Early Look

Wednesday, June 9, 2021

Futures	Up/Down	%	Last
Dow	-25.00	0.07%	34,561
S&P 500	2.25	0.05%	4,228
Nasdaq	28.50	0.20%	13,839

 

 

U.S. stock futures are mixed with Dow futures slipping, S&P futures flat and Nasdaq futures looking higher as Treasury yields fall to their lowest levels in weeks (1.50% for the 10-year) ahead of key inflation data later this week. Stock averages flirted with record highs on Tuesday, as the S&P neared but could not hold its early gains (ended Tuesday at 4,227, just off its closing high on May 7 of 4,232) while the Russell 2000 neared its all-time best close as investors appear wary ahead of inflation data due on Thursday in the form of consumer prices (CPI). Consumer discretionary and energy were the best performing major S&P 500 sectors on the day, while utilities were the weakest group. A lack of clear market catalysts kept institutional investors on the sidelines, while retail traders fueled the ongoing meme stocks rally with more volatility from the likes of AMC, GME, BBBY, WKHS, BB, with new names such as CLOV and WEN added to the fray. Fear remains non-existent in the market as the CBOE volatility index (VIX) touched its lowest level in over a year. It appears for the time being the “meme stocks” are taking over from crypto as the place to be as Bitcoin prices slid. Oil prices inch higher with WTI crude above $70 per barrel for the first time since October 2018 and Bitcoin rebounds.

 

In Asian markets, The Nikkei Index fell -102 points to 28,860, the Shanghai Index rose 11 points to 3,591 and the Hang Seng Index dipped -38 points to 28,742. In Europe, the German DAX is down about -80 points to 15,555, while the FTSE 100 slides about -40 points to 7,050. China data showed May PPI +9.0% y/y vs +8.5% poll, +6.8% in April, May CPI +1.3% y/y vs +1.6% poll, +0.9% in April (CPI highest in eight months). Chinese stocks edge higher despite the fastest factory inflation since 2008 as benign CPI suggests only limited pass-through to consumers

Market Closing Prices Yesterday

·     The S&P 500 Index inched higher 0.74 points, or 0.02%, to 4,227.26

·     The Dow Jones Industrial Average fell -30.42 points, or 0.09%, to 34,599.82

·     The Nasdaq Composite gained 43.19 points, or 0.31%, to 13,924.91

·     The Russell 2000 Index advanced 24.58 points, or 1.06% to 2,343.76

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:00 AM EST    Wholesale Inventories for April

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BF/B, CPB, DAKT, LOVE, UNFI, VRA

·     Earnings After the Close: ENZ, GEF, GME, KLXE, LAKE, OXM, RH, TCL, VRNT

 

Other Key Events:

·     Baird Global Consumer, Technology & Services Conference 2021 (virtual), 6/8-6/10

·     Deutsche Bank Global Consumer Conference (virtual), 6/7-6/10

·     Goldman Sachs Healthcare Conference (virtual), 6/8-6/10

·     Goldman Sachs 25th Annual European Financials Conference (virtual), 6/8-6/10

·     Jefferies Healthcare Virtual Conference, 6/8-6/10

·     Oppenheimer Virtual Software & Semiconductor Bus Tour, 6/7-6/11

·     Piper Global Exchange & FinTech Conference (virtual), 6/9-6/10

·     REITWeek 2021 Investor Virtual Conference, 6/8-6/10

·     UBS Global Industrials and Transportation Conference, 6/8-6/9

 

 

Macro	Up/Down	Last
Nymex	0.11	70.16
Brent	0.12	72.34
Gold	-2.60	1,890.25
EUR/USD	0.0019	1.2192
JPY/USD	-0.06	109.44
10-Year Note	-0.019	1.509%

 

 

World News

·     China’s factory gate prices rose at their fastest annual pace in over 12 years in May as the producer price index (PPI) increased 9.0% from a year earlier (est. 8.5%), the National Bureau of Statistics (NBS) said driven by significant price increases in crude oil, iron ore and non-ferrous metals. On a monthly basis, the PPI rose 1.6%, up from a 0.9 uptick in April.

·     China’s consumer price index (CPI) rose 1.3% in May in annual terms, the biggest increase in eight months. That was still slower than analysts’ forecast for a 1.6% increase, after a 0.9% gain in April.

·     U.S. Senate passed a wide ranging $250b Bill designed to counter China & compete with China

·     Bipartisan group meeting, Republican Senators came out of the meeting saying that they made a lot of progress, there is work to be done to reach an agreement, Manchin says a positive meeting, moving in the right direction.

 

Sector News Breakdown

Consumer

·     Casey General (CASY) Q4 EPS $1.12 vs. est. 88c; Q4 revs $2.38B vs. est. $2.22B

·     Calavo Growers (CVGW) Q2 adj EPS $0.43 vs. est. $0.44; Q2 revs $276.82M vs. est. $267.07M; sees Q3 revs $280M-$300M vs. est. $295.8M; sees Q3 adjusted EBITDA $11M-$15M; Q2 Fresh segment revenue decreased 5%, due primarily to 9% growth in avocado volume, offset by a 10% decrease in avocado prices and 31% lower tomato revenue

·     Limoneira (LMNR) Q2 adj EPS 10c vs. est. 6c; Q2 revs $45.1M in-line with ests; believes it is prudent to not provide lemon guidance at this time until covid-19 vaccine is widely distributed; continues to believe avocado revenue in fiscal 2021 will be strong due to market factors and positive initial crop indicators

·     Target Corp. (TGT) raises its quarterly dividend by 32% to $0.90

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) showed crude oil stockpiles fell -2.1m bbl vs -3.5m expected: Cushing -420k: Gasoline +2.4m: Distillates +3.75m

·     Air Products (APD) and Baker Hughes (BKR) announced a strategic global collaboration to develop next generation hydrogen compression aimed at lowering the cost of production and accelerating the adoption of hydrogen as a zero-carbon fuel

·     Ahead of its investor and analyst conference today, UPS (UPS) announced 2023 financial targets with FY23 consolidated revenue ranging from approximately $98 billion to approximately $102 billion vs. $99.92B consensus

·     SPX Corporation (SPXC) signs an agreement to sell 100% of the issued and outstanding stock of its wholly-owned subsidiary, SPX Transformer Solutions, to GE-Prolec Transformers, for $645 million in cash; lowers FY21 adjusted EPS view to $2.17-$2.37 from $3.06-$3.26 and lowers FY21 revenue view to $1.25B from $1.70B (est. $1.69B)

·     ABM Industries (ABM) Q2 adj EPS $0.82 vs. est. $0.71; Q2 revs $1.5B vs. est. $1.48B; raises year EPS view to $3.30-$3.50 from prior $3.00-$3.25 (est. $3.18); maintaining its guidance for FY 2021 Gaap income from continuing operations

·     Boeing (BA) seeks increase in $3.9bn Air Force One fixed-price contract; Manufacturer’s supplier problems could delay new jets for White House by a year – Financial Times reported

·     Sherwin-Williams (SHW) raises Q2 sales guidance and full year 2021 sales and diluted net income per share guidance; raises FY 2021 consolidated net sales guidance to be up a high-single to low-double-digit percentage over full year 2020; raises FY21 EPS view to $9.15-$9.45 from $8.80-$9.07 (est. $9.32)

·     Global Ship Lease (GSL) agrees to purchase 12 container ships from Borealis Finance LLC for an aggregate purchase price of $233.9M; GSL’s fleet will comprise 62 container ships with a total capacity of 322,770 TEU

·     Vale (VALE) said it will prepay an outstanding ~$2.5B balance related to project financing for the Nacala logistics corridor that serves the Moatize coal mine in Mozambique.

 

Financials

·     Cohen & Steers (CNS) reports preliminary AUM $94.2B as of May 31; an increase of $1.4B from assets under management at April 30. The increase was due to net inflows of $760M and market appreciation of $815M, partially offset by distributions of $201M

·     Amazon (AMZN) is considering replacing JPMorgan (JPM) in its co-brand card deal, Bloomberg reported saying American Express (AXP) and Synchrony Financial (SYF) are being considered as an alternative

·     UP Fintech (TIGR) 6.5M share Secondary priced at $24.50

 

Healthcare

·     Karyopharm Therapeutics (KPTI) announces key management changes to its commercial organization

·     LYRA Therapeutics (LYRA) announces positive outcome of end-of-phase 2 meeting with the FDA for lyr-210 for the treatment of chronic rhinosinusitis

·     Option Care Health (OPCH) 15M share Spot Secondary priced at $20.00

 

Technology, Media & Telecom

·     Comtech (CMTL) Q3 sales $139.4M vs. est. $140.7M; Q3 adj EPS 26c vs. est. loss of (1c); still sees FY adj Ebitda $74M-$76M vs. est. $74.5M; lowers FY net sales $580M-$590M from prior $610.0M-$620.0M (est. $616.4M)

·     Pegasystems (PEGA) expands share repurchase program to $60M

·     UiPath (PATH) Q1 EPS loss ($1.11) vs. (33c) last year; Q1 revs $186.2M vs. $113.1M last year

·     Ondas Holding (INDS) 6.4M share Spot Secondary priced at $7.00