Early Look

Thursday, June 3, 2021

Futures	Up/Down	%	Last
Dow	-146.00	0.42%	34,444
S&P 500	-18.25	0.44%	4,187
Nasdaq	-62.50	0.46%	13,611

 

 

Stock futures are edging lower, with investors expressing some caution ahead of key economic data jobs reports later this morning. Stocks finished Wednesday with slim gains ahead of today’s ADP private payrolls and jobless claims and tomorrow’s nonfarm payrolls. Investors have been closely watching for signs of inflation and indications on whether the Fed could put the brakes on the rebounding U.S. economy sooner than anticipated. Politico is reporting this morning that President Biden wants $1 trillion in new spending in the infrastructure bill. Energy stocks were market leaders on Wednesday, led higher as oil prices advanced on improving demand expectations as the economy strengthens and as the dollar weakens. The benchmark S&P 500 is up about 12% this year, and within about 1% of its record high, as investors anticipate an economic rebound from the coronavirus pandemic. The big story this week remains the strength in a group of stocks favored by retail investors on forums such as Reddit’s WallStreetBets, led this week by surges in AMC Theatres (AMC), Bed Bath & Beyond (BBBY), and Blackberry (BB), following the early year surge in GameStop (GME) which has not given up its gains. In Asian markets, The Nikkei Index rose 111 points to 29,058, the Shanghai Index slipped -12 points to 3,584 and the Hang Seng Index declined -331 points to 28,966. In Europe, the German DAX is lower by about 60 points to 15,540, while the FTSE 100 is down over 50 points to 7,050.

 

Events Calendar for Today

·     7:30 AM EST      Challenger Layoffs for May

·     8:15 AM EST      ADP Employment Change for May…est. 650K

·     8:30 AM ET         Weekly Jobless Claims…est. 390K

·     8:30 AM EST      Continuing Claims…est. 3.615M

·     8:30 AM EST      Q1 Nonfarm Productivity…est. 5.5%

·     8:30 AM EST      Q1 Unit Labor Costs…est. (-0.4%)

·     9:45 AM EST      Markit Composite, May-F…prior 68.1

·     9:45 AM EST      Markit Services PMI, May-F…est. prior 70.1

·     10:00 AM EST    ISM Non-Manufacturing PMI for May…est. 63.0

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

·     11:00 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CIEN, CONN, DLTH, EXPR, HOV, SCWX, SJM, SWIM, TTC

·     Earnings After the Close: ASAN, AVGO, COO, CRWD, DOCU, FIVE, IDT, JOAN, MDB, NX, PD, PHR, SAIC, SUMO, TLYS, WORK, ZUMZ

 

Other Key Events:

·     Bernstein Strategic Decisions Conference (virtual), 6/2-6/4

·     Cowen 49th Annual TMT Conference (virtual), 6/1-6/3

·     Goldman Sachs 3rd Asia Spotlight Symposium (virtual), 6/1-6/4

·     Jefferies Global Healthcare Conference, 6/1-6/3

·     KeyBanc Capital Markets Industrials & Basic Materials Conference (virtual), 6/1-6/4

·     Piper Consumer Marketplace Conference (virtual), 6/2-6/4

·     William Blair 40th Annual Growth Stock Conference (virtual), 6/1-6/3

·     Wells Fargo Energy Conference (virtual), 6/2-6/3

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 6.08 points, or 0.14%, to 4,208.12

·     The Dow Jones Industrial Average rose 25.07 points, or 0.07%, to 34,600.38

·     The Nasdaq Composite gained 19.85 points, or 0.14%, to 13,756.33

·     The Russell 2000 Index advanced 3.09 points, or 0.13% to 2,297.83

 

 

Macro	Up/Down	Last
Nymex	-0.10	68.73
Brent	-0.04	71.31
Gold	-12.00	1,896.35
EUR/USD	-0.0014	1.2197
JPY/USD	0.13	109.69
10-Year Note	+0.01	1.601%

 

 

World News

·     China Caixin services PMI 55.1 vs 56.2 estimate, composite PMI 53.8 vs 54.7

·     The EIA weekly report on U.S. oil inventories, supply and demand is at 11:00 this morning, pushed back a day due to the Memorial Day holiday.

·     UK May Markit Services PMI (final) higher: 62.9 vs 61.8 consensus

·     Eurozone May Markit Services PMI (final) higher: 55.2 vs 55.1 consensus

 

Sector News Breakdown

Consumer

·     PVH Corp. (PVH) Q1 EPS $1.92 vs. est. $0.83; Q1 revs $2.08B vs. est. $1.93B; Abel-Hodges to Step Down as CEO of Calvin Klein and move to an advisory position; sees Q2 EPS $1.15-$1.18 vs. est. $1.22; sees Q2 revs up 34% to 35% from prior year; raises FY21 EPS view to $6.50 from $6.00 (est. $6.16); raises FY21 revenue growth view to 24%-26% from 22%-24%

·     SpartanNash (SPTN) Q1 adj EPS $0.56 in-line with ests; Q1 revs $2.66B vs. est. $2.7B; reaffirms FY21 adj EPS view of $1.65-$1.80 (est. $1.76) and also backs FY21 revs view $8.8B-$9B vs. est. $8.93B; now expects that Retail comparable sales will be negative 5.0% to 7.0% for 2021

·     Sportsman’s Warehouse (SPWH) Q1 EPS 28c vs. est. loss (4c); Q1 revs $327M vs. est. $252.23M; Q1 comp store sales increased 24.1% YoY; Q1 adjusted EBITDA was $23.5 million compared to $8.2 million in the comparable prior year period

·     Churchill Downs (CHDN) bans trainer Bob Baffert for 2 years after Kentucky Derby winner Medina Spirit’s second positive drug test

·     Conn’s (CONN) Q1 adj EPS $1.55 vs. est. 30c; Q1 revs $291.3M vs. est. $293.77M; Q1 comp store sales up 19.4%; Q1 e-commerce sales up 95.7%

·     HeadHunter (HHR) 4.5M share Secondary priced at $37.00

 

Energy, Industrials & Materials

·      NRG Energy Inc. (NRG) and Exelon Corp. (EXC): watch utilities after suppliers to PJM Interconnection LLC’s grid, which serves more than 65 million people, will get $50 a megawatt-day to provide capacity for the year starting June 2022, according to yesterday auction results – down sharply from $140 in the previous auction, held in 2018 (ests, were for the price to fall to about $85). The results showed that the capacity price for the Chicago-area zone, known as ComEd, was $68.96 compared with $195.55 in the last auction. The price for the Pennsylvania and New Jersey zone, known as EMAAC, fell to $97.86 percent, from $165.73

·     The American Petroleum Institute (API) showed a draw of 5.36M barrels of oil for the week ended May 28; gasoline inventories showed a build of 2.51M barrels, distillate inventories show a build of 1.59M barrels and Cushing inventories show a build of 741K barrels

·     Patterson-UTI Energy (PTEN) reports an average of 72 drilling rigs operating for the month of May, 2021

·     Westport Fuel (WPRT) 18.2M share secondary prices at $5.50

 

Financials

·     The Federal Reserve will begin to unwind the corporate bond holdings it acquired last year through an emergency lending facility launched to calm credit markets at the height of the pandemic, the central bank said. The Fed said the sale of its holdings in the Secondary Market Corporate Credit Facility, which includes bonds of companies purchased in the secondary market and exchange-traded funds that invest in corporate bonds, will be “gradual and orderly.”

·     Cushman & Wakefield (CWK) announces offering of 10M ordinary shares for holders

·     Arch Capital (ACGL) announces $500 million public offering of depositary shares representing series G preferred shares

·     MarketAxess (MKTX) May trading volume of $478.7B consists of $204.4B in credit volume and $274.3B in rates volume; total credit volume decreased 10.6% this month year-over-year with a 37.9% rise in Eurobond trading volume.

·     Allstate (ALL) downgraded to Neutral from Buy at Citi

·     Cushman & Wakefield (CWK) 10M share Spot Secondary priced at $18.75

 

Healthcare

·     Syneos Health (SYNH) announces offering of 10.85M shares of common stock for holders

·     Tilray (TLRY) upgraded to Overweight from Neutral at Cantor Fitzgerald

 

Technology, Media & Telecom

·     Bill.com (BILL) files to sell 10.6M shares of common stock for holders

·     C3.ai (AI) Q4 EPS loss (24c) vs. est. loss (26c); Q4 revs $52.3M vs. est. $50.6M; sees FY22 revs $243M-$247.0M vs. est. $239.94M

·     Elastic (ESTC) Q4 adj EPS loss (8c) vs. est. loss (16c); Q4 revs $177.6M vs. est. $157.94M; sees Q1 adj EPS loss (13c)-(10c) vs. est. loss (12c); sees Q1 revs $171M-$173M vs. est. $168.78M; Q4 Revenue of $177.6 million, Up 44% YoY, Q4 SaaS Revenue of $51.3 million, Up 77% YoY and FY21 Revenue of $608.5 million, Up 42% YoY

·     FireEye (FEYE) entered into a definitive agreement to sell the FireEye Products business, including the FireEye name, to a consortium led by Symphony Technology Group in an all-cash transaction for $1.2B; board approves share repurchase program of up to $500M

·     Guidewire (GWRE) Q3 adj EPS loss (16c) vs. est. loss (24c); Q3 revs $164M vs. est. $157.74M; sees year revs $732M-$738M up from $725M-$733M prior (est. $730.4M)

·     NetApp (NTAP) authorizes additional $500M stock buyback; raises quarterly dividend by 4% to 50c per share; Q4 EPS $1.17 vs. est. $1.12; Q4 revs $1.56B vs. est. $1.50B; Q4 billings up 12% at 1.74B; sees Q1 EPS 89c-97c vs. est. 87c; sees Q1 revs $1.37B-$1.47B vs. est. $1.37B

·     Semtech (SMTC) Q1 adj EPS 53c vs. est. 52c; Q1 revs $170.4M vs. est. $164.31M; Q1 Wireless and Sensing products group net sales increased 7% sequentially and 78% year-over-year for a new record that included record net sales for our LoRa(R) platforms and proximity sensing products; guides Q2 adj EPS 57c-65c vs. est. 57c; sees Q2 revs $177M-$187M vs. est. $169.58M

·     Smartsheet (SMAR) Q1 Non-Gaap EPS loss (9c) vs. est. loss (14c); Q1 revs $117.1M vs. est. $111.81M; Q1 calculated billings grew 48% YoY to $132.8M; Q2 net operating cash flow was negative $3.0M, net free cash flow was negative $8.2M; number of all customers with annualized contract values (“ACV”) of $5,000 or more grew to 12,655, an increase of 32% YoY; sees FY22 EPS loss (44c)-(36c) vs. est. loss (40c); sees FY22 revenue $510M-$515M vs. est. $502.76M

·     Splunk (SPLK) Q1 EPS ($2.89) vs. est. loss (70c); Q1 revs $502M vs. est. $491.32M; sees Q2 revenue $550M-$570M vs. est. $561.36M; sees Q2 ARR $2.59B-$2.62B and Q2 Cloud ARR $950M-$960M; said Q1 net loss widened on higher operating expenses, driven in part by its transition to the cloud

·     Cambium Networks (CMBM) 2M share Secondary priced at $48.00

·     dLocal (DLO) 29.41M share IPO priced at $21.00

·     Flex (FLEX) files mixed securities shelf