Early Look

Monday, March 1, 2021

Futures	Up/Down	%	Last
Dow	285.00	0.92%	31,195
S&P 500	39.25	1.02%	3,848
Nasdaq	175.50	1.36%	13,086

 

 

Stock futures pop higher after selling pressure last week, helped by positive vaccine news as JNJ received FDA emergency use authorization for the third vaccine for the prevention of coronavirus disease (was widely expected), which is administered in a single shot. Stocks are also rising following a rebound in bonds, as the yield on the 10-year yield falls another 2bps to around 1.43%, nearly 18 bps off last week’s highs above 1.6% (1-year highs), as the S&P 500 index moves back above its 50-day moving average support (which stands at 3,815). Also, Biden’s pandemic relief bill, approved early Saturday by the U.S. House of Representatives, now goes to the Senate for approval. The moves in stocks comes a day after the tech-heavy Nasdaq index partly rebounded on Friday from its worst day in four months in choppy trading, even as sentiment remained fragile, with fears of a rise in inflation keeping U.S. bond yields near a one-year high. The S&P 500 was little changed to slightly lower on the day, while the Dow index fell to a three-week low. The Dow still posted gains of nearly 4% for the month, as investors bought into cyclical companies set to benefit from an economic reopening. For the week, the Dow fell 1.8%, the S&P 500 declined 2.5% and the Nasdaq sank 4.9%. Travel and “reopen” related stocks are looking higher again (airlines, leisure, lodging, restaurants) following the positive vaccine approval news this weekend. Crypto stocks looking higher ad Bitcoin prices jump around 5% back near the $48,000 mark. In Asian markets, The Nikkei Index jumped almost 700 points to 29,663, the Shanghai Index gained 42 points to 3,551 and the Hang Seng Index climbed 472 points to 29,452, all rebounding after plunging last week in a global rout amid rising Treasury yields. In Europe, the German DAX is higher by over 100 points to 13,900, while the FTSE 100 rises over 80 points to 6.570.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -18.19 points, or 0.48%, to 3,811.15

·     The Dow Jones Industrial Average fell -469.64 points, or 1.50%, to 30,932.37

·     The Nasdaq Composite gained 72.92 points, or 0.56%, to 13,192.35

·     The Russell 2000 Index inched higher 0.88 points, or 0.04% to 2,201.05

 

Events Calendar for Today

·     9:45 AM EST      Markit Manufacturing PMI-F

·     10:00 AM EST    Construction Spending MoM for Jan

·     10:00 AM EST    ISM Manufacturing PMI, for Feb

 

Earnings Calendar:

·     Earnings Before the Open: ASTE, ATNX, AXSM, BHVN, CDLX, CORE, FOLD, HGV, HNI, MIDD, NOVT, NRG, RETA, SSYS, TGNA, WKHS, XHR, XRAY

·     Earnings After the Close: ADVM, AI, AMBC, APPF, ATRA, CCXO, CLOV, DDD, FGEN, FSK, GAIA, HCCI, INO, IPAR, IPI, LMND, MBI, NSTG, NVAX, OMER, OOMA, OSUR, PLYA, RPAY, SCPL, SGMS, SILK, SPNE, UNIT, WIFI, ZM

 

Other Key Events:

·     BMO Capital Global Metals & Mining Conference (virtual), 3/1-3/5

·     Cowen Annual Healthcare Conference (virtual), 3/1-3/4

·     Credit Suisse 26^th Annual Energy Summit (virtual), 3/1-3/3

·     European Society for Medical Oncology (ESMO), 3/1-3/2

·     Morgan Stanley Energy & Power Conference (virtual), 3/1-3/3

·     Morgan Stanley TMT Conference (virtual), 3/1-3/3

·     Raymond James Institutional Investors Conference (virtual), 3/1-3/3

 

 

Macro	Up/Down	Last
Nymex	0.74	62.24
Brent	0.74	65.16
Gold	12.60	1,741.30
EUR/USD	-0.0028	1.2047
JPY/USD	0.13	106.70
10-Year Note	-0.024	1.432%

 

 

World News

·     China’s factory activity expands at a slower pace in February, misses expectations, official PMI data showed. Activity hit the lowest level since last May and missing market expectations as the official manufacturing Purchasing Manager’s Index (PMI) fell to 50.6 from 51.3 in January, data from the National Bureau of Statistics (NBS) showed on Sunday, below the est. decline to 51.1.

 

Sector News Breakdown

Consumer

·     Ross Stores (ROST) mentioned positively in Barron’s saying it offers shoppers a chance to find overlooked “treasures” among a heap of discards and its stock could offer investors the same opportunity, Ross has had a tough time during the pandemic and its stock has took a bigger beating, but the underperformance means it also has the most to gain as more vaccines are given

·     Gentherm (THRM) Q4 adj EPS $1.16 vs. est. 71c; Q4 revenue $288.9M vs. est. $257.29M; sees FY21 product revenue $1.05B-$1.13B vs. est. $1.02B; sees FY21 adjusted EBITDA between 17%-9%

 

Energy

·     Utility company stocks (XLU, VPU) and funds are a cheap way to plug into the seismic shift away from coal and toward wind and solar power over the next 15 years, providing a potential boon to both the environment and investors, according to the latest Barron’s cover feature. “Utilities are a stealth green energy play, with much lower valuations than most alternative-energy providers and less risk,” said the co-head of utilities and renewable energy research at SSR.

 

Financials

·     Citigroup (C) mentioned positively in Barron’ saying the company is broken-but the U.S. bank finally might have found the woman to fix it, with Jane Fraser stepping in as CEO on March 1. Citi has lagged behind the 48% surge in the KBW Bank Index, making it a bank with room to run

·     Warren Buffett Berkshire Hathaway’s (BRK/A) Q4 profits rose, with its net earnings rising to $38.5B, or $23,015 a Class A share equivalent, up almost 23% from the previous year’s profit of $29.2B, or $17,909 a share. Operating earnings, which exclude some investment results, rose to $5B from $4.4B the year before.

·     Online brokerage Robinhood is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources

·     Credit Suisse Group AG (CS) is exploring ways to reduce ties to Greensill Capital over concerns about the finance company’s exposure to a single client, U.K.-based steel magnate Sanjeev Gupta, The Wall Street Journal reported on Sunday

·     Getty Realty (GTY) entered agreement relating to offering and sale of shares of common stock having an aggregate offering price of up to $250M

 

Healthcare

·     The FDA granted the emergency use authorization for Johnson & Johnson’s (JNJ) COVID-19 shot, making it the third to receive approval in the U.S. (as well as MRNA and PFE/BNTX) and the first to have a single-dose regimen, a key tool in accelerating the vaccination drive

·     Due to production problems suffered by Catalent (CTLT), the manufacturing partner of Johnson & Johnson (JNJ), the U.S. government could receive fewer COVID-19 vaccine deliveries from the company, according to Financial Times.

·     AstraZeneca (AZN) sold its 7.7% stake in Covid-10 vaccine maker Moderna Inc. (MRNA) for more than $1B, The Times reported.

·     Eli Lilly (LLY) was awarded a U.S. Army contract valued at up to$2.52 billion for its Covid-19 treatment of combination monoclonal antibody therapeutic LY-CoV555 and LY-CoV016

·     Regeneron Pharmaceuticals, Inc. (REGN) announced detailed results from a Phase 2 proof-of-concept trial evaluating the investigational antibody cocktail REGN1908-1909 in cat-allergic patients with mild asthma. The trial met the primary endpoint of preventing early asthma reactions and also met key secondary endpoints

·     Dentsply Sirona (XRAY) Q4 adj EPS 87c vs. est. 64c; Q4 revenue $1.08B vs. est. $995.7M; sees FY21 adj EPS $2.60-$2.80 above consensus $2.40 and sees FY21 revenue $4B-$4.3B vs. est. $3.86B

 

Industrials & Materials

·     Space-transportation startup Rocket Lab USA is nearing an agreement to go public by merging with Vector Acquisition (VACQ), the Wall Street Journal reported; said the deal values Rocket Lab at around $4.1B including debt and could be finalized by Monday https://on.wsj.com/3uJhggr

·     CAE Inc. (CAE) agreed to buy L3Harris Technologies Inc.’s (LHX) military training business for $1.05 billion. CAE expects the deal to add to earnings in the first full year after the closing, which is expected to occur in the second half of 2120. Separately, agreed to sell its combat propulsion systems unit to Renk AG for about $400 million in cash

 

Technology, Media & Telecom

·     Logitech (LOGI) raises FY21 revenue view to up 63% from up 57%-60; raises long-term sales growth expectations to 8%-10%, up from high single digits; raises long-term non-gaap gross margin target to 39%-44%, up from 36%-40% and raises long-term non-gaap operating margin target to 14%-17%, up from 11%-14%