Early Look

Thursday, July 15, 2021

Futures	Up/Down	%	Last
Dow	-149.00	0.43%	34,667
S&P 500	-9.25	0.22%	4,358
Nasdaq	37.50	0.25%	14,928

 

 

U.S. stock futures are looking mixed as the S&P 500 and Dow trade lower, but the Nasdaq Composite edges higher with the 10-year Treasury yield sliding back to 2-week lows around 1.3%, as inflation fears remain absent amid reassurances from the Federal Reserve that price hikes are transitory, though recent economic data indicates otherwise with inflation readings touching highest levels in over a decade. The three major U.S. stock averages pulled back from session highs on Wednesday, with the S&P 500 and Nasdaq off record highs, after Federal Reserve Chairman Jerome Powell told Congress that tapering asset purchases is “still a ways off” and that he expects inflation to remain “elevated” in the near term. Inflation was the key focus yesterday as the producer price index rose 1.0% during June, exceeding the 0.6% consensus, while on a YoY basis, prices topped their highest levels in over ten-years. Amazingly, bonds rallied again, pushing the 10-year Treasury yield down 7 basis points to 1.35% despite the rising inflation expectations. Defensive sectors, namely Consumer Staples (XLP) and Real Estate, led gainers, while Energy (XLE) tumbled on falling oil prices. Crude oil fell 3.4% to $72.73 per barrel; gold increased 1.0% to $1,827.50 per ounce. In Asian markets, The Nikkei Index declined -329 points (1.15%) to 28,279, the Shanghai Index rose 36 points to 3,564, and the Hang Seng Index rose 208 points to 27,996. In Europe, the German DAX is down over 140 points to 15,645, while the FTSE 100 is down around -40 points to 7,050.

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 360K

·     8:30 AM EST      Continuing Claims…est. 3.313M

·     8:30 AM ET         Empire Manufacturing for July…est. 18.0

·     8:30 AM ET         Import Prices MoM for June…est. 1.2%

·     8:30 AM ET         Philly Fed Business Outlook for July…est. 28.0

·     9:15 AM ET         Industrial Production MoM for June…est. 0.6%

·     9:15 AM ET         Capacity Utilization for June…est. 75.6%

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

 

Earnings Calendar:

·     Earnings Before the Open: BK, CTAS, HOMB, MRTN, MS, PBCT, PGR, TFC, UNH, USB

·     Earnings After the Close: AA, AEHR, AOUT

 

Other Key Events:

·     Fed Chairman Powell to appear before Senate Banking Committee

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 5.09 points, or 0.12%, to 4,374.30

·     The Dow Jones Industrial Average rose 44.44 points, or 0.13%, to 34,933.23

·     The Nasdaq Composite slipped -32.70 points, or 0.22%, to 14,644.95

·     The Russell 2000 Index declined -36.51 points, or 1.63% to 2,202.36

 

 

Macro	Up/Down	Last
Nymex	-1.07	72.06
Brent	-0.89	73.87
Gold	-3.30	1,824.25
EUR/USD	-0.0009	1.1828
JPY/USD	-0.05	109.92
10-Year Note	-0.037	1.319%

 

 

World News

·     Chinese Q2 Y/Y GDP 1.3% vs 1.2% consensus; 7.9% y/y vs 8.1% consensus; China June Retail Sales beat: 12.1% y/y vs 11.0% cons; Chinese June Ind Prod beat: 8.3% y/y vs 7.8% consensus; Chinese June New Home Prices: 0.41% m/m vs 0.52% previous; 4.7% y/y vs 4.9% consensus

 

Sector News Breakdown

Consumer

·     F45 Training (FXLV) 20.313M share IPO priced at $16.00

·     ChargePoint (CHPT) 12M share Secondary priced at $23.50

·     Olink (OLK) 7.5M share Secondary priced at $31.00

 

Energy, Industrials & Materials

·     Icahn Enterprises (IEP) files $1.2B mixed securities shelf

·     Celanese (CE) announces new $1B share repurchase plan

·     Superior Plus Corp. (SPB.TO) agreed the $240 million acquisition of Kamps Propane to boost its footprint in California.

 

Financials

·     AIG Inc. (AIG) announces strategic partnership with Blackstone for its life & retirement business and sale to Blackstone of certain affordable housing assets. AIG to sell 9.9% equity stake in its life & retirement business to Blackstone for $2.2 billion. AIG to sell certain affordable housing assets to Blackstone real estate income trust, inc. for $5.1 billion

·     United Community Banks, Inc. (UCBI) to acquire Reliant Bancorp, Inc. (RBNC) in a deal for approximately $517B, or $30.58 per share of Reliant common stock; Reliant shareholders will receive 0.9842 shares of united common stock for each share of RBNC held

·     Bank of New York (BK) 2Q EPS $1.13 vs est. $1.00, qtrly fee & other revs $3.32B vs est. $3.2B, total revs $4.0B vs est. $3.88B; qtrly provision benefit $86Mm; qtr-end AUM $2.3T

·     Truist Financial (TFC) Q2 adj EPS $1.55 vs. est. $1.18; Q2 revs $5.65B vs. est. $5.47B; Q2 CET1 capital ratio 10.2%. Reports Q2 net charge-offs .2%;

·     Visa (V) and Mastercard (MA) continue to allow customers to use their cards to make purchases on Binance despite rising regulatory scrutiny on the cryptocurrency exchange – Financial Times

·     WNS Holdings (WNS) raises FY22 adj EPS view to $3.09-$3.28 from $2.98-$3.21 (est. $3.13) and boosts FY22 revenue view to $961M-$1.01B from $945M-$997M (est. $983.2M)

·     Macerich (MAC) upgraded to Hold from Underperform at Jefferies

 

Healthcare

·     UnitedHealth (UNH) Q2 adj EPS $4.70 vs. est. $4.43; Q2 revs $71.32B vs. est. $69.45B; raises FY21 adjusted EPS view to $18.30-$18.80 from $18.10-$18.60 (est. $18.57); said it expects Covid-19 effects to weigh its earnings by about $1.80 a share this year; Optum second quarter revenues of $38.3 billion grew 17.2% and operating earnings of $2.9 billion grew 29.1%

·     Biogen (BIIB) and InnoCare Pharma have entered into a license and collaboration agreement for orelabrutinib for the potential treatment of multiple sclerosis

·     Acutus Medical (AFIB) 5.5M share Secondary priced at $14.00

·     Rapid Micro Biosystems (RPD) 7.92M share IPO priced at $20.00

·     Incyte (INCY) Phase 3 REACH3 data show that ruxolitinib (Jakafi) significantly improved overall response rate (ORR) at Week 24 (49.7% vs. 25.6%) with a higher best overall response rate (76.4% vs. 60.4%) vs. best available therapy among patients with steroid-refractory/dependent chronic graft-versus-host disease (GVHD) 1

·     Sight Sciences (SGHT) 10M share IPO priced at $24.00

·     Galapagos (GLPG) reports positive topline results with selective tyk2 inhibitor glpg3667 in phase 1b psoriasis study; positive efficacy signal in psoriasis patients at week 4; says 40% of patients showed improvement of at least 50% in PASI response (PASI 50) with high dose of glpg3667 at week 4; data support initiation of phase 2b dose finding study in psoriasis

 

Technology, Media & Telecom

·     Taiwan Semiconductor (TSM) reports mixed Q2 results; Q2 revs rise 28% Y/Y to $13.29B vs. est. $13.31B; Q2 gross margin was 50.0% vs. guidance, 49.5%-51.5%, operating margin 39.1% vs. guidance 38.5%-40.5%; Q3 revs $14.6-14.9B vs. est. $14.71B

·     Netflix Inc (NFLX) said it has hired a former Facebook executive to lead its video games unit as the company ramps up its efforts to grow beyond its traditional streaming business (watch shares of ATVI, EA, TTWO on the news)

·     AMD (AMD) upgraded to Neutral from Sell at Citigroup and raise tgt to $95 (from $17) as checks indicate AMD share gains are finally accelerating in the server market, especially at hyper-scale companies such as AWS and Google

·     Microchip (MCHP) and NXPI Semi (NXPI) downgraded to Neutral at Mizuho saying while remain long the semiconductor technology sector overall, with Semis showing strong execution under tight, constrained supply conditions, they are selectively downgrading

·     EXFO Inc. (EXFO) Q3 EPS loss (-$0.07) vs. est. $0.03; Q3 sales $72.6M vs. est. $73M