Early Look

Tuesday, December 15, 2020

Futures	Up/Down	%	Last
DJ Industrials	146.00	0.49%	29,927
S&P 500	19.00	0.52%	3,659
Nasdaq	47.50	0.38%	12,509

 

 

Stock futures are rising, as the S&P 500 looks to snap its 4-day losing streak after a bipartisan group of lawmakers put forward another economic relief package, which would split a previously proposed $908B package into two parts. A first bill of $748B would avoid the issues holding up a deal by focusing on spending programs that are favored by both Democrats and Republicans, while a second $160B measure would be for state and local aid. Washington is under pressure to get some sort of deal done before the holidays. In Asian markets, The Nikkei Index down -44 points to 26,687, the Shanghai Index ended slightly lower at 3,367 and the Hang Seng Index fell -182 points to 26,207. In Europe, the German DAX is up around 100-points to 13,321, while the FTSE 100 is down slightly at 6,525. Stay at home stocks saw a bounce yesterday after New York City Mayor Bill De Blasio said New Yorkers should be prepared for a possible complete shutdown. The S&P 500 extended its losing streak to 4-days on Monday as the Dow also ended lower despite news that the Covid-19 vaccine campaign was launched in the U.S., with energy shares falling and further U.S. fiscal stimulus still uncertain. The Nasdaq Composite closed higher by roughly 0.5% while the Russell 2000 SmallCap posted a small advance as biotech stocks outperformed following a $39B deal in the space as AZN agreed to acquire Alexion (ALXN). The energy sector fell 3.5% though oil settled slightly up on the day and Brent finished above $50 per barrel. Uncertainty over more fiscal stimulus cut short a rally in U.S. stocks after the Senate last week approved an extension of funding to avoid a government shutdown. Progress on coronavirus vaccines boosted sentiment, with the first doses shipped across the United States as part of an effort to inoculate more than 100 million people by the end of March. The next potential catalyst this week is the Federal Reserve’s policy meeting on Tuesday and Wednesday, while the Bank of England meets on Thursday and the Bank of Japan on Friday which closes out central bank meetings for 2020.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.97 points, or 0.44%, to 3,647.49

·     The Dow Jones Industrial Average fell -184.82 points, or 0.62%, to 29,861.55

·     The Nasdaq Composite gained 62.17 points, or 0.50%, to 12,440.04

·     The Russell 2000 Index advanced 2.16 points, or 0.11% to 1,913.86

 

Economic Calendar for Today

·     7:45 AM EST      ICSC Weekly Retail Sales

·     8:30 AM EST      Import Prices MoM for November

·     8:30 AM EST      Export Prices MoM for November

·     8:55 AM EST      Johnson/Redbook Weekly Sales

·     9:15 AM EST      Industrial Production MoM for November

·     9:15 AM EST      Capacity Utilization for November

·     4:00 PM EST       Net Long-term TIC Flows for October

·     4:30 PM EST       API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: AOUT, GTIM, NDSN

 

Other Key Events:

·     Cowen Annual Networking Summit (virtual), 12/14-12/15

·     FBN Securities Silicon Valley Virtual Tour, 12/14-12/15

·     JMP Securities Hematology Summit, 12/15-12/16

·     Oppenheimer Midwest Industrial Summit, 12/14-12/15

·     Truist Texas Bank Summit (virtual), 12/14-12/15

 

 

Macro	Up/Down	Last
WTI Crude	0.06	47.05
Brent	0.05	50.34
Gold	16.90	1,844.25
EUR/USD	0.0019	1.2163
JPY/USD	-0.06	103.99
10-Year Note	+0.007	0.898%

 

 

World News

·     U.S. Attorney General Bill Barr stepped down from his post according to President Trump who said “Just had a very nice meeting with Attorney General Bill Barr at the White House,” Trump tweets. “Our relationship has been a very good one, he has done an outstanding job! As per letter, Bill will be leaving just before Christmas to spend the holidays with his family…” Deputy AG Jeff Rosen will take over the Justice Dept. as acting attorney general

 

Sector News Breakdown

Consumer

·     DraftKings (DKNG), Penn Gaming (PENN): New Jersey sportsbooks generated $931M in wagers in November to smash the prior record of $803.1M set in October and increase a brisk 54% from last year’s level even as the sports world goes through daily COVID-19 disruption.

·     La-Z-Boy (LZB) says it will resume its share repurchase program after suspending it last March due to the pandemic.

·     J Alexander Holdings (JAX) says it has been impacted by a second wave of required dining room closures and increased capacity restrictions in certain of the markets in which it operates, including in Illinois, Kentucky, Michigan, Missouri, Pennsylvania, Maryland and Colorado. As of December 14, 2020, a total of 10 of the Company’s 46 locations are closed for indoor dining

 

Energy, Industrials and Materials

·     Following OPEC in cutting its forecast for oil demand growth in 2021, the IEA also expects a slower rebound than initially anticipated as the aviation sector takes longer to recover from the pandemic

·     JinkoSolar (JKS) announced its CEO Kangping Chen steps down, with Chairman Xiande Li to replace him, effective immediately. JKS’ chief marketing officer, chief operating officer, chief human resources officer and chief technology officer also resign

·     Northrop Grumman (NOC) has been awarded a $185.7M IDIQ contract for the A-10 Aircraft Structural Integrity Program (‘ASIP’) Legacy VII.

·     Waste Management (WM) announces plan to increase its quarterly dividend 5.5% to $0.575c and received authorization from its board of directors to repurchase up to $1.35 bln of company’s common stock

 

Financials

·     Apartment Investment and Management Company (AIV) announced that it has completed the separation of its businesses, creating two, separate and distinct, publicly traded companies, Apartment Income REIT Corp. and Aimco. Separately, the company will be removed from the S&P 500 as of Dec. 21 to make room for the inclusion of Tesla. S&P Dow Jones Indices had said

·     Wells Fargo (WFC) upgraded to overweight from market weight at KBW Inc. as upgraded the universal bank sector to overweight as well

 

Healthcare

·     Eli Lilly (LLY) raises quarterly dividend by 15% to $0.85

·     Eli Lilly and Company (LLY) announced a definitive agreement to acquire Prevail Therapeutics (PRVL) for $22.50 per share in cash (or an aggregate of approximately $880 million) payable at closing plus one non-tradable contingent value right (“CVR”) worth up to $4.00 per share in cash (or an aggregate of approximately $160 million), for a total consideration of up to $26.50 per share in cash (or an aggregate of approximately $1.040 billion). https://bit.ly/3oYghpb

·     MediWound (MDWD) signs distribution agreement with Ghassan Aboud Group to market and distribute its drug NexoBrid in the UAE

·     Mirum Pharmaceuticals (MIRM) 3.75M share Secondary priced at $20.00

·     TG Therapeutics (TGTX) 6.32M share Secondary priced at $43.50

·     OncoCyte (OCX) rises as diagnostic test maker Burning Rock Biotech Ltd (BNR) enters into an exclusive licensing agreement with OCX to bring co’s cancer risk stratification test DetermaRx to China

·     Boston Scientific (BSX) board approved new stock repurchase program authorizing co to repurchase up to $1.0B of common stock

·     Arvinas (ARVN) announces offering of $250M of common stock

·     iRhythm Technologies (IRTC) President and CEO Kevin King to retire; Michael Coyle joins company as President and CEO Effective January 12, 2021

·     Legend Biotech (LEGN) was selected for addition to the NASDAQ Biotechnology Index, effective prior to market open on Monday, December 21, 2020.

·     Mesoblast (MESO) slips after announcing top-line results from the landmark DREAM-HF Phase 3 trial of its allogeneic cell therapy rexlemestrocel-L (REVASCOR) in 537 patients with advanced chronic heart failure.

·     Ocular Therapeutix (OCUL) files automatic mixed securities shelf

·     Opiant Pharmaceuticals (OPNT) has announced an additional commitment of up to $3.5M from the Biomedical Advanced Research and Development Authority (BARDA), to accelerate the development of OPNT003, nasal nalmefene, for opioid overdose.

 

Technology, Media & Telecom

·     BIDU (BIDU) shares rise 5%; Reuters reported according to sources the company is looking to make electric vehicles and has also held talks with automakers. BIDU has held early talks with Zhejiang Geely Holding Group Co Ltd, Guangzhou Automobile Group Co Ltd and China FAW Group Corp Ltd.’s

·     Semiconductors/equipment at Goldman Sachs: NXPI downgrade from Buy to Neutral w/ $160 pt given lack of relative upside to our updated price target of $160 as shares have risen 1-2% since it was added to the Buy list on 10/18/18; raised tgts on several other names: AMD to $110 from $96, MCHP to $154 from $133, ON to $36 from $27, QRVO to $190 from $180, TXN to $171 from $162, ARW to $96 from $81, AVT to $25 from $23, MU to $83 from $77 and INTC to $42 from $38, TER to $128 from $107, KLAC to $271 from $219, LRCX to $557 from $451, STX to $52 from $47, SWKS to $171 from $162