Early Look

Friday, June 18, 2021

U.S. futures are looking mixed again, looking much like yesterday’s closing levels when the Nasdaq Composite closed at a new all-time high as Treasury yields dropped across the board (10-yr yield fell back around the 1.5% level), boosting growth stocks, while a steep drop in shares of energy, banks, materials and industrials weighed on the S&P 500 and SmallCap Russell 2000. The S&P 500 Banks index plunged more than 4% for its worst day since June 2020, led by Dow components JPM and Goldman, while Citigroup shares dropped an 11^th straight day. In Asian markets, The Nikkei Index fell -54 points to 28,964, the Shanghai Index was little changed at 3,525, and the Hang Seng Index rose 242 points to 28,801. In Europe, the German DAX is lower by about 70 points to 15,650, while the FTSE 100 is down around 55 points to dip below 7,100. On Wednesday, the Fed forecast that it likely will raise rates two times by the end of 2023 and Chairman Jerome Powell said the central bank has begun discussing when to begin pulling back on bond purchases of $120 billion a month. Stocks fell initially on those headlines but have since found solid footing with a rotation back into high growth names and out of the relation names with commodities, energy and financials in free fall the last two-days.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -1.84 points, or 0.04%, to 4,221.86

·     The Dow Jones Industrial Average fell -210.22 points, or 0.62%, to 33,823.45

·     The Nasdaq Composite jumped 121.67 points, or 0.87%, to 14,161.35

·     The Russell 2000 Index declined -27.23 points, or 1.18% to 2,287.46

Events Calendar for Today

·     1:00 PM EST       Baker Hughes Weekly rig count data

Sector News Breakdown

Consumer

·     Smith & Wesson Brands (SWBI) Q4 GAAP EPS $1.71 vs. est. $1.02; Q4 revs $322.9M vs. est. $259.8M; raises dividend 60% to $0.08 and announces new $50M share buyback plan; Q4 gross margin 45.1% vs. 32.2% last year

Energy, Industrials and Materials

·     U.S. Steel (X) guides Q3 adj EPS approx $3.08 vs. est. $2.67; Q2 adjusted Ebitda is expected to be approximately $1.2B; and Q2 adj net income is expected to be about $880M and excludes impacts primarily related to certain restructuring and asset impairment charges; to fully redeem senior notes due 2025

·     CAI International (CAI) to be acquired by Mitsubishi HC Capital Inc. in an all-cash transaction for $56.00 per share, which represents a total equity value of approximately $1.1B

·     Mammoth Energy (TUSK) files to sell 24.1M shares of common stock for holders

·     Alaska Air (ALK) and Delta Air (DAL) upgraded to Outperform from Peer Perform at Wolfe Research and United Airlines (UAL) upgraded to Peer Perform from Underperform

·     Occidental (OXY) upgraded to Overweight from Equal Weight, Marathon Oil (MRO) upgraded to Equal-weigh at Morgan Stanley, while the firm downgraded Devon Energy (DVN), EQT Corp. (EQT) and Cimarex Energy (XEC) to Equal-weight

·     ArcelorMittal North America Holding, a wholly-owned subsidiary of ArcelorMittal SA (MT) to sell its remaining 38.2M common shares in Cleveland-Cliffs (CLF) and to use proceeds for new $750M share buyback program.

Financials

·     LPL Financial (LPLA) reported total brokerage and advisory assets for May of +44% vs. +3.90% YoY; May brokerage, advisory assets $1.07 trillion

·     Ares Commercial (ACRE) 6.5M share Spot Secondary priced at $15.82

Healthcare

·     Athira Pharma Inc.’s (ATHA) CEO Leen Kawas has been put on temporary leave as the board reviews actions stemming from doctoral research while at Washington State University, the company said Thursday.

·     Geron Corp (GERN) rises after reporting positive data from a mid-stage study of blood cancer treatment imetelstat, which showed benefits including symptom response and overall survival in patients with myelofibrosis, a chronic blood cancer

·     Ambrx Biopharma (AMAM) 7M share IPO priced at $18.00

·     Codex DNA (DNAY) 6.67M share IPO priced at $16.00

·     Codexis (CDXS) raises 2021 revenue view to $89M-$93M from $82M-$85M (est. $83.74M) following the receipt of a binding purchase order for up to $13.9M of a proprietary high performance enzyme product from an undisclosed global pharmaceutical company

·     Century Therapeutics (IPSC) 10.6M share IPO priced at $20.00

·     Cyteir Therapeutics (CYT) 7.4M share IPO priced at $18.00

Technology, Media & Telecom

·     Adobe Systems (ADBE) Q2 adj EPS $3.03 vs. est. $2.82: Q2 revs $3.84B vs. est. $3.73B; Q2 Digital Media segment revenue was $2.79 billion, which represents 25% YoY; creative revenue grew to $2.32 billion, representing 24% YoY; Document Cloud revenue was $469 million, representing 30% YoY growth; sees Q3 total revenue about $3.88B (vs. est. $3.83B)

·     Fox Corporation (FOXA) announces $2 billion incremental stock repurchase authorization

·     Spotify (SPOT) is announced its acquired Podz, a small team working to improve podcast discovery

·     Tremor International (TRMR) 6.76M share ADS priced at $19.00