Early Look

Thursday, January 28, 2021

Futures	Up/Down	%	Last
Dow	-6.00	0.02%	30,187
S&P 500	-9.25	0.24%	3,735
Nasdaq	-108.50	0.82%	12,999

 

 

U.S. futures are looking lower, extending losses after posting its worst trading session in about three months ahead of another busy day of earnings. Losses on the Dow Jones Industrial Average (2.2%), Nasdaq Composite (2.7%) and S&P 500 (2.6%) all accelerated into the close as volume and volatility jumped. Fear also crept into the market as the Cboe Volatility index (VIX) posted its highest close since early November, rising 14.19 points at 37.21 as all eleven S&P 500 sectors fell on the day. Stock opened lower but selling accelerated after the latest statement from the Federal Reserve, even though the Fed left interest rates near zero and made no change to its monthly bond purchases and called into question the timing of the economic recovery from the COVID-19 pandemic. The other top story outside of earnings, was the continued rush of retail investors taking on Wall Street short sellers in Reddit chat rooms continue to send shares of fundamentally weak, heavily shorted companies through the roof as shares of AMC, GME, KOSS, BBBY, M, SPCE, among many others have surged. The SEC said yesterday it is “aware of and actively monitoring the on-going market volatility in the options and equities markets.” Earlier Wednesday, the White House said it was watching the huge moves made by the company and some other stocks. The SEC’s acting chair Allison Herren Lee and other officials said they were working with fellow “to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants.” In Asian markets, The Nikkei Index dropped -437 points to 28,197, the Shanghai Index fell -68 points to 3,505 and the Hang Seng Index plunged -746 points to 28,550. In Europe, the German DAX is lower by about -100 points to 13,520, while the FTSE 100 is down -70 points to 6,495.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped-98.85 points, or 2.57%, to 3,750.77

·     The Dow Jones Industrial Average fell -633.83 points, or 2.61%, to 30,30.17

·     The Nasdaq Composite plunged -355.47 points, or 2.61%, to 13,270.60

·     The Russell 2000 Index declined -41.16 points, or 1.91% to 2,108.70

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 875K

·     8:30 AM EST      Continuing Claims…est. 5.05M

·     8:30 AM EST      Gross Domestic Product (GDP) for Q4…est. 4.0%

·     8:30 AM EST      GDP Consumer Spending for Q4…est.

·     8:30 AM EST      GDP Deflator for Q4…est. 2.4%

·     8:30 AM EST      Core PCE Advance for Q4…est. 1.5%

·     8:30 AM EST      Advance Goods Trade Balance for December

·     10:00 AM EST    Leading Index MoM for December…est. 0.3%

·     10:00 AM EST    New Home Sales MoM for December…est. 1.9%

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

·     11:00 AM EST    Kansas City Fed Manufacturing for January

 

Earnings Calendar:

·     Earnings Before the Open: AAL, ABMD, ADS, AIR, AOS, ATI, BC, CFR, CMCSA, CNX, COLB, CRS, DHR, DOV, DOW, EWBC, EXP, FCFS, FLEX, FLWS, GFF, HZO, IBCP, JBLU, KEX, KOP, LUV, MA, MCD, MKC, MMC, MO, MSCI, MUR, NOC, NUE, ORI, OSIS, PHM, SHW, SWK, TROW, TSCO, VLO, VLY, WRK, X, XEL

·     Earnings After the Close: ABCB, AJG, BY, BZH, CE, CSTR, DLB, EGHT, EMN, ETH, FFIC, FIBK, FICO, FISI, GBCI, HLI, HTH, JNPR, MATW, MDLZ, MSTR, NATI, OLN, PFG, RMD, SBCF, SWKS, USX, V, WDC

 

 

Macro	Up/Down	Last
Nymex	-0.07	52.784
Brent	-0.03	55.78
Gold	-4.00	1,840.00
EUR/USD	-0.0009	1.2102
JPY/USD	0.19	104.30
10-Year Note	-0.007	1.01%

 

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) Q4 adj EPS $0.80 vs. est. $1.03 on revs $10.7B vs. est. $10.4B, says planning to grow manufacturing capacity as quickly as possible, free cash flow $1.87B vs. est. $1.04B, qtrly automotive gr mgn 24.1% vs 22.5% yr ago, says over a multi-yr horizon expect to achieve 50% avg annual growth in vehicle deliveries

·     Las Vegas Sands (LVS) 4Q revs $1.15B vs. est. $1.28B, qtrly adj property EBITDA $141Mm vs $1.39B yr ago; EPS ($0.37) vs. est. ($0.32)

·     Levi Strauss (LEVI) Q4 EPS 20c vs. est. 15c; Q4 revenue $1.39B vs. est. $1.34B; says revs declined 12% on a reported and constant-currency basis, a significant sequential improvement from the reported third-quarter net revenues decline of 27%

·     Meritage Homes (MTH) Q4 EPS $3.97 vs. est. $3.36; Q4 revenue $1.41B vs. est. $1.31B; Q4 homes closed 3.74M and Q4 average sales price 376,000; Q4 includes a 420 bps increase in home closing gross margin, 50% increase in diluted EPS and 52% increase in orders over prior year

·     Pulte Homes (PHM) 4Q adj EPS $1.49 vs. est. $1.40 on home sales revs $3.1B vs. est. $3.1B, qtrly net new orders +24% to 7,056 homes, order value +33% to $3.3B, end of qtr backlog 15,158 homes +44%; announces cash tender offer for up to $300Mm of certain outstanding debt securities

·     Stanley Black & Decker (SWK) Q4 EPS $3.29 vs. est. $2.98; Q4 revenue $4.41B vs. est. $4.11; sees FY21 adjusted EPS $9.70-$10.30 vs. est. $9.71; Sales from the company’s tools and storage business climbed to $3.26 billion, from $2.61 billion a year earlier

·     Tractor Supply (TSCO) Q4 EPS $1.64 vs. est. $1.51; Q4 revenue $2.88B vs. est. $2.72B; Q4 comp sales rose 27.3%; sees FY21 EPS $6.50-$6.90, vs. est. $6.52 and FY21 revenue $10.7B-$11B vs. est. $10.53B; guides FY21 comp store sales (2%)-1%; raises dividend by 30%

·     Whirlpool (WHR) Q4 adjusted EPS $6.64 vs. est. $6.07 and Q4 revenue $5.8B vs. est. $5.59B; 4Q adj. EBIT margin of 11.3%, up 410 basis points y/y; sees FY21 adjusted EPS $19.00-$20.00 vs. est. $19.10 and sees FY21 net sales increase of ~6% vs. est. $20.1B; Targets 2021 cash provided by operating activities of ~$1.55b, FCF of at least $1b

·     Academy Sports (ASO) 12M share Secondary priced at $21.50

·     Agrify (AGFY) 5.4M share IPO priced at $10.00

 

Energy

·     Murphy Oil (MUR) Q4 adj EPS loss (9c) vs. est. loss (7c); Q4 revenue $330.2M vs. est. $490.72M; Q4 production averaged 149 thousand MBOEPD with 55% oil and 62% liquids; N.A. onshore business produced about 82 MBoed in q4; planning 2021 capital expenditures to be in range of $675 to $725 mln

·     Valero (VLO) Q4 adj EPS loss ($1.06) vs. est. loss ($1.42); Q4 revenue $16.6B vs. est. $16.21B; refining segment reported a $377 mln operating loss for q4 of 2020, compared to operating income of $1.4 bln; refinery throughput volumes averaged 2.6 mln barrels per day in q4 2020, 468 thousand barrels per day lower than q4 2019

·     Bonanza Creek (BCEI) said average sales volumes are expected to be 25.0 thousand barrels of oil equivalent per day for Q4, total capital expenditure guidance for q1 of 2021 is $35 to $40 mln; Q1 production guidance is a range of 22.0 to 24.0 Mboe/d

 

Financials

·     Cathay General (CATY) Q4 EPS 89c vs. est. 76c; Q4 loan loss provision ($5.0M) vs. ($5.0M) a year ago; Q4 net charge-offs $7.6M vs. ($2.32M) a year ago; Q4 NNIM 3.12%, up 10 bps from Q3; loans, excluding PPP increased by $103.4M, or 2.7% annualized

·     Sallie Mae (SLM) 4Q core EPS $1.15 vs. est. $0.35, approves new $1.25B share repurchase

·     SL Green Realty (SLG) Q4 FFO $1.56 vs. est. $1.54; Q4 revenue $234.9M vs. est. $194.1M; Q4 Manhattan same-store office occupancy 93.4% as of December 31, 2020, inclusive of leases signed but not yet commenced, as compared to 94.2% at the end of the previous quarter. Reports Q4 same-store net operating income down 5.9%

 

Healthcare

·     Applied Genetic Technologies’ (AGTC) rose after additional data from its ongoing ACHMB3 and ACHMA3 clinical trials in patients with achromatopsia (ACHM), an inherited retinal disease.

·     Edwards Lifesciences (EW) Q4 adj EPS 50c vs. est. 53c; Q4 revenue $1.2B vs. est. $1.19B; Q4 TAVR sales grew 2 percent; underlying sales flat; 2021 guidance reiterated with sales growth expected in the mid-teens; Looking ahead to 2021, the company continues to anticipate underlying sales growth in the 15%-20%

·     Hologic (HOLX) Q1 ad EPS $2.86 vs. est. $2.17 on revs $1.61B vs. est. $1.4B, sees 2Q revs $1.5-1.56B vs. est. $1.36B, sees 2Q adj EPS $2.56-2.68 vs. est. $2.02

·     Stryker (SYK) Q4 adj EPS $2.81 vs. est. $2.55; Q4 revenue $4.26B vs. est. $4.33B; expects eps will be modestly favorable for fy21 if foreign currency exchange rates hold; will not be providing quarterly guidance; expects 2021 organic net sales growth to be in range of 8% to 10% from 2019

·     CureVac (CVAC) 5M share Secondary priced at $90.00

·     Seer (SEER) 3.75M share Secondary priced at $67.00

·     Surgalign (SRGA) 25M share Secondary priced at $1.50

·     Ortho Clinical (OCDX) 76M share IPO priced at $17.00

 

Industrials & Materials

·     ACI Worldwide (ACIW) said it estimates 2020 revenue will be $1.28B-$1.295B vs. est. $1.26B; sees 2020 adjusted EBITDA of $350M-$360M and reaffirms long-term outlook for mid-single-digit organic revenue growth

·     Dow Inc. (DOW) Q4 EPS 81c vs. est. 67c; Q4 revenue $10.7B vs. est. $10.03B; Volume increased 1% versus the year-ago period, reaching pre-pandemic volume levels in all operating segments; total cash and available committed liquidity at quarter-end was $14.6 bln, an increase of $3.9 bln over year-ago period

·     Dover (DOV) 4Q adj EPS $1.55 on revs $1.78B vs. est. $1.72B; guides FY21 adj EPS $6.24-6.45 vs. est. $6.24

·     Northrop Grumman (NOC) 4Q sales 10.2B vs. est. $9.27B, adj EPS $6.59 vs. est. $5.76, qtr-end backlog $81B; guides FY21 sales $35.1-35.5B vs. est. $37.46B, sees MTM-adjusted EPS $23.15-23.65 vs. est. $24.19, sees adj FCF $3.0-3.3B; authorizes additional $3.0B share repurchase

·     ZIM Integrated (ZIM) 14.5M share IPO priced at $15.00

·     Landstar (LSTR) Q4 EPS $1.70 vs. estimate $1.72 and revenue $1.30B up 30% YoY) vs. est. $1.20B; sees Q1 EPS $1.55-$1.65 and revs $1.1B-$1.5B vs. est. $1.45 and $1.06B

·     Packaging Corp. (PKG) Q4 EPS $1.33 vs. est. $1.42; Q4 sales $1.7B vs. est. $1.73B; total corrugated products shipments with one less workday were up 9.9%, and shipments per day were up 11.7% YoY; containerboard production was 1,174,000 tons, and containerboard inventory was down 13,000 tons YoY

·     Tetra Tech (TTEK) 1Q EPS $0.96 vs. est. $0.81 on revs $765Mm vs. est. $588Mm, backlog $3.2B; guides 2Q EPS $0.73-0.78 vs. est. $0.72, sees FY21 EPS $3.45-3.60 vs. est. $3.42

·     United Rentals (URI) 4Q revs $2.28B vs. est. $2.17B, EPS $4.09 vs. est. $4.23, says anticipate another robust year of FCF generation after significantly increasing CAPEX to support growing demand

 

Technology, Media & Telecom

·     Apple (AAPL) Q1 EPS $1.70 vs. est. $1.41; Q1 revenue $111.44B vs. est. $103.28B; Sales of iPhones were $65.6B, compared with estimates of $59.80B and beating Apple’s previous quarterly all-time high of $61.58 B in iPhone sales for the first quarter of fiscal 2018; now has an active installed base of 1.65 billion devices, compared with 1.5 billion devices a year ago; Mac sales reached $8.68 billion, in line with analyst expectations of $8.69 billion; wearables and accessories segment, which includes the Apple Watch and AirPods product lines, hit $12.97 billion in revenue, versus analyst estimates of $11.96B; Greater China rev. $21.31B, +57% YoY

·     Facebook (FB) Q4 EPS $3.88 vs. est. $3.22; Q4 revenue $28.07B vs. est. $26.43B; board authorized repurchases of up to an added $25B; reports DAUs 1.84B on average for December 2020, up 11% y/y (est. 1.83B), MAUs of 2.8B as of December 31, up 12% y/y (est. 2.76B); sees significant pressure on 2H growth rates

·     Avnet (AVT) Q2 adj EPS 48c vs. est. 39c; revenue $4.7B vs. est. $4.27B; sees Q3 adj EPS 52c-58c above est. 48c and revs $4.3B-$4.7B vs. est. $4.25B.

·     CACI (CACI) Q2 EPS $4.18 vs. est. $3.60; Q2 revenue $1.47B vs. est. $1.5B; contract awards in Q2 FY21 totaled $2.1B; total backlog as of December 31, 2020 was $22.4B compared with $20.3B a year ago, an increase of 10%; guides FY21 EPS $14.47-$15.25 vs. est. $15.01; sees FY21 revenue $6.05B-$6.25B vs. est. $6.16B

·     Cree Inc. (CREE) Q2 adjusted EPS loss (24c) vs. est. loss of (25c); Q2 revenue $127M vs. est. $121.5M; sees Q3 adjusted EPS loss (25c)-(21c) vs. consensus (20c) and sees Q3 revenue $127M-$133M vs. est. $128.84M

·     Crown Castle (CCI) 4Q AFFO/shr $2.33 vs. est. $1.65, sees FY21 AFFO/shr $6.64-6.74 vs. est. $6.72; qtrly results impacted by Spring cancellation and reduction in staffing completed during 4Q; says expands strategic relationship with Verizon with long-term 5G small cell commitment

·     Lam Research (LRCX) Q2 EPS $6.03 vs. est. $5.72; Q2 revenue $3.46B vs. est. $3.34B; U.S. GAAP gross margin of 46.4%, U.S. GAAP operating income as a percentage of revenue of 29.2%, and U.S. GAAP diluted EPS of $5.96; for Q3, said it expects revenue to be between $3.5 billion and $3.9 billion, while EPS is expected to be between $6.07 and $6.87 vs. est. $3.31B and $5.72

·     MKS Instruments (MKSI) Q4 EPS $2.34 vs. est. $2.02; Q4 revenue $660.2M vs. est. $602.98M; sees Q1 EPS Non-Gaap 42.16 vs. est. $1.97 and revs about $650M vs. est. $605.3M

·     Resideo technologies (REZI) 4Q revs $1.5B vs. est. $1.4B, announces launch of debt refinancing process, estimates op profit of about $152Mm for 4Q vs. est. $128.7Mm, estimates adj EBITDA of about $212Mm vs. est. $174.6Mm

·     ServiceNow (NOW) 4Q adj EPS $1.17 vs. est. $1.05 on revs $1.25B vs. est. $1.22B, subscription revs $1.18B +32%; Q4 subscription billings $1.83B, up 41% from last year

·     STMicroelectronics NV (STM) posted Q4 net profit ahead of analysts’ expectations saying it climbed to $582M from $392M last quarter and above est. $547.2M; gross profit for the quarter rose to $1.25B from $1.08B with gm of 38.8%; sees Q1 revs $2.93B at mid-point and sees $1.8B-$2B cap-ex for the year

·     Qualtrics (XM) 50.4M share IPO priced at $30.00

·     Teradyne (TER) Q4 EPS $1.10 vs. est. $1.05; Q4 revenue $759M vs. est. $721.1M; authorizes a $2B stock repurchase plan; guides Q1 revenue $720M-$780M vs. est. $738.7M and EPS 95c-$1.11 vs. est. $1.04

·     Xilinx (XLNX) 3Q adj EPS $0.78 vs. est. $0.68 on revs $803Mm vs. est. $775.7Mm, says will suspend qtrly dividend as well as open market stock repurchase program; says qtrly wired and wireless group performed better than expected as 5G deployments ramped more meaningfully in North America (note XLNX in process of being acquired by AMD)