Morning Preview: January 06, 2021

Early Look

Wednesday, January 6, 2021









S&P 500










U.S, futures are looking mixed (Dow futures higher, Nasdaq futures plunging) as politics are front and center stage as Democrats won one U.S. Senate race in Georgia and are leading in the other, moving closer to party sweep that would give them control of the chamber and the power to advance President-elect Joe Biden’s policy goals. Raphael Warnock beat Republican incumbent Kelly Loeffler. Meanwhile, Jon Ossoff holds a narrow lead over incumbent David Perdue in the other race, with a final outcome not expected until later on Wednesday at the earliest. Winning both contests would give Democrats control of the Senate, creating a 50-50 split and giving Vice President-elect Kamala Harris the tie-breaking vote once she and Biden take office on Jan. 20. In Asian markets, The Nikkei Index fell -102 points to 27,055, the Shanghai Index rose 22 points to 3,550 and the Hang Seng Index gained 42 points to 27,62. In Europe, the German DAX is up 115 points to 13,765, while the FTSE 100 is higher by over 150 points to 6,765. Later Wednesday, Congress will meet to certify Trump’s election loss over the objection of a number of Republican lawmakers who have said they will try to reject some state tallies though there is no chance of success. All three major U.S. stock averages ended Tuesday’s session firmly higher, erasing part of Monday’s decline, as the energy sector surged when Saudi Arabia said it will cut oil production starting next month, while the ISM manufacturing index came in stronger than expected as new orders, production, and orders grew. Note the 10-year yield tops the 1% level for the first time in 9-months while oil futures add to yesterday’s gains.

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:15 AM EST      ADP Employment Data for December…est. 88K

·     9:45 AM EST      Markit Composite Dec-F

·     9:45 AM EST      Markit Services PMI, Dec-F

·     10:00 AM EST    Durable Goods Orders MoM, for Nov

·     10:00 AM EST    Factory Orders MoM for November…est. 0.7%

·     10:30 AM ET      Weekly DOE Inventory Data


Earnings Calendar:

·     Earnings Before the Open: GBX, MSM, RPM, SMPL, UNF

·     Earnings After the Close: LNDC, RGP, SAR


Other Key Events:

·     Citigroup 2021 Global Technology, Media, Telco Virtual Conference, 1/4-1/7

·     Citigroup Transports MidCap Conference (virtual), 1/5-1/6

·     Goldman Sachs Energy Conference (virtual), 1/6-1/7


Market Closing Prices Yesterday

·     The S&P 500 Index climbed 26.21 points, or 0.71%, to 3,726.86

·     The Dow Jones Industrial Average rose 167.71 points, or 0.55%, to 30,391.60

·     The Nasdaq Composite jumped 120.51 points, or 0.95%, to 12,818.96

·     The Russell 2000 Index advanced 33.20 points, or 1.71% to 1,979.11





















10-Year Note





World News

·     Georgia Senate runoff – Raphael Warnock beat Republican incumbent Kelly Loeffler. Meanwhile, Jon Ossoff holds a narrow lead over incumbent David Perdue in the other race, with a final outcome not expected until later on Wednesday at the earliest

·     Later Wednesday, Congress will meet to certify Trump’s election loss over the objection of a number of Republican lawmakers who have said they will try to reject some state tallies though there is no chance of success.

·     Euro zone economic activity contracted more sharply than previously thought at the end of 2020; IHS Markit’s final December Composite Purchasing Managers’ Index (PMI) rose to 49.1 from November’s 45.3 but was significantly below a flash reading of 49.8


Sector News Breakdown


·     Tesla (TSLA) price tgt raised to $810 from $540 (Bull case $1,232) at Morgan Stanley saying despite the extraordinary run in the share price, they continue to believe that Tesla can outperform vs. our sector in 2021

·     Cal-Maine (CALM) Q2 EPS loss &25c) vs. est. loss (8c); 2Q net sales rose 11.1% YoY to $347.3M vs. est. $333.5M; 2Q dozen eggs sold 273.7 million, +4.8% YoY and 2Q net average selling price/dozen $1.227, +5.8% YoY

·     Tiffany & Co. (TIF) said its holiday net sales reached a record high, up 2% thanks in large part to sales in China and online transactions. Americas net sales from Nov. 1 through Dec. 31 fell 5% and sales in Europe fell 8%, while sales in Asia Pacific and Japan rose 20% and 8%

·     Nissan (NSANY) said Q4 sales of 243,133 units, down 19.3% YoY and total 2020 U.S. sales decreased 33.2% to 899,217 units

·     Beyond Meat (BYND) downgraded to neutral from overweight at Piper saying the company’s current retail trends fail to keep up with his expectations for Q4



·     The American Petroleum Institute (API) showed a draw of 1.66M barrels of oil for the week ending Jan. 1, a build of 5.47M barrels, distillate inventories show a build of 7.14M barrels and Cushing inventories show a build of 1M barrels

·     Whiting Petroleum (WLL) announced its 2021 capital, operating costs and production guidance, reflecting an operating plan focused on delivering sustainable free cash flow: Forecasted annual oil production of 50 MBO per day, 85 MBOE per day at the mid-point; Estimated capital expenditures of $240 million

·     Patterson-UTI Energy (PTEN) announced an average of 64 drilling rigs operating for the month of December



·     Wells Fargo & Company (WFC) announced that the Office of the Comptroller of the Currency (OCC) has terminated a 2015 consent order related to the company’s Bank Secrecy Act/Anti-Money Laundering compliance program. “Building the right risk and control infrastructure and remediating our legacy issues remain our top priority, and the termination of this consent order is evidence of our progress,” said CEO Charlie Scharf.

·     MarketAxess Holdings Inc. (MKTX) announced monthly trading volume for December 2020 of $472.3 billion (+1.2% YoY) consisting of $203.5 billion in credit volume and $268.7 billion in rates volume

·     Alexandria Real Estate (ARE) 6M share Spot Secondary priced at $164.00

·     MasterCard (MA) upgraded to Buy from Neutral at Bank America



·     Optum, a part of UnitedHealth (UNH) agreed to Change Healthcare (CHNG) for $25.75 per share in cash; says acquisition will boost UnitedHealth EPS and adjusted EPS by approximately $0.20 and $0.50 respectively in 2022 

·     Radius Health Inc. (RDUS) has acquired the development and commercialization rights to a synthetic cannabidiol oral solution from Benuvia Therapeutics Inc., paying $12.5 million for the rights to the solution, and said it may also pay up to $45 million more to Benuvia if it continues to develop RAD011 for other clinical uses, depending on development milestones.

·     Fate Therapeutics (FATE) 4.421M share Secondary priced at $85.50

·     Perrigo (PRGO) downgraded to Sector Perform from Outperform at RBC Capital

·     AdaptHealth (AHCO) 8M share Secondary priced at $33.00

·     NGM Biopharmaceuticals (NGM) 4.63M share Secondary priced at $27.00

·     Aerpio Pharmaceuticals (ARPO) said its board has initiated a process to explore and review a range of strategic alternatives focused on maximizing stockholder value from the company’s clinical assets and cash resources, which amounted to $47.3M as of September 30, 2020

·     Hologic (HOLX) said it agreed to acquire Biotheranostics, Inc., a privately held, commercial-stage company that provides molecular diagnostic tests for breast and metastatic cancers, for approximately $230M

·     Isoray Medical Inc. (ISR) shares rose around 200% after the FDA cleared a prostate cancer treatment that uses its Cesium-131 brachytherapy seeds. C4 Imaging LLC and Isoray said FDA 510(k) clearance was given for the use of C4’s Sirius positive-signal MRI Markers with Cesium-131

·     Myriad Genetics, Inc. (MYGN) announced the substantial completion of its strategic business unit and products review which will enable the company to better serve patients and healthcare providers and further expand its leadership in Women’s Health, Oncology and Mental Health.


Industrials & Materials

·     Greenbrier (GBX) Q1 adj EPS loss (30c) vs. est. loss (7c) and reports Q1 revenue $402.99M vs. est. $481.03M; said diversified new railcar backlog as of November 30, 2020 was 23,900 units with an estimated value of $2.35B, including orders for 2,900 railcars valued at approximately $260M received during the quarter

·     MSC Industrial (MSM) Q1 adj EPS $1.10 vs. est. $1.08 and reports Q1 revenue $771.9M vs. est. $770.18M; said saw continued sequential improvement in sales of non-safety and non-janitorial product lines, while sales of safety and janitorial products, anchored by our PPE program, grew roughly 20%

·     RPM (RPM) Q2 adj EPS $1.06 vs. est. $1.00 on revs $1.49B vs. est. $1.45B


Technology, Media & Telecom

·     ACM Research (ACMR) guides 2020 revs to be in range of $153M-$155M vs. est. $151M and for 2021 revs to be $205M-$230M vs. est. $206M

·     Smart Global Holdings (SGH) Q1 EPS 78c vs. est. 71c; Q1 sales $291.7M vs. est. $290.9M; guides Q2 sales $285M-$305M vs. est. $286.2M; sees Q2 EPS 80c plus/minus 5c vs. est. 69c

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Market commentary provided by Catena Media Financials US, LLC, 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.