Early Look

Monday, June 28, 2021

U.S. futures are looking mixed, with the Nasdaq edging higher as Treasury yields remain lower (10-year around 1.51%), while global markets slide amid increased restrictions overseas given the Covid-19 variant. Futures for the S&P 500 index, which closed Friday at its 31st all-time high of the year, drifted between muted gains and losses early. Last week, the S&P rose 2.74% (biggest weekly gain since 1st week of Feb), the Dow gained 3.44%, the Russell 2000 jumped 4.64% and the Nasdaq climbed 2.35%. Cryptos resume broad rally, with Bitcoin up more than 6% above $34K, while Ethereum jumps 8% back above 2K. WTI crude hovers around $74; gold near $1,780, the Dollar Index (DXY) edges higher for the first time in three days as Aussie and kiwi soften on new virus restrictions. Asian markets were little changes across the board as The Nikkei Index dips -16 points to 29,048, the Shanghai Index was little changed at 3,606 and the Hang Seng Index slipped about -20 points to 29,268. In Europe, the German DAX is lower by about 50 points to15,560, while the FTSE 100 slides -40 points to drop back below 7,100. Shares in global markets have marched higher since mid-May, boosted by a robust economic recovery, the prospect of further fiscal stimulus and low bond yields. Investors last week also were encouraged by the announcement of a roughly $1 billion bipartisan infrastructure deal.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 14.21 points, or 0.33%, to 4,280.70

·     The Dow Jones Industrial Average rose 237.02 points, or 0.69%, to 34,433.84

·     The Nasdaq Composite dipped -9.32 points, or 0.06%, to 14,360.39

·     The Russell 2000 Index edged higher 0.77 points, or 0.03% to 2,334.40

Events Calendar for Today

·     10:30 AM EST    Dallas Fed Manufacturing for June

Earnings Calendar:

·     Earnings Before the Open: none

·     Earnings After the Close: LIVX, MLHR

Other Key Events:

·     American Diabetes Association Scientific Session of the ADA (virtual), 6/25-6/29

·     Raymond James Company Meetings at Mobile World Congress (virtual), 6/28-7/1

Sector News Breakdown

Consumer

·     GameStop (GME) has made it into the Russell 1000 index, FTSE Russell announced on Saturday (in order to be included in the latest index reconstitution, stocks had to have market caps of at least $7.3 billion on May 7)

·     Tesla Inc. (TSLA) announced a recall to address a safety issue in more than 285,000 passenger vehicles in China, including more than 90% of locally made vehicles sold by the company, associated with their cruise-control system, the country’s market regulator said.

·     Hertz Global Holdings (HTZGQ) a positive mention in Barron’s saying shares may climb when the company emerges from bankruptcy this week, just in time for a surge in travel. It will have a healthy balance sheet with little or no net corporate debt.

·     Burberry announced that Marco Gobbetti has notified the board of his intention to step down as Chief Executive Officer and leave the company at the end of 2021.

·     Dorman Products (DORM) announced that it has entered into a definitive agreement to acquire Dayton Parts for total consideration of $338 million, subject to customary adjustments

·     Fat Brands Inc. (FAT) has agreed to buy Global Franchise Group, the company behind five quick-service restaurant brands, for $442.5 million in cash and stock from Serruya Private Equity Inc. and Lion Capital LLP.

Energy, Industrials & Materials

·     The U.S. Federal Aviation Administration (FAA) has told Boeing Co (BA) that its planned 777X is not yet ready for a significant certification step and warned it “realistically” will not certify the airplane until mid- to late 2023 – Reuters

·     The speaker of Iran’s parliament said on Sunday Tehran will never hand over images from inside of some Iranian nuclear sites to the U.N. nuclear watchdog as a monitoring agreement with the agency had expired, Iranian state media reported

·     Chart (GTLS) mentioned positively in Barron’s saying the company offers opportunity to bet on hydrogen, natural gas. Notes Chart currently makes most of its money providing equipment to industrial-gas companies or fossil-fuel energy markets…but its stock offers a way to play both the rebound in traditional energy and the transition to new forms of it

Financials

·     Mortgage insurers viewed positively in Barron’s shares the industry still looks cheap. Barron’s notes higher home prices mean more buyers will need mortgage insurance, and historically low rates mean fewer defaults which could benefit the industry and stocks of three companies: NMI Holdings (NMIH), Essent Group (ESNT) and MGIC Investment (MTG)

·     OceanFirst Financial Corp. (OCFC) announces 2021 Stock Repurchase Program – to repurchase approximately 5% of the Co’s outstanding common stock up to an additional 3M shares (is in addition to the remaining 1,519,145 shares available)

Healthcare

·     The U.S. FDA has updated the fact sheets for Pfizer (PFE)/ BioNTech (BNTX) and Moderna (MRNA) COVID-19 vaccines to indicate the information on rare cases of heart inflammation following the immunization.

·     Biogen (BIIB): Two House committees plan to investigate the FDA approval and pricing of the company’s Alzheimer’s drug Aduhelm. Rep. Carolyn B. Maloney (D-N.Y.), Chairwoman of the Committee on Oversight and Reform, and Rep. Frank Pallone (D-N.J.), Jr., Chairman of the Committee on Energy and Commerce said the committees will investigate the FDA approval

·     Intellia Therapeutics (NTLA) shares rise 30%; reported initial data from the 1st phase I trial of a systemic CRISPR therapy, NTLA-2001 in hATTR, demonstrating a clean safety profile and a mean reduction in the circulating TTR biomarker of 87% after a 1-time dosing at 0.3 mg/kg: this is what it looks like when preclinical data translate – according to Chardan.

·     Arbutus Biopharma (ABUS) +14%; announces AB-729 and AB-836 data in chronic hepatitis B virus (HBV) infection at the EASL International Liver Congress. AB-729 continues to demonstrate robust mean HBsAg reduction across all doses and dosing intervals with a favorable safety and tolerability profile, followed by a sustained plateau phase. AB-836 pre-clinical data suggest the potential for increased efficacy and an enhanced resistance profile relative to previous generation capsid inhibitors

·     Eli Lilly (LLY) announces 40-week results from SURPASS-2 trial evaluating tirzepatide compared to injectable semaglutide 1 mg in adults with type 2 diabetes

·     Kymera Therapeutics (KYMR) announces positive interim results from the Single Ascending Dose (SAD) portion of the Phase 1 trial of KT-474, demonstrating the first degrader proof-of-mechanism in targeted protein degradation in a healthy volunteer study

·     Orphazyme AS (ORPH) is cutting its workforce by about two-thirds following a recent U.S. regulatory finding that more data was needed before its principal drug could be approved. Earlier in June, the FDA said it needed more information beyond the single Phase 2/3 clinical trial that Orphazyme had conducted.

·     Trillium Therapeutics (TRIL) joins the broad-market Russell 2000 and 3000 Indices effective after the US market opens on June 28

·     Sorrento Therapeutics (SRNE) files to sell 5.52M shares of common stock for holders

Technology, Media & Telecom

·     Microsoft Corp. (MSFT) said hackers, linked by U.S. authorities to Russia’s Foreign Intelligence Service, installed malicious information-stealing software on one of its systems and used information to attack its customers; MSFT is aware of three customers that were affected by the recent activity, the company said

·     Perion Network (PERI) raises FY21 revenue view to $410M-$430M from $390M-$410M (est. $400.21M) and raises FY21 adjusted EBITDA view to $49M-$51M from $39M-$41M; sees Q2 revs $105M vs. est. $95.9M

·     Smith Micro Software (SMSI) files prospectus relates to resale or other disposition from time to time of up to 1.5 mln common shares by selling stockholder