Early Look

Monday, November 22, 2021

S&P futures are looking at new all-time highs once again, powering higher amid more upward buying momentum which has been paced by large cap tech buying, as Nasdaq futures are also looking at new highs. In Asian markets, The Nikkei Index rose 28 points to 29,774, the Shanghai Index gained 21 points to 3,582 and the Hang Seng Index declined -98 points to 24,951. In Europe, the German DAX is up a few points to 16,175, while the FTSE 100 rises +0.3% to 7,250. Treasury bond yields have held steady over the last few weeks despite surging inflation, while the dollar firmed against its global peers, heading into the Thanksgiving holiday-shortened week in a cautiously bullish mood. A light week of news expected outside of roughly 12 S&P 500 companies reporting earnings this week and light economic calendar until Wednesday, which is highlighted by minutes of the November Fed meeting. A few M&A deals announced over the weekend highlight Monday morning news, including a $6B purchase of telecom company Vonage (VG) by Ericsson (ERIC). Oil prices look to rebound after plunging last week, while gold edges lower and Bitcoin prices fall around the $57K level after a sell-off last week.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.58 points, or 0.14%, to 4,697.96

·     The Dow Jones Industrial Average fell -268.92 points, or 0.75%, to 35,601.98

·     The Nasdaq Composite climbed 63.74 points, or 0.40%, to 16,057.44

·     The Russell 2000 Index declined -20.43 points, or 0.86% to 2,343.16

Events Calendar for Today

·     8:30 AM ET         National Activity Index for October

·     10:00 AM ET      Existing Home Sales MoM October

Earnings Calendar:

·     Earnings Before the Open: AVYA, CRNC, FNA, SR, TWST

·     Earnings After the Close: A, ARWR, CENT, DLPN, ENTA, IBEX, JACK, KEYS, TPCS, URBN, ZM

World News

·     Japan is considering releasing oil reserves in response to rising crude prices, however by law Japan can only release reserves at a time of supply constraint or natural disaster, not to lower price

·     Protests are growing worldwide against coronavirus restrictions. Tens of thousands marched through Vienna on Saturday after the Austrian government announced a nationwide lockdown, while Dutch police opened fire on protesters in Rotterdam, resulting in seven injured. Demonstrations also took place in Switzerland, Italy, Croatia and Northern Ireland.

Sector News Breakdown

Consumer

·     Monster Beverage (MNST) is said to be exploring a possible deal with Constellation Brands Inc (STZ) according to a Bloomberg report; MNST is 19% owned by Coca-Cola (KO); a potential deal comes after Coke recently agreed to buy sports drink Body Armor for $5.6B, purchasing the remainder of the company it didn’t already own.

·     FAT Brands (FAT) agrees to acquire Native Grill & Wings for $20 million

·     General Motor (GM) and Ford (F) could get boost from EVs, according to Barron’s. The article noted at one point this past week, Rivian Automotive (RIVN) was worth as much as Ford Motor (F) and General Motors (GM) combined…but maybe there is a way for traditional auto makers to close that valuation gap, namely issuing tracking stocks

·     Macy’s (M) may still be worth buying after shares soared to their highest close this week in three years after the retailer said it’s exploring separating its fast-growing digital business from its bricks-and-mortar stores

·     LCI Industries (LCII) mentioned positively in Barron’s saying bottlenecks and supply shortages have caused major problems for the recreational vehicle parts maker, but those problems are starting to ease-and that could be the catalyst for a higher stock price

Energy, Industrials and Materials

·     Oil prices slid to seven-week lows on Friday as China and the U.S. discuss releasing strategic oil reserves to keep energy prices under control, and as the resurgence of COVID restrictions in Europe places the global demand recovery into question. WTI front-month crude settled -3.7% to $76.10/bbl Friday, capping a fourth straight weekly decline with a 5.8% drubbing.

·     Astra Space Inc. (ASTR) shares surged rise 37% after the space-transportation company successfully completed its first commercial orbital launch for the U.S. Space Force; said the test payload, launched from its Kodiak Spaceport in Alaska, reached precise orbit in less than 10 minutes.

·     Ault Global Holdings (DPW) announced its plan to split into two public companies by pursuing a spin-off of Ault Alliance to its stockholders

·     Coterra Energy (CTRA) is a stock worth considering according to Barron’s noting natural gas prices have fallen this month, as warmer weather and growing supply eased fears of a global power crunch…which gives investors another chance to buy into the industry

Financials

·     Private equity giant KKR & Co. (KKR) has made a proposal to buy all of Telecom Italia SpA, a move aimed at revamping the troubled Italian phone company that has shed about half its market value in the past five years, according to Bloomberg this weekend

·     Mining stocks have gained an average of 291% this year as Bitcoin has doubled, far ahead of the Nasdaq Composite’s 25% return, according to Barron’s; notes Power & Digital Infrastructure Acquisition (XPDI), Marathon Digital (MARA), and Rio Blockchain (RIOT) are among some Bitcoin mining stocks to consider

·     BitSight and Marsh McLennan (MMC) announced a collaboration to help organizations better understand, measure, and manage their cyber risks.

·     Victory Capital Holdings (VCTR) announced that its stockholders approved the Company’s previously announced proposal to eliminate the Company’s dual-class share structure at a Special Meeting of Stockholders held on November 19

Healthcare

·     Bluebird Bio (BLUE) announces FDA priority review of BLA for beti-cel Gene therapy for patients with β-thalassemia who require regular red blood cell transfusions.

·     Obseva (OBSV) says U.S. FDA accepted the marketing application for its drug candidate, linzagolix, to manage heavy menstrual bleeding associated with uterine fibroids in premenopausal women

Technology, Media & Telecom

·     Ericsson AB (ERIC) agreed to buy cloud-communications provider Vonage Holdings Corp. (VG), for $6.2 billion, paying $21 per share (28% premium to Friday close), as the telecom-equipment maker said will expand its wireless enterprise business and broaden its global offerings. https://on.mktw.net/3xbmsLQ 

·     Activision Blizzard (ATVI) CEO Bobby Kotick has told senior managers he would consider leaving the company if he can’t quickly fix the culture problems at the videogame giant, the WSJ reported

·     Cisco (CSCO) shares look cheap according to Barron’s saying as supply-chain issues roil the tech sector, no company underscores the issue more than Cisco Systems. The stock fell more than 6% on Thursday after the company reported financial results, but while there will be continued near-term noise for Cisco, investors should hop aboard now

·     Walt Disney World (DIS) is putting its COVID-19 vaccine mandate on hold. The decision comes after Florida Gov. Ron DeSantis signed new legislation shielding workers from vaccine mandates, while the Occupational Safety and Health Administration suspended enforcement of the Biden administration’s mandate for private businesses with 100 or more employees.