Early Look

Monday, April 19, 2021

Stock futures are looking lower following the S&P 500 and Dow’s fourth straight week of gains amid signs of a strong global recovery from the coronavirus pandemic, while the Nasdaq Composite dips after posting its 3^rd-straight week of gains last Friday. Both the Dow and S&P 500 index closed at record highs for a second day on Friday as soaring growth in China and strong U.S. data provided investors with further reason to believe in a surging post-pandemic recovery. For the week, the Dow rose 1.2%, the S&P 500 gained 1.4%, and the Nasdaq rose 1.1%. The yield on the 10-year U.S. Treasury dipped to 1.54%, extending recent declines amid diminished concerns that the Federal Reserve would boost interest rates sooner than expected to curtail recovery-induced inflation. Bitcoin prices had a wild ride over the weekend, falling to lows around the $52,000 level after ending last week around $62,000, with a blitz lower across the crypto space (Ethereum, Bitcoin, Litecoin) on no specific news, but follows a volatile week after Coinbase (COIN) priced its IPO midweek, drawing further interest in the crypto space. In Asian markets, The Nikkei Index ended little changed at 29,685, the Shanghai Index jumped 50 points to 3,477, and the Hang Seng Index gained 136 points to 29,106. In Europe, the German DAX is down about -15 points to 15,440, while the FTSE 100 rises about 15 points to 7,035. Investors now brace for a very busy week of earnings, including several Dow components (IBM, INTC, JNJ, KO).

Market Closing Prices Yesterday

·     The S&P 500 Index gained 15.05 points, or 0.36%, to 4,185.47

·     The Dow Jones Industrial Average rose 164.68 points, or 0.48%, to 34,200.67

·     The Nasdaq Composite edged higher 13.58 points, or 0.10%, to 14,052.34

·     The Russell 2000 Index advanced 5.60 points, or 0.25% to 2,262.67

Events Calendar for Today

·     No Major Economic Data Released

Earnings Calendar:

·     Earnings Before the Open: ACU, GNTY, KO, ONB, PLD

·     Earnings After the Close: ACC, CCK, FNB, HXL, IBM, PNFP, SFBS, STLD, UAL, WTFC, ZION

Other Key Events:

·     American Academy of Neurology (virtual) 4/17-4/22

World News

·     Bitcoin fell as much as 14% to $51,541 with a power outage in China being blamed as well as continuation of selling pressure from last Friday’s announcement from Turkey’s central bank banning the use of cryptocurrencies. Bloomberg also noted there was also speculation Sunday in several online reports that the crypto plunge was related to concerns the U.S. Treasury may crack down on money laundering carried out through digital assets. The Treasury declined to comment, and its Financial Crimes Enforcement Network (FinCEN) said in an emailed response on Sunday (more) https://bloom.bg/3x7njwE 

·     More Democratic senators showing concern about raising the corporate tax rate to 28% and are more willing to back a rise to 25%, according to Axios

·     Japanese March Trade Balance: JPY +663.7b vs JPY +490b consensus; Japanese March Exports +16.1% y/y vs +11.6% consensus; Japanese March Imports: +5.7% y/y vs +4.7% consensus

Sector News Breakdown

Consumer

·     GameStop (GME) rises after Keith Gill, the man known as “Roaring Kitty” on social media and whose online posts helped spark the recent retail frenzy in GME, exercised call options on stock to buy 50,000 more shares at a strike price of $12, Bloomberg reported. Gill now has 200,000 shares in the firm, and his stake is worth over $30 mln. Separately, the company GME CEO George Sherman is stepping down by the end of July or earlier

·     Harley Davidson (HOG) Q1 EPS $1.68 vs. est. 88c and revs $1.42B vs. est. $1.25B; qtrly motorcycles and related products (motorcycles) segment revenue up 12%; sees 2021 motorcycles segment revenue growth to be 30-35%; sees 2021 motorcycles segment operating income margin of 7%-9%

·     Tesla (TSLA) shares slide following a report of a car involved in an accident that killed two passengers over the weekend in Texas was believed to be without a driver and on autopilot. The Tesla Model S crashed into a tree, caught fire and led to the deaths of the two passengers – one in the front passenger seat and one in back, according to multiple reports

·     ChargePoint (CHPT), Volta among EV charging stocks at fire-sale prices according to Barron’s saying EV charging stocks are intriguing for three reasons. First, the stocks of the four main companies are down more than 43% from their 52-week highs, on average. Second, the business models are sound. And third, the government is coming to help. Volta, which is merging with Tortoise Acquisition Corp II (SNPR), plans to build charging stations at prime retail sites and generate sales from ads and payments from retailers.

·     Peloton (PTON) treadmills are unsafe for people with young children or pets, federal agency says. Warning from the CPSC comes after its probe into child’s death; peloton calls advisory ‘inaccurate and misleading’ https://on.wsj.com/3v7lq1j

·     PetIQ (PETQ) mentioned positively saying the company which sells pet-health products and operates a vet-clinic service, looks like a rare bargain in the business, noting the stock trades at 19 times estimated 2022 earnings, lower than larger peers like Chewy (CHWY) and Idexx Laboratories (IDXX)

·     O’Reilly Automotive (ORLY) is ready to ride the reopening with additional stores and market share, according to Barron’s saying the shares gained 46% during the past year, trailing rivals AutoZone (AZO) and Advance Auto Parts (AAP) but should see an uptick and catch up with competitors as Americans get back on the road.

·     QuantumScape (QS) CEO Jagdeep Singh said the battery maker is considering legal action after Scorpion Capital released a short report last week. QuantumScape shares have fallen 13% since the report was published.

Energy, Industrials and Materials

·     Clean Energy Fuels Corp. (CLNE) said it signed an agreement with Amazon (AMZN) to provide low and negative carbon renewable natural gas (RNG). The fuel will be provided at 27 existing Clean Energy fueling stations and another 19 non-exclusive new or upgraded Clean Energy-owned stations that Clean Energy expects to be constructed by the end of the year.

·     First Solar (FSLR) upgraded to Buy from Neutral at Citigroup and raise tgt to $100 from $88, and opened a “90-day catalyst” on the shares

·     BP Plc (BP) plans to spend about $1.3B to build a network of pipes and other infrastructure to collect and capture natural gas produced as a byproduct from oil wells in the Permian Basin of Texas and New Mexico – WSJ

Financials

·     Coinbase (COIN) is the best way to play the Bitcoin boom, according to Barron’s saying it’s a “novel” company with competitive advantages that have enabled it to increase market share. The stock may drop in the next crypto downturn, but it can tap a number of revenue streams.

·     Discover Financial (DFS) downgraded to market perform from outperform at BMO Capital

·     M&T Bank (MTB) Q1 EPS $3.33 vs. est. $3.00

Healthcare

·     Cannabis stocks could will in focus this week (CURLF, CRLBF, GTBIF, TCNNF): The SAFE Banking Act, H.R. 1996, legislation seen as crucial to advance federal marijuana legalization, will get a House floor vote on April 19, according to a legislative calendar. The bill would provide protections for banks that engage with legitimate cannabis-related businesses

·     Pfizer (PFE) agreed to supply additional COVID-19 vaccines, says Japan’s vaccine minister. Pfizer CEO has agreed to Japanese Prime Minister Yoshihide Suga’s request to supply additional doses of the COVID-19 vaccine, the vaccine minister of Japan said on Sunday.

·     Pfizer (PFE) and BioNTech (BNTX) will supply an additional 100M doses of the companies’ COVID-19 vaccine, to the European Union in 2021, bringing the total number of doses to be delivered to 600M.

·     Prothena (PRTA) announces positive results from Phase 1 study of PRX004 in patients with hereditary ATTR Amyloidosis (hATTR).

Technology, Media & Telecom

·     Disney (DIS) future is bright according to Barron’s saying the company has proved it’s more than movies and parks, as streaming results have shattered forecasts and TV isn’t dying as quickly as expected.

·     Amazon (AMZN) said the company’s embattled video game division has canceled an online role-playing game based on the fantasy series Lord of the Rings, which was announced in 2019

·     Corning (GLW) upgraded to Overweight from Neutral at JPMorgan with a price target of $55, up from $39 saying the company’s favorable positioning as a fiber supplier to leverage the upcoming investment cycle in fiber-based broadband connectivity as well as tailwinds from government directed investments in broadband services drive an improved outlook for its optical segment