Early Look

Wednesday, February 3, 2021

Futures	Up/Down	%	Last
Dow	23.00	0.08%	30,609
S&P 500	13.25	0.35%	3,831
Nasdaq	87.50	0.65%	13,536

 

 

U.S. futures are edging higher, paced by gains in technology after better results from Alphabet (GOOGL) overnight (trading at new all-time highs), while Amazon (AMZN) earnings also beat views, but was trumped by news that CEO Jeff Bezos was stepping down. The same factors continue to be market drivers including strong earnings results, additional stimulus relief hopes and a broader vaccine rollout worldwide as fear last week has quickly disappeared with major averages closing in on new record highs again. Major U.S. stock indexes rallied more than 1% on Tuesday, helped by gains in big tech (ahead of AMZN, GOOGL results) and by optimism over progress on a large fiscal pandemic relief package. At the same time the recent short-squeeze plays that have garnered intense focus such as GME, AMC, BBBY, KOSS, FIXX, etc. fizzled. In Asian markets, The Nikkei Index rose 284 points to 28,646, the Shanghai Index fell -16 points to 3,517 and the Hang Seng Index rose 58 points to 29,307. In Europe, the German DAX is higher by over 90 points to 13,930, while the FTSE 100 is up 20 points to 6,535. Yesterday, The White House confirmed plans to hike weekly vaccine supplies to 11.5M doses, distributing doses directly to up to 40,000 pharmacies. Investors prepare for another busy morning of corporate earnings, with hopes that markets can turn back to company fundamentals from the short squeeze news that has dominated news over the last week. Reuters reported overnight that U.S. Treasury Secretary Janet Yellen is calling a meeting of key financial regulators this week to discuss market volatility driven by retail trading in GameStop and other stocks. Yellen will convene heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said on Tuesday.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 52.45 points, or 1.39%, to 3,826.31

·     The Dow Jones Industrial Average rose 475.57 points, or 1.57%, to 30,687.48

·     The Nasdaq Composite surged 209.38 points, or 1.56%, to 13,612.78

·     The Russell 2000 Index advanced 25.28 points, or 1.19% to 2,151.44

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Change for January…est. 49K

·     9:45 AM EST      Markit Composite PMI Jan-F…prior 58.0

·     9:45 AM EST      Markit Services PMI Jan-F…prior 57.5

·     10:00 AM EST    ISM Non-Manufacturing PMI for Jan…est. 56.8

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABBV, APO, AVY, BIIB, BSX, DT, EPD, EVR, GWW, HUM, HWM, IEC, INGR, LAD, LFUS, LGND, MIME, MSGS, MTOR, PFGC, SC, SLAB, SMG, SNDR, TGI, WNC

·     Earnings After the Close: ADTN, AFG, AFL, ALGN, ALGT, ALL, ANGI, ASH, AVB, AXTA, CCMP, CENT, CHNG, CSGS, CSII, CTSH, DGII, EBAY, ECHO, ELF, EMKR, FORM, GLAD, GRUB, HMN, IAC, IVAC, KE, KLAC, LCI, LNC, MDU, MET, MWA, MXL, NTGR, PAHC, PLUS, PYPL, QCOM, QNST, QRVO, RGLD, RYN, TBI, TTMI, UHAL VVV

 

Other Key Events:

·     BMO Capital Infrastructure and Utilities Virtual Conference, 2/3-2/4

·     Stephens Texas Bank Virtual Field Trip, 2/2-2/4

 

 

Macro	Up/Down	Last
Nymex	0.33	55.09
Brent	0.48	57.94
Gold	-2.50	1,835,50
EUR/USD	-0.0021	1.2023
JPY/USD	0.07	105.05
10-Year Note	+0.019	1.12%

 

 

World News

·     U.S. Treasury Secretary Janet Yellen is calling a meeting of key financial regulators this week to discuss market volatility driven by retail trading in GameStop and other stocks. Yellen will convene heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said on Tuesday – Reuters

·     Eurozone IHS Markit’s final January Composite Purchasing Managers’ Index (PMI) fell to 47.8 from December’s 49.1 but was a touch above a flash reading of 47.5. A PMI covering the service industry fell to 45.4 from December’s 46.4 but came in higher than the 45.0 flash reading

 

Sector News Breakdown

Consumer

·     Amazon (AMZN) 4Q EPS $14.09 vs. est. $7.23 on revs $125.6B vs. est. $119.7B, AWS net sales $12.74B, op income $3.56B; sees 1Q op inc between $3.0-6.5B, sees Q1 net sales $100-106B (+33-40% incl +300bps fx) vs. est. $95.7B; announces CEO transition, Bezos to become Executive Chair

·     Capri Holdings (CPRI) 3Q EPS $1.18 vs. est. $1.01 on revs $1.3B vs. est. $1.33B, qtrly e-comm sales +65%, qtrly Versace global retail sales +dd, qtrly Kors revs -18.6%, qtrly Choo revs -26.7%, net inventory -18% yr/yr; not providing annual earnings guidance but did say expect revs and EPS will exceed pre-pandemic levels by FY23

·     Chipotle (CMG) Q4 adj EPS $3.48 vs. est. $3.73 and in-line revs of $1.61B; Q4 comparable restaurant sales increased 5.7% and Q4 Digital sales grew 177.2% and accounted for 49.0% of sales; not providing fiscal 2021 comparable restaurant sales growth guidance; sees around 200 new restaurant openings in 2021, which assumes minimal construction and permit delays related to covid-19

·     Container Store (TCS) Q3 adj EPS $0.42 vs. est. $0.33; Q3 revenue $275.5M vs. est. $262.16M; net sales in The Container Store retail business were $256.5 million, up 21.0%, inclusive of the 19.5% increase in Custom Closets; Q3 online sales increased 98.1%; sees Q4 adjusted EPS $0.52-$0.57c vs. rest. $0.42

·     Fortune Brands (FBHS) Q4 EPS $1.16 (in-line with ests) and revs $1.66B vs. est. $1.62B; sees FY21 EPS $4.85-$5.05 vs. est. $4.76 and sees FY21 sales growth in the range of 12.5% to 14.5%; expects to generate free cash flow of approximately $600 to $650 mln for 2021

·     Kia Motors (KIMTF) soars after Bloomberg reports the carmaker will sign a 4 trillion won ($3.59 billion) deal with Apple Inc (AAPL) to build electric vehicles https://bloom.bg/3jaxoT0

 

Energy

·     The American Petroleum Institute (API) reported a weekly draw of 4.26M barrels of crude oil for the latest week, showed gasoline inventories fell 240K barrels, distillate inventories a draw of 1.62M barrels and Cushing inventories a draw of 1.88M barrels.

·     PG&E (PCG) agreed to sell license agreements for wireless providers to place wireless telecom antennas on the company’s towers to SBA Communications (SBAC) for $973M

·     Enterprise Products Partners LP (EPD) said Q4 profit and revenue fell as it reported lower gross operating margins in some businesses; Q4 revenue was $7.04B, down 12% from $8B YoY and missing rh $7.6B estimate; sees 2021 growth Capex $1.6B

 

Financials

·     Carlisle cos. (CSL) authorizes repurchase of an added 5m shares

·     Chubb (CB) Q4 core EPS $3.18 vs. est. $2.82; Net premiums written were $8.41 billion, rising 5% from a year earlier and net premiums earned were $8.43 billion, up over 6%; Q4 pre-tax and after-tax catastrophe losses were $314 mln and $271 mln, respectively

·     Horace Mann (HMN) 4Q EPS $1.13 vs. est. $0.91 on revs $352.3Mm vs. est. $326.4Mm; sees FY21 core EPS $3.00-3.20 vs. est. $2.95, says auto and supplemental policyholder behavior expected to gradually return to near historical levels by yr-end 2021

·     Opendoor Technologies (OPEN) announces offering of 24M shares of common stock

·     MarketAxess Holdings Inc. (MKTX) announced monthly trading volume for January 2021 of $575.3 billion consisting of $236.5 billion in credit volume and $338.8 billion in rates volume; Total credit average daily trading volume of $12.4 billion, surpassing previous record from March 202; high yield average daily trading volume of $1.9 billion; emerging markets average daily trading volume of $2.9 billion and total trading volume of $55.9 billion

·     VEON (VEON) announced a strategic global partnership with payment technology leader Mastercard (MA) to boost digital financial services in key markets.

 

Healthcare

·     Amgen (AMGN) Q4 adj EPS $3.81 vs. est. $3.39; Q4 revenue $6.6B vs. est. $6.58B; guides FY21 adjusted EPS $16.00-$17.00 vs. est. $17.02 and revenue $25.8B-$26.6B vs. est. $26.43B; q4 worldwide Aranesp sales $375m, Neulasta sales $536m and Enbrel sales $1.27b

·     PerkinElmer (PKI) 4Q adj EPS $3.96 vs. est. $3.00 on revs $1.355B vs. est. $1.224B; guides 1Q adj EPS at least $3.00 vs. est. $2.40, sees 1Q revs about $1.19B vs. est. $1.1B; sees FY21 adj EPS at least $8.50 vs. est. $8.88

·     Steris Plc (STE) 3Q adj EPS $1.73 vs. est. $1.52 on revs $808.9Mm vs. est. $793M

·     Arcutis Biotherapeutics (ARQT) 5.5M share Secondary priced at $35.00

·     Argenx (ARGX) 1.608M share Secondary priced at $320.00

·     Krystal Biotech (KRYS) 1.923M share Spot Secondary priced at $65.00

 

Industrials & Materials

·     Albemarle (ALB) files to sell $1.3B in common stock; sees Q4 adjusted EPS $1.11-$1.19 above Street at $1.07 and revenue $870M-$880M vs. est. $837.26M; anticipates that its full-year 2021 performance will improve relative to 2020 with continued economic recovery following the COVID-19 pandemic

·     Amcor Plc (AMCR) sees FY21 adj EPS growth +10-14% vs. est. +11%, sees FY21 adj FCF about $1.0-1.1B

·     U.S. Steel (X) files to sell 40M shares, to use proceeds from offering to redeem 35% of outstanding 2025 senior secured notes, general corporate purposes

·     Freeport McMoRan (FCX) reinstated a cash dividend of $0.30 per share, with the initial quarterly dividend expected to be paid on May 1 (prior dividend was $0.20)

·     U.S. Steel (X) 42M share Spot Secondary priced at $16.65

 

Media & Telecom

·     Match Group (MTCH) 4Q EPS $0.48 vs. est. $0.48 on revs $651Mm vs. est. $648.8Mm, qtrly avg subs +12% to 10.9Mm, qtrly ARPU +5% to $0.62; sees 1Q revs $645-655Mm vs. est. $646.6Mm, sees 1Q adj EBITDA $210-215Mm vs. est. $218.3Mm; guides FY21 revs $2.75-2.85B vs est. $2.84B, expects to surpass $1B adj EBITDA in FY21

·     Sony Corp (SNE) raised its full-year profit outlook amid more demand for games, movies and other content due to the lockdowns; said expects to sell more than 7.6 million PS5 consoles by end-March; now expects 940 billion yen ($8.95 billion) in operating profit in the 12 months through March compared with the 700 billion yen it previously forecast.

·     Spotify (SPOT) Q4 EPS EU loss (66c) vs. est. loss EU (55c) on revs EU$2.186B vs. est. EU$2.15B; qtrly total MAUs up 27% to 345 mln; says optimistic about the underlying trends in the business into 2021 and beyond; sees Q1 revs EU1.99B-2.19Band Q1 total MAUs 354 mln to 364 mln

 

Technology

·     Alphabet (GOOGL) Q4 EPS $22.30 vs. est. $15.90; Q4 revenue $56.9B vs. est. $53.13B; 4q operating margin 28%; 4q operating income $15.65b; 4q google advertising revenue $46.2b; 4q google cloud revenue $3.83b; 4q google search & other revenue $31.9b; 4q traffic acquisition costs $10.47b; Operating margin rose to 28% from a year-ago 20%

·     Bottomline Technologies (EPAY) 2Q core EPS $0.30 vs. est. $0.28 on revs $116Mm vs. est. $113.7Mm; on Track for FY21 subscription rev growth at or near 15%-20% target

·     Brooks Automation (BRKS) Q1 EPS $0.47 vs. est. $0.42; Q1 revenue $250M vs. est. $243.62M; guides Q2 non-GAAP EPS 48c-57c above consensus 42c on revenue $267M-$283M vs. est. $246.73M

·     EA In. (EA) 3Q $0.72 vs. est. $0.78 on revs $1.67B vs. est. $1.59B, net bookings $2.4B; Q4 Gross margin came in at 75%, while operating margin was 45.6%; sees FY21 revs about $5.6B vs. est. $6B, sees FY21 net bookings about $6.075B

·     FireEye (FEYE) Q4 EPS 12c vs. est. 10c on better revs $248M vs. est. $240.01M; sees FY21 EPS 35c-37c vs. est. 36c and revs $990M-$1.01B vs. est. $992.1M; Non-GAAP operating margin of 12 percent, an increase of 5 points YoY; Platform, cloud subscription and managed services annualized recurring revenue of $340 million, an increase of 20% YoY

·     Ichor Holdings (ICHR) 4Q adj EPS $0.81 vs. est. $0.71 on revs $245Mm vs. est. $240.7Mm; guides 1Q adj EPS $0.64-0.76 vs. est. $0.64, sees 1Q revs $245-265Mm vs. est. $245.8Mm

·     Manhattan Associates (MANH) Q4 adj EPS 45c vs. est. 32c; Q4 revenue $147.08M vs. est. $137.96M; sees FY21 adjusted EPS $1.44-$1.59, vs. est. $1.47 and sees FY21 revenue $595M-$625M vs. est. $605.89M; Services revenue was $70.9M for Q4 compared to $86.3M YoY

·     Sanmina (SANM) Q1 non-GAAP EPS $1.02 vs. est. $0.81; Q1 revenue $1.76B vs. est. $1.77B; sees Q2 non-GAAP PS 76c-86c above consensus 74c and revs $1.65B-$1.75B vs. est. $1.71B

·     Super Micro (SMCI) 2Q adj EPS $0.63 vs. est. $0.44 on sales $830Mm vs. est. $821.7Mm, sees 3Q adj EPS $0.37-0.57 vs. est. $0.50, sees 3Q sales $790-870Mm vs. est. $810Mm; says may repurchase up to $200Mm common stock, also announces CFO resignation

·     Tenable Holdings (TENB) shares fell -11%; 4Q adj EPS $0.13 vs. est. $0.06 on revs $118.1Mm vs. est. $114.8Mm; guides 1Q adj EPS $0.04-0.06 vs. est. $0.04, sees 1Q revs $118-120Mm vs. est. $121Mm; guides FY21 adj EPS $0.26-0.30 vs. est. $0.26, sees FY21 revs $510-515Mm vs. est. $520.8Mm

·     Viavi Solutions (VIAV) 2Q adj EPS $0.23 vs. est. $0.19 on revs $299.9Mm vs. est. $290.5Mm; guides 3Q adj EPS $0.16-0.18 vs. est. $0.15, sees 3Q revs $280-300Mm vs. est. $271.9Mm; says calendar 2021 expected to be a revenue recovery year

·     Check Point (CHKP) Q4 EPS $2.17 vs. est. $2.11; Q4 revenue $563.8M vs. est. $555.4M

·     On24 (ONTF) 8.561M share IPO priced at $50.00