Morning Preview: January 15, 2021

Early Look

Friday, January 15, 2021

Futures

Up/Down

%

Last

Dow

-134.00

0.43%

30,775

S&P 500

-17.25

0.45%

3,774

Nasdaq

-42.50

0.33%

12,859

 

 

U.S. futures are pointing lower, adding to late yesterday’s slide as hopes of a fiscal boost provided by a $1.9 trillion U.S. stimulus plan were overshadowed by the prospect of stricter lockdowns in France and Germany and a resurgence of COVID-19 cases in China. Overnight, U.S. President-elect Joe Biden released details of a $1.9T COVID-19 relief package designed to support households and businesses. The proposal, known as the American Rescue Plan, includes direct payments of $1,400 to most Americans; increasing the federal unemployment benefit to $400 per week and extending it through the end of September; boosting the federal minimum wage to $15 per hour; extending the eviction and foreclosure moratoriums until the end of September; $350B in state and local government assistance, $170B for K-12 schools and higher education institutions; $50B towards COVID-19 testing; $20B towards a national vaccine program in partnership with states, localities, and tribes; making the Child Tax Credit fully refundable for the year and increase the credit to $3,000 per child. In stock news, U.S. earnings season will kick into full swing with results from JPMorgan, Citigroup and Wells Fargo. In Asian markets, The Nikkei Index fell -179 points to 28,519, the Shanghai Index is little changed at 3,566 and the Hang Seng Index rose 77 points to 28,573. In Europe, the German DAX is lower by over -90 points to move back below 13,900, while the FTSE 100 is down about -60 points to 6,740. Wall Street ended mixed yesterday, as the Dow, S&P 500 and Nasdaq Comp all fell from intraday record highs though the Russell 2000 SmallCap index managed to close at fresh all-time bests as cyclical sectors rallied (along with Transports and Semiconductors), while Megacap tech shares fell (FB, AMZN, TWTR) as markets awaited plans for additional fiscal stimulus from President-elect Joe Biden overnight. Economic data disappointed as the weekly jobless report showed the number of Americans filing first-time claims for unemployment benefits increased more than expected last week.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -14.30 points, or 0.38%, to 3,795.54

·     The Dow Jones Industrial Average fell -68.95 points, or 0.22%, to 30,991.52

·     The Nasdaq Composite slipped -16.31 points, or 0.12%, to 13,112.64

·     The Russell 2000 Index surged 43.38 points, or 2.05% to 2,155.35

 

Events Calendar for Today

·     8:30 AM EST      Producer Price Index MoM (PPI) for December

·     8:30 AM EST      PPI Ex: Food & Energy (core) MoM for December

·     8:30 AM EST      Producer Price Index YoY (PPI) for December

·     8:30 AM EST      PPI Ex: Food & Energy (core) YoY for December

·     8:30 AM EST      Empire Manufacturing Index for January

·     8:30 AM EST      Advance Retail Sales MoM for December

·     8:30 AM EST      Retail Sales Ex: Autos MoM for December

·     9:15 AM EST      Industrial Production MoM for December

·     9:15 AM EST      Capacity Utilization for December

·     10:00 AM EST    University of Michigan Sentiment, Jan-P

·     10:00 AM EST    Business Inventories MoM for November

 

Earnings Calendar:

·     Earnings Before the Open: C, JPM, PNC, WFC

 

 

Macro

Up/Down

Last

Nymex

-0.86

52.71

Brent

-1.02

55.40

Gold

6.75

1,853.30

EUR/USD

-0.0021

1.2134

JPY/USD

-0.15

103.65

10-Year Note

-0.02

1.11%

 

 

Sector News Breakdown

Consumer

·     Driven Brands (DRVN) 31.8M share IPO priced at $22.00

·     GameStop (GME) Director Wolf sold 810,000 shares @ $21.22 between 1/12-1/13 as per a filing

·     Monster Beverage (MNST) announced that Hilton Schlosberg was elected by the board of the company as co-CEO of the company. Schlosberg will serve as co-CEO together with Rodney Sacks, who has served as the CEO of the company since 1990

·     Tenneco (TEN): Carl Icahn reports stake of 12.99% as of Jan 14, down from prior 14.1% stake

·     Lennar (LEN) announces $1B stock repurchase authorization

·     Yeti (YETI) downgraded to Neutral from Buy at Citigroup but raise tgt to $85 from $69 after 400% rise

 

Energy, Industrials and Materials

·     CVR Energy (CVI) said it is not interested in buying Delek US Holdings (DK) and proposes to replace three Delek board nominees with its own; CVI remains the largest holder at 15% stake and says it plans to focus instead on devoting capital to internal higher-return projects

·     Emerson Electric (EMR) upgraded to Buy at UBS and raise tgt to $100 from $69 as see order momentum inflecting strongly, driven by recovering capex & industrial production

·     Ingersoll Rand (IR) upgraded to Buy at UBS and increase the price target to $58 from $37 as expect EBITDA margins to improve at a significantly higher rate than consensus expects which in turn should lead to a re-rating of ~2x

·     Oceaneering International (OII) announces that its Subsea Robotics segment won multiple contracts during Q4, with anticipated aggregate revenue in excess of $225M.

·     Worthington Industries (WOR) said on Jan. 13, unit sold its remaining 7 million shares of Nikola (NKLA) common stock for net pre-tax cash proceeds of $146.59 million

 

Financials

·     Bank earnings later this morning with JPMorgan (JPM), Citigroup (C), Wells Fargo (WFC) and PNC Bank (PNC) all expected to report

·     Goldman Sachs Group Inc (GS) is considering acquisitions to bulk up its consumer banking unit Marcus, after the Wall Street firm slowed loan and deposit growth at its fledgling business last year in the wake of the coronavirus pandemic, three bank sources said – as per Reuters

·     CME Group (CME) downgraded to Perform on valuation at Oppenheimer

 

Healthcare

·     DBV Technologies (DBVT) shares rose 55% after saying it received written responses from the FDA to questions provided in the Type A meeting request the Co. submitted in October 2020

·     Lannett Company Inc. (LCI) said the co decided to discontinue 23 lower gross margin product lines; expected impairment charge estimated to be $180 mln-$210 mln; will be reflected Q2 2021

·     Amwell (AMWL) 11.281M share Secondary priced at $27.50

·     Nanobiotix (NBTX) announced positive first results from the complete phase Ib part of a phase Ib/II study evaluating NBTXR3 (PEP503) activated by radiotherapy with concurrent chemotherapy

 

Technology, Media & Telecom

·     SAP AG (SAP) forecast flat revenue and a decline in operating profit in 2021, as it released preliminary annual results that came at the high end of guidance slashed last autumn; said it expected adjusted revenue, at constant currency, to be flat to up 2% this year, while adjusted operating profit was seen falling by 1%-6%; full-year revenue for 2020 exceeded its lowered guidance while profit hit the high end

·     Playtika (PLTK) 69.5M share IPO priced at $27.00

·     BlackRock (BLK) has sold almost all its stake in China Telecom (CHA), a company subject to a new ban on U.S. investment, a stock market filing on Friday showed – Reuters

·     Fluent (FLNT) guides Q4 revs in range of $81M-$82M vs. $85.43M consensus; and FY20 revenue is anticipated to be $309.7M-$310.7M vs. $314.14M consensus, growth of 10.1% YoY

·     Progress Software (PRGS) 4Q adj EPS $0.91 vs. est. $0.78 on revs $122.4Mm vs. est. $128Mm; guides year EPS $3.22-$3.28 vs. est. $3.22; guides 1Q21 adj revs $109-123Mm vs. est. $130.8Mm, sees FY21 adj revs $513-521Mm vs. est. $516.2Mm; guides 1Q21 adj EPS $0.72-0.76 vs. est. $0.81

·     Tufin Software (TUFN) guides Q4 revs $30.5M-$31.1M vs. est. $26.8M and said Raymond Brancato has been appointed Chief Revenue Officer, reporting directly to CEO and co-founder Ruvi Kitov

·     Porch (PRCH) announced four strategic acquisitions. Porch and Homeowners of America, or HOA, have executed a definitive merger agreement for Porch to acquire HOA and all related subsidiaries

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.