Early Look

Thursday, November 18, 2021

Futures	Up/Down	%	Last
Dow	72.00	0.20%	35,939
S&P 500	15.25	0.34%	4,702
Nasdaq	92.50	0.57%	16,404

 

 

Looking like a strong start for U.S. equity markets with futures rising across the board, paced by gains in technology again as the Nasdaq rises +0.9% behind better earnings/guidance results from chipmaker NVDA. Oil prices slumped and Treasury bond yields eased, as markets looked away from inflation pressures and into the underlying strength of the American consumer heading into the fast-approaching holiday season. In Asian markets, The Nikkei Index slipped -0.3% to 29,598, the Shanghai Index fell -0.47% to 3,520, and the Hang Seng Index plunged -330 points, or 1.29% to settle at 25,319. In Europe, the German DAX is up a few points to 16,265, while the FTSE 100 slips -0.18% to 7,278. Reports suggesting a coordinated release of petroleum reserves by the U.S. and China also eased some near-term inflation worries, as did a pullback in benchmark Treasury note yields Cisco Systems (CSCO) declines as quarterly guidance fell short of consensus estimates. A moderately busy day of economic data with weekly jobless claims, Philly manufacturing and leading index expected. It has been a mixed week thus far for stocks, with tech leading long with consumer discretionary, while transports and SmallCaps have broadly underperformed.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -12.23 points, or 0.26%, to 4,688.67

·     The Dow Jones Industrial Average fell -211.17 points, or 0.58%, to 35,931.05

·     The Nasdaq Composite dropped -52.28 points, or 0.33%, to 15,921.57

·     The Russell 2000 Index declined -28.02 points, or 1.16% to 2,377.01

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 260K

·     8:30 AM EST      Continuing Claims…est. 2.12M

·     8:30 AM ET         Philly Fed Survey for November…est. 24.0

·     10:00 AM ET      Leading Index for October…est. +0.8%

·     10:30 AM ET      Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET      Kansas City Fed Manufacturing for November

 

Earnings Calendar:

·     Earnings Before the Open: ATKR, AZEK, BERY, BJ, BRC, KSS, M, MMS, NJR, ONEW, PLCE, WOOF

·     Earnings After the Close: AMAT, AMSWA, BBWI, BECN, BRBR, CAL, DLA, ESE, HAYN, INTU, MATW, NGVC, NUAN, PANW, POST, ROST, WDAY, WWD

 

Other Key Events:

·     Barclay’s Global Auto Conference (virtual), 11/17-11/18

·     JMP Securities Financial Services and Real Estate Conference, Virtual Conference, 11/18

·     Needham Annual tech Week (virtual), 11/16-11/18

·     STAT Summit 2021 (virtual), 11/16-11/18

·     Wolfe Research Annual Healthcare Conference (virtual), 11/17-11/18

 

 

Macro	Up/Down	Last
Nymex	-0.35	78.01
Brent	0.01	80.29
Gold	-5.40	1,867.40
EUR/USD	0.0027	1.1345
JPY/USD	0.09	114.16
10-Year Note	-0.007	1.598%

 

 

World News

·     The White House has asked some of the globe’s biggest oil-consuming nations to consider releasing some of their crude reserves in an attempt to lower prices and stimulate economic recovery, Reuters reported. In recent weeks, President Joe Biden and top aides have brought up the issues with allies including Japan, South Korea, and India, as well as with China.

·     Fed’s Evans said he is looking for inflation pressures to fade & will be watching them well into middle of next year, wouldn’t be surprised if unemployment rate is 4.5% by year end, gas prices are hitting household budgets & are an economic headwind but on the other hand stocks are high & financial conditions are good, it’ll take till middle of next year to complete bond taper & at that point will be thinking about raising rates, optimistic about a vibrant labor market next year, was expecting a more resilient supply chain than we’ve seen so far

·     The European Parliament’s main political parties agreed to a deal that would apply to companies with a market capitalization of at least 80 billion euros ($91 billion) and offering at least one internet service, such as an online search. This would give them wider range of companies to regulate under the EU’s planned Digital Markets Act (DMA)

·     China’s oil reserve office is working on a release of crude oil reserves, they declined to comment on US request for China to release reserves to help ease global prices

 

Sector News Breakdown

Consumer

·     Alibaba (BABA) Q2 revs rose 29% to $31.15B vs. est. $32.05; revises FY22 revenue view to grow 20%-23% year-over-year; annual active consumers of Alibaba ecosystem across world reached approximately 1.24 bln for twelve months ended September 30, 2021

·     BJ’s Wholesale (BJ) Q3 adj EPS $0.91 vs. est. $0.80; Q3 revs $4.26B vs. est. $3.92B; Q3 comparable club sales, excluding gasoline sales, increased by 5.7%, reflecting two-year stacked comp of 24.2%; authorizes $500M share buyback

·     Bed Bath & Beyond (BBBY) named as a new long in Whitney Tilson flagship newsletter, $100 target

·     America’s Car-Mart (CRMT) Q2 EPS $3.33 vs. est. $3.20; Q2 revs $288M vs. est. $269.76M; Q2 unit sales were up almost 6%, the average retail sales price was up 21% and interest income was up 39%, resulting in top line growth of 29% for the quarter

·     Bath & Body Works (BBWI) 3Q adj EPS $0.92 vs est. $0.60 on revs $1.681B vs est. $1.6B; guides 4Q EPS $2.10-2.25 vs est. $2.24

·     Copart (CPRT) Q1 non-GAAP EPS $1.07 vs. est. $1.01; Q1 revs $810.1M vs. est. $743.73M

·     Copa Holdings (CPA) Q3 EPS 70c on revs $444.9M vs. est. $371.64M; Q3 RPMs down 36.2% from 3Q19; Q3 ASMs down 31.1% from 3Q19; Q3 load factor down 6.4 pp from 3Q19.

·     Kraft Heinz (KHC) announces offering of 30.6M shares of common stock for holders

·     Oatly Group (OTLY) on November 17, 2021, co announced that it has initiated a recall for a limited selection of products in Sweden

·     Sweetgreen (SG) 13M share IPO priced at $28.00

·     Victoria Secret (VSCO) shares rise 11%; Q3 adj EPS $0.82 vs. est.$0.71; Q3 sales rose 7% to $1.44B vs. est. $1.46B; Q3 total comp sales rose 4%; sees Q4 EPS $2.35-$2.65 and sales in range flat to up 3% vs. est. $2.80 and $2.28B

 

Energy, Industrials and Materials

·     Boeing (BA) upgraded to Overweight from Neutral at JPMorgan and raise tgt to $275 from $260

·     Canadian Solar (CSIQ) Q3 EPS $0.42 vs. est. $0.18; Q3 revs $1.23B vs. est. $1.33B; Q3 solar module shipments of 3.9 GW in Q3; said it expects Q4 revenue $1.5B-$1.6B vs. est. $1.79B; sees Q4 gross margin should be between 14% and 16%; sees year revs view $6.5B-$7.0B vs. est. $6.39B

·     Deere (DE) workers voted to approve a modified contract proposed by the company, ending a near six-week strike; the United Auto Workers members of Deere ratified a six-year agreement by a vote of 61% to 39%

·     Amtech Systems (ASYS) 4Q EPS $0.05 vs est. $0.10 on revs $24.3Mm vs est. $26Mm; guides 1Q revs $24-27Mm vs est. $27.7Mm

·     Helmerich & Payne, Inc. (HP) Q4 EPS ($0.74) vs est. ($0.51) on revenue $344M vs est. $350M; exited qtr with 127 active rigs, +5%; have 141 rigs working today, expects 1Q22 rig count to increase over 20% to 152-157; expect utilization of readily available rigs to remain very high and projected increase in rig demand will be more than they can accommodate with current active fleet, meaning they have to reactivate more long-idled rigs to satisfy demand

·     Hillenbrand, Inc. (HI) 4Q adj EPS $1.00 vs est. $0.91 on revs $755Mm vs est. $732.7Mm; guides 1Q adj EPS $0.87-0.94 vs est. $0.82, sees FY22 adj EPS $3.70-4.00 vs est. $3.68

·     Maxeon Solar Technologies (MAXN) to supply TotalEnergies with up to 400mw of high-efficiency solar modules for its Danish fields project in Texas; project will require modules to be delivered in late 2022 through Q3 2023; 3Q EPS ($1.62) vs est. ($1.40) on revs $220Mm vs est. $228Mm; guides 4Q revs $215-235Mm vs est. $268.2Mm

·     Tetra Tech, Inc. (TTEK) 4Q adj EPS $1.05 vs est. $1.00 on revs $892Mm vs est. $638Mm; guides 1Q revs $630-680Mm vs est. $658Mm, sees 1Q EPS $0.98-1.03 vs est. $1.00; guides FY22 revs $2.6-2.8B vs est. $2.68B, sees FY22 EPS $4.00-4.20 vs est. $4.11

·     ZTO Express (ZTO) Q3 adj EPS $0.22, in-line with ests; Q3 revs $1.15B vs. est. $1.2B

·     Northern Oil and Gas (NOG) 10M share Spot Secondary priced at $20.00

 

Financials

·     i3 Verticals, Inc. (IIIV) 4Q adj EPS $0.33 vs est. $0.29 on revs $67.2Mm vs est. $64.3Mm; guides FY22 adj EPS $1.25-1.40 vs est. $1.23, sees revs $280-300Mm vs est. $261.1Mm and adj EBITDA $70-78Mm vs est. $67Mm

·     AG Mortgage (MITT) 7M share Secondary priced at $10.25

·     Victory Capital (VCTR) 4M share Secondary priced at $34.00

 

Healthcare

·     Clover Health (CLOV) 52.17M share Secondary priced at $5.75

·     Definitive Healthcare (DH) 11M share Secondary priced at $36.00

 

Technology, Media & Telecom

·     Nvidia (NVDA) 3Q adj EPS $1.17 vs est. $1.11 on revs $7.1B vs est. $6.83B (data center revs $2.94B +55%, gaming revs $3.22B +42%), adj gross margin 67% in-line; guides 4Q revs $about 7.4B +/-2% vs est. $6.86B, says demand for Nvidia AI is surging

·     Cisco Systems (CSCO) shares fell -6%; Q1 adj EPS $0.82 vs. est. $0.80; Q1 revs rise 8% to $12.9B vs. est. $12.98B; sees Q2 rev growth 4.5%-6.5% YoY vs. est. 7.4% and vs. est. $12.85B; sees Q2 adj EPS $0.80-$0.82 vs. est. $0.82; guides year revs growth 5%-7%; Q1 Non-GAAP total gross margin dipped to 64.5% from 65.8% and product gross margin fell to 63.8% from 65.3%

·     Activision Blizzard (ATVI) downgraded to Neutral from Overweight at JPMorgan

·     DoubleVerify (DV) 8M share Secondary priced at $31.25

·     JD.com (JD) Q3 revs rose 25.5% to $34.2B vs. est. $33.9B; said annual active customer accounts increased by 25% to 552.2M in the twelve months ended September 30; Operating income fell 41% to CNY2.57 billion; said it swung to a Q3 loss of 2.81 billion yuan ($440.6 million) from a net income of CNY7.56 billion a year earlier

·     Kulicke & Soffa (KLIC) Q4 EPS $2.17 vs. est. $2.13; Q4 revs $485.3M vs. est. $481M; sees Q1 EPS about $1.88 vs. est. $1.54 and revs about $460M vs. est. $411.7M

·     Joyy (YY) Q3 adj EPS $0.42 vs. est. loss (-$0.04); Q3 revs $650.5M vs. est. $621.45M; Q3 global average mobile MAUs decreased by 17.2% to 288.8M from 348.9M in the corresponding period of 2020, sees Q4 revenue $652M-$661M vs. est. $668.99M

·     QuickLogic (QUIK) 3Q adj EPS ($0.03) vs est. ($0.06) on revs $3.9Mm vs est. $3.8Mm

·     Sonos Inc. (SONO) 4Q adj EPS $0.08 vs est. ($0.07) on revs $359.5Mm vs est. $360.2Mm; guides FY22 revs $1.925-2.0B vs est. $1.86B, sees FY22 adj EBITDA $280-325Mm vs est. $276.4Mm, says enters FY22 with significant backlog due to continued supply constraints; announces $150 million stock repurchase program

·     ViacomCBS Inc. (VIAC) announced that Paramount+ experienced its most successful week ever, adding more than one million new subscribers and setting a new record for total signups since its rebrand