Early Look

Tuesday, November 2, 2021

Futures	Up/Down	%	Last
Dow	-4.00	0.01%	35,796
S&P 500	-2.25	0.05%	4,603
Nasdaq	-29.50	0.19%	15,864

 

 

U.S. futures are holding steady, only moderately lower from yesterday’s closing all-time highs for the major averages as investors brace for the FOMC meeting, with results expected tomorrow afternoon. Bitcoin prices surging to highs, up over 4% around $63,400 in another broad spike for crypto assets; Ethereum +3.25% at $4,450. House Speaker Pelosi is planning to go ahead with plans to vote this week on President Biden’s two bills even though Democratic moderates are echoing Senator Manchin’s complaints that they don’t know full cost & economic impact. In corporate news, JNJ, TEVA, ENDP and ABBV win the first case for pharmaceutical companies in the four-year litigation over the drugs in a $50B opioid litigation case. In commodity prices, gold holds below $1,800, oil is little changed around $84 per barrel and Wheat hit $8.00 a bushel Monday, highest levels since 2012 as world reserves declined following extreme weather. The Aussie dollar drops and the curve bull steepens after the RBA scraps its April 2024 yield target and signals openness to earlier rate hikes. Tesla (TSLA) falls over 4%, is falling off a record high close of $1,208.59 – follows tweet from CEO Musk overnight saying there has been no contract signed yet with Hertz and that the Hertz deal has zero effect on Tesla’s economic.

 

Wall Street’s main indexes notched record closing highs again on Monday, adding to the big totals in October as Tesla (TSLA) shares surged and the energy sector gained on rising oil prices while investors looked ahead to a major Federal Reserve meeting later in the week. The Dow Jones Industrial Average briefly eclipsed 36,000 points for the first time before slipping just below. Along with the barrage of earnings again this week, the Federal Reserve is expected to approve plans to scale back its $120 billion monthly bond-buying program on Wednesday. The small-cap Russell 2000 index was a standout, rising 2.7% for its biggest daily percentage gain since late August. Economic data was mixed as the ISM U.S. manufacturing activity slowed in October, with all industries reporting record-long lead times. In Asian markets, The Nikkei Index slipped -0.43% to 29,520, the Shanghai Index dropped -1.1% to 3,505, and the Hang Seng Index fell -0.22% to 25,099. In Europe, the German DAX is up +0.4% at 15,875, while the FTSE 100 declines around -0.6% below 7,250.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 8.29 points, or 0.18%, to 4,613.67

·     The Dow Jones Industrial Average rose 94.28 points, or 0.26%, to 35,913.84

·     The Nasdaq Composite jumped 97.53 points, or 0.63%, to 15,595.92

·     The Russell 2000 Index surged 60.93 points, or 2.65% to 2,358.12

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

 

Earnings Calendar:

·     Earnings Before the Open: AME, APO, ARCB, AVNS, BBGI, BCC, BHC, BLD, BLMN, CEIX, CLW, CMI, COP, CRSR, CTLT, DD, EL, EPD, ESPR, ETN, EXLS, EXPD, EXTR, GNRC, GPN, HEES, HEP, HSC, HSIC, IART, IDXX, INCY, IPGP, IT, KKR, LCII, LDOS, LEA, LGIH, LPX, MIME, MLM, MMP, MPC, MPLX, MYGN, NRZ, NXST, NYMT, OMCL, PFE, PINC, RL, ROK, SABR, SAGE, SEE, TMX, TNC, UAA, VAL, WEC, WLK, XHR, XYL ZBRA

·     Earnings After the Close: ACT, AFG, AIZ, AKAM AMGN, ANDE, ATVI, AWK, AYX, BFAM, BGFV, BKH, BRY, BXC, CASA, CDK, CERS, CHK, COUR, CRK, CSLT, CZR, DCO, DCPH, DEI, DENN, DOX, DRRX, DVN, EGHT, EIX, ENLC, EXAS, EXEL, FMC, FNF, FRSH, GAIN, GNW, GPOR, HALO, HCC, HLF, HRB, HURN, INFI, INSP, KAI, KAMN, KAR, LPI, LSCC, LSI, LYFT, MANT, MDLZ, MG, MGNX, MOD, MRCY, MTCH, NP, NSA, OKE, OVV, PAA, PAGP, PAYC, PKI, PRO, PRTS, PRU, RAMP, RARE, RCKY, RM, RRR, SGRY, SKY, SRC, STE, TCS, TMUS, TVTY, UIS, UNM, VECO, VOYA, VRSK, WTTR, WU, ZG

 

Other Key Events:

·     China Caixin Services PMI for October

·     Wolfe Research Wealth Symposium, 11/2-11/3 (virtual)

 

 

Macro	Up/Down	Last
Nymex	-0.08	83.97
Brent	0.07	84.78
Gold	-2.40	1,785.50
EUR/USD	-0.0013	1.1593
JPY/USD	-0.46	113.54
10-Year Note	-0.019	1.554%

 

 

World News

·     Senator Manchin says he is prepared to support a Build Back Better plan that combats inflation, is fiscally responsible, and will create jobs. The plan the House is finalizing meets those tests-it is fully paid for, will reduce the deficit, and brings down costs for health care, child care, elder care, and housing

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) is down over 4%, is falling off a record high close of $1,208.59 – follows tweet from CEO Musk overnight saying there has been no contract signed yet with Hertz and that the Hertz deal has zero effect on Tesla’s economic. Separately, Tesla is recalling 11,700 U.S. Vehicles because communication error may cause a false forward-collision warning or unexpected activation of the operating software — notice filed with NHTSA

·     Tesla (TSLA) recalling 11,700 U.S. Vehicles because communication error may cause a false forward-collision warning or unexpected activation of the operating software — notice filed with NHTSA

·     Clorox (CLX) Q1 adj EPS $1.21 vs. est. $1.03; Q1 revs $1.8B vs. est. $1.7B; sees FY22 adj EPS$5.40-$5.70 vs. est. $5.46, or a decrease between 26% and 21% respectively and sees fiscal year 2022 organic sales decline of 2% to 6%; plans to pursue additional pricing actions through end of fiscal 2022 that will encompass about 70% of its portfolio; Q1 gross margin 37% vs. 48% a year ago; organic sales fell 5% in FQ1 as a decline in volume, unfavorable price mix and unfavorable foreign exchange all played in

·     Chegg Inc. (CHGG) tumbles -30%; Q3 EPS in-line $0.20 on revenue $171.9M vs est. $174.5M; sees Q4 revs $194M-$196M vs est. $240.6M, lowered FY revs to $762M-$764M from $805M-$815M (est. $812.7M); sees FY adj EBITDA $255M-$257M vs est. $298.9M

·     Leggett & Platt (LEG) Q3 EPS $0.71 vs. est. $0.77; Q3 revs up 9% to $1.32B vs. est. $1.32B; narrows FY21 adj EPS view to $2.70-$2.80 from $2.70-$2.90 (est. $2.85) and also narrows FY21 revenue view to $5B-$5.1B from $4.9B-$5.1B (est. $5.02B)

 

Energy

·     CVR Energy (CVI) Q3 EPS $0.83 vs est. ($0.04) on revenue $1.9B vs est. $1.73B

·     Diamondback Energy (FANG) Q3 EPS $3.56 on revs $1.91B vs. est. $1.53B; Q3 2021 average production of 239.8 mboe/d (404.3 mboe/d); lowering full year 2021 cash capex guidance to $1.49B-$1.53B; initiating Q4 2021 oil production guidance of 221 – 225 mbo/d (368 – 375 mboe/d) and raises FY21 oil production guidance of 222-223 mbo/d (370-372 mboe/d), up from 219-222 mbo/d (363-370 mboe/d)

·     FirstEnergy (FE) says its three Ohio utilities reached a settlement to resolve several proceedings under consideration by the Public Utilities Commission of Ohio to provide $306M in refunds to utility customers in the state.

·     Marathon Petroleum (MPC) Q3 adj EPS $0.73 vs. est. $0.71; Q3 revs $32.61B vs. est. $22.65B; said it is pursuing strategic alternatives, which could include a sale, of its 68,000 bpd Kenai refinery near Anchorage, Alaska.

·     Transocean (RIG) Q3 adj EPS loss (-$0.19) vs. est. loss (-$0.18); qtrly total contract drilling revenues were $626 mln, compared to $656 mln in q2 of 2021; contract backlog was $7.1 bln as of October 2021 fleet status

·     Williams Energy (WMB) 3Q adj EPS $0.34 vs est. $0.28 on revs $2.48B vs est. $2.1B; guides FY adj EBITDA $5.5-5.55B vs est. $5.42B; raising available funds from operations guide to $4.025-4.075B

 

Financials

·     Credit Acceptance Corp. (CACC) Q3 adj EPS $13.84 vs est. $12.02 on revenue $470.1M vs est. $461.4M

·     CURO Group Holdings (CURO) 3Q adj EPS $0.15 vs est. $0.10 on revs $209.3Mm vs est. $206.6Mm

·     EverQuote (EVER) 3Q EPS ($0.18) vs est. ($0.16) on revs $107.6Mm vs est. $109.9Mm; guides 4Q revs $93.5-98.5Mm vs est. $123.6Mm

 

Healthcare

·     Bruker Group (BRKR) Q3 adj EPS $0.63 vs. est. $0.44; Q3 revs $608.9M vs. est. $575.1M; raises FY21 adj EPS view to $2.05-$2.09 from prior $1.88-$1.93 (est. $1.93); boosts FY rev growth to 19.5%-20.5%, with organic revenue growth of 16.5%-17.5%; sees non-GAAP operating margin of 19.5% to 20.0%

·     Hologic (HOLX) 4Q adj EPS $1.61 vs est. $1.01 on revs $1.32B vs est. $1.04B; guides 1Q adj EPS $1.15-1.25 vs est. $0.96, sees FY22 adj EPS $3.55-3.85 vs est. $3.69, sees FY revs $3.75-4.0B vs est. $3.83B

·     McKesson (MCK) Q2 adj EPS $6.15 vs est. $4.66 on revenue $66.6B vs est. $63.12B; raises FY22 adj EPS view to $21.95-$22.55 from $19.80-$20.40 (est. $20.32)

·     Neurocrine Bioscience (NBIX) 3Q adj EPS $0.64 vs est. $0.60 on revs $296Mm vs est. $297.8Mm

·     Addus HomeCare (ADUS) 3Q adj EPS $0.91 vs est. $0.89 on revs $216.7Mm vs est. $225.8Mm

·     Legend Biotech (LEGN) slides after the U.S. FDA extends review of co’s experimental drug, cilta-cel, for treatment of patients with multiple myeloma, cancer of plasma cells by three-months to Feb. 28, 2022

·     California judge rules that Teva Pharma (TEVA) did not cause a public nuisance or make false or misleading statements about opioids

 

Industrials & Materials

·     Avis Budget (CAR) Q3 adj EPS $10.74 vs. est. $6.52; Q3 revs $3.0B vs. est. $2.71B; revenues were driven by increased revenue per day and rental days as demand continued from the second quarter s nearly doubled YoY; Adjusted EBITDA in the Americas was $952 million for the third quarter 2021 driven by strong pricing and sustained cost discipline

·     Boise Cascade (BCC) 3Q EPS $2.31 vs est. $2.04 on sales $1.9B vs est. $1.65B; guides CAPEX approx $100-130Mm in 2022

·     BWX Technologies, Inc. (BWXT) Q3 adj EPS $0.76 vs est. $0.79 on revenue $499M vs est. $535.2M; sees FY21 consolidated revenue +0-1%; sees FY21 adj EPS $3.05, which is low-end of previous range $3.05-$3.20 (est. $3.06); Investor Day scheduled November 16

·     DuPont (DD) is nearing a deal to buy Rogers Corp. (ROG), an electronics-materials specialist with a market value of nearly $4 billion, the people said. It also plans to review alternatives for its unit specializing in materials used in the automotive industry – WSJ https://on.mktw.net/3GL1CqQ 

·     Douglas Dynamics (PLOW) Q3 EPS $0.29 vs. est. $0.38; Q3 revs $127.6M vs. est. $136.4M; Narrows FY21 revenue view to $525M-$565M from $520M-$580M; lowers the top end of FY21 EPS view to $1.40-$1.90 from $1.40-$2.20

·     Generac Holdings (GNRC) said it intends to acquire Ecobee, a maker of smart heating and air conditioning thermostats, in a stock and cash deal worth up to $770M

·     GXO Logistics (GXO) Q3 adj EPS $0.56 vs. rest. $0.51; Q3 revs $2.0B vs. est. $1.82B; raises FY21 rev view to $7.6B-$7.8B from $7.5B-$7.7B; also boosts FY21 adjusted EBITDA view to $607M-$637M from $605M-$635M

·     Kennametal (KMT) 1Q adj EPS $0.44 vs est. $0.38 on sales $484Mm vs est. $487.2Mm; guides 2Q sales +9-14% vs est. +16.75%

·     Mosaic (MOS) Q3 adj EPS $1.35 vs. est. $1.55; Q3 revs rise 44% YoY to $3.4B vs. est. $3.66B; Q4 phosphate and potash realized prices expected to reflect material increases over Q3; phosphate average realized prices in q4 expected to be $55 to $65 per tonne higher than prices realized during Q3; net sales in the potash segment totaled $589M, up from $464M YoY

·     Olin (OLN) announces new $1B share repurchase program

 

REITs

·     Brixmor (BRX) Q3 FFO $0.39 vs. est. $0.34; Q3 revs $290.19M vs. est. $279.35M; reports an increase in Q3 same property NOI of 14.5% versus last year; raises FY21 same property NOI growth expectations to 7.5%-8.5% from 4.5%-6.0%; narrows FY FFO view to $1.72-$1.75 from $1.70-$1.76

·     Centerspace (CSR) 3Q core FFO/shr $0.98 vs est. $0.96/ guides FY core FFO/shr $3.92-4.02, was $3.78-3.94, vs est. $3.90

·     Insperity (NSP) 3Q adj EPS $0.89 vs est. $0.86 on revs $1.2B vs est. $1.18B; guides 4Q adj EPS $0.61-0.81 vs est. $0.75; sees 4q adj Ebitda $45M to $56M, vs. est. $52.0m; narrows FY21 EPS view to $4.25-$4.46 from $4.00-$4.59

·     Public Storage (PSA) 3Q core FFO/shr $3.42 vs est. $3.23; guides FY core FFO/shr $12.50-12.80 vs est. $12.38

·     Realty income (O) Q3 EPS $0.34 vs est. $0.40, adj. FFO $0.91 vs est. $0.90 on revenue $491.9M vs est. $471.6M; sees FY21 adj FFO $3.55-$3.60 vs est. $3.44; sets prelim FY22 adj FFO $3.84-$3.97 vs est. $3.84

·     Simon Property Group (SPG) 3Q FFO/shr $3.13 vs est. $2.52, raises FY FFO/shr to $11.55-11.65 vs est. $10.93; sees FY EPS $6.61-6.71 vs est. $5.55; qtrly occupancy 92.8% at qtr end; raises dividend to $1.65/shr for 4Q

·     Tanger Factory (SKT) Q3 core FFO $0.47 vs. est. $0.06; Q3 Same center NOI for the consolidated portfolio increased to $73.8M from $66.1M for the Q3 of 2020; Tenant sales at our open-air centers are accelerating, reaching an all-time high of $448 per square foot; raises FY21 Core FFO view to $1.67-$1.71 from $1.52-$1.59

·     Vornado Realty (VNO) 3Q FFO/shr $0.82 vs est. $0.74, adj EPS $0.14 vs est. $0.13; says appoints Deirdre Maddock as CAO

 

Technology, Media & Telecom

·     Arista Networks (ANET) shares rose 15%; Q3 adj EPS $2.96 vs. est. $2.73; Q3 revs $758.7M vs. est. $737.9M; approves a 4 for 1 stock split; board authorized additional $1B for stock buyback; guides Q4 revs $775M-$795M vs. est. $754M; sees Q4 adj gr margins 63%-65%

·     Cirrus Logic (CRUS) 2Q adj EPS $1.82 vs est. $1.63 on revs $465.9Mm vs est. $450.4Mm; says CFO to retire; guides 3Q revs $490-530Mm vs est. $502.3Mm, sees 3Q gross margin 50-52% vs est. 50.8%, sees GAAP R&D and SG&A between $141-147Mm including approx $19Mm stock-based comp, $9Mm amortization of acquired intangibles and $3Mm acquisition-related costs

·     Harmonic (HLIT) 3Q adj EPS $0.09 vs est. $0.03 on revs $126.3Mm vs est. $118.5Mm; guides 4Q adj EPS $0.10-0.14 vs est. $0.13, sees 4Q revs $147-157Mm vs est. $141Mm

·     Impinj (PI) files to sell $225M convertible senior notes due 2027

·     Kyndryl holdings inc. (KD) will replace NetScout systems inc. (NTCT) in the S&P midcap 400, and NetScout systems will replace Invacare corp. (IVC) in the S&P SmallCap 600 effective prior to the opening of trading on Friday, November 5

·     NXP Semiconductors (NXPI) Q3 EPS $1.91 vs. est. $2.72; Q3 revs $2.9B vs. est. $2.85B; non-GAAP gross margin was 56.5%, and non-GAAP operating margin was 33.5%; Cash flow from operations was $924 million, with net capex investments of $200 million

·     Rambus (RMBS) 3Q EPS $0.03 vs est. $0.33 on revs $81.3Mm vs est. $113Mm; guides 4Q product revs $40-46Mm, expects licensing billings $62-68Mm

·     SBA Communications (SBAC) Q3 adj FFO $2.71vs est. $2.42 on revs $589.3M vs est. $576.5M; raised FY21 adj FFO view to $10.55-$10.76 from $10.32-$10.72, sales view to $2.29B-$2.31B from $2.26B-$2.3B (est. $2.29B); authorized new $1B share repurchase program with no deadline

·     Varonis Systems (VRNS) 3Q adj EPS $0.05 vs est. $0.02 on revs $100.4Mm vs est. $97.4Mm; guides 4Q adj EPS $0.12-0.13 vs est. $0.09, sees 4Q revs $120-123Mm vs est. $117.5Mm; guides FY adj EPS $0.10-0.11 vs est. $0.04, sees FY revs $383.5-386.5Mm vs est. $378.4Mm

·     ZoomInfo (ZI) Q3 adj EPS $0.13 vs est. 12c on revenue $197.6M vs est. $183.8M; sees Q4 adj EPS 12c-13c vs est. 13c on revenue $206M-$208M vs est. $195.3M; raised full-year forecast for adj EPS by 1c to 51c-52c (est. 51c) and revenue to $731M-$733M from $703M-$707M (est. $705.8M)