·     10:30 AM ET      Weekly DOE Inventory Data

·     2:00 PM EST       FOMC Policy Meeting Results

 

Earnings Calendar:

·     Earnings Before the Open: ABT, ADP, ANTM, APH, BA, BX, CPF, CVLT, EAT, EXTR, GD, GLW, HES, HESM, KNX, MKTX, MNRO, MPX, NDAQ, NSC, NYCB, OSK, PB, PGR, ROL, T, TDY, TXT, VFC

·     Earnings After the Close: AAPL, ALTA, AMP, ARAY, AVT, AZPN, BRXL, CACI, CALX, CASH, CATY, CCI, CMO, CNMD, CNS, CREE, CUBI, DRE, EW, FB, HOLX, ISBC, LEVI, LRCX, LSTR, LVS, MKSI, MTH, NOW, NXGN, PKG, PROV, PTC, RJF, SEIC, SLG, SLM, SYK, TER, TSLA, TTEK, URI, WASH, WHR

 

 

Macro	Up/Down	Last
Nymex	0.27	52.88
Brent	0.32	56.23
Gold	-7.10	1,843.85
EUR/USD	-0.0036	1.2124
JPY/USD	0.17	103.79
10-Year Note	-0.006	1.04%

 

 

Sector News Breakdown

Consumer

·     GameStop (GME) surged after CNBC reported that hedge fund Melvin Capital closed out of its short position

·     Starbucks (SBUX) 1Q adj EPS $0.61 vs. est. $0.55 on revs $6.7B vs. est. $6.93B, China comps +5%, international comps -3%, US comps -5%, Americas comps -6%; guides 2Q adj EPS $0.45-0.50 vs. est. $0.59, sees FY adj EPS $2.70-2.90 vs. est. $2.81

·     Stride (LRN) 2Q revs $376.1Mm vs. est. $363.7Mm; sees FY revs $1.5-1.525B vs. est. $1.48B; guides 3Q revs $375-385Mm vs. est. $367.1Mm

·     Carnival (CCL) files automatic mixed securities shelf

·     International Game Technology (IGT) announced that its PlaySports platform is powering the recently launched FanDuel Sportsbook mobile app in Michigan,

·     Marriott Vacations (VAC) to sell $500M in convertible senior notes due 2026

 

Energy

·     Plug Power (PLUG) 28M share Spot Secondary priced at $65.00

·     Shoals Technologies (SHLS) 77M share IPO priced at $25.00

 

Financials

·     Capital One Financial (COF) Q4 EPS $5.29 vs. est. $2.86; Q4 revs $7.3B vs. est. $6.97B; authorized a common stock repurchase program of up to $7.5B; provision for credit losses decreased 20% to $264 mln; Q4 net interest margin 6.05%, up 37 bps; December 2020 domestic credit card net charge-offs rate 2.41% vs 2.57% in November 2020 and delinquencies rate for domestic credit card 2.42% vs. 2.29% prior

·     Boston Properties (BXP) Q4 FFO $1.37 vs. est. $1.59; sees Q1 FFO $1.53-$1.57 vs. est. $1.62; says collected 99.6% of total rent payments from office tenants in Q4

·     RenaissanceRe (RNR) Q4 operating EPS loss ($1.59) vs. est. loss ($1.27); Q4 revenue $1.395B vs. est. $1.26B; Book value per common share increased $3.33, or 2.5%, to $138.46 in Q4, tangible book value per common share plus accumulated dividends increased $3.84 to $155.17 in Q4; Gross premiums written increased $30.0 million, or 3.3%, to $935.5M in Q4 last year

·     W. R. Berkley (WRB) Q4 EPS $1.67 vs. est. 79c; Q4 revenue $2.31B vs. est. $2.10B; Q4 net premiums written $1.80B vs. $1.66B last year and Q4 GAAP combined ratio 92.8% vs. 93.0% YoY

·     Navient (NAVI) Q4 adjusted EPS 97c on revs $241M vs. est. 83c and $283.9M

·     Two Harbors (TWO) announces offering of $250M of convertible senior notes

 

Healthcare

·     Agios (AGIO) announces phase 3 activate-t trial of mitapivat achieved primary endpoint in adults with pyruvate kinase deficiency who are regularly transfused; safety profile consistent with previously reported data

·     Anthem (ANTM) Q4 adj EPS $2.54 vs. est. $2.52; Q4 revenue $31.5B vs. est. $30.78B; medical-loss ratio was 88.9%, compared with 89% in the prior-year quarter; Expenses grew 19% to $31.21B, partly driven by the return of the health-insurance tax; announces $5B increase to share repurchase program; sees FY21 adjusted EPS greater than $24.50 vs. est. $25.34

·     Personalis (PSNL) 3.95M share Spot Secondary priced at $38.00

·     Scopus BioPharma (SCPS) 1M share IPO priced at $9.00

·     SPAC Falcon Capital Acquisition (FCACU) is in discussions to merge with digital health startup Sharecare and take it public, Reuters reported, citing people familiar.

·     Encompass Health (EHC) Q4 adjusted EPS 93c vs. est. 85c and Q4 revenue $1.21B (in-line); sees FY21 adjusted EPS $3.31-$3.53 below consensus $3.83 and guides FY21 revenue $5B-$5.17B vs. est. $5.06B; says review of its Home Health and Hospice business is ongoing

·     Varian Medical (VAR) 1Q adj EPS $1.14 vs. est. $1.10 on revs $779Mm vs. est. $843Mm

 

Industrials & Materials

·     CH Robinson Worldwide (CHRW) Q4 EPS $1.08 vs. est. 97c; Q4 revenue up 20% YoY to $4.55B vs. est. $4.23B; Transportation revenue $4.31B; Gross profits increased 10.5% to $636.1 million; Operating expenses decreased 1.9% to $433.8M, primarily due to cost savings initiatives; effective tax rate in the quarter was 24.1% compared to 21.4% in the fourth quarter last year.

·     Canadian National (CNI) Q4 adj eps c$1.43 vs. est. c$1.42; 4q revs C$3.66b vs. est. C$3.64B; plans buyback of up to 14m shares; fluid operations and renewed demand set tone for 2021 as company reinstates guidance; targeting to deliver eps growth in high single-digit range in 2021 vs adjusted diluted eps of c$5.31 in 2020; targeting free cash flow in range of c$3.0 bln to c$3.3 bln in 2021

·     Marten Transport (MRTN) Q4 EPS 24c vs. est. 22c and revs $227.33M vs. est. $226.8M; said 2020 operating ratio, net of fuel surcharges, was also the best ratio for any year since we became a public company in 1986; 21.9% operating income improvement in 2020 continues the strong growth we achieved in 2019 of 8.7% and in 2018 of 23.7%

·     Textron (TXT) Q4 adj EPS $1.06 vs. est. 91c; Q4 revenue $3.67B vs. est. $3.46B; sees FY21 adjusted EPS $2.70-$2.90 vs. est. $2.68; sees FY21 revenue approximately $12.5B vs. est. $12.57B

 

Technology, Media & Telecom

·     Microsoft (MSFT) revs $43.1B vs. est. $40.2B, EPS $2.03 vs. est. $1.64, server products and cloud svc revs +26% driven by Azure revs +50%, LinkedIn revs +23%, qtrly commercial bookings +19%; Revenue in Productivity and Business Processes was $13.4B and increased 13%, up 11% in constant currency. Office Commercial products and cloud services revenue increased 11%, up 9% in constant currency, driven by Office 365 Commercial revenue growth of 21%, up 20% in constant currency

·     Advanced Micro (AMD) 4Q adj EPS $0.52 vs. est. $0.47 on revs $3.24B vs. est. $3.02B, qtrly gr margin 45%; guides 1Q21 revs $3.1-3.3B vs. est. $2.74B, sees 1Q adj gross margin 46%; guides FY21 revs approx +37% vs. est. +28.5%, sees FY adj gross margin approx 47%; qtrly computing and graphics segment revs $1.96B +18%, qtrly client processor avg selling price lower yr/yr due to mix, qtrly enterprise, embedded and semi-custom segment revs $1.28B +176%

·     AT&T (T) 4Q revs $45.7B vs. est. $44.56B, adj EPS $0.75 vs. est. $0.73, postpaid sub net adds 1.2Mm with phone net adds 800K; qtr-end 41.5Mm subs to HBO Max and HBO

·     F5 Networks (FFIV) Q1 adj EPS $2.59 vs. est. $2.47; Q1 revenue $625M in line with consensus; sees Q2 adjusted EPS $2.32-$2.44 vs. est. $2.41 and Q2 revenue $625M-$645M above consensus $621.66M.

·     Maxim (MXIM) Q4 adjusted EPS 73c vs. est. 68c; Qa4 revs $628.3M (+14% Yoy) vs. est. $604.6M; R&D expenses $114.8 million, +2.6% y/y, estimate $115.6 million and adjusted gross margin 67.4% vs. 66% y/y, vs. estimate 67.6%

·     Texas Instruments (TXN) 4Q EPS $1.80 vs. est. $1.34 on revs 4.08B vs. est. $3.6B; guides 1Q EPS $1.44-1.66 vs. est. $1.34, sees 1Q revs $3.79-4.11B vs. est. $3.6B

·     DZS (DZSI) 4M share Spot Secondary priced at $14.50

·     TE Connectivity (TEL) Q1 adj EPS $1.47 vs. est. $1.28; Q1 revenue $3.5B vs. est. $3.26B; communications segment also posted higher revenue on growth of high-speed cloud products and of the appliance market it serves; sees Q2 adjusted EPS $1.47 vs. est. $1.33 and revenue $3.5B vs. est. $3.34B