Morning Preview: July 27, 2021

Auto PostDaily Market Report

Early Look

Tuesday, July 27, 2021

Futures

Up/Down

%

Last

Dow

-110.00

0.31%

34,924

S&P 500

-10.25

0.23%

4,404

Nasdaq

-8.50

0.06%

15,109

 

 

Global stock markets and U.S. futures decline amid a further Chinese selloff as Beijing undertook an extensive regulatory overhaul in the country. Focus turns back to the Fed and earnings as Fed officials are expected to discuss an eventual tapering of the stimulus at a meeting concluding tomorrow while Tesla Inc. (TSLA) rose in premarket trading after an earnings beat. The S&P 500 and Dow closed at new all-time bests in sideways trading Monday as investors prepare for the Fed’s two-day policy meeting and ahead of quarterly earnings. Big tech in focus tonight with Apple, Microsoft, and Alphabet (GOOGL) expected to post results while China stocks look to recover as big cap Alibaba (BABA) and Baidu (BIDU) each fall more than 5% on Monday after Beijing recently unveiled new rules on private tutoring and online education firms, the latest in a series of crackdowns on the technology sector that have roiled financial markets. The S&P 500 energy index was the strongest gainer among 11 sector indexes yesterday, jumping 2.5%, with health care the worst performer. Bitcoin prices pullback slightly after Bloomberg reported late yesterday that Amazon (AMZN) denies will accept bitcoin, launch crypto coin in 2022 – said an Amazon spokesperson denied the report form City A.M. Crypto assets were up between 15%-20% on Monday after the reports initially surfaced. In Asian markets, The Nikkei Index climbed 136 points to 27,970, the Shanghai Index dropped over 80 points (2.49%) to settle at 3,381 and the Hang Seng Index plunged again, falling over 1,000 points for a 2nd straight day (4.22%) to 25,086. In Europe, the German DAX is down over 70 points to 15,550, while the FTSE 100 is off about 30 points to dip below the 7,000 level.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 10.51 points, or 0.24%, to 4,422.30

·     The Dow Jones Industrial Average rose 82.76 points, or 0.24%, to 35,144.31

·     The Nasdaq Composite edged higher 3.72 points, or 0.03%, to 14,840.71

·     The Russell 2000 Index climbed 7.27 points, or 0.33% to 2,216.92

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:30 AM ET         Durable Goods Orders for June…est. 2.1%

·     8:30 AM ET         Durable Goods Ex Transportation for June…est. 0.8%

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:00 AM ET         CaseShiller 20 City Index for May…est. 1.6%

·     9:00 AM ET         Monthly Home Prices MoM for May

·     10:00 AM ET      Consumer Confidence for July…est. 123.9

·     10:00 AMET       Richmond Fed Manufacturing for July…prior 22

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAN, ABG, ADM, ARCH, AWI, BSX, CIT, CNC, CTS, CVLT, DTE, ECL, ENTG, FELE, FISV, GE, GLW, GPK, HUBB, IQV, IVZ, JBLU, LECO, LW, MMM, MSCI, NXRT, PCAR, PHM, PII, RGEN, ROK, RTX, SHW, SIRI, SSTK, ST, SWK, TPB, UPS, WM, XRX

·     Earnings After the Close: AAPL, AAT, AGYS, AMD, ASH, ATEN, AXTI, BXP, BYD, CAC, CAKE, CHE, CHRW, CSGP, EGP, EHC, ENPH, EQR, EXR, FCF, FIBK, GOOGL, HA, HAFC, HBNC, HIW, HRZN, HT, HVT, IEX, JBT, JNPR, LBRT, MANH, MASI, MAT, MDLZ, MPWR, MSFT, MTDR, MXIM, NAVI, NBR, NLOK, NOV, OLN, OVV, PGRE, QS, SBUX, STAG, SYK, TDOC, TENB, TER, TRMK, USNA, V, WHG, WIRE, WSBC

 

Other Key Events:

·     Alzheimer’s Association International Conference (AAIC) 2021 (virtual), 7/26-7/30

·     Society of Cataract & Refractive Surgery, 7/23-7/27, in Las Vegas

 

 

Macro

Up/Down

Last

Nymex

0.01

71.92

Brent

0.19

74.69

Gold

-030

1,797.35

EUR/USD

-0.0017

1.1786

JPY/USD

-0.28

110.11

10-Year Note

-0.022

1.254%

 

 

Sector News Breakdown

Consumer

·     Tesla Motors (TSLA) Q2 non-GAAP EPS $1.45 vs. est. $0.96; Q2 revs $11.96B vs. est. $11.3B; said produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0% and exceeded $1B of GAAP net income for the first time in our history; qtrly automotive gross margin 28.4% vs 25.4% reported last year; qtrly automotive rev of which regulatory credits $354 mln vs $428 mln reported last year; qtrly vehicle asp declined by 2% yoy as Model S & Model X deliveries were reduced in q2 due to the product updates; records $23 million in bitcoin-related impairments after crypto’s second-quarter plunge

·     PulteGroup, Inc. (PHM) and Invitation Homes (INVH), the nation’s premier single-family home leasing company, announced today the formation of an innovative strategic relationship

·     Stanley Black & Decker (SWK) Q2 EPS $3.08 vs. est. $2.87; Q2 revs $4.3B vs. est. $4.21B; raises FY21 EPS view to $11.35-$11.65 from $10.70-$11.00 (est. $11.19) and sees FY21 organic revenue growth 16%-18%

·     TriNet Group (TNET) Q2 adj EPS $1.56 vs. est. $0.81; Q2 revs rose 16% to $1.1B as compared to the same period last year; Q2 adjusted EBITDA was $154 million, compared to Adjusted EBITDA of $199 million, in the same period last year; total Worksite Employees (WSEs) increased 9% compared to the same period last year, to approximately 340,000; sees FY revs up 10%-12% YoY

 

Energy

·     Range Resources (RRC) 2Q adj EPS $0.24 vs est. $0.24 on adj revs $644Mm vs est. $569.9Mm, qtrly production avg 2.10 BCFE/day, about 31% liquids; says remains on track to spend at or below $425Mm capital budget; guides FY production avg about 2.15 BCFE/day with about 30% liquids

 

Financials

·     Amazon.com Inc (AMZN) on Monday denied a media report saying the e-commerce giant was looking to accept bitcoin payments by the end of the year. The report from London’s City A.M. newspaper sent Bitcoin prices surging above $40K before it trimmed gains to last trade around $37,500. “Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” said a spokesperson from Amazon

·     AGNC Investment (AGNC) Q2 EPS loss (83c); reports $16.39 tangible net book value per common share as of June 30, decreased ($1.33) per common share, or -7.5%, from $17.72 per common share as of March 31.

·     American Campus Communities (ACC) 2Q adj FFO/shr $0.42 vs est. $0.37 on revs $208.5Mm vs est. $187.8Mm; guides 3Q FFO/shr $0.32-0.36 vs est. $0.32, sees FY FFO/shr $1.95-2.09 vs est. $1.92

·     Ameriprise (AMP) 2Q adj EPS $5.27 vs est. $5.21 on revs $3.42B vs est. $3.37B, AUM +28% to $1.2T

·     Brandywine (BDN) Q2 FFO $0.32 vs. est. $0.32; sees 2021 FFO $1.34-$1.40 vs. est. $1.36; Core Portfolio: 90.5% occupied and 92.5% leased; New and Renewal Leases Signed: 435,000 square feet; Rental Rate Mark-to-Market: Increased 22.2% / 13.7% on accrual / cash basis; Same Store Net Operating Income: 0.5% on an accrual basis and 1.8% on a cash basis

·     Brown & Brown (BRO) Q2 adj EPS 49c vs. est. 40c; Q2 revs $727.3M vs. est. $679.46M

·     Heartland Financial (HTLF) Q2 EPS $1.41 vs. est. $1.26; Q2 revs $173.7M vs. est. $174.7M; Q2 net interest margin was 3.37% compared to 3.44%during the first quarter of 2021 and 3.81% during the second quarter of 2020

·     Independence Realty (IRT) 2Q EPS $0.03 vs est. $0.01, sees FY same-store property NOI growth 6.5-7.5%, sees FY core FFO/share $0.76-0.78 vs est. $0.75; announces 14M share secondary offering

·     Sun Communities (SUI) 2Q core FFO/shr $1.80 vs est. $1.61 on revs $603.9Mm vs est. $374.9Mm, says home sales volume +89.5% to 1,158 homes for qtr ended June 30, 2021; guides FY core FFO/shr $6.25-6.37 vs est. $6.03

·     TransUnion (TRU) Q2 adj EPS 96c vs. est. 91c; Q2 revs $774M vs. est. $745.78M; sees FY21 adj EPS $3.63-$3.70 vs. est. $3.54; sees FY21 revenue $3.034B-$3.059B vs. est. $2.98B

 

Healthcare

·     Biogen (BIIB) and Ionis (IONS) announced that topline data from a Phase 1b placebo-controlled, multiple ascending dose clinical study showed that BIIB080/IONIS-MAPT met its primary objective of safety and tolerability in patients with mild Alzheimer’s disease.

·     HealthStream Inc. (HSTM) 2Q EPS $0.08 vs est. ($0.04) on revs $64.8Mm vs est. $60.6Mm; guides FY revs $253-257Mm vs est. $251.3Mm, sees FY adj EBITDA $48-50Mm vs est. $42.8Mm

·     ObsEva (OBSV) rises 25%; after entering a pact for Organon to exclusively develop and commercialize ebopiprant, a treatment for preterm labor

·     Medpace (MEDP) Q2 GAAP EPS $1.06 vs. est. $0.99; Q2 revs $278.3M vs. est. $272.1M; raises FY21 EPS view to $4.31-$4.50 from$4.24-$4.42 (est. $4.38); sees FY21 revs $1.11B-$1.15B vs. est. $1.13B; net new business awards were $387.6M in Q2, representing an increase of 52.5%

·     Universal Health (UHS) Q2 adj EPS $3.76 vs. est. $2.68; Q2 revs $3.2B vs. est. $3.01B; increases 2021 full year earnings guidance and announces $1 billion increase to stock repurchase program authorization; sees year EPS $11.46-$12.16 (above prior $10.05-$11.05) vs. est. $11.00; sees year revs $12.35B-$12.5B vs. est. $12.33B

 

Industrials & Materials

·     General Electric (GE) Q2 adj EPS 5c vs. est. 4c; Q2 revs $18.3B vs. est. $18.13B; Q2 Industrial organic revenues $16.9B, up 7%; reiterates FY21 adjusted EPS view 15c-25c vs. est. 26c; raises 2021 outlook for Industrial free cash flow range from $2.5B-$4.5B to $3.5B-$5.0B

·     3M (MMM) Q2 adj EPS $2.59 vs. est. $2.26; Q2 revs $8.95B vs. est. $8.55B; Q2 operating cash flow was $1.9B with adjusted free cash flow of $1.6B contributing to adjusted free cash flow conversion of 103%; raises FY21 EPS view to $9.70-$10.10 from $9.20-$9.70 (est. $9.81) and also boosts FY21 revenue view to up 7%-10% from up 5%-8%

·     China is considering imposing more tariffs on steel exports as it seeks to cap domestic production and tame surging prices. Potential rates being discussed range from 10% to 25% and products include hot-rolled coil, according to two people familiar with the matter – Bloomberg (watch shares of X, STLD, RS, NUE)

·     Axalta Coating (AXTA) Q2 EPS $0.54 vs. est. $0.46; Q2 sales $1.13B vs. est. $1.08B; Q2 sales increased 72.6% year-over-year, including a 5.3% foreign currency benefit, driven by 56.4% higher volumes and 9.3% higher average price and product mix; sees FY 2021 adjusted eps $1.85-$2.00 vs. est. $2.06; sees FY adjusted Ebit $685-$725 mln and sees FY 2021 net sales growth about 20%-22%

·     Hexcel Corp. (HXL) 2Q adj EPS $0.08 vs est. $0.01 on sales $320Mm vs est. $324Mm, continues to withhold financial guidance

·     Crane Co. (CR) 2Q adj EPS $1.83 vs est. $1.38 on sales $796Mm vs est. $743.6Mm; guides FY adj EPS $5.95-6.15 vs est. $5.73, sees FY core sales +7-9%, sees FY net sales $3.1B vs est. $3.03B

·     Packaging Corp. (PKG) 2Q adj EPS $2.17 vs est. $1.78 on sales $1.9B vs est. $1.78B, guides 3Q EPS $2.37 vs est. $2.11

·     PotlatchDeltic (PCH) Q2 EPS $2.77 vs. est. $2.52; Q2 revs $447.5M vs. est. $422.2M; Generated record Total Adjusted EBITDDA of $275.0M and Total Adjusted EBITDDA margin of 61%; historic lumber prices drove record Wood Products Adjusted EBITDDA of $204.6M

·     Simpson Manufacturing (SSD) Q2 EPS $1.66 vs. est. $1.60; Q2 revs $410.3M vs. est. $393.68M; raises FY21 CapEx view to $55M-$60M from $50M-$55M

·     TFI International Inc. (TFII) 2Q adj EPS $1.44 vs est. $0.96 on revs $1.84B vs est. $1.35B, increased qtrly dividend by 21% to $0.23/share

 

Technology, Media & Telecom

·     Chinese internet companies extend losses premarket as Beijing steps up its tech crackdown with shares of Alibaba (BABA), Baidu (BIDU), JD.com (JD), Pinduoduo (PDD) NetEase (NTES) plunging again along with ride-hailing firm Didi (DIDI) and EV makers Li Auto Inc (LI) and Nio Inc (NIO) as Chinese regulators have vowed to strengthen the oversight of its big tech firms

·     Xerox (XRX) Q2 adj EPS 47c vs. est. 38c; Q2 revs $1.79B vs. est. $1.77B; says have a strong balance sheet and sufficient liquidity, including approximately $2.1 billion of cash and cash equivalents

·     Intel (INTC) unveiled a new process and packaging technology roadmap. “Building on Intel’s unquestioned leadership in advanced packaging, we are accelerating our innovation roadmap to ensure we are on a clear path to process performance leadership by 2025,” Intel CEO Pat Gelsinger said

·     Amkor Technology (AMKR) 2Q EPS $0.51 on sales $1.41B vs. est. $0.47 and $1.35B; guides 3Q net sales $1.65-1.75B

·     Cadence Design Systems (CDNS) Q2 adj EPS $0.86 vs. est. $0.76; Q2 revs $728M vs. est. $721.16M; sees Q3 adj EPS $0.74-$0.76 vs. est. $0.74; Q3 revs $730M-$750M vs. est. $722.56M; raises FY21 adjusted EPS view to $3.14-$3.20 from $2.99-$3.07 and ups FY21 revenue view to $2.925B-$2.965B from $2.88B-$2.93B

·     F5 Networks (FFIV) 3Q adj EPS $2.76 vs est. $2.46 on revs $652Mm vs est. $638.1Mm; guides 4Q adj EPS $2.68-2.80 vs est. $2.71, sees 4Q revs $660-680Mm vs est. $662.1Mm

·     Calix Inc. (CALX) Q2 EPS non-GAAP 38c vs. est. 27c; Q2 revs $168.7M vs. est. $161.52M; sees Q3 non-GAAP EPS 26c-30c vs. est. 24c; sees Q3 revenue $164M-$170M vs. est. $156.38M

·     Celestica (CLS) Q2 adj EPS $0.30 vs. est. $0.24; Q2 revs $1.42B vs. est. $1.38B; sees Q3 adj EPS $0.30-$0.36 vs. est. $0.28; sees Q3 revs $1.4B-$1.55B vs. est. $1.44B

_________________________________________________________________

Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

Live Trading

Open an Account

Paper Trading

Register