Early Look

Friday, June 11, 2021

Stock futures are looking higher, trying to build off yesterday’s gains as the S&P 500 Index posted its first closing high in over a month and as the Nasdaq Composite outperformed (rising over 0.75%) as the yield on the benchmark 10-year yield fell to its lowest levels since March, now down around the 1.43% level. Market fears of rising prices and inflation have deteriorated despite another spike in CPI yesterday when prices topped 5% on YoY basis, its highest levels since 2008 as investors hang on to the notion (implied by the Fed) that the price hikes are indeed transitory. Market gains were paced by strong gain in healthcare and REITs. In Asian markets, The Nikkei Index fell -9 points to 28,948, the Shanghai Index slid -21 points to 3,589, and the Hang Seng Index rose 103 points to 28,842. In Europe, the German DAX is up about 40 points to 15,610, while the FTSE 100 is higher by 45 points to 7,133.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 19.63 points, or 0.47%, to 4,239.18

·     The Dow Jones Industrial Average rose 19.10 points, or 0.06%, to 34,466.24

·     The Nasdaq Composite jumped 108.58 points, or 0.78%, to 14,020.33

·     The Russell 2000 Index declined -15.72 points, or 0.68% to 2,311.41

Events Calendar for Today

·     10:00 AM EST    University of Michigan Sentiment June-P

·     1:00 PM EST       Baker Hughes Weekly rig count data

Other Key Events:

·     FBN Securities Silicon Valley Tech Tour (virtual), 6/10-6/11

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

World News

·     The U.S. Senate Commerce Committee unveiled on Thursday a bipartisan surface transportation bill that would authorize $78 billion over five years, including sharply higher passenger rail funding, along with tougher auto safety requirements.

·     Ten Senate Democrats and Republicans say they reached five-year, nearly $1 trillion infrastructure deal ‘; agreement calls for about $974 bln in infrastructure spending over five years without raising taxes. The package includes about $579 bln in new spending.

·     UK Apr GDP beat m/m: 2.3% m/m vs 2.2% cons; 3m/3m 1.5% in-line; y/y 27.6% in-line; UK April Trade Balance smaller deficit: -£10.96b vs -£12.1b consensus; UK Apr Trade Balance non-EU smaller deficit: -£5.55b vs -£6.54b previous

Sector News Breakdown

Consumer

·     Chewy.com (CHWY) 1Q EPS $0.09 vs. est. ($0.03) on sales $2.14B vs. est. $2.13B; Gross margin of 27.6% expanded 420 bps YoY; net margin of 1.8% improved 480 bps YoY; Q1 adjusted EBITDA of $77.4M; Q1 active customers 19.8M, up 31.6% from last year

·     Dave & Busters (PLAY) Q1 EPS $0.40 vs. est. loss (-$0.19); Q1 revs $265.3M vs. est. $256.6M; Q1 comp store sales fell -35%; sees Q2 revs $335M-$350M vs. est. $287.4M

·     Copa Holdings (CPA) reports revenue passenger miles dropped 58% to 753.6M in May 2021 vs. May 2019; capacity down 53.4% to 970.9M available seat miles as compared to May 2019

Energy, Industrials and Materials

·     The IEA forecasts global oil demand to recover to pre-pandemic levels late next year and urged OPEC and its allies to keep markets balanced by tapping their plentiful spare production capacity

·     Livent (LTHM) 13M share Secondary priced at $17.50

·     REV Group (REVG) 5.5M share Secondary priced at $15.50

·     Navigator Holdings (NVGS) Q1 EPS $0.05 vs. est. $0.05; Q1 revs $85.7M vs. est. $71.29M

Financials

·     AGNC Investment (AGNC) estimates tangible net book value per share of $16.82 as of May 31, 2021, down 6.4% from $17.96 it estimated at April 30.

·     Agree Realty (ADC) 4M share Spot Secondary priced at $71.50

·     Manning & Napier (MN) reports preliminary AUM $22.1B as of May 31

·     Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $160.9 billion as of May 31, 2021

·     TaskUs (TASK) 13.2M share IPO priced at $23.00

Healthcare

·     Vertex Pharma (VRTX) shares declined over 10% after abandoning further development of VX-864 for alpha-1 antitrypsin deficiency saying that the treatment benefit seen in a phase 2 study is “unlikely to translate into substantial clinical benefit.”

·     Jury selection began this week in a case considered one of the biggest and most complicated in the effort to hold corporations liable for the opioid crisis according to Barron’s. The trial, in New York, was delayed a year because of the pandemic. New York state and two of its counties, Nassau and Suffolk on Long Island, are suing a number of companies, including Johnson & Johnson (JNJ), McKesson (MCK) and Teva Pharmaceutical (TEVA), for monetary damages

·     Tyme Technologies, Inc. (TYME) completes strategic review, announces oasis breast trial with Georgetown University, and reports fiscal year 2021 financial results; review identified breast cancer as a priority indication for development, a focus on second-line pancreatic cancer, and continuation of trial in high-risk sarcomas

·     CureVac (CVAC) slides; The efficacy of CureVac’s Covid-19 vaccine is still hard to determine but is set to remain in focus as critical data from the phase 3 trial is expected this month, Berenberg says. Analysts at the bank say the trial’s progress seems encouraging and could facilitate a rapid regulatory discussion in the coming months. They expect the CVnCoV vaccine to be 70% to 80% effective – DJ

·     PTC Therapeutics (PTCT) announced interim results from the ongoing RAINBOWFISH trial that demonstrated pre-symptomatic infants with spinal muscular atrophy, or SMA

·     Vertex Pharmaceuticals (VRTX) and CRISPR Therapeutics (CRSP) announce new data on 22 patients, with follow-up of at least 3 months, treated with CRISPR/Cas9-based gene-editing therapy, CTX001

Technology, Media & Telecom

·     Nvidia (NVDA) has agreed to acquire DeepMap, a startup committed to building high-definition maps for autonomous vehicles to navigate the world safely

·     Didi Chuxing, China’s biggest ride-hailing firm, made public the filing for its long-anticipated U.S. stock market listing, setting the stage for what is expected to be the world’s biggest initial public offering this year.

·     SeaChange (SEAC) 1Q adj EPS ($0.07) vs. est. ($0.09) on revs $5.1Mm vs. est. $4.9Mm; qtr end backlog $20.1Mm