Early Look

Tuesday, March 2, 2021

Futures	Up/Down	%	Last
Dow	-57.00	0.17%	31,454
S&P 500	-12.25	0.31%	3,887
Nasdaq	-43.50	0.33%	13,237

 

 

U.S. overnight futures are looking lower, paring back slightly (-0.4%) after posting its best one day return in over 9-months on Monday, sending major averages not far near record highs again after sliding the week prior on rising inflation and rate concerns. In Asian markets, The Nikkei Index slipped -255 points to 29,408, the Shanghai Index dropped -42 points to 3,508 and the Hang Seng Index declined -356 points to 29,095. In Europe, the German DAX is higher by around 50 points to 14,060, while the FTSE 100 is up about 40 points to 6,625. Earnings season is finally slowing down after a busy quarter that saw strong beats on both the top and bottom line, though several companies still not providing guidance for the year amid uncertainty due to Covid-19. Cyclical sectors like energy and financials are also continuing to outperform the broader market due to optimism about vaccines and economic resurgence, though some are cautioning the rotation is overdone. Light on the economic calendar today. The 10-year U.S. Treasury note yield, which is keeping investors on edge, also slipped to a session low of 1.41% before drifting back higher around 1.45%.

 

The S&P 500 posted its biggest daily percentage gain since June 5th and the tech heavy Nasdaq ended up more than 3% on Monday as bond yields eased and investors were optimistic over news that Johnson & Johnson became the third authorized COVID-19 vaccine in the United States and began to ship its single-dose shot vaccine. U.S. Treasury yields eased for a second straight session from a one-year high hit last week (10-year above 1.63%), falling to 1.43%. The recent rise in yields has sparked investor concern over inflation, although Federal Reserve officials have downplayed inflation worries. All 11 S&P 500 sectors were higher on the day, led by gains in the S&P 500 technology sector along with financials and cyclicals. The Russell 2000 SmallCap outperformed rising over 3.3%. Meanwhile, the Senate is preparing to move ahead this week with President Biden’s sweeping coronavirus relief package. The House passed the $1.9 trillion package over the weekend, and Senate approval appears more likely after senators dropped a proposed minimum-wage increase.

 

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 90.67 points, or 2.38%, to 3,901.82

·     The Dow Jones Industrial Average rose 603.14 points, or 1.95%, to 31,535.51

·     The Nasdaq Composite spiked 396.48 points, or 3.01%, to 13,588.83

·     The Russell 2000 Index advanced 74.27 points, or 3.37% to 2,275.32

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AMRS, ANF, AZO, CHFS, CHS, DIN, FOE, IGT, KOPN, KSS, KTB, LL, MDCA, TGT, TILE, TXMD, WHF

·     Earnings After the Close: AMBA, BGFV, BGS, BOX, DAR, DLTR, FUBO, GO, HOV, HPE, HRZN, JWN, LUNG, MCHX, MRCC, NVEE, RIGL, ROST, SND, TMDX, URBN, VEC, VEEV

 

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

·     Credit Suisse Global Healthcare Conference (in London), 3/2-3/4

·     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	-0.03	60.61
Brent	-0.14	63.55
Gold	5.80	1,29.10
EUR/USD	-0.0028	1.2021
JPY/USD	0.15	106.91
10-Year Note	+0.026	1.44%

 

 

Sector News Breakdown

Consumer

·     Target Corp. (TGT) Q4 EPS $2.67 vs. est. $2.54; Q4 revs rose 21.1% to $28.34 billion, beating the average estimate of $27.48 billion; full-year sales rose by over $15 billion, larger than the combined growth of the last 11 years; comparable sales rose 20.5% in Q4, comfortably beating analysts’ estimates for a 16.4% rise; same-day deliveries and store pick-up services surged 212%; held back on providing sales and earnings forecast for fiscal 2021

·     Estee Lauder (EL) announced offering and pricing of $600 mln aggregate principal amount of 1.950% senior notes due 2031

·     Jeld-Wen (JELD) 8M share Spot Secondary priced at $29.25

·     Lumber Liquidators (LL) Q4 adj EPS $1.06 vs. est. 50c; Q4 revenue $304.21M vs. est. $296.51M; not providing guidance for the year at this time; SG&A expense increased 7.5% to $99.6 million, or 32.7% of sales, down 110 basis points YoY

·     Li Auto (LI) delivered 2,300 Li ONEs in February 2021, representing an increase of 755.0% YoY; recorded 5,379 deliveries in January 2021.

·     XPeng (XPEV) delivered a total of 2,223 Smart EVs in February, consisting of 1,409 P7s, the company’s smart sports sedan, and 814 G3s, its smart compact SUV. Vehicle deliveries in January and February combined represented a 577% increase year-over-year

·     Beyond Meat, Inc. (BYND) announced its intention to offer, subject to market and other conditions, $750,000,000 aggregate principal amount of convertible senior notes due 2027 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended

·     Inter Parfums (IPAR) Q4 EPS 47c vs. est. 44c; Q4 revenue $184.0M vs. est. $184.00M; raises year EPS view to $1.40-$1.45 from prior $1.20-$1.25 and revs $650M-$660M

·     NIO (NIO) Q4 adj EPS loss (14c) vs. est. loss (7c); Q4 revenue $1.02B vs. est. $1.01B; deliveries of vehicles were 17,353 in the fourth quarter of 2020, including 4,873 ES8s, 7,574 ES6s and 4,906 EC6s, compared with 8,224 in the fourth quarter of 2019 and 12,206 vehicles delivered in the third quarter of 2020; sees Q1 revenue $1.13B-$1.16B vs. est. $718.49M

·     Scientific Gaming (SGMS) Q4 EPS loss (95c) vs. est. loss (47c); Q4 revenue $762M vs. est. $708.62M; Free cash flow, a non-GAAP financial measure, increased $20 million to $72 million from the prior year period

 

Energy, Industrials and Materials

·     Daqo New Energy (DQ) announced that it has signed a three-year high-purity polysilicon supply agreement with Zhonghuan Semiconductor for its solar wafer business

·     Intrepid Potash (IPI) Q4 EPS loss (5c) vs. est. loss (14c); Q4 revenue $48.44M vs. est. $45.6M; Q4 potash production 106,000 tons and Q4 potash sales volumes 78,000 tons

·     Parsons (PSN) awarded $2 billion ceiling air force base modernization contract

·     Sherwin-Williams Company (SHW) announced that David B. Sewell, President and COO, has notified the company of his decision to resign effective as of the close of business on March 12

 

Financials

·     First Republic (FRC) announces offering of 1.5M shares of common stock

·     Lemonade (LMND) Q4 EPS loss (60c) vs. est. loss (64c); Q4 revenue $20.5M vs. est. $19.12M; Q4 customer count up 56% y/y to 1,000,802; Q4 gross earned premium of $50.0M increased by $24.0M or 92% y/y; sees FY21 revenue $114M-$117M vs. est. $111.33M; sees FY21 adj. EBITDA ($173M) to ($163M) vs. ($97.9M) in FY20

·     Morgan Stanley (MS) files prospectus relates to resale from time to time by selling stockholders of up to 2.3 mln shares of co’s common stock

·     Prudential (PRU) files mixed securities shelf

·     Repay Holdings (RPAY) Q4 adj EPS 17c vs. est. 11c; Q4 revenue $41.4M vs. est. $38.72M; Q4 card payment volume was $4.0B, an increase of 16% YoY; sees 2021 revs $178M-$188M vs. est. $185.5M; sees 2021 card payment volume $17.5B-$18B

·     Site Centers (SITC) 15M share Spot Secondary priced at $13.20

·     WillScot Mobile Mini (WSC) 12.75M share Spot Secondary priced at $27.20

 

Healthcare

·     Aslan (ASLN) announces $60M American Depositary Shares offering

·     FibroGen (FGEN) shares fell -22%; and its partner, AstraZeneca (AZN), announced that the Cardiovascular and Renal Drugs Advisory Committee of the FDA will hold an advisory committee, or AdCom, meeting to review the new drug application for Roxadustat in the U.S.

·     Karuna Therapeutics (KRTX) 2.08M share Secondary priced at $120.00

·     Idera Pharma (IDRA) Q4 EPS loss ($2.11) vs. est. loss (23c); reit ILLUMINATE-301 data later this month; anticipate that current cash, cash equivalents, and short-term investments, will fund operations through q2 2022

·     Inovio Pharma (INO) Q4 revs $5.6M vs. est. $1.1M; EPS loss (14c) vs. est. loss (22c); announces positive results from REVEAL 1, a Phase 3 pivotal trial evaluating VGX-3100, its DNA-based HPV

·     Merck & Co Inc. (MRK) voluntarily withdrawing U.S. indication for Keytruda (pembrolizumab) for treatment of patients with metastatic small cell lung cancer

·     Novavax (NVAX) Q4 EPS loss ($2.70) vs. est. loss ($1.49); Q4 revenue $279.7M vs. est. $304.88M; had $806.4 mln in cash, cash equivalents, marketable securities and restricted cash; potential for emergency use authorization filing with the U.S. FDA for covid-19 vaccine in q2 2021

·     Sarepta (SRPT) Q4 EPS loss ($1.84) vs. est. loss ($1.87); Q4 revs $145.1M vs. est. $145.5M; Q4 net product sales increased approximately 23% over the fourth quarter of 2019; full-year 2020 product revenue increased almost 20% over the prior year

·     Silk Road Medical (SILK) Q4 EPS loss (49c) vs. est. loss (28c); Q4 revenue $21.13M vs. est. $21.34M; sees FY21 revenue $102M-$108M vs. est. $111.52M and Cash, cash equivalents, and short-term investments were $147.5M as of December 31, 2020

 

Technology, Media & Telecom

·     AppFolio (APPF) Q4 results missed analyst estimates on revenue and EPS, reporting $72.43M (+8% Y/Y) and a $0.01 loss per share, which was $0.12 below consensus and declines to provide full-year guidance, citing the pandemic-related lack of visibility.

·     3D Systems (DDD) Q4 EPS 9c vs. est. 10c; Q4 revenue $172.7M vs. est. $168.47M; expects 2021 gross profit margins to be between 40% and 44%, taking into account businesses divested in 2020 and early 2021, as well as the impact of the company’s cost savings initiatives

·     Cs.ai Inc. (AI) Q3 EPS loss (13c) vs. est. loss (16c); Q3 revenue $49.1M vs. est. $47.3M; qtrly subscription revenue of $42.7 mln, increased 23% year over year; sees 2021 revs $180.9M-$181.9M (est. $177.1M) and FY21 non-GAAP loss from ops $50.1M-$49.1M

·     Ceridian (CDAY) announces $500M senior unsecured convertible notes offering

·     Ooma (OOMA) Q4 EPS 12c vs. est. 10c; Q4 revenue $44.3M vs. est. $43.28M; achieved solid growth despite the pandemic, with business subscription services revenues up 27% in fiscal 2021 versus the prior year; sees Q1 revs $44M-$44.8M vs. est. $43.2M and year revs $182.5M-$185.5M vs. est. $181.5M

·     Roku (ROKU) to acquire Nielsen’s (NLSN) advanced video advertising business, accelerating Roku’s launch of dynamic ad insertion for tv programmers and marketers; Nielsen and Roku will expand traditional tv and tv streaming coverage across Roku’s platform to help standardize cross-media measurement; files prospectus supplement related to offering of class a common stock of up to $1 bln; intend to use net proceeds from sale of securities for working capital, general corporate purposes

·     Inseego (INSG) shares fell -14%; Q4 EPS loss (14c) vs. est. 0c; Q4 revenue $86.1M vs. est. $83.81M

·     eBay (EBAY) and Norway’s Adevinta have agreed to sell three primary classifieds operations in Britain in order to obtain regulatory approval for a long-planned $9.2B deal. Those include Shpock, Gumtree and Motors.co.uk.

·     Switch (SWCH) shares fell -7%; Q4 adj EPS 6c vs. est. 5c; Q4 revenue $127.7M vs. est. $131.3M; Adjusted EBITDA of $268.3 million, compared to $231.1 million in 2019, an increase of 16%. Adjusted EBITDA margin was 52.5%, compared to 50.0% in 2019; Signed total contract value of $501 million, including a record $76 million of incremental annualized recurring revenue; sees FY21 revenue $540M-$555M vs. est. $588.3M

·     Zoom Media (ZM) shares rise 10%; Q4 EPS $1.22 vs. est. 79c; Q4 revenue $882.49M vs. est. $811.77M; Approximately 467,100 customers with more than 10 employees, up approximately 470% YoY; 1,644 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 156% YoY; sees Q1 EPS 95c-97c vs. est. 72c and sees Q1 revenue $900M-$905M vs. est. $804.78M