Early Look

Thursday, July 1, 2021

Stocks are muted to begin the second half of the year ahead of an OPEC+ meeting and weekly jobless claims data today and the monthly non-farm payrolls jobs report tomorrow morning. The Nasdaq is slipping in pre-market trading, continuing yesterday’s underperformance. Micron shares are also trading down in the pre-market despite its earnings beat and guidance raise after the company raised its capex guidance due to higher input costs and investments in new products. Bitcoin is sliding again over the past 2 days, as it is now valued at about $33,300 despite being above $36,000 on Tuesday afternoon. WTI Crude has also hit $75/barrel for the first time since October 2018 after reports that OPEC+ has reached a preliminary output deal. In Asian markets, The Nikkei Index is off by 84 points, the Shanghai Index has barely budged down 2 points, and the Hang Seng Index is down 166 points. In Europe, the German DAX has edged higher by 19 points, while the FTSE 100 has gained 42 points.

Market Closing Prices Yesterday

The S&P 500 Index rose 5.52 points, or 0.13%, to 4,297

The Dow Jones Industrial Average climbed 210.29 points, or 0.61%, to 34,502

The Nasdaq Composite dipped -24.38 points, or 0.17%, to 14,504

The Russell 2000 Index inched higher 1.71 points, or 0.07% to 2,310

Economic Calendar: 

·      7:30 AM ET                 Challenger Layoffs for June

·      8:30 AM ET                 Weekly Jobless Claims

·      8:30 AM ET                 Continuing Claims

·      9:45 AM ET                 Markit Manufacturing PM, June-F

·      10:00 AM ET               Construction Spending for May

·      10:00 AM ET               ISM Manufacturing PMI, for June

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

Earnings Calendar:

·      Earnings Before the Open: AYI, LNN, MKC, SMPL, WBA

·      Earnings After the Close: None

Other Key Events:

·      Raymond James Company Meetings at Mobile World Congress (virtual), 6/28-7/1

Sector News Breakdown

Consumer

Hertz (HTZZ) common stock to trade as HTZZ (from HTZGQ) starting today after emerging from Chapter 11 bankruptcy

Bally’s (BALY) and Gamesys Group shareholders both approved the companies’ proposed business combination

McCormick & Co (MCK) Q2 adj EPS $0.69 vs est $0.61; Q2 revenue $1.56B vs est $1.47B; sees FY21 adj EPS $3.00-$3.05 from prev. $2.97-$3.02; expects to FY21 sales growth 11-13%, 8-10% in constant currency,

Energy, Industrials & Materials

ExxonMobil (XOM) sees Q2 earnings gain of $0.6-1B from higher oil price, $200M from higher gas prices, and $800M in chemical margins

Apache (APA) filed mixed securities shelf

Enbridge (ENB) upgraded to Neutral at Goldman

Edison International (EIX) downgraded to Sector Weight from OW at KeyBanc

Desktop Metal (DM) files to sell 2.49M shares of common stock for holders

U.S. Department of Defense awarded new contracts to Lockheed Martin (LMT), Raytheon (RTX), Mercury Systems (MRCY), Northrup Grumman (NOC), L3Harris Technologies (LHX)

MKS Instruments (MKSI) agreed to acquire Atotech (ATC) for $5.1 billion in cash in stock, paying $16.20 in cash and 00052 of a share of MKS for each ATC common share. This deal is equivalent to $26.02/share, a 1.9% premium

Financials

Realty Income (O) started an offering of 7.3M shares

Franklin Covey (FC) Q3 EPS $0.90 vs est $0.07, Q3 revenue $58.7M vs est $51.6M; now sees FY21 adj EBITDA $24.5M-$26.5M from prev. range $20M-$22M

Healthcare

Apellis (APLS) and Beam Therapeutics (BEAM) entered into an exclusive research collaboration to apply base editing to discover novel therapies for complement-driven diseases

Raymond James initiated coverage on Passage Bio (PASB) at Outperform with a $29 PT, Agios Pharmaceuticals (AGIO) at Market Perform, and Vertex Pharmaceuticals (VRTX) at Market Perform

CureVac (CVAC) said statistical criteria for primary endpoint were met – Phase 2b/3 showed protection in age group 18-60; 48% vaccine efficacy against Covid of any severity across all age groups and 15 variants, 53% against disease of any severity, and 77% against moderate and severe disease.

Novavax (NVAX) published results of its UK Phase 3 clinical trial that demonstrated high levels of efficacy of its Covid-19 vaccine

Technology, Media & Telecom

Micron (MU) 3Q adj eps $1.88 vs est. $1.72, gross margin 42.9% vs est. 42.0%; sees 4Q revs $8-8.4B vs est. $7.85B; expects DRAM, NAND supply to remain tight into 2022

Texas Instruments (TXN) announced it purchased Micron’s (MU) 300-mm semiconductor factory in Lehi, UT for $900M

COHU announced a $100 million debt prepayment that reduces outstanding principal of its term loan B facility to about $104M and is is expected to save about $0.8M in fiscal Q3 interest expense

DBV Technologies (DBVT) filed for stock shelf of up to $250M

Shaw Communications (SJR) Q3 EPS $0.56 vs est $0.28 on revs $1.1B (+18.2% YoY)