Early Look

Thursday, August 19, 2021

Futures	Up/Down	%	Last
Dow	-275.00	0.79%	34,612
S&P 500	-31.25	0.72%	4,362
Nasdaq	-86.50	0.58%	14,763

 

 

U.S. futures are looking sharply lower, adding to yesterday’s late day slide and tracking weakness in Europe and Asia as noise gets louder that the central bank could start dialing back on pandemic stimulus programs. Stock markets tumbled late Wednesday, closing at the lows after minutes from the July meeting of the FOMC showed a move to pare $80B per month in Treasuries and $40B per month of mortgage securities could happen this year. While there’s still debate regarding the timing and pace, officials said tapering would not necessarily mean an imminent rate increase. European stocks slumped the most in a month as well following the U.S. move. Other factors hitting stocks include China slowing growth fears as the delta variant continues to disrupt global growth. Those fears aren’t helped by a study from the U.K. that showed coronavirus vaccines are less effective against the delta variant and calls from the Biden Administration for a third booster shot. While the next meeting of the FOMC will occur on September 21-22, Fed Chair Jay Powell is scheduled to speak at Jackson Hole next week. Treasuries bounce with yields slipping as the dollar hits its highest levels in about 4-months. Oil prices are falling for a 6^th straight day, with WTI crude down over 3%, dropping to around $63 per barrel for WTI as investors remain worried about the outlook for fuel demand as COVID-19 cases surge worldwide

 

Fed officials continue to call for a “taper” sooner. Yesterday St. Louis Fed President James Bullard said he preferred tapering to end by the first quarter of 2022, with the last three months of next year being a “logical place” for a rate increase. Several other Fed officials, including Robert Kaplan of Dallas and Esther George of Kansas City, have urged the central bank to begin removing stimulus as soon as the September meeting in recent days. Fed Chair Jerome Powell may also provide information in remarks to the central bank’s annual research conference in Jackson Hole, Wyoming, next week.

 

In Asian markets, The Nikkei Index fell -304 points (1.1%) to settle at 27,291, the Shanghai Index fell -19 points to 3,465 and the Hang Seng Index declined -550 points (or 2.1%) to settle at 25,316. In Europe, the German DAX is down over -275 points (1.75%) to 15,685, while the FTSE 100 tumbles -145 points (or over 2%) to trade 7,025.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -47.81 points, or 1.07%, to 4,400.27

·     The Dow Jones Industrial Average fell -382.59 points, or 1.08%, to 34,960.69

·     The Nasdaq Composite slumped -130.27 points, or 0.89%, to 14,525.91

·     The Russell 2000 Index declined -18.39 points, or 0.84% to 2,158.78

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 363K

·     8:30 AM EST      Continuing Claims…est. 2.80M

·     8:30 AM ET         Philly Fed Survey for Aug…est. 23.0

·     10:00 AM ET      Leading Index MoM for July…est. 0.8%

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

 

Earnings Calendar:

·     Earnings Before the Open: BJ, EL, KSS, LYTS, M, MSGS, PFGC, TPR, WOOF

·     Earnings After the Close: AMAT, ATGE, BLND, LFVN, ROST

 

Other Key Events:

·     B Riley Summer Summit, 8/18-8/19

·     Citigroup Midstream and Energy Infrastructure Conference (virtual), 8/18-8/19

·     Jefferies Back-to-School Bus Tour, 8/18-8/19

 

 

Macro	Up/Down	Last
Nymex	-2.26	63.20
Brent	-2.08	66.15
Gold	1.50	1,789.35
EUR/USD	-0.002	1.1691
JPY/USD	-0.07	109.70
10-Year Note	-0.048	1.225%

 

 

Sector News Breakdown

Consumer

·     Bath & Body Works (BBWI) 2Q EPS $1.34 vs est. $0.81 on sales $1.704B vs est. $1.666B; guides 3Q adj EPS $0.55-0.60 vs est. $0.56

·     Red Robin Gourmet (RRGB) 2Q adj EPS ($0.22) vs est. $0.00 on revs $277Mm vs est. $275.3Mm, restaurant comps +66.3% over the same period in 2020, and decreased 2.4% compared to the same period in 2019; average weekly sales per fiscal period grew by a total of $2,503 during the second quarter of 2021

·     SpartanNash (SPTN) Q2 adj EPS $0.54 vs. est. $0.48; Q2 sales $2.11B vs. est. $2.08B; Q2 adjusted EBITDA was $54.4 million, compared to $59.2 million in the prior year quarter; Q2 retail comparable store sales declined 2.7% and comparable store sales increased by 12.1% on a two-year basis; increased the low end of the fiscal 2021 profitability outlook range

·     Victoria Secrets (VSCO) 2Q adj EPS ($0.97) vs est. $1.59 on sales $1.614B vs est. $1.518B, total comps +5% vs 2Q19, comparable store sales -3% vs 2Q19; direct channel sales $468.8Mm -24% YoY and +26% vs 2019; guides 3Q EPS $0.60-0.70 vs est. $0.93, sees 3Q sales +mid-to-high-single digits YoY

·     John B. Sanfilippo & Son, Inc. (JBSS) 4Q EPS $1.07 vs est. $1.15 on sales $206.7Mm vs est. $198.2Mm

·     Ford (F) will halt production at U.S. truck plant on Aug. 23 for 1 week over chip shortage, will temporarily shutter its Kansas City assembly plant that builds its best-selling F-150 pickup truck due to a semiconductor-related part shortage as a result of the COVID-19 pandemic in Malaysia

·     Tesla (TSLA) will be conducting its artificial intelligence day on Thursday. The electric vehicle company likely will showcase, among other things, the company’s advances in self-driving capabilities

 

Energy, Industrials and Materials

·     Crude prices fell for a fifth day on Wednesday, as investors remain worried about the outlook for fuel demand as COVID-19 cases surge worldwide just as more supply reaches the market from large global producers, including the United States. Brent crude ended down 80 cents, or 1.2%, at $68.23 a barrel. The global benchmark has lost 11% in the last 13 trading days dating to the end of July. U.S. crude futures settled down $1.13, or 1.7%, to $65.46 a barrel.

 

Financials

·     Robinhood (HOOD) Q2 EPS loss ($2.16) vs. est. loss (-$0.15); Q2 revs $565.33M vs. est. $521.84M; Q2 monthly active users increased 109% to 21.3M, compared with 10.2M YoY; assets under custody increased 205% to $102B in Q2, compared with $33B in the second quarter of 2020; sees 3q seasonal headwinds, lower trading activity across industry, resulting in lower rev; SEC staff informed co on August 13, 2021 that they are reviewing resale S-1 – said no sales can be made off resale S-1 until sec staff completes their review and declares it effective

·     DLocal Ltd. (DLO) 2Q EPS $0.06 vs est. $0.05 on revs $59Mm vs est. $40.5Mm, payment volume $1.5B +319%

 

Healthcare

·     Coherus Biosciences (CHRS) and Junshi Biosciences announced positive interim results from phase III trials on its non-small cell lung cancer treatment Toripalimab

·     Paratek Pharmaceuticals (PRTK) announces FDA orphan drug designation for Nuzyra® (omadacycline) for the treatment of infections caused by nontuberculous mycobacteria

 

Technology, Media & Telecom

·     Cisco Systems (CSCO) Q4 Non-Gaap EPS $0.84 vs. est. $0.82; Q4 revs $13.1B vs. est. $13.03B; sees Q1 EPS $0.66-$0.66 and rev growth 7.5%-9.5% YoY; sees FY 2022 adj eps $3.38 to $3.45, vs. est. $3.41

·     Nvidia (NVDA) Q2 Non-GAAP EPS $1.04 vs. est. $1.01; Q2 revs $6.51B vs. est. $6.33B; Q2 data center revenue $2.37B (up 35% YoY) vs. est. $2.28B; Q2 gaming revenue $3.06B (up 85% YoY and 11% QoQ) vs. est. $2.96B; Q2 automotive revenue $152M vs. est. $167.5M; sees Q3 revs $6.80B plus/minus 2% vs. est. $6.54B

·     Keysight Technologies (KEYS) Q3 EPS $1.54 vs. est. $1.44; Q3 revs $1.25B vs. est. $1.22B; sees Q4 EPS $1.59-$1.65 vs. est. $1.59; sees Q4 revs $1.25B-$1.27B vs. est. $1.26B; Q3 Orders grew 23% to reach $1.31 billion, compared with $1.07 billion last year

·     Synopsys Inc. (SNPS) 3Q adj EPS $1.81 vs est. $1.78 on revs $1.057B vs est. $1.05B; guides 4Q revs $1.138-1.168B vs est. $1.036B, sees adj EPS $1.75-1.80 vs est. $1.49; guides FY revs $4.19-4.22B vs est. $4.08B, sees FY adj EPS $6.78-6.83 up from prior $6.38-$6.45 vs est. $6.48

·     Workday (WDAY) announced it has achieved ready status for the Federal Risk and Authorization Management Program, or FedRAMP, at a moderate impact level.

·     Trimble Inc. (TRMB) board approved a new share repurchase program authorizing up to $750 mln in repurchases